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Exhibit 10.4    
    

 
 

COLLABORATIVE RESEARCH AND DEVELOPMENT AND LICENSE AGREEMENT

        THIS COLLABORATIVE RESEARCH AND DEVELOPMENT AND LICENSE AGREEMENT
(the "Agreement") is entered into as of March 31, 2006 (the "Effective Date") by
and between OPTIMER PHARMACEUTICALS INC., a Delaware corporation with its offices located at 10110 Sorrento Valley Road, Suite C, San
Diego, California 92121 ("Optimer"), and CEMPRA PHARMACEUTICALS, INC., a Delaware corporation
with its offices located at 170 Southport Drive, Suite 500, Morrisville, NC 27560. Optimer and Cempra may be referred to herein individually as a
"Party" or collectively, as the "Parties." 

 
 

RECITALS

        WHEREAS, Optimer is a biopharmaceutical company engaged in the discovery and development of pharmaceutical
products using its proprietary carbohydrate synthesis technology; 

        WHEREAS, Cempra is a biopharmaceutical company engaged in the discovery and development of novel pharmaceutical products; 

        WHEREAS, Cempra and Optimer desire to enter into a relationship to identify, develop and commercialize pharmaceutical products comprising
novel Macrolide Antibiotics to treat infectious diseases. 

        WHEREAS, Cempra and Optimer entered into a letter agreement dated November 10, 2005 wherein Optimer and Cempra agreed to execute a
detailed agreement regarding the synthesis by Optimer of Macrolide Antibiotics for Cempra; and 

        WHEREAS, Optimer is willing to synthesize Macrolide Antibiotics using its proprietary carbohydrate synthesis technology, assist Cempra in
the development thereof, and is prepared to grant Cempra a license under such technology to allow Cempra to develop and commercialize pharmaceutical products arising from this relationship; 

        NOW, THEREFORE, in consideration of the foregoing and the covenants and promises contained in this Agreement, the Parties agree
as follows: 

1.    DEFINITIONS    

        1.1   "Affiliate" means a person, corporation, partnership, or other entity that controls, is controlled by or is under common
control with a Party. For the purposes of this Section 1.1, the word "control" (including, with correlative meaning, the terms "controlled by" or "under the common control with") means the
actual power, either directly or indirectly through one or more intermediaries, to direct the management and policies of such entity, whether by the ownership of at least fifty percent (50%) of the
voting stock of such entity, or by contract or otherwise. 

        1.2   "ASEAN Countries" means all member nations of the Association of Southeast Asian Nations as of the Effective Date. 

        1.3   "Cempra Know-How" means any Know-How which is developed or acquired and Controlled by Cempra or
its Affiliates during the term of this Agreement that is necessary and useful for the research, development, manufacture, importation, use, or sale of Cempra Products. 

        1.4   "Cempra Patents" means any Patents, other than Optimer Patents, which are Controlled by Cempra or its Affiliates during
the term of this Agreement and that claim the manufacture, importation, use or sale of Macrolide Antibiotics or Cempra Products. 

        1.5   "Cempra Product" means a pharmaceutical product (including but not limited to Combination Products or those comprised of
one or more Test Products, Macrolide Antibiotics, or any analogs or derivatives of either of the foregoing) for which the use, sale, or manufacture thereof would, but for the licenses granted Cempra
hereunder, infringe the Optimer Patents in the country in which such product is sold by Cempra, an Affiliate thereof, or a Third Party sublicensee of either of the foregoing. 

 

        1.6   "Collaboration" means all activities performed by or on behalf of Optimer or Cempra in the course of the Research Program
with respect to the Development and Commercialization of Test Products and Cempra Products. 

        1.7   "Combination Product" means a pharmaceutical product (i) containing (x) in the case of Cempra, an active
pharmaceutical ingredient for which, if included in a pharmaceutical product as the sole active pharmaceutical ingredient the use, sale, or manufacture thereof would, but for the licenses granted
Cempra hereunder, infringe the Optimer Patents in the country in which such product is sold by Cempra, an Affiliate thereof, or a Third Party sublicensee of either of the foregoing, or (y) in
the case of Optimer, an active pharmaceutical ingredient which (I) contains a Macrolide Antibiotic, Test Product, or derivative or analog of either of the foregoing, (II) is a Cempra
Product, or (III) whose manufacture, sale, or use is covered in any ASEAN Country by a Valid Claim of any Cempra Patent, Joint Invention Patent, or foreign counterpart of any Optimer Patent;
and (ii) one or more other pharmaceutically active ingredients for which rights are not included in the license granted to (x) Cempra under this Agreement, with respect to Cempra
Products, or (y) Optimer, with respect to Optimer Products. 

        1.8   "Commence" or "Commencement", when used to describe a Phase 1
Trial, Phase 2 Trial, Phase 3 Trial, or Phase 4 Trial, means the first dosing of the first patient for such trial. 

        1.9   "Commercialization" means all activities that are undertaken after Regulatory Approval of an NDA for a particular Product
and that relate to the commercial marketing and sale of such Product including advertising, marketing, promotion, distribution, and Phase 4 Trials. 

        1.10 "Confidential Information" means all Information, and other information and materials, received by either Party from the
other Party pursuant to this Agreement that: (i) is designated as confidential at the time of disclosure or promptly thereafter; (ii) under the circumstances surrounding disclosure
should be treated as confidential by the receiving Party, or (iii) by reason of its nature would be treated as confidential by a reasonable receiving party, which would include, without
limitation, trade secrets.. 

        1.11 "Control" means, with respect to any intellectual property right, that a Party owns or has a license to such item or
right, and has the ability to grant a license or sublicense in or to such right as set forth herein without violating the terms of any agreement or other arrangement with any Third Party. 

        1.12 "Develop" or "Development" means, with respect to a Test Product or Product, engaging in preclinical and clinical drug
development activities, which may include but is not limited to research, pre-clinical, clinical and regulatory activities directed towards obtaining Regulatory Approval of a Product,
including but not limited to the performance by Optimer of its obligations and Cempra of its responsibilities under the Research Program. 

        1.13 "Development Plan" has the meaning set forth in Section 4.1. 

        1.14 "Diligent Efforts" means the carrying out of obligations or tasks in a manner consistent with the efforts a Party
devotes to research, development or marketing of a pharmaceutical product or products of similar market potential, profit potential or strategic value resulting from its own research efforts, taking
into account technical and regulatory factors, target product profiles, product labeling, past performance, costs, economic return, the regulatory environment and competitive market conditions in the
therapeutic area, all based on conditions then prevailing, and subject to and in consideration of, in each case, the resources available to such Party and within such Party's organization for such
efforts. Diligent Efforts requires that a Party, at a minimum, assign responsibility for such obligations to specific employees, sets and seeks to achieve specific and meaningful objectives for
carrying out such obligations, and consistently makes and implements decisions designed and allocates resources reasonably sufficient to advance progress with respect to such objectives. 

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        1.15 "Fair Market Value" means the fair market value of Cempra capital stock on the date the relevant milestone is achieved
under Section 6.2(a) or (b), as applicable, which shall be determined as follows: 

        (a)   if the Cempra capital stock to be issued under Section 6.2(a) or (b) is traded on a public securities
exchange or through the Nasdaq National Market, the fair market value thereof shall be deemed to be the average of the closing prices of such security on such exchange over the 30-day
period ending three (3) business days prior to the date such security was received; 

        (b)   if the Cempra capital stock to be issued under Section 6.2(a) or (b) is actively traded
over-the-counter, the fair market value thereof shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the 30-day period
ending three (3) business days prior to the date such security was received; or 

        (c)   If there is no active public market for any Cempra capital stock issued under Section 6.2(a) or (b), the
fair market value thereof shall be as determined in good faith by Cempra's Board of Directors based on a reasonable consideration of all relevant factors. 

        1.16 "FDA" means the United States Food and Drug Administration, or any successor federal agency thereto. 

        1.17 "Field" means all human and animal diagnostic and therapeutic uses. 

        1.18 "First Commercial Sale" means the first sale of commercial quantities of any Product sold to a Third Party by a Party,
its Affiliate, or a sublicensee of either of the foregoing in any country after, if and as reasonably necessary or applicable, receipt of Regulatory Approval for such Product in such country. Sales
for test marketing, sampling and promotional uses or clinical trial or research purposes or compassionate uses will not be considered to constitute a First Commercial Sale 

        1.19 "FTE" means the equivalent of one person working full time for one 12-month period in a research,
development, commercialization, regulatory or other relevant capacity, approximating 1800 hours per year. In the interests of clarity, though, a single individual who works more than
1800 hours in a single year shall be treated as one FTE regardless of the number of hours worked. 

        1.20 "Good Clinical Practices" or "GCP" means current Good Clinical Practices as specified in the United States Code
of Federal Regulations, at the time of testing, and all FDA and ICH guidelines, including the ICH Consolidated Guidelines on Good Clinical Practices. 

        1.21 "Good Laboratory Practices" or "GLP" means current Good Laboratory Practices as specified in the United States
Code of Federal Regulations at 21 CFR § 58 at the time of testing and all applicable ICH guidelines. 

        1.22 "Good Manufacturing Practices" or "GMP" means current Good Manufacturing Practices and standards as provided for
(and as amended from time to time) in European Community Directive 91/356/EEC (Principles and Guidelines of Good Manufacturing Practice for Medicinal Products) and in the Current Good
Manufacturing Practice Regulations of the United States Code of Federal Regulations Title 21 (21 CFR §§ 210-211) in relation to the production
of pharmaceutical intermediates and active pharmaceutical ingredients, as interpreted by ICH Harmonized Tripartite Guideline, Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients,
and subject to any arrangements, additions or clarifications agreed from time to time between the Parties. 

        1.23 "Governmental Authority" means any court, agency, department or other instrumentality of any foreign, federal, state,
county, city or other political subdivision. 

        1.24 "Human Clinical Trial" means any Phase 1 Trial, Phase 2 Trial, Phase 3 Trial or Phase 4
Trial the subject of which includes a Test Product or Product. 

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        1.25 "IND" means an Investigational New Drug Application filed with the FDA or the equivalent application or filing
filed with any equivalent agency or government authority outside of the United States (including any supra-national agency such as in the European Union) necessary to Commence human clinical
trials in such jurisdiction, and including all regulations at 21 CFR § 312 et. esq., and equivalent foreign regulations. 

        1.26 "Information" means information, results and data of any type whatsoever, including without limitation, databases,
inventions, practices, methods, techniques, specifications, formulations, formulae, knowledge, know-how, skill, experience, test data including pharmacological, biological, chemical,
biochemical, toxicological and clinical test data, analytical and quality control data, stability data, studies and procedures, and patent and other legal information or descriptions. 

        1.27 "Invention" means any discovery, invention, improvement, concept or idea, whether or not patentable, conceived or
reduced to in the course of the activities conducted pursuant to this Agreement, together with all intellectual property rights relating thereto. Inventions may include, but not be limited to,
processes, compounds, compositions, or methods. 

        1.28 "Know-How" means any non-public, proprietary Information and other data, instructions,
processes, methods, formulae, techniques, compositions, materials, expert opinions and information, including without limitation, biological, chemical, pharmacological, toxicological, pharmaceutical,
physical and analytical, clinical, safety, manufacturing and quality control data and information. Know-How does not include any rights under Patents. 

        1.29 "Letter Agreement" means the letter agreement between Optimer and Cempra dated November 11, 2005. 

        1.30 "Macrolide Antibiotics" means any macrolide or ketolide, including but not limited to any
(i) [***] compound that incorporates, is based on, or is described in, or the synthesis of which is in whole or part based on or described in, the Optimer Technology,
including but not limited to those synthesized by Optimer under this Agreement or the Letter Agreement, (ii) [***] (including but not limited to
[***]), and (iii) any derivatives or analogs of any of the foregoing. For avoidance of doubt, the parties expressly agree that Macrolide Antibiotics shall not mean any
18-membered-lactone-ring-based compound (e.g., Optimer's OPT-80). 

        1.31 "NDA" means a New Drug Application filed with the FDA or the equivalent application or filing filed with any
equivalent Governmental Authority outside of the United States necessary for approval of a drug in such jurisdiction. 

        1.32 "Net Sales" means 

        (a)   with respect to a Product (subject to subsections (b) and (c) below), the amount received by a Party or its
Affiliate or a Third Party sublicensee for sales of such Product to Third Parties, excluding reasonable sales returns, allowances and rebates actually paid, granted or accrued, including, without
limitation, trade, quantity and cash discounts and any other reasonable adjustments actually allowed, including, but not limited to, those granted on account of price adjustments (including
retroactive price adjustments), billing errors, rejected goods, damaged or defective goods, recalls, returns, rebates, chargeback rebates, reimbursements or similar payments granted or given to
wholesalers or other distributors, buying groups, health care insurance carriers or other institutions, pharmacy benefit management companies, health maintenance organizations or other health care
organizations, or any governmental or regulatory authority or agency (including their purchasers and/or reimbursers), adjustments arising from consumer discount programs, customs or excise duties,
tariffs, sales tax, consumption tax, value added tax, and other taxes (except income taxes) or duties relating to sales, and similar payments respect to the United States government, any state
government, any local government, or any foreign government, or to any governmental or regulatory authority in respect of sales, and freight, handling, and insurance; and 

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        (b)   in the case of Combination Products, 

        [***]

        1.33 "Optimer Improvements" means any Other Sole Inventions of Optimer and, to the extent owned by Optimer, Other Joint
Inventions that, in either case, constitute improvements, enhancements, or modifications of any Macrolide Antibiotics, Cempra Products, or other technology claimed in the Optimer Patents listed on  Schedule 1.30, or which would be useful or necessary in the manufacture, use, or sale of Cempra Products.
 

        1.34 "Optimer Know-How" means all Know-How Controlled by Optimer or its Affiliates as of the
Effective Date, or which is developed or acquired by and Controlled by Optimer or its Affiliates during the term of this Agreement, including but not limited to any Know-How related to
Optimer Improvements, that is necessary or useful for the research, development, manufacture, importation, use or sale of the Macrolide Antibiotics, Test Products or Cempra Products. 

        1.35 "Optimer Patents" means any Patents Controlled by Optimer or its Affiliates as of the Effective Date or which are
developed and Controlled, or licensed to and Controlled, by Optimer or its Affiliates during the term of this Agreement, that are necessary or useful for the research, development, manufacture,
importation, use or sale of Macrolide Antibiotics, Test Products, or Cempra Products, including without limitation, the Patents listed on  Schedule 1.35 and any Patents (or, with respect to
Patents jointly owned by the Parties, Optimer's rights to any such Patents) claiming
any Optimer Improvements. 

        1.36 "Optimer Product" means any product (including but not limited to Combination Products) developed and/or commercialized
by Optimer in any ASEAN Country that (i) contains a Macrolide Antibiotic, Test Product, or derivative or analog of either of the foregoing, (ii) is a Cempra Product, or
(iii) whose manufacture, sale, or use is covered in any ASEAN Country by a Valid Claim of any Cempra Patent, Joint Invention Patent, or foreign counterpart of any Optimer Patent. For avoidance
of doubt, the parties expressly agree that, for purposes of this Agreement (including, but not limited to, Optimer's royalty payment obligation set forth in Article 6), Optimer Products shall
not include any product which incorporates an 18-membered-lactone-ring-based compound as an active pharmaceutical ingredient (e.g., Optimer's
OPT-80) unless such product incorporates an additional active pharmaceutical ingredient which itself (or the mechanism of action of which) independently renders such product an
Optimer Product pursuant to the foregoing definition. 

        1.37 "Optimer Technology" means Optimer Patents and Optimer Know-How. 

        1.38 "Patent" means: (a) an issued unexpired United States or foreign patent (including inventor's certificate)
that has not been held invalid or unenforceable by a court of competent jurisdiction from which no appeal can be taken or has been taken within the required time period, including without limitation
any substitution, extension, registration, confirmation, reissue, re-examination, renewal or any like filing thereof; or (b) any pending United States or foreign patent
application, including without limitation any continuation, division or continuation-in-part thereof and any provisional application. 

        1.39 "Phase 1 Trial" means a clinical trial that generally provides for the first introduction into humans of a
Product with the primary purpose of determining safety, metabolism and pharmacokinetic properties and clinical pharmacology of the Product, and generally consistent with 21 CFR
§ 312.21(a). 

        1.40 "Phase 2 Trial" means a clinical trial of a Product on patients, including possibly pharmacokinetic studies, the
principal purpose of which is to make a preliminary determination that such Product is safe for its intended use and to obtain sufficient information about such Product's efficacy to permit the design
of further clinical trials, and generally consistent with 21 CFR § 312.21(b). 

        1.41 "Phase 3 Trial" means a clinical trial that provides for a pivotal human clinical trial of a Product, which trial
is designed to: (a) establish that a Product is safe and efficacious for its intended use; (b) define warnings, precautions and adverse reactions that are associated with the Product in
the 

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dosage
range to be prescribed; (c) support Regulatory Approval of such Product; and (d) generally consistent with 21 CFR § 312.21(c). 

        1.42 "Phase 4 Trial" means clinical trial of a Product Commenced in a particular country after Regulatory Approval for
such Product in such country in order to support commercialization of the Product. 

        1.43 "Product" means an Optimer Product or Cempra Product, as appropriate. 

        1.44 "Regulatory Approval" means any and all approvals (including supplements, amendments, pre- and
post-approvals, pricing and reimbursement approvals), licenses, registrations or authorizations of any national, supra-national (e.g., the European Commission or the Council of the
European Union), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, that are necessary for the manufacture, distribution, use or, in the
Commercializing Party's reasonable judgment, sale of a Product in a regulatory jurisdiction. 

        1.45 "Regulatory Authority" means any Governmental Authority with responsibility for granting any licenses or approvals
necessary for the marketing and sale of pharmaceutical products including, without limitation, the FDA and any drug regulatory authority of countries of the European Union, and Japan, and where
applicable any ethics committee or any equivalent review board. 

        1.46 "Regulatory Filing" means the NDA, biologic license application ("BLA"), IND, or any foreign counterparts thereof and
any other filings required by regulatory authorities relating to the study, manufacture or commercialization of any Product. 

        1.47 "Research Program" means the activities conducted by Optimer and Cempra pursuant to the obligations and responsibilities
set forth in a Work Plan and Budget established by the Parties pursuant to this Agreement. 

        1.48 "Research Term" means the period commencing on the Effective Date and continuing until the earlier of
(i) completion by Optimer of the tasks assigned to Optimer in the Work Plan and Budget or (ii) the second anniversary of the Effective Date, subject to any extensions thereof agreed to
by the Parties in writing. 

        1.49 "Royalty Term" means, on a country-by-country and Product-by-Product
basis: 

        (a)   For Cempra Products, the period commencing on the First Commercial Sale thereof in a particular country and continuing
until the later of (a) the last to expire Valid Claim of an Optimer Patent covering the manufacture, use or sale of such Cempra Product in such country or (b) ten (10) years
following the First Commercial Sale of such Cempra Product in such country; and 

        (b)   For Optimer Products, the period commencing on the First Commercial Sale thereof in a particular country and continuing
until the later of (a) the last to expire Valid Claim of a Cempra Patent covering the manufacture, use or sale of such Optimer Product in such country or (b) ten (10) years
following the First Commercial Sale of such Optimer Product in such country. 

        1.50 "Sublicensing Revenue" means net revenue received from Third Party sublicensees, other than royalties or other payments
calculated on the basis of sales of Cempra Products, directly and solely as consideration for Cempra's or its Affiliates' sublicensing to Third Parties (other than Cempra Affiliates) of the rights to
Optimer Patents licensed to Cempra and its Affiliates under this Agreement, including but not limited to upfront and milestone payments, but excluding (i) [***] 

        1.51 "Term" has the meaning assigned to it in Section 9.1. 

        1.52 "Territory" means worldwide, excluding ASEAN Countries. 

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        1.53 "Test Product" means a Macrolide Antibiotic or derivative or analog thereof that has been designated by Cempra to be the
subject of Development pursuant to Section 3.4. 

        1.54 "Third Party" means any entity other than (a) Optimer, (b) Cempra or (c) an Affiliate of either
of them. 

        1.55 "Valid Claim" means a claim of any pending patent application or any issued, unexpired United States or granted
foreign patent within any Patent that has not been dedicated to the public, disclaimed, abandoned or held invalid or unenforceable by a court or other body of competent jurisdiction from which no
further appeal can be taken, and that has not been explicitly disclaimed, or admitted by the Party Controlling such Patent in writing to be invalid or unenforceable or of a scope not covering Products
through reissue, disclaimer or otherwise. 

        1.56 "Work Plan and Budget" has the meaning set forth in Section 3.1. 

1A.    JOINT STEERING COMMITTEE    

        1A.1    Joint Steering Committee.    Promptly after the Effective
Date, the Parties shall establish a "Joint Steering Committee" as described in this Section 1A. The Joint Steering Committee shall exist during the Research Term. The Joint Steering Committee
shall, subject to applicable provisions of this Agreement concerning the Research Program, Work Plan, and Budget, (i) develop, review, approve, and establish all aspects of the Work Plan and
Budget and, once the initial Work Plan and Budget have been established, (ii) monitor and oversee the Parties' progress thereunder, advise the Parties with respect thereto, and develop, review,
and approve any changes or amendments to the Work Plan and Budget, such changes and amendments to be effective upon approval thereof by the Joint Steering Committee and agreement by (i) Optimer
with respect to obligations of Optimer (such agreement not to be unreasonably withheld) or (ii) Cempra with respect to responsibilities of Cempra, provided that, notwithstanding the foregoing,
the Joint Steering Committee shall have no authority to amend the body of this Agreement. Each party shall indicate in writing within five (5) business days of approval by the Joint Steering
Committee whether or not it agrees to its proposed obligations or responsibilities, and, if not agreeing to its proposed obligations or responsibilities, provide its reasonable objections thereto. In
the absence of such written notice within such five (5) business day period, a party shall be deemed to have rejected its proposed obligations or responsibilities, and, in the event Optimer
rejects its proposed obligations or responsibilities (whether by written notice or the absence thereof), Cempra shall be free to pursue alternative solutions therefor. Notwithstanding anything to the
contrary in this Agreement,
the Joint Steering Committee shall have no rights or responsibilities, and Cempra shall have no obligations with respect to the Joint Steering Committee, following the Research Term. 

        1A.2    Membership.    The Joint Steering Committee will be comprised
of an equal number of representatives from each Party. The exact number of such representatives shall be as agreed upon by the Parties, but no event shall such number be less than two (2) nor
more than five (5) for each Party. Each Party shall provide the other with a list of its initial members of the Joint Steering Committee promptly after the Effective Date. Each Party may
replace any or all of its representatives on the Joint Steering Committee at any time upon written notice to the other Party. Any member of the Joint Steering Committee may designate a substitute to
attend and perform the functions of that member at any meeting of the Joint Steering Committee. Each Party may, in its reasonable discretion, invite non-member representatives of such
Party to attend meetings of the Joint Steering Committee. 

        1A.3    Meetings.    During the Research Term, the Joint Steering
Committee shall meet at least twice per calendar year, or more frequently as the Parties deem appropriate, on such dates, and at such places and times, as provided herein or as the Parties shall
agree, provided, however, that (i) the first meeting shall be held within 30 days of the Effective Date and (ii) the Joint Steering Committee and the Parties shall use best
efforts to draft, review, and approve the initial Work Plan and Budget as soon as reasonably practicable following the Effective Date. Meetings of the Joint Steering Committee shall 

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alternate
between the offices of the Parties or their respective Affiliates, or such other place as the Parties may agree. The members of the Joint Steering Committee also may convene or be polled or
consulted from time to time by means of telecommunications, video conferences, electronic mail or correspondence, as deemed necessary or appropriate, provided that the Parties hold at least one
face-to-face meeting each year. Each Party shall bear all costs and expenses relating to its members' attendance at meetings of the Joint Steering Committee. 

        1A.4    Decision-Making.    The Joint Steering Committee shall use
good faith efforts to operate and make decisions by consensus, provided that in the event the Joint Steering Committee is unable to reach consensus regarding any matter before the Joint Steering
Committee within a reasonable period of time not to exceed ten (10) business days, Cempra shall have the tie-breaking vote to resolve such deadlock and determine the Joint Steering
Committee's final decision regarding such matter, including but not limited to approval of any Work Plan and Budget, or any changes thereto, consistent with the parameters described below, provided
that no Work Plan or Budget shall be effective without the written agreement of (i) Optimer with respect to any obligations of Optimer thereunder (such agreement not to be unreasonably
withheld) and (ii) Cempra with respect to any responsibilities of Cempra thereunder (such agreement not to be unreasonably withheld). Each party shall indicate in writing within five
(5) business days of approval by the Joint Steering Committee whether or not it agrees to its proposed obligations or responsibilities, and, if not agreeing to its proposed obligations or
responsibilities, provide its reasonable objections thereto. In the absence of such written notice within such five (5) business day period, a party shall be deemed to have rejected its
proposed obligations or responsibilities, and, in the event Optimer rejects its proposed obligations or responsibilities (whether by written notice or the absence thereof), Cempra shall be free to
pursue alternative solutions therefor. 

2.    MANAGEMENT OF THE RESEARCH PROGRAM    

        2.1    General.    The general purpose of the Collaboration described
in Sections 2 and 3 of this Agreement is to synthesize, develop and commercialize Macrolide Antibiotics for sale as Cempra Products. If and as determined by the Joint Steering Committee,
Optimer shall synthesize Macrolide Antibiotics and conduct preliminary research and biological testing on such Macrolide Antibiotics according to a Work Plan and Budget that has been developed and
approved by the Joint Steering Committee and agreed upon by Optimer and Cempra (such agreement not to be unreasonably withheld). Each party shall indicate in writing within five (5) business
days of approval by the Joint Steering Committee whether or not it agrees to the Work Plan or Budget approved by the Joint Steering Committee and, if not agreeing thereto, provide its reasonable
objections thereto. In the absence of such written notice within such five (5) business day period, a party shall be deemed to have agreed to such Work Plan and Budget. Cempra shall, as
determined by the Joint Steering Committee, conduct (or have conducted by Third Parties) preclinical and animal testing on such Macrolide Antibiotics synthesized by Optimer. Based on the
results of such research, the Joint Steering Committee may designate certain Macrolide Antibiotics as Test Products for preclinical testing and further development by Cempra. Cempra shall be solely
responsible, at its expense, for animal testing, preclinical and clinical development of such Test Products, including as may be provided for in a Work Plan and Budget approved by the Joint Steering
Committee and agreed upon (i) by Optimer with respect to Optimer's obligations thereunder (such agreement not to be unreasonably withheld) and (ii) Cempra with respect to Cempra
responsibilities thereunder. Each party shall indicate in writing within five (5) business days of approval by the Joint Steering Committee whether or not it agrees to its proposed obligations
or responsibilities, and, if not agreeing to such obligations or responsibilities, provide its reasonable objections thereto. In the absence of such written notice within such five (5) business
day period, a party shall be deemed to have rejected its proposed obligations or responsibilities, and in the event Optimer rejects its proposed obligations or responsibilities (whether by written
notice or the absence thereof), Cempra shall be free to pursue alternative solutions therefor. For so long as Cempra retains its license hereunder, and except as provided for performance by 

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Optimer
under any Work Plan and Budget, Cempra shall be responsible for the research, Development, manufacturing, marketing and Commercialization of Cempra Products, subject only to the terms and
conditions of this Agreement, including without limitation the payments owed to Optimer for such Cempra Products as set forth in Article 6. 

        2.2    Information Exchange.    During the Research Term, Optimer and
Cempra shall keep the Joint Steering Committee fully and regularly informed of their activities (and the activities of their Affiliates and/or sublicensees) in connection with their conduct of
the Research Program and the Development and Commercialization of Test Products and Cempra Products, and shall diligently respond to any other reasonable requests by the Joint Steering Committee or
the other Party for information. Each Party will provide the Joint Steering Committee (during the Research Term) and the other Party (during the entire term of this Agreement) with formal written
progress reports of its activities under this Agreement, no less than twice per year. 

        2.3    Independence.    Subject to the terms of this Agreement and any
applicable Work Order and Budget, the activities and resources of each Party shall be managed by such Party, acting independently and in its individual capacity. The relationship between Optimer and
Cempra is that of independent contractors and neither Party shall have the power to bind or obligate the other Party in any manner, other than as is expressly set forth in this Agreement. 

3.    CONDUCT OF THE RESEARCH PROGRAM    

        3.1    Work Plan and Budget.    The Research Program shall be carried
out by Optimer and Cempra according to a written work plan setting forth the obligations of Optimer and responsibilities of Cempra (the "Work
Plan") and budget providing for Cempra's funding of Optimer's obligations thereunder (the "Budget"). The Work Plan shall
set forth in reasonable detail the obligations of Optimer and responsibilities of Cempra with respect to the Research Program, including the identity and number of Macrolide Antibiotics that Optimer
shall endeavor to synthesize and formulate for animal testing, and shall include the desired quantities of such Macrolide Antibiotics, timeframe for delivery, technical specifications
(the "Specifications"), and the Budget shall set forth the budget for such synthesis and formulation work by Optimer. The Joint Steering
Committee shall develop an initial Work Plan and Budget and shall submit such plan to Optimer and Cempra for review and approval, such approval not to be unreasonably withheld, within thirty
(30) days following the execution of this Agreement. In the absence of a party's written approval of or reasonable objection to the Work Plan and Budget within five (5) business days of
its submission to the parties by the Joint Steering Committee, a party shall be deemed to have agreed to such Work Plan and Budget. The Work Plan and Budget may be amended from time to time by the
Joint Steering Committee during the Research Term, based upon the data obtained in the Research Program or from Cempra's independent activities, provided such amendments do not violate or contradict
any provision of this Agreement. In the event of an inconsistency or disagreement between the Work Plan and Budget and this Agreement, the terms of this Agreement shall prevail. 

        3.2    Work Performed to Date.    The Parties acknowledge that initial
research and Macrolide Antibiotics synthesis activities have been conducted by the Parties pursuant to the Letter Agreement (the "Initial
Research"). All Initial Research, including any Macrolide Antibiotics, Information, inventions, know-how, data, information, or other intellectual property rights
created pursuant to the Initial Research, is deemed included within the scope of this Agreement. No amounts shall be due Optimer by Cempra for the conduct of the Initial Research. 

        3.3    Synthesis of Macrolide Antibiotics and Biological
Testing.    The Joint Steering Committee shall, during the Research Term, determine the Macrolide Antibiotics designated for synthesis and Development under this
Agreement, and Optimer shall provide its advice and comment with respect thereto. The Joint Steering Committee shall determine which Macrolide Antibiotics will be the subject of synthesis and
Development as part of Optimer's performance under the Research Program, and 

10

 

Optimer
shall provide its advice and comment with respect thereto, provided that Optimer shall have no obligation to perform such synthesis and Development without its consent (such consent not to be
unreasonably withheld). Optimer shall indicate in writing within five (5) business days of approval by the Joint Steering Committee whether or not it consents, and, if not consenting, provide
its reasonable objections to such obligations. In the absence of such written consent or reasonable objection within such five (5) business day period, Optimer shall be deemed to have rejected
such obligations and Cempra shall be free to seek alternative solutions therefor. The Joint Steering Committee shall, during the Research Term, designate the initial number of Macrolide Antibiotics
for synthesis under this Agreement, provided Optimer shall provide its advice and comment with respect thereto. Optimer shall, if and as included in the Work Plan and Budget, use Diligent Efforts to
synthesize Macrolide Antibiotics that have been designated by the Joint Steering Committee for synthesis, to conduct biological testing on such Macrolide Antibiotics, and to provide such Macrolide
Antibiotics in reasonable quantities to Cempra as determined by the Joint Steering Committee. If and as included in the Work Plan and Budget, Optimer shall use Diligent Efforts to synthesize and
conduct biological testing with respect to each Macrolide Antibiotic according to applicable Specifications for such Macrolide Antibiotics, and to produce and provide to Cempra a sufficient quantity
of each Macrolide Antibiotic to allow Cempra to conduct further Development of such Macrolide Antibiotics. Optimer shall use Diligent Efforts to provide additional quantities of each Macrolide
Antibiotics to Cempra at Cempra's reasonable request on an as needed basis. The reasonable, documented direct expense of manufacturing additional quantities of Macrolide Antibiotics will be paid for
by Cempra as set forth in the Work Plan and Budget. 

        3.4    Preclinical Testing and Human Clinical Testing.    Cempra may
perform, in its sole discretion and at its own expense, after, during the Research Term, providing reasonable opportunity for advice and comment by the Joint Steering Committee, preclinical testing on
Macrolide Antibiotics that have been synthesized by Optimer or any other Cempra Products of Cempra's choosing. Based on the results of any such preclinical testing, the Joint Steering Committee may,
subject to the advice and comment of Cempra and Optimer, determine whether additional Macrolide Antibiotics should be synthesized or developed by Optimer for preclinical testing, or whether any
existing Macrolide Antibiotics should be reformulated by Optimer (or a Third Party) for further testing. The Joint Steering Committee may, subject to Optimer's and Cempra's approval (such
approval not to be unreasonably withheld), amend or revise the applicable Work Plan and Budget accordingly to allow for such additional synthesis or reformulation activities. Each party shall indicate
in writing within five (5) business days of approval by the Joint Steering Committee whether or not it approves of such amendment or revision, as applicable, and, if not approving thereof,
provide its reasonable objections thereto. In the absence of such a written response from a particular party within such five (5) business day period, a party shall be deemed to have rejected
such amendment or revision to the extent it proposes additional obligations or responsibilities for the objecting party, and, in the event Optimer rejects its proposed obligations or responsibilities
(whether by written notice or the absence thereof), Cempra shall be free to pursue independent solutions with respect to the subject matter of the rejected amendment or revision. Cempra shall, after,
during the Research Term, providing reasonable opportunity for advice and comment by the Joint Steering Committee, have the right to designate one or more of such Macrolide Antibiotics as Test
Products for human clinical testing. In the event that Cempra enrolls a patient for human clinical testing of any Macrolide Antibiotics prior to formal designation of such Macrolide Antibiotics as a
Test Product, such Macrolide Antibiotics shall be deemed to have been designated as a Test Product upon enrollment of the first such patient. If a Test Product does not achieve desirable results
during Phase 1 Trials, then, if and as requested by the Joint Steering Committee, subject to Optimer's consent (such consent not to be unreasonably withheld), Optimer shall use Diligent Efforts
to reformulate such Test Product according to specifications established by the Joint Steering Committee. Any such reformulation activities shall be reflected in a revised Work Plan and Budget to be
developed and approved by the Joint Steering Committee, negotiated in good faith, and agreed 

11

 

upon
by the Parties (such agreement not to be unreasonably withheld), and the reasonable, documented, direct costs incurred by Optimer for such reformulation and related additional testing of a Test
Product by Optimer shall be borne by Cempra pursuant to such Budget. Each party shall indicate in writing within five (5) business days of approval by the Joint Steering Committee whether or
not it agrees to such revised Work Plan and Budget, and, if not agreeing to its proposed additional obligations or responsibilities contained therein, provide its reasonable objections thereto. In the
absence of providing such written notice within such five (5) business day period, a party shall be deemed to have rejected its proposed obligations or responsibilities, and, in the event
Optimer rejects its proposed obligations or responsibilities (whether by written notice or the absence thereof), Cempra shall be free to seek alternative solutions therefor. In the event that Cempra
enrolls a patient in a Phase 2 Trial or in a Phase 3 Trial, or obtains Regulatory Approval, for any Macrolide Antibiotics or Test Product prior to formal designation of such
Macrolide Antibiotics or Test Product as a Cempra Product, such Macrolide Antibiotics or Test Product shall be deemed to have been designated as a Cempra Product upon the first such event to occur
with respect to such Macrolide Antibiotics or Test Product. 

        3.5    Pre-Clinical and Clinical Supply.    As may be
provided in any Work Plan and Budget established by the Joint Steering Committee and agreed upon by Optimer, Optimer shall use Diligent
Efforts in accordance with such Work Plan and Budget to produce, or have produced, a sufficient quantity of each Test Product to enable Cempra to conduct preclinical testing of such Test Products, and
to cooperate with Cempra in preparing formulations, conducting feasibility studies, and facilitating such testing. Optimer shall not have any obligation or responsibility for providing clinical
supplies of Test Products or Cempra Products. 

        3.6    Research and Supply Costs.    Cempra shall reimburse Optimer
for Optimer's reasonable, documented internal costs associated with Optimer's work under the Work Plan and Budget, which shall equal the pro-rated cost of full-time equivalent
employees to the extent used by Optimer in performing its portion of the Research Program. Such cost shall (1) be commercially reasonable based on the applicable employees' role in performing
Optimer's portion of the Research Program, job title and responsibilities with Optimer, training, education, and expertise, which shall, in each case, be reasonably appropriate for the tasks performed
thereby, and (2) not exceed US$[***] on an annual basis in any event. Cempra shall reimburse Optimer for the purchasing of key intermediates from Third Parties at
Optimer's cost, which cost shall be commercially reasonable and included in the Budget. Cempra shall also reimburse Optimer for commercially reasonable and documented external
out-of-pocket expenses consistent with the Work Plan and Budget that Optimer incurs for performing such work, including without limitation commercially reasonable and
documented payments to any Third Party manufacturer for production of Macrolide Antibiotics, Test Products and/or Cempra Products. At the end of each calendar quarter, Optimer shall submit to Cempra
an invoice that sets forth in reasonable detail the internal costs and external expenses Optimer has incurred in performing its obligations under the Work Plan and Budget. Cempra shall remit payment
to Optimer within thirty (30) days following Cempra's receipt of such invoice. Any disputes arising between the Parties related to the amounts invoiced under this Section 3.6 shall be
resolved in accordance with Article 12. Notwithstanding anything to the contrary, (i) Cempra shall not be obligated to pay Optimer any amounts with respect to Optimer's performance of
its obligations under the Research Program except as specifically described in any Budgets established by the Joint Steering Committee, (ii) Optimer shall not incur any Third Party costs in
performing under the Research Program, and Cempra shall not be responsible for the reimbursement of any such Third Party costs, except as approved in advance by the Joint Steering Committee, and
(iii) Cempra shall not be obligated to reimburse any costs of Optimer incurred in performing its obligations under the Research Program to the extent such costs are covered by any grant funding
provided to Optimer (including but not limited to any SBIR or other government grants). 

12

 

        3.7    Conduct of Research.    The Parties shall use Diligent Efforts
to conduct their tasks and responsibilities under the Work Plan and Budget throughout the Research Program. In addition, the Parties shall conduct their tasks and responsibilities under the Research
Program in compliance in all material respects with the requirements of applicable laws, rules and regulations and all applicable GLP to attempt to achieve their objectives consistent with industry
standards. Optimer shall use commercially reasonable efforts to (i) perform in accordance with, maintain, and obtain any awarded, active, or future grants (including but not limited to any SBIR
or other government grants) concerning research or development related to the research and development of Macrolide Antibiotics, Test Products, and/or Cempra Products (collectively, such grants,
"Subject Grants"), (ii) ensure payment and receipt of all funds to be provided to Optimer under Subject Grants to the extent covering any of Optimer's costs of performing of Optimer's portion
of the Research Program, and (iii) ensure that (a) all Optimer
Improvements, Optimer Know-How, and results generated, in each case, under the Subject Grants, and all intellectual property rights appurtenant to the foregoing (including but not limited
to Optimer Patents) shall be owned by Optimer and included in the licenses granted to Cempra hereunder, subject to any nonexclusive rights the United States government may have in any of the
foregoing, by operation of law pursuant to the terms of such Subject Grants. 

        3.8    Acceptance.    If,
as set forth in the Work Plan, Cempra has responsibility for performing quality control and/or quality assurance testing on Macrolide Antibiotics and/or Test Products supplied by Optimer, Cempra shall
have thirty (30) business days following its receipt of a shipment to confirm that such shipment meets the applicable Specifications. If, as set forth in the Work Plan, Optimer has
responsibility for performing quality control and/or quality assurance testing on Macrolide Antibiotics and/or Test Products supplied by Optimer, Cempra shall be deemed to have accepted any delivery
of Macrolide Antibiotics and/or Test Products supplied by Optimer unless Cempra gives Optimer written notice of its rejection within fifteen (15) business days of delivery, unless any defect in
the Macrolide Antibiotics and/or Test Products could not have been identified by reasonable visual examination, in which event Cempra shall not be deemed to have accepted such Macrolide Antibiotics
and/or Test Products until fifteen (15) business days after the date when such defect could first have been reasonably identified by Cempra. If Cempra reasonably rejects in whole or in part any
nonconforming shipment at any time following its receipt thereof, Cempra shall provide Optimer written notice of such rejection within the applicable time period described above. If nonconforming
Macrolide Antibiotics or Test Products are delivered to Cempra by Optimer in the course of the Research Program, Optimer shall, if and as elected by Cempra in its sole discretion (i) use
commercially reasonable efforts to replace in a timely manner the nonconforming Macrolide Antibiotics or Test Products at no additional cost to Cempra or (ii) refund to Cempra any amounts paid
to Optimer with respect to the manufacture or supply of such Macrolide Antibiotics or Test Products. 

4.    DEVELOPMENT AND COMMERCIALIZATION    

        4.1    Development Plan;
Reports.    The Development of Cempra Products shall be governed by a development plan developed by Cempra, in consultation with the Joint Steering Committee, subject
to amendment at any time by Cempra, that describes the proposed overall program of Development (the "Development Plan"). Cempra shall engage, at its sole expense, a Scientific Advisory Board,
which shall, during the Research Term, include one representative of Optimer, initially to be Yoshi Ichikawa, Ph.D., to review and comment on the Development Plan. During the Research Term, Optimer
and the Joint Steering Committee shall have the right to comment and make suggestions with respect to the Development Plan; provided, however, that Cempra shall have the sole right and responsibility
for determining the Development Plan for Cempra Products. Each Party shall conduct its Development of Products in compliance in all material aspects with the requirements under all applicable laws,
rules and regulations, including without limitation applicable GLP, GCP and GMP. Each Party shall keep the other Party and, during the Research Term, the Joint Steering Committee regularly informed on
a semiannual basis via summary updates with respect to its material Development and Commercialization 

13

 

activities
and those of its Affiliates and Third Party sublicensees. Such reports shall be the Confidential Information of a Party and subject to applicable provisions set forth in Article 8. 

        4.2    Regulatory Matters.    Cempra shall have control of and be
responsible for all regulatory applications, filings and communications with regulatory authorities regarding Cempra Products, including obtaining Regulatory Approval of Cempra Products, in any
jurisdiction in the Territory. Cempra shall keep Optimer regularly informed of its efforts and progress with respect to regulatory matters and approvals on a semiannual basis. Cempra shall own all the
Regulatory Filings it makes and Regulatory Approvals it obtains. Optimer shall have the right of access to such regulatory documents and material for its use in obtaining Regulatory Approval in ASEAN
Countries (subject to any payment obligations under Sections 6.6 and 6.7). Optimer shall cooperate with Cempra in all such regulatory efforts as reasonably requested by Cempra and
provide all reasonable assistance to Cempra. If and as requested by Cempra, Optimer shall be responsible, at the expense of Cempra, which expense shall be reasonable, documented, and agreed upon in
advance by the parties, for preparing and providing to Cempra in a timely manner all documents and submissions that relate directly to the manufacturing of Cempra Product, as reasonably required for
Regulatory Filings and Regulatory Approval of the Cempra Product in the Territory, including the CMC of any IND or NDA in electronic format, for filing by Cempra. 

        4.3    Manufacture and Supply.    With respect to the Territory, and
except as may otherwise be specified in the Work Plan and Budget, Section 3.5, or any separate clinical supply agreement entered into by the Parties, Cempra shall, as between the Parties, be
responsible for the manufacture of clinical materials for each Cempra Product, and for the commercial supply of each Cempra Product, and for all costs associated therewith. Cempra shall use Diligent
Efforts to make necessary Regulatory Filings to obtain, or cause a Third Party manufacturer to obtain, Regulatory Approval in the Territory for the manufacture of Cempra Products. 

        4.4    Development and Commercialization Costs.    Cempra shall be
responsible for all costs associated with its Development and Commercialization of the Cempra Products, including the manufacture, marketing and commercialization of such Cempra Products in the Field
and in the Territory, provided that,
notwithstanding the foregoing, Cempra's only obligations to Optimer with respect to any such costs shall solely be as provided for in Section 3 and 4.2, or as otherwise agreed to by the
parties in writing. 

        4.5    Third Party Commercialization.    Subject to the terms and
conditions set forth in Section 5.2, Cempra may utilize, at its discretion, Third Party contractors, distributors, marketing organizations, agents or sublicensees to research, develop,
manufacture, supply, promote, market, distribute, and/or sell Cempra Products in one or more countries or jurisdictions in the Territory. 

        4.6    Pricing.    Cempra shall be solely responsible for pricing and
other terms of sale for Cempra Products. 

        4.7    Diligent Efforts; Decision Not to Develop.    

        (a)   Cempra
shall, itself and/or through its Affiliates and Third Party sublicensees, use Diligent Efforts to Develop and Commercialize Cempra Products in the Territory. In
the event that Cempra makes a determination not to Develop and Commercialize at least one Cempra Product hereunder, Cempra shall promptly notify Optimer in writing of such determination in writing. If
Cempra (itself or through its Affiliates or Third Party sublicensees) does not use Diligent Efforts as set forth in this Section 4.7(a), or if Cempra makes a determination not to further
Develop and Commercialize at least one Cempra Product hereunder, then Optimer may terminate this Agreement in accordance with Section 9.3(a) below; provided, however, that if Cempra has
notified Optimer in writing of a determination not to Develop and Commercialize at least one Cempra Product, then the cure period set forth in Section 9.3(a) shall not apply. 

14

 

        (b)   Optimer
shall, itself and/or through its Affiliates and Third Party sublicensees, use Diligent Efforts to develop and commercialize Products in ASEAN Countries. In the
event that Optimer makes a determination not to Develop and Commercialize at least one Product hereunder in ASEAN Countries, Optimer shall promptly notify Cempra in writing of such determination in
writing. If Optimer (itself or through its Affiliates or Third Party sublicensees) does not use Diligent Efforts as set forth in this Section 4.7(b), or if Optimer makes a determination not to
further Develop and Commercialize at least one Product in ASEAN Countries hereunder, then Cempra may terminate this Agreement in accordance with Section 9.3(a) below; provided, however, that if
Optimer has notified Cempra in writing of a determination not to Develop and Commercialize at least one Product in ASEAN Countries, then the cure period set forth in Section 9.3(a) shall
not apply. 

5.    LICENSES AND RELATED RIGHTS    

        5.1    License to Cempra.    Optimer hereby grants to Cempra and its
Affiliates an exclusive license, with the right to sublicense as set forth in Section 5.2, under the Optimer Technology and the Optimer Improvements to make, have made, use, sell, offer for
sale and import Macrolide Antibiotics, Test Products, and Cempra Products in the Field in the Territory. It is understood and agreed that Optimer retains the right under the Optimer Technology to
conduct activities allocated to Optimer in the Research Program. 

        5.2    Cempra Sublicensing.    Cempra and its Affiliates shall have
the right to sublicense their rights under Section 5.1 to one or more Third Parties. Cempra shall promptly provide Optimer a written copy of each such sublicense (and each
amendment thereto, if any), and in no event more than ten (10) days following its execution, provided that Cempra may redact any portions of such sublicenses (or amendments) disclosing
sublicensees' proprietary information, technology, or research and development plans as reasonably necessary to comply with any confidentiality provisions of such sublicense. Each sublicense shall be
consistent with the terms and conditions of this Agreement. For purposes of this Agreement, a Third Party to whom Cempra or its Affiliate grants exclusive rights to market one or more Cempra Products
in a given territory shall be deemed a "sublicensee" of Cempra hereunder for such territory. 

        5.3    [***] Intellectual Property.    If
Optimer licenses any rights to any Macrolide Antibiotics from [***] or any affiliate thereof during the term of this Agreement, it shall provide prompt written notice thereof
to Cempra, identifying such licensed intellectual property, and, if and as elected by Cempra in writing its sole discretion, (i) Patents to which Optimer obtains rights under such a license
shall be deemed included in Optimer Patents for purposes of this Agreement and (ii) Know-How to which Optimer obtains rights under such a license shall be deemed include in Optimer
Know-How. 

        5.4    Optimer Rights in ASEAN Countries.    Cempra hereby grants to
Optimer and its Affiliates an exclusive license, with the right to sublicense as set forth in Section 5.5, in the Field under Cempra Patents and Cempra Know-How to make, have made,
use, sell, offer for sale and import Optimer Products in ASEAN Countries, which license shall include a right of reference to all Regulatory Filings, Regulatory Approvals, and supporting data and
documentation of Cempra with respect to Cempra Products. 

        5.5    Optimer Sublicensing.    Optimer and its Affiliates shall have
the right to sublicense their rights under Section 5.4 to one or more Third Parties. Optimer shall promptly provide Cempra a written copy of each such sublicense (and each
amendment thereto, if any), and in no event more than ten (10) days following its execution, provided that Optimer may redact any portions of such sublicenses (or amendments) disclosing
sublicensees' proprietary information, technology, or research and development plans as reasonably necessary to comply with any confidentiality provisions of such sublicense. Each sublicense shall be
consistent with the terms and conditions of this Agreement. For purposes of this Agreement, a Third Party to whom Optimer or its Affiliate grants exclusive rights to 

15

 

market
one or more Optimer Products in a given territory shall be deemed a "sublicensee" of Optimer hereunder for such territory 

        5.6    Bankruptcy.    All rights and licenses granted under or
pursuant to any section of this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to "intellectual
property" as defined under Section 101(35A) of the U.S. Bankruptcy Code. The Parties shall retain and may fully exercise all of their respective rights and elections under the
U.S. Bankruptcy Code. The Parties agree that a Party that is a licensee of such rights under this Agreement shall retain and may fully exercise all of its rights and elections under the
U.S. Bankruptcy Code, and that upon commencement of a bankruptcy proceeding by or against the licensing Party (such Party, the "Involved Party")
under the U.S. Bankruptcy Code, the other Party (such Party, the "Noninvolved Party") shall be entitled to a complete duplicate of or complete
access to (as such Noninvolved Party deems appropriate), any such intellectual property and all embodiments of such intellectual property, provided the Noninvolved Party continues to fulfill
its payment or royalty obligations as specified herein in full. Such intellectual property and all embodiments thereof shall be promptly delivered to the Noninvolved Party (a) upon any such
commencement of a bankruptcy proceeding upon written request therefore by the Noninvolved Party, unless the Involved Party elects to continue to perform all of its obligations under this Agreement or
(b) if not delivered under (a) above, upon the rejection of this Agreement by or on behalf of the Involved Party upon written request therefor by the Noninvolved Party. The foregoing is
without prejudice to any rights the Noninvolved Party may have arising under the U.S. Bankruptcy Code or other applicable law. 

        5.7    Disclosure of Information.    Upon execution of this Agreement
and thereafter during the term hereof, each party shall disclose to the other party, in confidence under the terms of Article 8 hereof, (a) all relevant Information as shall become
available to it relating to the Macrolide Antibiotics, Test Products and Cempra Products, and (b) all relevant Information as shall become available to it relating to the safety and efficacy of
each Macrolide Antibiotic, Test Product, and Cempra Product to the extent necessary or useful to develop or manufacture a Cempra Product. Optimer will use reasonable efforts to disclose to Cempra or,
if and as requested by Cempra, to the FDA all relevant Information in its possession required for Cempra to register for sale or obtain approval for sale of each Cempra Product. 

        5.8    No Implied Licenses.    Other than those rights and licenses
expressly granted herein, no other rights or licenses are granted or shall be deemed granted under this Agreement by either Party. 

6.    FINANCIAL TERMS    

        6.1    Upfront Payment.    Cempra shall issue Optimer
[***] [***] [***] shares of Cempra common stock ([***]% of total number of outstanding shares as
determined on a fully-diluted basis as of the Effective Date), within thirty (30) after the Effective Date of this Agreement. The Cempra common stock issued to Optimer pursuant to this
Section 6.1 shall not be subject to dilution until after Cempra closes on an Equity Investment (as defined below). Upon closing of an Equity Investment, Cempra shall issue Optimer
additional shares of Cempra common stock sufficient to ensure that the total number of shares of Cempra common stock held by Optimer immediately following such Equity 

16

 

Investment
equals the percentage of Cempra's total number of outstanding shares (as calculated on a fully-diluted basis immediately following the Equity Investment) noted below: 

	Gross Proceeds to Cempra in Equity Financing
	 	Percentage of Cempra Common Stock to be Held by Optimer

	$[***] to $[***]	 	[***]%
	
 $[***] to $[***]	
 	

[***]%
	
 $[***] to $[***]	
 	

[***]%
	
 $[***] to $[***]	
 	

[***]%
	
 $[***] or more	
 	

[***]%

Following
the first such issuance of additional shares, all shares issued to Optimer will be subject to dilution on a pari passu basis with the
Cempra common stock held by other holders of Cempra common stock and Optimer shall not be entitled to any further shares of stock under this Section 6.1. For purposes of this Agreement,
an "Equity Investment" shall mean Cempra's issuance and sale of equity securities to venture capital, institutional, corporate, or private investors resulting in aggregate gross proceeds to Cempra of
at least [***] [***]. The issuances of stock to Optimer under this Section 6.1 shall be done pursuant to separate Subscription Agreements, a form
of which is attached hereto as Schedule 6.1(1), and the Cempra common stock held by Optimer shall be subject to a shareholders agreement, which
shall initially be in the form of set forth at Schedule 6.1(2). Optimer agrees to enter into reasonable or customary agreements required by any
future equity investors regarding subjecting Optimer's shares of Cempra common stock to rights of first refusal and co-sale, such rights to terminate on an initial public offering of
Cempra stock pursuant to a registration statement filed pursuant to the Securities Act of 1933, as amended. 

        6.2    Milestone Payments to Optimer.    

        (a)   Cempra shall pay to Optimer a milestone payment (the "[***]
Milestone Payment") in the amount of $[***] upon Cempra's, its Affiliate's, or their sublicensee's [***]
(the "[***] Milestone"), and the [***] Milestone Payment shall be payable in cash or
Cempra capital stock, as further described below. Cempra shall notify Optimer within thirty (30) days of its determination that a [***] Milestone has occurred. Optimer
shall indicate in writing, within ten (10) business days of such notice from Cempra, whether it elects the [***] Milestone Payment to be paid in cash or shares of Cempra
capital stock having a Fair Market Value, as calculated as of the date the [***] Milestone is achieved, equal to the [***] Milestone Payment; in the
absence of such election within such ten (10) business day period, Cempra shall be entitled to make such election in its sole discretion. The [***] Milestone Payment
shall be paid (or, if to be paid in Cempra capital stock, such stock shall be issued) no later than twenty (20) days after the earlier of (i) the date on which Optimer provides its
written election, as described above, or (ii) the expiration of the ten (10) business day period referenced above. Only one [***] Milestone Payment shall be
payable by Cempra under this Agreement, regardless of the number of Cempra Products or indications therefor developed by Cempra, its Affiliates, or their sublicensees under this Agreement. 

        (b)   Cempra shall pay to Optimer a milestone payment (each, a "[***] Milestone
Payment") in the amount of $[***] upon Cempra's, its Affiliate's, or their sublicensee's completion of the first [***] Trial of
each Cempra Product resulting in data reasonably sufficient to support the conduct of a [***] Trial with respect to such Cempra Product
(the "[***] Milestone"), and the initial [***] Milestone Payment shall be payable in cash
or Cempra capital stock, as further described below. Cempra shall notify Optimer within thirty (30) days of its determination that a [***] Milestone has occurred.
Optimer shall indicate in writing, within ten (10) business days of the initial such notice from Cempra, whether it elects the initial [***] Milestone Payment to be paid
in cash or shares of Cempra capital stock having a Fair Market Value, as calculated as of the date the initial [***] Milestone is achieved, equal to the

17

 

[***]
Milestone Payment; in the absence of such election within such ten (10) business day period, Cempra shall be entitled to make such election in its sole discretion.
The initial [***] Milestone Payment shall be paid (or, if to be paid in Cempra capital stock, such stock shall be issued) no later than twenty (20) days after the
earlier of (i) the date on which Optimer provides its written election, as described above, or (ii) the expiration of the ten (10) business day period referenced above; all other
[***] Milestone Payments shall be paid in immediately available funds, pursuant to Section 6.9 below, no later than thirty (30) days following the achievement of
such [***] Milestone. Only one [***] Milestone Payment shall be payable by Cempra under this Agreement with respect to each Cempra Product, regardless
of the number of indications therefor developed by Cempra, its Affiliates, or their sublicensees under this Agreement. 

        (c)   In addition to the Phase 2 Milestone Payments, in the event that (i) Cempra or an Affiliate thereof
sublicenses rights for Development and Commercialization of a Cempra Product to a Third Party sublicensee and (ii) Cempra, an Affiliate, or such sublicensee completes a Phase 3 Trial of
such Cempra Product resulting in data sufficient to support Regulatory Approval of such Cempra Product (the date upon which both of the foregoing have been achieved, the
"Sublicensee Milestone"), then Cempra shall pay to Optimer (a) the following amounts with respect to each of the first two (2) Cempra
Products to achieve the Sublicensee Milestone: (1) $[***] within thirty (30) days after each such Cempra Product achieves the Sublicensee Milestone
(the "Initial Sublicensee Milestone Payments") and (2) [***] percent ([***]%) of all
Sublicensing Revenue, if any, received in excess of $[***] with respect to each such Cempra Product from the Third Party sublicensee(s) for such Cempra Product (to be
paid to Optimer within thirty (30) days of Cempra's receipt of each applicable payment of Sublicensing Revenue from such sublicensee(s)) ("Trailing Sublicensee Milestone
Payments") and, with respect to each of the subsequent two Cempra Products to achieve the Sublicensee Milestone, (b) $[***] within thirty
(30) days after the date upon which such subsequent Cempra Product achieves the Sublicensee Milestone ("Subsequent Sublicensee Milestone
Payments"; collectively, with all of the foregoing payments described in this subsection (c), the "Sublicensee Milestone
Payments"). Cempra shall notify Optimer within thirty (30) days of each of the first four occurrences of the Sublicensee Milestone. 

        Notwithstanding
anything to the contrary, (i) the Initial Sublicensee Milestone Payment shall only be payable by Cempra [***] under this Agreement,
(ii) an Initial Sublicensee Milestone Payment shall not be due or payable under this Agreement with respect to a particular Cempra Product if the Initial Cempra Milestone Payment
(as defined in Section 6.2(d) below) becomes due for such Cempra Product prior to the date upon which the applicable Initial Sublicensee Milestone Payment becomes due for such Cempra
Product, (iii) the aggregate, combined, total number of Subsequent Sublicensee Milestone Payments and Subsequent Cempra Milestone Payments due under this Agreement shall be
[***] (regardless of the number of Cempra Products or indications therefor), and (iv) a Subsequent Sublicensee Milestone Payment shall not be due or payable under this
Agreement with respect to a particular Cempra Product if the Subsequent Cempra Milestone Payment (as defined in Section 6.2(d) below) becomes due with respect to such Cempra Product
prior to the date upon which the Subsequent Sublicensee Milestone Payment becomes due with respect thereto. Except with respect to Trailing Sublicensee Milestone Payments, and notwithstanding anything
to the contrary in this Agreement, the total possible combined aggregate amount due Optimer under this Section 6.2(c) and Section 6.2(d) below shall not exceed, and Cempra shall not be
obligated to pay Optimer any amounts in excess of, $[***]. 

18

   
        (d)   In addition to the [***] Milestone Payments, if, prior to the occurrence of a Sublicensee
Milestone with respect to a Cempra Product, an [***] is obtained (the "Cempra Milestone"), Cempra shall pay Optimer
(i) $[***] with respect to each of the first [***] Cempra Products to achieve the Cempra Milestone (the "Initial
Cempra Milestone Payments") and (ii) $[***] with respect to each of the subsequent two Cempra Products to achieve the Cempra Milestone
(the "Subsequent Cempra Milestone Payments"; collectively, with the Initial Cempra Milestone Payment, the "Cempra
Milestone Payments") within, in each case, thirty (30) days of the first anniversary of such Cempra Product's achievement of the Cempra Milestone. 

        Notwithstanding
anything to the contrary, each Cempra Milestone Payment (i) shall only be payable by Cempra once under this Agreement with respect to a particular Cempra Product,
regardless of the number of indications therefor, (ii) an Initial Cempra Milestone Payment shall not be due or payable under this Agreement with respect to a particular Cempra Product if an
Initial Sublicensee Milestone Payment (as defined in Section 6.2(c) above) becomes due with respect to such Cempra Product prior to the date upon which the Initial Cempra Milestone
Payment becomes due with respect to such Cempra Product, (iii) the aggregate, combined, total number of Subsequent Sublicensee Milestone Payments and Subsequent Cempra Milestone Payments due
under this Agreement shall be [***] (regardless of the number of Cempra Products or indications therefor), and (iv) a Subsequent Cempra Milestone Payment shall not be
due or payable under this Agreement with respect to a particular Cempra Product if the Subsequent Sublicensee Milestone Payment (as defined in Section 6.2(c) above) becomes due with
respect to such Cempra Product prior to the date upon which the Subsequent Cempra Milestone Payment becomes due with respect thereto. 

        (e)   As a condition to the issuance(s) of Cempra capital stock to Optimer pursuant to Sections 6.2(a)
and/or 6.2(b), as applicable, Optimer shall enter into reasonable or customary agreements (including but not limited to subscription or purchase agreements) substantially consistent with those
entered into by other holders of such shares of stock, including but not limited to investors, as applicable, and which may concern the issuance of such stock, voting provisions, and/or rights of
first refusal and co-sale with respect to such shares. 

        6.3    Royalty Payments to Optimer.    For the duration of the
applicable Royalty Term for each Cempra Product, Cempra shall pay to Optimer the following royalty payments, subject to adjustment as described in Sections 6.4 and 6.5, based on Net
Sales of Cempra Products sold in the Territory by Cempra, its Affiliates, and their Third Party sublicensees: 

          (i)  [***]
percent ([***]%) of Net Sales for the first $[***] of aggregate worldwide Net Sales of
Cempra Products sold by Cempra, its Affiliates, and their Third Party sublicensees in a particular calendar year; and 

         (ii)  [***]
percent ([***]%) of Net Sales for the portion, if any, of aggregate worldwide Net Sales of Cempra Products sold by
Cempra, its Affiliates, and their Third Party sublicensees exceeding $[***] in a particular calendar year. 

        As
an example of the royalty calculation contemplated above, if aggregate worldwide Net Sales of Cempra Products by Cempra, its Affiliates, and their Third Party sublicensees in a
particular calendar year total $[***], Cempra shall owe Optimer $[***] under this Section 6.3
([***]% × $[***] = $[***]; [***]% of
$[***] = $[***]; $[***] + $[***] = $[***]). 

        6.4    Third Party Royalties on Cempra Products.    In the event that: 

        (a)   a
Cempra Product is deemed by a final, unappealable decision of a court of competent jurisdiction to infringe a claim of a patent(s) owned or controlled by a Third Party
in any given country of the Territory, and Cempra, an Affiliate thereof, or any sublicensee thereof licenses such patent(s) in settlement of such claims ("Cempra Infringement
License"), 

19

 

        (b)   Cempra,
an Affiliate thereof, or any sublicensee of either of the foregoing determines that it is commercially, reasonably necessary or advisable to pay royalties to a
Third Party to obtain a license to practice any Third Party's rights in order to manufacture, use, Commercialize or Develop a Cempra Product in any given country of the Territory
("Cempra Necessary License"), or 

        (c)   it
would be useful to obtain a license to practice any Third Party's rights that could improve, enhance, or modify a Cempra Product in any given country of the Territory
("Cempra Improvement License"), as determined reasonably and in good faith by Cempra, an Affiliate thereof, or any sublicense of either of
the foregoing, 

        then
Cempra may deduct any fees, milestones or royalties paid for Cempra Infringement Licenses, Cempra Necessary Licenses and Cempra Improvement Licenses due to such Third Parties
(or such amounts paid by Cempra, its Affiliate, or any sublicensee of either of the foregoing in settlement of such infringement action) (collectively, all of the foregoing,
"Third Party Royalties") from the royalties otherwise due to Optimer with respect to Net Sales; provided, however, that, notwithstanding the foregoing,
the total amount due to Optimer under this Agreement with respect to Net Sales for Cempra Products sold by Cempra and its Affiliates any particular calendar quarter shall not be reduced by more than
[***] percent ([***]%) as a result of any such deduction, and any amounts not deducted in a calendar quarter shall be carried forward for deduction in
the subsequent calendar quarter(s), subject to such [***] percent ([***]%) limitation in each case. 

        6.5    Cempra Compulsory Licenses.    Should a compulsory license be
granted, or be the subject of a possible grant, to a Third Party under the applicable laws of any country in the Territory under the Optimer Patents and/or Optimer Know-How, or to any
Cempra Product, the Party receiving notice thereof or otherwise becoming aware thereof shall promptly notify the other Party thereof, including any material information concerning such compulsory
license, and the applicable royalty rate payable hereunder for sales of Cempra Products in such country will be adjusted to match any lower royalty rate granted to such Third Party for such country
with respect to the sales of such Cempra Products, subject to any adjustments pursuant to Section 6.4 above. 

        6.6    Milestone Payments to Cempra.    For each of the first
[***] Optimer Products to achieve the Optimer Milestone (as defined below), Optimer shall, within two (2) years of the earlier of (i) the
[***] of an Optimer Product in any ASEAN Country by Optimer, an Affiliate thereof, or any sublicensee of either of the foregoing or (ii) [***] of
an Optimer Product in any ASEAN Country, pay Cempra $[***] with respect to such Optimer Product (the first to occur of the foregoing with respect to an Optimer Product,
the "Optimer Milestone"). Such payment shall be due with respect solely to each of the first [***] (2) Optimer Products
to achieve the Optimer Milestone. Optimer shall notify Cempra in writing within thirty days of each occurrence of the Optimer Milestone. 

        6.7    Royalties to Cempra.    For the duration of the applicable
Royalty Term for each Optimer Product, Optimer shall pay to Cempra the following royalty payments based on Net Sales of Optimer Products in ASEAN Countries by Optimer, its Affiliates, and their Third
Party sublicensees: 

        (iii)  [***]
percent ([***]%) of Net Sales for the first $[***] of aggregate worldwide Net Sales of
Optimer Products by Optimer, its Affiliates, and their Third Party sublicensees in a particular calendar year; and 

        (iv)  [***]
percent ([***]%) of Net Sales for the portion, if any, of aggregate worldwide Net Sales of Optimer Products by
Optimer, its Affiliates,
and their Third Party sublicensees exceeding $[***] million in a particular calendar year. 

        As
an example of the royalty calculation contemplated above, if aggregate Net Sales of Optimer Products in a particular calendar year total $[***], Optimer shall
owe Cempra $[***] under this Section 6.7 ([***]% × $[***] =
$[***]; [***]% of $[***] = $[***];
$[***] + $[***] = $[***]). 

20

 

        6.8    Third Party Royalties on Optimer Products.    In the event
that: 

        (a)   a
Optimer Product is deemed by a final, unappealable decision of a court of competent jurisdiction to infringe a claim of a patent(s) owned or controlled by a Third
Party in any given country of the Territory, and Optimer, an Affiliate thereof, or any sublicensee thereof licenses such patent(s) in settlement of such claims ("Optimer
Infringement License"), 

        (b)   Optimer,
an Affiliate thereof, or any sublicensee of either of the foregoing determines that it is commercially, reasonably necessary or advisable to pay royalties to a
Third Party to obtain a license to practice any Third Party's rights in order to manufacture, use, Commercialize or Develop an Optimer Product in any given country of the Territory
("Optimer Necessary License"), or 

        (c)   it
would be useful to obtain a license to practice any Third Party's rights that could improve, enhance, or modify a Optimer Product in any given country of the
Territory ("Optimer Improvement License"), as determined reasonably and in good faith by Optimer, an Affiliate thereof, or any sublicense of either of
the foregoing, 

        then
Optimer may deduct any fees, milestones or royalties paid for Optimer Infringement Licenses, Optimer Necessary Licenses and Optimer Improvement Licenses due to such Third Parties
(or such amounts paid by Optimer, its Affiliate, or any sublicensee of either of the foregoing in settlement of such infringement action) (collectively, all of the foregoing,
"Third Party Royalties") from the royalties otherwise due to Cempra with respect to Net Sales; provided, however, that, notwithstanding the foregoing,
the total amount due to Cempra under this Agreement with respect to Net Sales for Optimer Products sold by Optimer and its Affiliates any particular calendar quarter shall not be reduced by more than
[***] percent
([***]%) as a result of any such deduction, and any amounts not deducted in a calendar quarter shall be carried forward for deduction in the subsequent calendar quarter(s),
subject to such [***] percent ([***]%) limitation in each case. 

        6.9    Optimer Compulsory Licenses.    Should a compulsory license be
granted, or be the subject of a possible grant, to a Third Party under the applicable laws of any country in the Territory under the Cempra Patents and/or Cempra Know-How, or to any
Optimer Product, the Party receiving notice thereof or otherwise becoming aware thereof shall promptly notify the other Party thereof, including any material information concerning such compulsory
license, and the applicable royalty rate payable hereunder for sales of Optimer Products in such country will be adjusted to match any lower royalty rate granted to such Third Party for such country
with respect to the sales of such Optimer Products, subject to any adjustments pursuant to Section 6.8 above. 

        6.10    Payments and Payment Reports.    Except as otherwise provided
herein, all royalties and payments due under this Section 6 shall be paid within ninety (90) days of the end of the relevant calendar quarter for which the applicable Net Sales occur
and/or revenues are received, subject, with respect to Net Sales, as applicable, by Third Party sublicensees, to any longer reporting periods which may be reasonably agreed to by Cempra, Optimer, or
their Affiliates with respect to such sublicensees. Each royalty payment shall be accompanied by a statement stating (as applicable) the number, description, and aggregate Net Sales, by
country, of each Product sold during the relevant calendar quarter by Cempra or Optimer, as applicable, and their respective Affiliates and Third Party sublicensees and detailing the calculation of
royalties due for such calendar quarter, as well as, with respect to Cempra's reporting obligations, an accounting of Sublicense Revenues received in the applicable calendar quarter. 

        6.11    Payment Method.    Except with respect to any milestone
payments due under Sections 6.2 (a) and (b) that are paid in Cempra stock in accordance therewith, all payments due under this Agreement shall be made by bank wire transfer in
immediately available funds to an account 

21

 

designated
by the Party owed such payments. All payments hereunder shall be made in the legal currency of the United States of America. 

        6.12    Taxes.    It is understood and agreed between the Parties that
any payments made under Section 6.1, 6.2, or 6.6 of this Agreement are inclusive of any value added or similar tax imposed upon such payments. In addition, in the event any of the payments made
by either Party (the "Paying Party") pursuant to Article 6 become subject to withholding taxes under the laws of any jurisdiction, such amounts payable or, in the case of stock to be
issued to Optimer pursuant to Sections 6.2(a) or (b), as applicable, shares issuable to the other Party (the "Paid Party") shall be reduced by the amount of taxes deducted and
withheld, and the Paying Party shall pay the amounts of such taxes to the proper Governmental Authority in a timely manner and promptly transmit to the Paid Party an official tax certificate or other
evidence of such tax obligations together with proof of payment from the relevant Governmental Authority of all amounts deducted and withheld sufficient to enable the Paid Party to
claim such payment of taxes. Any such withholding taxes required under applicable law to be paid or withheld shall be an expense of, and borne solely by, the Paid Party. The Paying Party will provide
the Paid Party with reasonable assistance to enable the Paid Party to recover such taxes as permitted by law. 

        6.13    Blocked Currency.    In each country where the local currency
is blocked and cannot be removed from the country under such country's applicable law, royalties accrued in that country shall be paid to a Party in the country in local currency by deposit in a local
bank designated by such Party, unless the Parties otherwise agree. 

        6.14    Sublicenses.    For avoidance of doubt, the Parties agree that
in the event that a Party grants licenses or sublicenses to Third Parties to sell Products, the licensing (or sublicensing) Party shall use commercially reasonable efforts to include in such
licenses or sublicenses an obligation for the licensee or sublicense to account for and report its sales of Products on a basis reasonably sufficient to enable payment of royalties hereunder with
respect to such sales as if such sales of the licensee or sublicensee were Net Sales of the applicable Party. 

        6.15    Foreign Exchange.    Conversion of a Party's Net Sales
recorded in local currencies to U.S. dollars will be performed by such Party in a manner consistent with such Party's normal practices used to prepare its audited financial statements for
external reporting purposes, provided that such practices use a widely accepted source of published exchange rates. Each Party shall notify the other of the conversion method(s) used by it for
such purposes. 

        6.16    Interest.    If either Party fails to make any payment when
due to the other Party under this Agreement, then interest shall accrue on a daily basis at a rate equal to the thirty (30) day U.S. dollar LIBOR rate effective for the date that payment
was due, as published by The Wall Street Journal. The obligation to pay interest on such late payments set forth herein shall not be construed to limit
or restrict a Party's right to terminate this Agreement in accordance with the terms and conditions of Section 9.3. 

        6.17    Records; Audits.    Each Party shall keep or cause to be kept
such records as are required to determine, in a manner consistent with generally accepted accounting principles in the United States, the sums or credits due under this Agreement, including,
but not limited to Net Sales. At the request (and expense) of either Party, the other Party and its Affiliates and sublicensees shall permit an independent certified public accountant appointed
by such Party and reasonably acceptable to the other Party, at reasonable times not more than once a year and upon reasonable notice, to examine only those records as may be necessary to determine,
with respect to any calendar year ending not more than three (3) years prior to such Party's request, the correctness or completeness of any royalty report or payment made under this Agreement.
The Party requesting the audit shall bear the full cost of the performance of any such audit, unless such audit discloses a variance adverse to the Party requesting the audit of more than five percent
(5%) from the amount of the original invoice, report, royalty or 

22

 

payment
calculation, in which case the Party being audited shall bear the reasonable, documented cost of the performance of such audit. Each Party shall promptly pay to the other Party the amount of
any underpayment of royalties revealed by an examination and review. Any overpayment by a Party of royalties or any other amount paid to the other Party revealed by an examination and review shall, in
the overpaying Party's sole discretion, (i) be fully-creditable against future payments under this Agreement or (ii) refunded to the overpaying Party within sixty (60) business
days of its request. 

7.    Intellectual Property    

        7.1    General Principles.    

        (a)   The
Optimer Technology existing as of the Effective Date shall, subject to the rights granted under this Agreement, remain the sole property of Optimer and may be
licensed by Optimer for any purpose that is not inconsistent nor in conflict with this Agreement. 

        (b)   All
right, title, and interest in any and all Know-How or Inventions generated, conceived or reduced to practice by employees, agents or independent
contractors of Optimer or its Affiliates, solely or jointly with employees, agents or independent contractors of Cempra or any Affiliate thereof, in connection with the performance of Optimer's
obligations under this Agreement, or that relate to Cempra Products in any manner, except any such Know-How or Inventions that are generated using grant monies provided by the
United States government to Optimer and which are, therefore, subject to the limitations and requirements of such grants with respect to such intellectual property (collectively, all of the
foregoing, "Optimer Inventions"), and all right, title, and interest in all intellectual property rights appurtenant thereto, shall vest in Cempra,
subject to the terms of the license grant set forth in Article 5 and Optimer's ownership of the Optimer Technology and sole or joint ownership (as applicable) of Optimer
Improvements. Optimer shall notify Cempra promptly in writing and in reasonable detail of any Optimer Inventions. Optimer hereby assigns all right, title, and interest to Optimer Inventions and all
intellectual property rights appurtenant thereto to Cempra, and agrees to take all actions and execute all documents, and to cause its Affiliates, employees, agents, and independent contractors to
execute all documents and take all actions, requested by Cempra to
effect the purposes of the foregoing. Optimer hereby appoints Cempra as it attorney to effect on its behalf any assignment of the Optimer Inventions which Optimer has failed to make to Cempra within
7 days in accordance with the terms of this Section with the right but not the obligation to do any and all acts and things reasonably necessary to effect unconditionally such assignment
including the right for Cempra to execute all deeds, documents or instruments and swear any oaths or declarations in the name of and on behalf of Optimer necessary for such purpose. Cempra's
appointment as attorney under this Section is given to secure Cempra's interest in the Optimer Inventions and intellectual property rights appurtenant thereto and to secure the performance of
Optimer's obligations to assign the Optimer Inventions and intellectual property rights appurtenant thereto in the event of termination and such appointment shall be perpetual and irrevocable,
notwithstanding Optimer entering into liquidation, being wound-up or dissolved or having a receiver, manager, administrator, administrative receiver or similar person appointed over any of
its assets. 

        (c)   Subject
to Section 7.1(d) below, Optimer and Cempra shall each own any inventions conceived solely by its own employees or agents, other than those inventions
that are Optimer Inventions ("Other Sole Inventions"), including but not limited to (i) Know-How, conceived or reduced to practice
during the term of this Agreement or (ii) such inventions generated using grant monies provided by the United States government to Optimer and which are, therefore, subject to the
limitations and requirements of such grants with respect to such intellectual property. Subject to Section 7.1(d) below, Cempra and Optimer shall each own an undivided one-half
interest in any inventions conceived jointly by employees or agents of both Cempra and Optimer, other than those inventions that are Optimer Inventions ("Other Joint
Inventions"), 

23

 

including
but not limited to (i) Know-How conceived or reduced to practice during the term of this Agreement and (ii) such inventions generated using grant monies provided by
the United States government to Optimer and which are, therefore, subject to the limitations and requirements of such grants with respect to such intellectual property. Subject to
Sections 7.1(d), 7.2, and 7.3 below, each Party may use, protect, license and enforce its own Other Sole Inventions in its discretion. The determinations of inventorship, and each
Party's rights and interests with respect to Other Joint Inventions and jointly created Know-How relating to such Other Joint Inventions, shall be the same as provided with respect to
patents under United States law, and in particular, subject in all cases to the provisions of this Agreement, either Party may exploit or grant licenses under such Other Joint Inventions and
jointly created Know-How without a duty of accounting to the other Party. 

        (d)   Notwithstanding
anything to the contrary, the exclusive license granted in Section 5.1 above shall include rights to Optimer Improvements, Optimer's rights in
Other Joint Inventions and Other Sole Inventions, Optimer's rights in all Patents claiming any of the foregoing, and Optimer's rights in all Know-How related to all of the foregoing,
subject to any nonexclusive rights the United States government may have in any of the foregoing, by operation of law pursuant to the terms of any applicable grants. 

        (e)   Notwithstanding
anything to the contrary, the exclusive license granted in Section 5.4 above shall include rights to Cempra's rights in Other Joint Inventions and
Other Sole Inventions, Cempra's rights
in all Patents claiming any of the foregoing, and Cempra's rights in all Know-How related to all of the foregoing. 

        7.2    Patent Prosecution and Maintenance of Optimer
Patents.    Optimer shall be responsible for, and be obligated to the extent it is commercially reasonable to diligently pursue, or to cause Optimer's licensors to
diligently pursue, the preparation, filing, prosecution (including but not limited to, by conducting interferences, oppositions and reexaminations or other similar proceedings), maintenance
(by timely paying all maintenance fees, renewal fees and other applicable fees and costs), and extension of Patents within the Optimer Patents (including but not limited to those claiming
Optimer's Other Sole Inventions). Optimer will regularly advise Cempra of the status of all pending Optimer Patent applications, including any related hearings or other proceedings, and, at Cempra
request, will provide Cempra with copies of all documentation concerning such applications, including all correspondence to and from any Governmental Authority. Optimer shall consult with and obtain
written consent from Cempra prior to abandoning any Optimer Patent, which consent shall not be unreasonably withheld, delayed, or conditioned. Optimer will solicit Cempra's advice and review of such
applications and important prosecution matters related thereto in reasonably sufficient time prior to filing thereof, and will take into account Cempra's reasonable comments related thereto. The costs
of prosecution and maintenance of Optimer Patents shall be borne by Optimer. 

        7.3    Patent Prosecution and Maintenance of Cempra Patents.    Cempra
shall be responsible for, and be obligated to the extent it is commercially reasonable to diligently pursue, or to cause Cempra's licensors to diligently pursue, the preparation, filing, prosecution
(including but not limited to, by conducting interferences, oppositions and reexaminations or other similar proceedings), maintenance (by timely paying all maintenance fees, renewal fees and
other applicable fees and costs), and extension of Patents within the Cempra Patents (including but not limited to those claiming Cempra's Other Sole Inventions). Cempra will regularly advise Optimer
of the status of all pending Cempra Patent applications, including any related hearings or other proceedings, and, at Optimer's request, will provide Optimer with copies of all documentation
concerning such applications, including all correspondence to and from any Governmental Authority. Cempra shall consult with and obtain written consent from Optimer prior to abandoning any Cempra
Patent, which consent shall not be unreasonably withheld, delayed, or conditioned. Cempra will solicit Optimer's advice and review of such applications and important prosecution matters related
thereto in reasonably sufficient time prior to 

24

 

filing
thereof, and will take into account Optimer's reasonable comments related thereto. The costs of prosecution and maintenance of Cempra Patents shall be borne by Cempra. 

        7.4    Patent Prosecution and Maintenance of Patents Claiming Other Joint
Inventions.    Subject to Sections 7.7 and 7.8, for Patents claiming Other Joint Inventions ("Joint Invention
Patents"), Cempra will have, without prejudice to ownership, the first right to prepare, file and prosecute such Patent applications and maintain any resulting Patents;
provided, however, that Cempra may request that Optimer undertake such responsibilities upon written notice to Optimer, and Optimer may agree to do so, in its sole discretion. If Optimer does not
agree to undertake such responsibilities within ten (10) days of such request with respect to any such Patents, Cempra shall not have any further obligations to prosecute or maintain such
Patents. Within nine (9) months after the filing date of a
Patent application in respect of an Other Joint Invention, the Party filing such application will request that the other Party identify those non-priority, non-PCT ("foreign")
countries in which the other Party desires that the filing Party file corresponding Patent applications. Within thirty (30) days after receipt of such request, the other Party will provide to
the filing Party a written list of such foreign countries in which the other Party wishes to effect corresponding foreign patent application filings. The Parties will then attempt to agree on the
particular countries in which such applications will be filed, provided that in the event agreement is not reached, the issue shall be resolved pursuant to Section 12.3
("Designated Foreign Filings"). Thereafter, the filing Party will effect all such Designated Foreign Filings in a timely manner. It is presumed unless
otherwise agreed in writing by the Parties, that a corresponding PCT application will be filed designating all PCT member countries. Should the Party filing the priority application not agree to file
or cause to be filed a Designated Foreign Filing, the other Party will have the right to effect such Designated Foreign Filing. 

        Regardless
of which Party is responsible for preparation, prosecution and maintenance of a Joint Invention Patent, the Parties shall share equally all reasonable, documented costs and
expenses incurred in connection with procuring Joint Invention Patents (including entering national phase in all agreed countries), including application preparation, filing fees, prosecution,
maintenance and all costs associated with reexamination, oppositions and interference proceedings. The filing Party shall invoice the other Party for such costs and expenses, and the other Party will
pay such invoices within thirty (30) days after receipt. 

        7.5    Cooperation.    The Parties agree to cooperate in the
preparation and prosecution of all Joint Invention Patent applications filed under Section 7.3, including obtaining and executing necessary powers of attorney and assignments by the named
inventors, providing relevant technical reports to the filing Party concerning the Other Joint Invention disclosed in such Joint Invention Patent applications, obtaining execution of such other
documents which will be needed in the filing and prosecution of such Joint Invention Patent applications, and, as requested, updating each other regarding the status of such Joint Invention Patent
applications. The Parties will reasonably cooperate to obtain any export licenses that might be required for such activities. 

        7.6    Disclosure.    Each party shall make available to the other
party in confidence all information in its possession necessary or expedient for the filing of Patents arising out of such party's performance under this Agreement in all countries of
the world. 

        7.7    Infringement.    If in the opinion of either Party any issued
Patent contained in the Optimer Patents has been infringed by a Third Party, such Party shall give to the other Party prompt written notice of such alleged infringement. 

        (a)    Optimer Patents.    With respect to any alleged infringement of
any Optimer Patents with respect to the rights granted to Cempra under this Agreement, Cempra shall have the first and primary right, but not the obligation, to, in its sole discretion, to initiate,
prosecute, and control any action or legal proceedings, and/or enter into a settlement, including any declaratory judgment action, on its behalf or in Optimer's name, if necessary, with respect to
such alleged infringement. 

25

 

If,
within [***] months of the notice above, Cempra (i) shall have been unsuccessful in persuading the alleged infringer to desist, (ii) shall not have
brought and shall not be diligently prosecuting an infringement action, or (iii) has not entered into settlement discussions with respect to such infringement, or if Cempra notifies Optimer
that it has decided not to undertake any of the foregoing against any such alleged infringer, then Optimer shall then have the right to bring suit to enforce such Optimer Patents at its own expense.
In any such litigation brought by Cempra, Cempra shall have the right to use and sue in Optimer's name, and Optimer shall cooperate reasonably, as requested by Cempra and at Cempra's expense (which
expense shall be reasonable). 

        (b)    Cempra Patents.    With respect to any alleged infringement of
any Cempra Patents with respect to the rights granted to Optimer under this Agreement, Optimer shall have the first and primary right, but not the obligation, to, in its sole discretion, to initiate,
prosecute, and control any action or legal proceedings, and/or enter into a settlement, including any declaratory judgment action, on its behalf or in Cempra's name, if necessary, with respect to such
alleged infringement. If, within [***] months of the notice above, Optimer (i) shall have been unsuccessful in persuading the alleged infringer to desist,
(ii) shall not have brought and shall not be diligently prosecuting an infringement action, or (iii) has not entered into settlement discussions with respect to such infringement, or if
Optimer notifies Cempra that it has decided not to undertake any of the foregoing against any such alleged infringer, then Cempra shall then have the right to bring suit to enforce such Cempra Patents
at its own expense. In any such litigation brought by Optimer, Optimer shall have the right to use and sue in Cempra's name, and Cempra shall cooperate reasonably, as requested by Optimer and at
Optimer's expense (which expense shall be reasonable). 

        (c)    Procedure.    The Party pursuing or controlling any action
against an alleged infringer pursuant to the foregoing (the "Controlling Party") shall be free to enter into a settlement, consent judgment, or
other voluntary disposition of any such action, provided, however, that (i) the Controlling Party shall consult with the other Party (the "Secondary
Party") prior to entering into any settlement thereof and (ii) any settlement, consent judgment or other voluntary disposition of such actions which
(1) materially limits the scope, validity, or enforceability of any Optimer Patents (if Optimer is the Secondary Party) or Patents Controlled by Cempra (if Cempra is the Secondary
Party), (2) subjects the Secondary Party to any non-indemnified liability or obligation, or (3) admits fault or wrongdoing on the part of Secondary Party must be approved in
writing by Secondary Party, such approval not to be unreasonably withheld. Secondary Party shall provide the Controlling Party notice of its approval or denial of such approval within ten
(10) business days of any request for such approval by the Controlling Party, provided that (i) in the event Secondary Party wishes to deny such approval, such notice shall include a
written description of Secondary Party's reasonable objections to the proposed settlement, consent judgment, or other voluntary disposition and (ii) Secondary Party shall be deemed to have
approved such proposed settlement, consent judgment, or other voluntary disposition in the event it fails to provide such notice within such ten (10) business day period. Any recovery or
damages received by the Controlling Party with respect to the infringement of a Party's rights under this
Agreement shall be used first to reimburse the Parties for unreimbursed reasonable, documented expenses incurred in connection with such action, and the remainder shall be split
[***] ([***]%) to Controlling Party and [***] percent ([***]%) to Secondary Party. Notwithstanding the
foregoing, the Secondary Party, at its expense, shall have the right to be represented by counsel of its choice in any such proceeding. 

        7.8    Infringement of Third Party Rights.    

        (a)   If
a claim is brought by a Third Party alleging patent infringement by Cempra, Optimer, their Affiliates, or their sublicensees with respect to the manufacture, use,
sale, offer for sale or importation of Macrolide Antibiotics, Test Products, Cempra Products, or Optimer Products or any third party 

26

 

challenges
the validity of any claims of any Optimer Patents or Cempra Patents, each Party will give prompt written notice to the other Party of such claim. 

        (b)   As
between the parties to this Agreement, Cempra shall have the first and primary right at its own expense to defend, control the defense of, and/or settle any such
claim against Cempra, its Affiliates, or its sublicensees in the Territory, using counsel of its own choice. Cempra shall be free to enter into a settlement, consent judgment, or other voluntary
disposition of such action, provided that any settlement, consent judgment or other voluntary disposition of such actions which (i) materially limits the scope, validity, or enforceability of
patents included in the Optimer Patents, (ii) subjects Optimer to any nonindemnified liability, or (ii) admits fault or wrongdoing on the part of Optimer must be approved in writing by
Cempra, such approval not being unreasonably withheld. Optimer shall provide Cempra notice of such approval or denial of such approval within ten (10) business days of any request for such
approval by Cempra, provided that (i) in the event Optimer wishes to deny such approval, such notice shall include a written description of Optimer's reasonable objections to the proposed
settlement, consent judgment, or other voluntary disposition and (ii) Optimer shall be deemed to have approved of such proposed settlement, consent judgment, or other voluntary disposition in
the event it fails to provide such notice within such ten (10) business day period. Optimer agrees to cooperate with Cempra in any reasonable manner deemed by Cempra to be necessary in
defending any such action. Cempra shall reimburse Optimer for any out of pocket expenses incurred in providing such assistance. Any recovery or damages received by Cempra in any action or settlement
under this Section 7.7(b) with respect to the rights licensed to Cempra under this Agreement shall be used first to reimburse the Parties for unreimbursed reasonable, documented expenses
incurred in connection with such action, and the remainder shall be split [***] percent ([***]%) to Cempra and [***] percent
([***]%) to Optimer. Notwithstanding the foregoing, either Party, at its expense, shall have the right to be represented by counsel of its choice in any such proceeding
controlled by the other Party. 

        (c)   As
between the parties to this Agreement, Optimer shall have the first and primary right at its own expense to defend, control the defense of, and/or settle any such
claim against Optimer, its Affiliates, or its sublicensees in any ASEAN Countries, using counsel of its own choice. Optimer shall be free to enter into a settlement, consent judgment, or other
voluntary disposition of such action with respect to any ASEAN Countries, provided that any settlement, consent judgment or other voluntary disposition of such actions which (i) materially
limits the scope, validity, or enforceability of any Patents owned or Controlled by Cempra, (ii) subjects Cempra to any nonindemnified liability, or (ii) admits fault or wrongdoing on
the part of Cempra must be approved in writing by Cempra, such approval not being unreasonably withheld. Cempra shall provide Optimer notice of such approval or denial of such approval within ten
(10) business days of any request for such approval by Optimer, provided that (i) in the event Cempra wishes to deny such approval, such notice shall include a written description of
Cempra's reasonable objections to the proposed settlement, consent judgment, or other voluntary disposition and (ii) Cempra shall be deemed to have approved of such proposed settlement, consent
judgment, or other voluntary disposition in the event it fails to provide such notice within such ten (10) business day period. Cempra agrees to cooperate with Optimer in any reasonable manner
deemed by Optimer to be necessary in defending any such action. Optimer shall reimburse Cempra for any out of pocket expenses incurred in providing such assistance. Any recovery or damages received by
Optimer in any action or settlement under this Section 7.7(c) with respect to the rights licensed to Optimer under this Agreement shall be used first to reimburse the Parties for unreimbursed
reasonable, documented expenses incurred in connection with such action, and the remainder shall be split [***] percent ([***]%) to Optimer and
[***] percent ([***]%) to Cempra. Notwithstanding the foregoing, either Party, at its expense, shall have the right to be represented by counsel of its
choice in any such proceeding controlled by the other Party. 

27

 

        7.9    Reimbursement.    Each Party shall invoice the other Party for
any reasonable, documented costs incurred that are to be borne by the other Party pursuant to this Article 7. Each Party shall pay the other Party such amounts within thirty (30) days of
its receipt of any such invoice. 

        7.10    Trademarks.    Cempra may, in its sole discretion, select
trademarks for Cempra Products and shall own all such trademarks world-wide. To the extent Cempra pursues trademarks for Cempra Products, as between the parties, Cempra shall have the sole
responsibility for the filing, prosecution and maintenance of registrations of product trademarks for Cempra Products, at its sole expense. Optimer shall not have any rights to any trademarks of
Cempra under this Agreement; provided that, if it is commercially reasonable to do so, Cempra shall, at Optimer's request, license such trademarks under a separate agreement to Optimer for use in the
ASEAN Countries. Optimer may, in its sole discretion, select trademarks for Optimer Products and shall own all such trademarks world-wide. To the extent Optimer pursues trademarks for
Optimer Products, as between the parties, Optimer shall have the sole responsibility for the filing, prosecution and maintenance of registrations of product trademarks for Optimer Products, at its
sole expense. Cempra shall not have any rights to any trademarks of Optimer under this Agreement; provided that, if it commercially reasonable to do so, Optimer shall, at Cempra's request, license
such trademarks under a separate agreement to Cempra for use in the Territory. 

8.    CONFIDENTIALITY    

        8.1    Treatment of Confidential Information.    The Parties agree
that during the Term, and for a period of five (5) years after the end of the Term, a Party receiving Confidential Information of the other Party will (a) maintain in confidence such
Confidential Information to the same extent such Party maintains its own proprietary industrial information of similar kind and value (but at a minimum each Party shall use commercially
reasonable efforts), (b) not disclose such Confidential Information to any Third Party without prior consent of the other Party, and (c) not use such Confidential Information for any
purpose except those permitted by this Agreement. 

        8.2    Exceptions.    A Party shall not have the obligations set forth
in Section 8.1 with respect to any portion of such Confidential Information that it can show by adequate documentation: 

        (a)   is publicly disclosed by the disclosing Party, either before or after it becomes known to the receiving Party; 

        (b)   was known to the receiving Party, without obligation to keep it confidential, prior to when it was received from the
disclosing Party, as demonstrated by receiving Party's written records; 

        (c)   is subsequently disclosed to the receiving Party without obligation of confidentiality or limitation on use by a Third
Party lawfully in possession thereof without obligation to keep it confidential; 

        (d)   has been published by a Third Party; or 

        (e)   has been independently developed by the receiving Party without the aid, application or use of Confidential Information. 

        8.3    Authorized Disclosure.    Notwithstanding Section 8.1, a
Party may disclose Confidential Information belonging to the other Party to the extent such disclosure is necessary in the following instances: 

        (a)   filing or prosecuting Patents pursuant to Article 7; 

        (b)   Regulatory Filings; 

28

  

        (c)   prosecuting or defending litigation relating to Macrolide Antibiotics, Test Products or Products; 

        (d)   complying with applicable laws and governmental regulations; and 

        (e)   disclosure, in connection with the performance of this Agreement or exercise of the licenses or rights conveyed herein,
to Affiliates, licensees, sublicensees, employees, consultants, or agents of either Party, each of whom prior to disclosure must be bound by substantially similar obligations of confidentiality and
non-use at least equivalent in scope to those set forth in this Article 8. 

        8.4    Terms of the Agreement.    The Parties acknowledge that the
terms of this Agreement shall be treated as Confidential Information of both Parties. Such terms may be disclosed by a Party to individuals or entities covered by 8.3(e) above, each of whom prior to
disclosure must be bound by similar obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Article 8. Disclosure of the terms of this
Agreement (but not other Confidential Information received from the other Party) may also be made, under obligations of confidentiality and non use at least equivalent in scope to those set
forth in this Article 8, to actual or potential bankers, lenders, investors, acquirors, acquisition targets, and strategic partners of either Party. 

        8.5    Publicity.    The public announcement of the execution of this
Agreement is set forth on Schedule 8.5 hereto. Each Party shall be entitled, in its sole discretion, to make public announcements regarding its
Development and Commercialization of Products, subject to the other Party's opportunity to review and comment with respect thereto provided below. In addition, either Party may make a public
statement, including in analyst meetings, concerning the Agreement or the progress of the Test Products or Products where such statement is required by law, applicable stock exchange regulation or
legal proceedings. In connection with any filing described in the foregoing sentence, such Party shall use commercially reasonable efforts to obtain confidential treatment of economic and trade secret
information. In any event, the Parties agree to take all reasonable action to avoid disclosure of Confidential Information except as permitted hereunder, and shall cooperate with each other with
respect to all such disclosures. The Party that is required to or has otherwise decided to make a public statement pursuant permitted under this Section 8.5 will give the other Party reasonable
advance notice of the text of any proposed statement so that the other Party will have the opportunity to comment upon the statement. Either Party may disclose any matter that has previously been
publicly disclosed in accordance with this Section 8.5. Except as described above, neither Party will make any public announcement regarding the terms of or events related to the Agreement
without the prior consent of the other Party. 

        8.6    Publications.    Neither Optimer nor its employees, contractors
or investigators shall publish or present any information, including without limitation the results of the Research Program or preclinical or clinical studies, with respect to any Macrolide
Antibiotic, Test Product or Cempra Product without Cempra's prior consent (which may be withheld in Cempra's sole and final discretion), except as permitted under Section 8.3(d) or this
Section 8.6. Optimer agrees to provide Cempra a copy of any such proposed publication or presentation at least 60 days prior to its submission for publication, and Cempra shall have
60 days in which to review the proposed publication or presentation for the purposes described below. Cempra may request in writing, and the Optimer shall agree to, (i) the deletion of
any of Cempra's Confidential Information, (ii) any reasonable changes requested by Cempra, consistent with scientific practice, or (iii) a delay of such proposed submission for an
additional period, not to exceed ninety (90) days, in order to protect the potential patentability of any technology described therein. Cempra, at its election, shall be entitled to receive in
any such publication an acknowledgment of its support of and involvement in the Research Program and its rights to Optimer Technology. 

29

 

9.    TERM AND TERMINATION    

        9.1    Term.    This Agreement shall become effective on the Effective
Date and shall continue on a Product-by-Product (Cempra Product or Optimer Product, as applicable) and country-by-country basis until the earlier of
(1) the expiration of the Royalty Term with respect to the applicable Product (Cempra Product or Optimer Product, as applicable) in the applicable country; or (2) the effective date of
termination pursuant to Section 9.2 or 9.3 (the "Term"). Upon expiration of this Agreement pursuant to clause (1) above with
respect to a particular Product in a particular country, the Parties and their Affiliates shall have the perpetual, unrestricted, fully-paid, royalty-free
world-wide right, with rights of sublicense, to make, use, sell, offer for sale, and import such Product in such country. 

        9.2    Termination by Cempra or Optimer.    Cempra may terminate this
Agreement at any time upon thirty (30) days prior written notice to Optimer. At any time following the end of the Research Term, Optimer may terminate this Agreement upon thirty
(30) days prior written notice to Cempra. In either case, the effects of such termination shall be as further described in Section 9.4 below. 

        9.3    Mutual Termination Rights.    Either Party will have the right
to terminate this Agreement upon the following: 

        (a)   It believes that the other Party is in material breach of this Agreement, in which case the non-breaching
Party may deliver written notice of such material breach to the other Party, such notice to describe in detail the nature of such breach. The allegedly breaching Party shall have
[***] days from receipt of such notice to cure such breach. Any such
termination shall become effective at the end of such [***] period unless the breaching Party has cured any such breach or default prior to the expiration of such
[***] period (or, if such default is capable of being cured but cannot be cured within such [***]-day period, the breaching Party has
commenced and diligently continued actions to cure such default provided always that, in such instance, such cure must have occurred within [***] days after notice
thereof was provided to the breaching Party by the non-breaching Party to remedy such default); or 

        (b)   the other Party is generally unable to meet its debts when due, or makes a general assignment for the benefit of its
creditors, or there shall have been appointed a receiver, trustee or other custodian for such Party for or a substantial part of its assets, or any case or proceeding shall have been commenced or
other action taken by or against such Party in bankruptcy or seeking the reorganization, liquidation, dissolution or winding-up of such Party or any other relief under any bankruptcy,
insolvency, reorganization or other similar act or law, and any such event shall have continued for sixty (60) days undismissed, unstayed, unbonded and undischarged. In such circumstances, the
other Party may, upon notice to such Party, terminate this Agreement, such termination to be effective upon such Party's receipt of such notice. 

        9.4    Effects of Termination.    

        (a)   Except as set forth in Sections 9.1, 9.4(b), 9.4(c), and 9.4(d), upon any termination of this Agreement, all
licenses granted under this Agreement shall terminate, Cempra and its Affiliates shall cease Development and Commercialization of all Macrolide Antibiotics, Test Products and Cempra Products, and
Optimer and its Affiliates shall cease development and/or commercialization of Optimer Products, provided that, notwithstanding the foregoing, each Party and its Affiliates shall have the privilege,
subject to the payment of royalties as required under Section 6, of (i) completing the manufacture of any Products in the process of manufacture as of the effective date of such
termination (the "Termination Date"), (ii) selling such Products and all finished Products in their possession or under their control as
of the Termination Date for a period of one year following the Termination Date upon commercially reasonable conditions, and (iii) completing performance of all contracts entered into with
third parties prior to the Termination Date (1) for the marketing, sale, or manufacture of Products or (2) requiring the use of Products or technology claimed in the Optimer Patents or
Cempra Patents, 

30

 

as
applicable, for a period of one year following the Termination Date. Notwithstanding any provision herein to the contrary, no termination of this Agreement by either Party shall be construed as a
termination of any valid sublicense granted by the other Party, its Affiliates, or its sublicensees with respect to the rights granted under this Agreement. Upon termination of this Agreement by a
Party each sublicense of rights granted to a Third Party by the other Party shall, to the extent not imposing obligations on the other Party in excess of those contained herein, be automatically
assigned to such Party. 

        (b)   If a Party terminates this Agreement in accordance with Section 9.2, then, at the other Party's express election
upon notice of termination, all licenses granted by the terminating Party to the non-terminating Party shall survive, in which event, the non-terminating Party's obligations
set forth in Article 4 and in Article 6 (including without limitation the obligation to pay to the terminating Party any milestone and/or royalty payments set forth in
Article 6 and provide the reports set forth therein), the non-terminating Party's rights under Section 7, and al other provisions of this Agreement applicable to the
foregoing, other than Sections 1A, 2, and 3 (which shall terminate), shall survive. It is understood and agreed that following such a termination, the terminating Party shall retain the right
to terminate the other Party's remaining licenses and rights in accordance with Section 9.3, and the non-terminating Party shall retain the right to subsequently terminate its
remaining licenses and rights under this Agreement pursuant to Section 9.2, in which event the applicable provisions of Section 9.4(a) shall apply. 

        (c)   If Cempra terminates this Agreement in accordance with Section 9.3, then at Cempra's express election upon notice
of termination, all licenses and rights granted by Optimer to Cempra shall survive, in which event Cempra's obligations set forth in Article 4 and in Article 6 (including without
limitation the obligation to pay to Optimer the royalty and milestone payments set forth in Article 6 and provide the reports set forth therein), Cempra's rights under Section 7,
and all other provisions of this Agreement applicable to the foregoing, other than Sections 1A, 2, and 3 (which shall terminate), shall survive. It is understood and agreed that following such
a termination, Optimer shall retain the right to terminate the remaining licenses and rights of Cempra in accordance with Section 9.3, and Cempra shall retain the right to subsequently
terminate its remaining licenses and rights under this Agreement pursuant to Section 9.2, in which event the applicable provisions of Section 9.4(a) shall apply. 

        (d)   If Optimer terminates this Agreement in accordance with Section 9.3, then at Optimer's express election upon
notice of termination, all licenses and rights granted by Cempra to Optimer shall survive, in which event Optimer's obligations set forth in Article 4 and in Article 6 (including
without limitation obligation to pay to Cempra the royalty and milestone payments set forth in Article 6 and provide the reports set forth therein), Optimer's rights under
Article 7, and all other provisions of this Agreement applicable to the foregoing, other than Sections 1A, 2, and 3 (which shall terminate), shall survive. It is understood and agreed
that following such a termination, Cempra shall retain the right to terminate the remaining licenses and rights of Optimer in accordance with Section 9.3, and Optimer shall retain the right to
subsequently terminate its remaining licenses and rights under this Agreement pursuant to Section 9.2, in which event the applicable provisions of Section 9.4(b) shall apply. 

        (e)   Termination of this Agreement shall not terminate the obligations of a Party to make any payments then owing through the
date of termination or the obligations of confidentiality imposed on either Party. 

        (f)    The remedies set forth in this Article 9 are not exclusive, and shall not limit any other legal or equitable
remedies that are available to the parties. 

31

 

        9.5    Survival.    The following provisions shall survive any
expiration or termination of this Agreement: Sections 5.6, 6.15, 7, 8, 9, 10, 11, 12 and 13, together with any sections referenced in such surviving provisions or necessary to give
them effect. 

10.    REPRESENTATIONS AND WARRANTIES    

        10.1    General Representations and Warranties.    Each Party
represents and warrants to the other that, as of the date hereof: 

        (a)   it is duly organized and validly existing under the laws of its state or country of incorporation, and has full corporate
power and authority to enter into this Agreement and to carry out the provisions hereof; 

        (b)   it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person or
persons executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action; 

        (c)   this Agreement is legally binding upon it and enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law
or regulation of any Governmental Authority having jurisdiction over it; 

        (d)   it is aware of no action, suit or inquiry or investigation instituted by any governmental agency that questions or
threatens the validity of this Agreement; 

        (e)   all necessary consents, approvals and authorizations of all governmental authorities and other Persons required to be
obtained by such Party to enter into, or perform its obligations under, this Agreement have been obtained (provided, however, that the foregoing shall not be construed as a representation or warranty
concerning governmental authorizations and non-infringement of intellectual property rights of Third Parties disclaimed in Section 10.3 below). 

        (f)    it has not granted, and will not grant during the Term of the Agreement, any right to any Third Party that would conflict
with the rights granted to the other Party hereunder. It has (or will have at the time the performance is due) maintained and will maintain and keep in full force and effect all agreements
necessary to perform its obligations hereunder; 

        (g)   all products, materials and Information created by the Parties under this Agreement is current and accurate, is such
Party's original work (except for identified third-party materials), and, to such Party's knowledge, will not infringe upon, violate or misappropriate any intellectual property right of any third
party; and 

        (h)   to the extent any third-party materials are incorporated in the products, such Party has obtained from such third party
rights (if any) reasonably sufficient to enable the such Party to comply with this Agreement. 

        10.2    Optimer Representations and Warranties.    Optimer represents,
warrants, and covenants that: 

        (a)   Optimer has not, and during the term of the Agreement will not, grant any right to any Third Party relating to Optimer
Technology which conflicts with the rights granted to Cempra hereunder; 

        (b)   During the Term, Optimer will not, without the prior written consent of Cempra, encumber the Optimer Patents or Optimer
Know-How, respectively, with liens, mortgages, security interests or another similar interest that would give the holder the right to convert the interest into ownership, unless the
encumbrance is expressly subject to the licenses herein; 

32

 

        (c)   Optimer has (or will have at the time performance is due) maintained and will maintain and keep in full force and
effect all agreements necessary to perform its obligations hereunder; 

        (d)   Optimer does not have any present knowledge from which it would reasonably conclude that the Optimer Patents are invalid
or that their exercise would infringe patent rights of any Third Party; 

        (e)   The Optimer Patents listed on Schedule 1.30 are, as of the
Effective Date, the only patents or patent applications owned, controlled, or licensed by Optimer claiming Macrolide Antibiotics, Test Products, Cempra Products, Optimer Technology, or the
manufacture, use or application of any of the foregoing. 

        (f)    To the best of Optimer's knowledge, each item included in the Optimer Patents that is registered, filed or issued under
the authority of an appropriate governmental authority is and at all times has been in compliance with all legal requirements applicable thereto, and all filings, payments, and other
actions required to be made or taken to maintain such item of Optimer Patents in full force and effect have been made by the applicable deadline. Furthermore, (1) no patent application or
patent included in the Optimer Patents has been abandoned or allowed to lapse and (2) no provisional patent application included therein has expired without the filing of a nonprovisional
patent application that claims the benefit of such provisional patent application. 

        (g)   Optimer has, to the knowledge of Optimer's executive management, furnished to Cempra all tangible manifestations of the
Optimer Technology which Optimer owns or possesses as of the Effective Date; 

        (h)   Optimer has taken commercially reasonable measures, using its good faith business judgment, to protect the
confidentiality of the Optimer Know How; 

        (i)    None of the Optimer Patents is the subject of any pending interference, opposition, cancellation or other protest
proceeding; 

        (j)    Optimer has no knowledge of any claim pending, threatened, or previously made alleging infringement or misappropriation
of any patent, trade secret, or other intellectual property right of any Third Party relative to the Optimer Patents, the technology claimed therein, Optimer Know How, Test Products, Macrolide
Antibiotics, or Cempra Products; and 

        (k)   Optimer is not aware of any third party activities which would constitute misappropriation or infringement of the Optimer
Technology (including but not limited to Optimer Patents); 

        (l)    Optimer owns all right, title, and interest to all Optimer Technology, free and clear of any liens, claims, and
encumbrances of any party, and none of the Optimer Technology has been obtained by Optimer pursuant to any license or other agreement with any third party; 

        (m)  Optimer does not presently own or Control any rights to any trademarks, service marks, trade dress, or similar
intellectual property rights with respect to Cempra Products or Macrolide Antibiotics. 

        10.3    Cempra Representations and Warranties.    Optimer represents,
warrants, and covenants that: 

        (a)   Cempra has not, and during the term of the Agreement will not, grant any right to any Third Party relating to Cempra
Patent, Cempra Product, or Cempra Know-How which conflicts with the rights granted to Optimer hereunder; 

        (b)   During the Term, Cempra will not, without the prior written consent of Optimer, encumber the Cempra Patents or Cempra
Know-How, respectively, with liens, mortgages, security 

33

 

interests
or another similar interest that would give the holder the right to convert the interest into ownership, unless the encumbrance is expressly subject to the licenses herein; and 

        (c)   Cempra has (or will have at the time performance is due) maintained and will maintain and keep in full force and
effect all agreements necessary to perform its obligations hereunder. 

        10.4    Disclaimer Concerning Technology.    EACH PARTY EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, EXCEPT FOR THOSE SET FORTH IN THIS AGREEMENT, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, (A) BOTH PARTIES ACKNOWLEDGE AND AGREE THAT THE ACTIVITIES TO BE CONDUCTED UNDER THE RESEARCH PROGRAM ARE
INHERENTLY UNCERTAIN AND, PROVIDED THAT EACH PARTY ENGAGES IN DILIGENT EFFORTS TO PERFORM ITS OBLIGATIONS HEREUNDER, THAT THERE ARE OTHERWISE NO ASSURANCES THAT THE PARTIES WILL SUCCESSFULLY
SYNTHESIZE MACROLIDE ANTIBIOTICS MEETING THE SPECIFICATIONS SET FORTH BY CEMPRA AND OPTIMER JOINTLY OR IDENTIFY A TEST PRODUCT, OR SUCCESSFULLY CONDUCT OTHER ACTIVITIES CONTEMPLATED TO BE PERFORMED IN
THE RESEARCH PROGRAM, OR THAT ANY MACROLIDE ANTIBIOTICS OR TEST PRODUCT WILL BE SUCCESSFULLY DEVELOPED AND COMMERCIALIZED BY CEMPRA AS A LICENSED PRODUCT, OR THAT REQUIRED GOVERNMENTAL APPROVALS IN
CONNECTION WITH THE MANUFACTURE, CLINICAL DEVELOPMENT AND/OR COMMERCIALIZATION OF MACROLIDE ANTIBIOTICS, TEST PRODUCTS AND/OR LICENSED PRODUCTS CAN OR WILL BE OBTAINED; AND (B) EACH PARTY
EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, TO THE CONTRARY. 

11.    INDEMNITIES    

        11.1    Mutual Indemnification.    Subject to Section 11.2,
each Party hereby agrees to indemnify, defend and hold the other Party, its Affiliates, its licensees, and its and their officers, directors, employees, consultants, contractors, sublicensees and
agents (collectively, "Representatives") harmless from and against any and all damages or other amounts payable to a Third Party claimant, as well as
any reasonable attorneys' fees and costs of litigation arising out of any such Claim (as defined in this Section 11.1), (collectively,
"Damages") resulting from claims, suits, proceedings or causes of action ("Claims") brought by a Third
Party against a Party or its Representatives based on: (a) material breach by the indemnifying Party of this Agreement, (b) breach of any applicable law, rule, or regulation by
such indemnifying Party in connection with the performance of its obligations hereunder or the exercise of licenses or rights conveyed hereunder, (c) gross negligence or willful misconduct by
such indemnifying Party, its Affiliates, or their respective employees, contractors or agents, (d) the indemnifying Party's Development, Commercialization, manufacture, use or sale of Macrolide
Antibiotics, Test Products, or Products, except, in each case, to the extent such Damages are subject to indemnification by the other Party under this Section 11.1. 

        11.2    Notification.    In the event that any Third Party asserts a
claim with respect to any matter for which a Party (the "Indemnified Party") is entitled to indemnification hereunder
(a "Third Party Claim"), then the Indemnified Party shall promptly notify the Party obligated to indemnify the Indemnified Party
(the "Indemnifying Party") thereof; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party
shall relieve the Indemnifying Party from any obligation hereunder unless (and then only to the extent that) the Indemnifying Party is prejudiced thereby. Indemnifying Party may assume the
complete control of the defense, compromise or settlement of any Third Party Claim (provided that any settlement of any Third Party Claim that (i) subjects Indemnified Party to any
non-indemnified liability or (ii) admits fault or wrongdoing on the 

34

 

part
of Indemnified Party will require the prior written consent of such Indemnified Party, provided such consent will not be unreasonably withheld), including, at its own expense, employment of legal
counsel, and at any time thereafter Indemnifying Party will be entitled to exercise, on behalf of Indemnified Party, any rights which may mitigate the extent or amount of such Third Party Claim;  provided, however, that if Indemnifying Party has exercised its right to assume control of such Third
Party Claim, Indemnified Party (i) may, in its sole discretion and at its own expense, employ legal counsel to represent it (in addition to the legal counsel employed by Indemnifying
Party) in any such matter, and in such event legal counsel selected by Indemnified Party will be required to reasonably confer and cooperate with such counsel of Indemnifying Party in such defense,
compromise or settlement for the purpose of informing and sharing information with Indemnifying Party; (ii) will, at Indemnifying Party's own expense, make available to Indemnifying Party those
employees, officers, contractors, and directors of Indemnified Party whose assistance, testimony or presence is necessary or appropriate to assist Indemnifying Party in evaluating and in defending any
such Third Party Claim; provided, however, that any such access will be conducted in such a manner as
not to interfere unreasonably with the operations of the businesses of Indemnified Party; and (iii) will otherwise fully cooperate with Indemnifying Party and its legal counsel in the
investigation and defense of such Third Party Claim. 

        11.3    Exclusion of Damages.    IN NO EVENT SHALL EITHER PARTY OR ITS
AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES, WHETHER BASED UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE,
STRICT LIABILITY OR OTHER TORT, OR OTHERWISE, ARISING OUT OF THIS AGREEMENT, UNLESS SUCH DAMAGES ARE DUE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE LIABLE PARTY. NOTWITHSTANDING ANYTHING TO
THE CONTRARY, THE FOREGOING SHALL NOT BE CONSTRUED TO LIMIT THE INDEMNITY OBLIGATIONS SET FORTH IN SECTION 11.1 ABOVE OR EITHER PARTY'S LIABILITY FOR PATENT INFRINGEMENT OR BREACH OF
SECTIONS 8 (CONFIDENTIALITY), 7 (INTELLECTUAL PROPERTY), 5.1 (WITH RESPECT TO
CEMPRA'S BREACH THEREOF), OR 5.4 (WITH RESPECT TO OPTIMER'S BREACH THEREOF). 

12.    DISPUTE RESOLUTION    

        12.1    Disputes.    The Parties recognize that disputes as to certain
matters may from time to time arise during the Term that relate to either Party's rights and/or obligations hereunder. It is the objective of the Parties to facilitate the resolution of disputes
arising under this Agreement in an expedient manner by mutual cooperation and without resort to litigation or arbitration. To accomplish this objective, the Parties agree that, in the event of any
disputes, controversies or differences that may arise between the Parties, out of or in relation to or in connection with this Agreement, or for the breach thereof, upon the request of either Party,
the Parties agree to meet and discuss in good faith a possible resolution thereof. If the matter is not resolved within thirty (30) days following the request for discussions, either Party may
refer the matter to arbitration            in accordance with Section 12.3 below. Notwithstanding the foregoing, each Party shall be entitled to seek appropriate injunctive relief in
any
court of competent jurisdiction (i) to preserve such Party's rights pending resolution of arbitration proceedings under this Agreement, (ii) to avoid irreparable damages, or
(iii) with respect to any matters concerning intellectual property rights or confidentiality. 

        12.2    Governing Law.    Resolution of all disputes arising out of or
related to this Agreement or the performance, enforcement, breach or termination of this Agreement and any remedies relating thereto, shall be governed by and construed under the substantive laws of
the State of California, without regard to conflicts of law rules that would provide for application of the law of a jurisdiction outside California. 

35

 

        12.3    Arbitration.    Except as otherwise expressly provided herein,
the Parties agree that any dispute not resolved internally by the Parties, within thirty (30) days after meeting pursuant to Section 12.1, shall be finally resolved, upon notice to the
other Party by either Party, by binding arbitration in accordance with the provisions of this Section 12.3. The arbitration shall be conducted by the Judicial Arbitration and Mediation
services, Inc. ("JAMS") under its rules of arbitration then in effect, except as modified in this Agreement. Each Party shall select one (1) independent, neutral arbitrator experienced
in the biotechnology/pharmaceutical industry, and the two (2) arbitrators so selected shall choose a third independent, neutral arbitrator experienced in the biotechnology/pharmaceutical
industry. In the event a Party fails to select its such arbitrator within fifteen (15) business days of its receipt of the notice provided above, the other Party shall be entitled to select
such arbitrator. The arbitrators shall use their best efforts to rule on each disputed issue within sixty (60) calendar days after completion of hearings on the matter(s) in dispute, and the
arbitration decision(s) shall be rendered in writing to the Parties and must specify the basis(es) on which the decision(s) was(were) made. Such decision(s) shall be binding and not be appealable to
any court in any jurisdiction. Unless otherwise mutually agreed upon by the Parties, the arbitration proceedings shall be conducted in New York, New York. One or more of the Parties to
any arbitration proceeding commenced under this Agreement shall be entitled, as a part
of the arbitration award, to the costs and expenses (including reasonable attorneys fees and interest on any award) of investigating, preparing and pursuing an arbitration claim to the extent that the
arbitrators award such costs and expenses, provided that, notwithstanding the foregoing, the Parties shall bear the costs and expenses incurred in connection with an arbitration under this section in
inverse proportion to the award granted to each of them by the arbitrators. 

13.    MISCELLANEOUS    

        13.1    Entire Agreement; Amendment.    This Agreement, including the
exhibits attached hereto, sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the
Parties hereto and supersedes and terminates all prior agreements and understandings between the Parties, including the Letter Agreement. There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein and therein. No subsequent alteration, amendment, change or addition to
this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. 

        13.2    Force Majeure.    Both Parties shall be excused from the
performance of their obligations under this Agreement to the extent that such performance is prevented by force majeure and the nonperforming Party promptly provides notice of the prevention to the
other Party. Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party takes reasonable efforts to remove the condition. For purposes of
this Agreement, force majeure shall include conditions beyond the control of the Parties, including without limitation, an act of God, voluntary or involuntary compliance with any regulation, law or
order of any government, war, civil commotion, labor strike or lock-out, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or
materials by fire, earthquake, storm or like catastrophe; provided, however, the payment of invoices due
and owing hereunder shall not be delayed by the payer because of a force majeure affecting the payer, unless such force majeure specifically precludes the payment process. 

        13.3    Notices.    Any notices, approvals, or consents required or
permitted to be given under this Agreement shall be in writing, shall specifically refer to this Agreement and shall be deemed to have been sufficiently given for all purposes if mailed by first class
certified or registered mail, postage 

36

 

prepaid,
or by internationally recognized express delivery service or personally delivered. Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below: 

	 	 	For Optimer:	 	Optimer Pharmaceuticals, Inc.

10110 Sorrento Valley Rd., Suite C

San Diego, CA 92121

FEIN: 33-0830300

Fax: (858) 909-0737

Attention: Michael N. Chang, President/CEO
	
 	
 	

For Cempra:	
 	

Cempra Pharmaceuticals Inc.

170 Southport Drive, Suite 500

Morrisville, NC 27560

Fax: (919) 467-1716

Attention: Dr. Prabha Fenandes, President/CEO

        13.4    United States Dollars.    References in this Agreement
to "Dollars" or "$" shall mean the legal tender of the United States of America. 

        13.5    No Strict Construction.    This Agreement has been prepared
jointly and shall not be strictly construed against either Party. 

        13.6    Assignment.    Neither Party may assign or transfer this
Agreement or any rights or obligations hereunder without the prior consent of the other; provided,  however, that a Party may make such an assignment
without the other Party's consent (a) to an Affiliate or in conjunction with a merger,
acquisition, or sale of all or substantially all of the business or assets of such Party to which this Agreement pertains, or (b) if such Party or its Affiliates is required to, or reasonably
believes that it will be required to, divest any Product or a competing product in order to comply with law or the order of any Governmental Authority as a result of a merger or acquisition. This
Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties. Any assignment or attempted assignment by either Party in violation of the terms of
this Section 13.6 shall be null and void and of no legal effect. 

        13.7    Counterparts.    This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 

        13.8    Further Actions.    Each Party agrees to execute, acknowledge
and deliver such further instruments (including without limitation patent assignments), and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent
of this Agreement. 

        13.9    Severability.    If any one or more of the provisions of this
Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, or in arbitration proceedings between the Parties as set forth in
Article 12 of this Agreement, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good
faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering into this Agreement may
be realized. 

        13.10    Headings.    The headings for each article and section in
this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section. 

        13.11    No
Waiver.    Any delay in enforcing a Party's rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such
Party's rights to the future 

37

 

enforcement
of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time. 

 
 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

38

 

IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their proper officers as of the date and year first
above written. 

	CEMPRA PHARMACEUTICALS INC.	 	OPTIMER PHARMACEUTICALS, INC.
	
BY:	
 	

	
 	

BY:	
 	

	

NAME:	
 	

	
 	

NAME:	
 	

	

TITLE:	
 	

	
 	

TITLE:	
 	

39

 
 

Schedule 1.35    
    
    Optimer Patents    
    

Macrolide Patent Estate  

	 
	 	 
	 	 
	 	 
	 	 

	"Macrolides and Process for Their Preparation" 8024-006-PR	 	(3/10/2003)	 	Lapsed	 	Provisional	 	The application has converted to PCT application, 8024-006-WO.
	
	 	
	 	
	 	
	 	

	"Novel Antibacterial Agents", 8024-006-WO	 	WO2004080381/

23-Sep-04

(3/5/2004)	 	Published	 	PCT	 	The application claims composition of matter comprising 14 membered macrolide triazole compounds and/or 14 membered macrolide compounds with novel suger or sugar mimic moieties at C5 position. The PCT
application was published and has entered national phase in US, Europe and Canada.
	 	 	
	 	
	 	
	 	 
	8024-006-US	 	(9/9/2005)	 	Pending	 	US	 	Notice of Acceptance and Filing Receipt received on 1/12/06. Projected publication date 5/11/06.
	 	 	
	 	
	 	
	 	 
	8024-006-CA	 	(12/19/2005)	 	Pending	 	Canada	 	 
	 	 	
	 	
	 	
	 	 
	8024-006-EP	 	(1/11/2006)	 	Pending	 	Europe	 	 
	 	 	
	 	
	 	
	 	 

 
 

Schedule 6.1(1)    
    
    Subscription Agreement    
    

 
 

Schedule 6.1(2)
  Shareholders Agreement    
    

 
 

Schedule 8.5    
    
    Press Release    
    

QuickLinks

Exhibit 10.4

COLLABORATIVE RESEARCH AND DEVELOPMENT AND LICENSE AGREEMENT

RECITALS

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

Schedule 1.35 Optimer Patents

Schedule 6.1(1) Subscription Agreement

Schedule 6.1(2) Shareholders Agreement

Schedule 8.5 Press ReleaseQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.5    
    

 
 

*** Text Omitted and Filed Separately
  CONFIDENTIAL TREATMENT REQUESTED
  Under 17 C.F.R. §§ 200.80(b)(4) and 230.406    
    

 
 

FIRST AMENDMENT TO LICENSE AGREEMENT
  
    Between
  Optimer Pharmaceuticals, Inc.
  and
  Sloan-Kettering Institute for Cancer Research    

        This
First Amendment confirms the mutual understanding between Optimer Pharmaceuticals, Inc., a corporation, having a place of business at 10110 Sorrento Valley Road,
Suite C, San Diego, California 92121 ("LICENSEE") and the Sloan-Kettering Institute for Cancer Research, a not-for-profit corporation organized under the laws of New York State,
having a place of business at 1275 York Avenue, New York, New York 10021 ("SKI"). 

WHEREAS,
LICENSEE and SKI have entered into a license agreement (SK#6637) related to carbohydrate cancer vaccines with an Effective Date of July 31, 2002 ("Agreement"), a copy of which
is attached hereto; and 

WHEREAS,
the parties wish to amend the Agreement as LICENSEE no longer desires to develop Licensed Products II, effective as of June 30, 2005 ("Amendment Effective Date"), 

NOW,
THEREFORE, the parties, intending to be legally bound, hereby amend the Agreement as follows: 

	1.
	Definitions.
All capitalized terms used and not otherwise defined herein shall have the respective meanings set forth in the Agreement.

	2.
	Article
2.1 of the Agreement is hereby replaced in its entirety to read: 

SKI
hereby grants to LICENSEE: 

	(i)
	an
exclusive, worldwide license, to SKI Patents A in Field I, to make, have made, use, sell, have sold, import and develop Licensed Products I, with the
right to grant and authorize sublicenses;

	(ii)
	a
nonexclusive, worldwide license to SKI Patents D in Field I, to make, have made, use, sell, have sold, import and develop Licensed Products I, with the
right to grant and authorize sublicenses; and

	(iii)
	a
non-exclusive, worldwide, royalty-free license, without the right to grant and authorize sublicenses, to SKI's entire interest in and to the Know-How pursuant to the
licenses granted in this Section 2.1.

	3.
	Articles
4.1(d), 4.1(e), 4.1(g), and 4.1(h) of the Agreement are hereby made void.

	4.
	LICENSEE's
responsibility to pay for all costs and expenses incurred for the preparation, filing, prosecution, issuance, and maintenance of SKI Patents B under
Article 6.1 of the Agreement shall be limited to such costs and expenses incurred up to and including the Amendment Effective Date. Such costs and expenses incurred subsequent to the Amendment
Effective Date shall be done by SKI.

	5.
	All
other terms and conditions of the Agreement not specifically modified by this First Amendment shall remain in full force and effect. 

	6.
	On
and after the Amendment Effective Date, each reference in the Agreement to this "Agreement", "hereunder", "herein", "hereof" or words of like import referring to the Agreement shall
mean and be a reference to the Agreement as amended by this First Amendment.

	7.
	This
First Amendment may be executed in two counterparts, each of which will be deemed an original, but both of which shall constitute but one and the same instrument. 

IN
WITNESS WHEREOF, the parties have caused this First Amendment to the Agreement to be executed by their duly authorized representatives. 

	OPTIMER PHARMACEUTICALS, INC.	 	SLOAN-KETTERING INSTITUTE FOR CANCER RESEARCH
	
 /s/  MICHAEL N. CHANG      
 Michael N. Chang, Ph.D.

CEO	
 	

/s/  G. BERNHARDT      
 James S. Quirk

Senior Vice President,

Research Resources Management
	
 Date:    11-16-05
	
 	

Date:    12/22/05

  

 
 

LICENSE AGREEMENT
  
    for SKI's technology
  
    "Carbohydrate Cancer Vaccines"
  (SK#6637)    

 
 

TABLE OF CONTENTS    
    

	PREAMBLE

ARTICLES:

	 	 
	 	 

	I	 	DEFINITIONS	 	2
	II	 	GRANT	 	3
	III	 	DUE DILIGENCE, REGULATORY MATTERS	 	4
	IV	 	PAYMENTS	 	5
	V	 	REPORTS AND RECORDS	 	7
	VI	 	PATENT PROSECUTION	 	8
	VII	 	INFRINGEMENT	 	8
	VIII	 	INDEMNIFICATION, PRODUCT LIABILITY, WARRANTIES	 	9
	IX	 	EXPORT CONTROLS	 	10
	X	 	NON-USE OF NAMES	 	10
	XI	 	ASSIGNMENT	 	10
	XII	 	TERMINATION	 	10
	XIII	 	PAYMENTS, NOTICES AND OTHER COMMUNICATIONS	 	12
	XIV	 	MISCELLANEOUS PROVISIONS	 	12

        This
Agreement is effective on the date last subscribed below (the "Effective Date"), and is by and between Sloan-Kettering Institute for Cancer
Research (hereinafter referred to as "SKI"), a New York membership corporation with principal offices at 1275 York Avenue, New York, New York 10021,
and Optimer Pharmaceuticals, Incorporated, a corporation with principal offices located at 10110 Sorrento Valley Road, Suite C, San Diego,
California 92121 (hereinafter referred to as "LICENSEE"). 

 
 

WITNESSETH    
    

        WHEREAS, SKI is the owner of certain SKI Patents (as later defined herein) and has the right to grant licenses under said SKI Patents; and 

        WHEREAS,
SKI desires to have the SKI Patents utilized in the public interest and is willing to grant a license to its interest thereunder; and 

        WHEREAS,
LICENSEE seeks to commercially develop the SKI Patents through a thorough, vigorous and diligent program of exploiting the SKI Patents whereby public utilization shall result
therefrom. 

1

 

        NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows: 

 
 

ARTICLE I—DEFINITIONS    
    

        For the purpose of this Agreement, the following words and phrases shall have the following meanings: 

	1.1
	"LICENSEE"
shall include Affiliates, that is, any person, firm, corporation or other entity controlling, controlled by, or under common control with a party hereto. The term "control"
wherever used throughout this Agreement shall mean ownership, directly or indirectly, of more than 50% of the equity capital. With regard to SKI, "Affiliate" shall mean the Memorial Sloan-Kettering
Cancer Center and the Memorial Hospital for Cancer and Allied Diseases.

	1.2
	"SKI
Patents A", "SKI Patents B", "SKI Patents C", and "SKI Patents D" shall have meanings as defined in Exhibit A. "SKI
Patents" shall mean SKI Patents A, SKI Patents B, SKI Patents C, and SKI Patents D.

	1.3
	"Field
I" shall mean the treatment or prevention of human cancer with a carbohydrate vaccine comprising Globo H as the sole antigen. Specifically excluded from Field I are
(i) vaccines comprising mixtures of more than one type of carbohydrate antigen, one of which may be Globo H, and (ii) vaccines comprising Clustered Carbohydrate Antigens (defined as an
immunogenic molecule consisting of two or more identical or different carbohydrate antigens attached to a common peptide backbone).

	1.4
	"Field
II" shall mean the treatment or prevention of human cancer with a vaccine comprising Clustered Carbohydrate Antigens wherein the carbohydrate antigens have been synthesized
using Optimer's OPopSTM Technology.

	1.5
	"Know-How"
shall mean any technical information, know-how, processes, procedures, compositions, devices, methods, formulas, protocols, techniques, designs,
data or other subject matter owned or controlled by SKI which is necessary for the manufacture, sale and/or use of Licensed Products I and Licensed Products II (collectively, "Licensed Products"), in
each case, which is not in the public domain.

	1.6
	"Licensed
Products I" shall mean any and all products which fall within Field I and which would either (i) infringe a Valid Claim of SKI Patents A but for this agreement, or
(ii) are produced or used using a process or method that would infringe a Valid Claim of SKI Patents A but for this agreement.

	1.7
	"Licensed
Products II" shall mean any and all products which fall within Field II and which would either (i) infringe at least one Valid Claim of SKI Patents A, B, C or D but
for this agreement, or (ii) are produced or used using a process or method that would infringe at least one Valid Claim of SKI Patents A, B, C or D but for this agreement.

	1.8
	"Net
Sales" of a product shall mean LICENSEE's or sublicensee's, as indicated, billings for sales of that product less the sum of the following:

	a)
	Discounts
allowed in amounts customary in the trade;

	b)
	Sales,
tariff duties and/or use taxes directly imposed and with reference to particular sales;

	c)
	Outbound
transportation prepaid or allowed;

	d)
	Amounts
allowed or credited on returns; and 

2

 

	e)
	Bad
debts and uncollectible receivables provided that, in any calendar year, such deduction will not exceed four percent (4%) of the total billings for sales of Licensed
Products and Licensed Services sold in that year. 

No
deductions shall be made for commissions paid to individuals whether they be with independent sales agencies or regularly employed by LICENSEE or its Affiliates and on its payroll, or for cost of
collections. Licensed Products shall be considered "sold" when billed or invoiced. As LICENSEE agrees to pay royalties in countries where patent protection has not been sought, and SKI is willing to
forgo its rights to seek patent protection in such countries, Net Sales of a product shall explicitly include billings for sales of that product in such countries. 

	1.9
	"Royalty
Year" shall mean each twelve month period commencing January 1 and ending December 31 during the term of this Agreement. For the first year of this Agreement,
the Royalty Year shall be the period of time between the signing of the Agreement and December 31.

	1.10
	"Foreign
Major Market Countries" shall mean the United Kingdom, Germany, France, Italy, Spain and Japan.

	1.11
	"Net
Royalty" shall mean the total royalty compensation received by LICENSEE from a sublicensee in a given Royalty Year.

	1.12
	"Valid
Claim" shall mean a claim of an issued and unexpired patent, or a claim of a pending patent application, which has not been held unpatentable, invalid or unenforceable by a
court or other government agency of competent jurisdiction in a final decision from which no appeal may be taken, and has not been admitted to be invalid or unenforceable through reissue,
re-examination, disclaimer or otherwise. Should any issued Valid Claim be challenged and held invalid or unenforceable by a court or other government agency of competent jurisdiction from
which appeal may be taken, royalty payments that, but for the holding of invalidity or unenforceability would be due under this Agreement, shall be made by LICENSEE and shall be held in escrow by SKI
until no further appeals are available. If the claim is finally held to be valid and enforceable, the amounts held in escrow, including interest, shall be released to SKI and the relevant claim shall
be reinstated as a Valid Claim hereunder. If it is finally held to be invalid or unenforceable, the amounts held in escrow, including interest, shall be released to LICENSEE. 

 
 

ARTICLE II—GRANT    
    

	2.1
	SKI
hereby grants to LICENSEE: 
	(i)
	an
exclusive, worldwide license, to SKI Patents A in Field I, to make, have made, use, sell, have sold, import and develop Licensed Products I, with the right to grant
and authorize sublicenses;

	(ii)
	an
exclusive, worldwide license, to SKI Patents B in Field II, to make, have made, use, sell, have sold, import and develop Licensed Products II, with the right to
grant and authorize sublicenses;

	(iii)
	a
nonexclusive, worldwide license to SKI Patents A and SKI Patents C in Field II, and to SKI Patents D in Field I and Field II, to make, have made, use, sell, have
sold, import and develop Licensed Products I and Licensed Products II with the right to grant and authorize sublicenses; and

	(iv)
	SKI
hereby grants to LICENSEE a non-exclusive, worldwide, royalty-free license, without the right to grant and authorize sublicenses, to SKI's
entire interest in and to the Know-How pursuant to the licenses granted in this Section 2.1. 

3

 

	2.2
	Notwithstanding
any other provisions of this Agreement, it is agreed that SKI and its Affiliates shall retain the right to practice the licensed rights granted under
Section 2.1 for its own teaching, research and patient care activities.

	2.3
	All
rights reserved to the United States Government and others under 35 USC §§200-212, as amended, shall remain and shall in no way
be affected by this Agreement.

	2.4
	LICENSEE
hereby agrees that every sublicensing agreement to which it shall be party and which shall relate to the rights, privileges and license granted hereunder shall contain a
statement describing the date upon which LICENSEE'S exclusive rights, privileges and license hereunder shall terminate.

	2.5
	LICENSEE
agrees that any sublicenses granted by it shall provide that the obligations to SKI of Article III, Sections 3.1 and 3.3, V, VII, VIII, IX, X, XI, XII,
and XIV of this Agreement shall be binding upon the sublicensee as if it were a party to this Agreement. LICENSEE further agrees to attach copies of these Articles to sublicense agreements.

	2.6
	LICENSEE
agrees to forward to SKI a copy of any and all fully executed sublicense agreements, and further agrees to timely forward to SKI a copy of sublicensing revenue reports
received by LICENSEE from its sublicensees during the preceding Royalty Year.

	2.7
	If
LICENSEE receives from sublicensees anything of value in lieu of cash payments based upon payment obligations of any sublicense under this Agreement, LICENSEE shall pay SKI royalty
or other payments as required by Section 4.1, based on the fair market value of such payment, unless SKI waives in writing such payment obligation.

	2.8
	The
license granted hereunder shall not be construed to confer any rights upon LICENSEE by implication, estoppel or otherwise as to any technology not included in the SKI Patents,
except as expressly set forth herein.

	2.9
	All
rights not specifically granted herein are reserved to SKI. SKI explicitly retains the right to grant to third parties (i) exclusive licenses to SKI Patents A outside of
Field I and Field II, (ii) exclusive licenses to SKI Patents B outside of Field II, (iii) exclusive licenses to SKI Patents C outside of Field II, and (iv) exclusive licenses to
SKI Patents D outside of Field II.

	2.10
	SKI
shall cooperate to transfer to LICENSEE all Know-How, and all data, reports, analyses and other information necessary for the manufacture, use, and sale of Licensed
Products I and/or Licensed Products II in its possession or control, in a format reasonably acceptable to LICENSEE. 

 
 

ARTICLE III—DUE DILIGENCE, REGULATORY MATTERS    
    

	3.1
	LICENSEE
and its sublicensees shall use commercially reasonable efforts to bring Licensed Products to market through a thorough, vigorous and diligent program for exploitation of the
SKI Patents and to continue active, diligent marketing efforts for one or more Licensed Products or throughout the life of this Agreement.

	3.2
	Within
sixty (60) days of the Effective Date, SKI and Licensee shall mutually agree upon a timeline for clinical development of Licensed Products I and research development of
Licensed Products II ("Timeline"). Such Timeline shall be appended as Exhibit B to this Agreement, and may be amended from time to time as
necessary and by mutual consent. In the event that agreement cannot be reached on the Timeline within sixty (60) days of the Effective Date, or any developmental milestone specified in the
Timeline are not met by LICENSEE, SKI shall have the right to terminate this Agreement in accordance with Section 12.4. 

4

 
	3.3
	In
addition, LICENSEE shall adhere to the following milestones:

	(a)
	LICENSEE
shall have delivered to SKI prior to the execution of this Agreement, its detailed business, research and development plan including, for example, relevant schedules of
capital investments needed to implement the plan, financial, equipment, facility plans, number and kind of personnel and time planned for each phase of development of the SKI Patents for a three year
period, to the extent formed by LICENSEE. Similar reports shall be provided to SKI annually to relay update and status information on LICENSEE's business, research and development progress, including
projections of activity anticipated for the next reporting year.

	(b)
	LICENSEE
shall be responsible for diligently and promptly taking all reasonable steps to secure all required and/or necessary governmental approvals to sell, exploit, or market any
and all Licensed Products. LICENSEE shall advise SKI, through annual reports described in Section 3.3(a) above of its program of development for obtaining said approvals.

	3.4
	LICENSEE's
failure to perform in accordance with Sections 3.1 and 3.2 above shall be grounds for SKI to terminate this Agreement pursuant to Section 12.4 below.

	3.5
	SKI
shall cooperate, at its sole discretion, with LICENSEE before the Food and Drug Administration, and any other regulatory agencies in all matters regarding to Licensed Products I
and Licensed Products II. 

 
 

ARTICLE IV—PAYMENTS    
    

	4.1
	For
the rights, privileges and licenses granted hereunder, LICENSEE shall pay to SKI, in the manner hereinafter provided, until the end of the last to expire patent of the SKI Patents
or until this Agreement shall be terminated, as hereinafter provided, whichever occurs first:

	(a)
	A
license issue fee of fifty thousand dollars ($[***]) payable on the Effective Date of this Agreement.

	(b)
	One
hundred and twenty thousand (120,000) shares of Optimer Pharmaceuticals, Inc. common stock, par value $0.001 per share (the "Shares"), issuable immediately on the
Effective Date of this Agreement. In connection with the issuance of the Shares, SKI shall enter into the Common Stock Issuance Agreement, attached hereto as  Exhibit C ("Common Stock Issuance
Agreement").

	(c)
	For
Licensed Products I, a royalty in an amount equal to [***] percent ([***]%) of the Net Sales of Licensed Products I by
LICENSEE or any sublicensee.

	(d)
	Subject
to Section 4.1(e), for Licensed Products II, (a) for sales made by LICENSEE, a royalty in an amount equal to [***] percent
([***]%) of the Net Sales of Licensed Products II and (b) for sales made by a sublicensee, the greater of (i) twenty percent
([***]%) of the Net Royalty received by LICENSEE from the sublicensee or (ii) [***] percent of Net Sales of Licensed Products II by the
sublicensee.

	(e)
	For
any product in Field II that is not covered by a Valid Claim of SKI Patents B, (a) for sales made by LICENSEE, a royalty in an amount equal to [***]
percent ([***]%) of the Net Sales of such product and (b) for sales made by a sublicensee, the greater of (i) [***] percent
([***]%) of the Net Royalty received by LICENSEE from the sublicensee or (ii) [***] percent of Net Sales of such product by the sublicensee.

	(f)
	For
each of Licensed Products I, milestone payments as follows in the event that such milestone is achieved by LICENSEE and not a sublicensee:

	•
	[***]
dollars ($[***]) upon commencement of Phase III clinical studies; 

5

 

	•
	[***]
dollars ($[***]) upon first New Drug Application (NDA) filing;

	•
	[***]
dollars ($[***]) upon marketing approval in the United States;

	•
	[***]
dollars ($[***]) upon market approval in each and any of the Foreign Major Market Countries.

	(g)
	Subject
to Section 4.1(h), for each of Licensed Products II, milestone payments as follows in the event that such milestone is achieved by LICENSEE and not a
sublicensee:

	•
	[***]
dollars ($[***]) upon commencement of Phase I clinical studies;

	•
	[***]
dollars ($[***]) upon commencement of Phase II clinical studies;

	•
	[***]
dollars ($[***]) upon commencement of Phase III clinical studies;

	•
	[***]
dollars ($[***]) upon first New Drug Application (NDA) filing;

	•
	[***]
dollars ($[***]) upon marketing approval in the United States;

	•
	[***]
dollars ($[***]) upon market approval in each and any of the Foreign Major Market Countries.

	(h)
	For
any product in Field II that is not covered by a Valid Claim of SKI Patents B, milestone payments as follows in the event that such milestone is achieved by LICENSEE and not a
sublicensee:

	•
	[***]
dollars ($[***]) upon commencement of Phase I clinical studies;

	•
	[***]
dollars ($[***]) upon commencement of Phase II clinical studies;

	•
	[***]
dollars ($[***]) upon commencement of Phase III clinical studies;

	•
	[***]
dollars ($[***]) upon first New Drug Application (NDA) filing;

	•
	[***]
dollars ($[***]) upon marketing approval in the United States;

	•
	[***]
dollars ($[***]) upon market approval in each and any of the Foreign Major Market Countries.

	(i)
	LICENSEE
shall pay SKI [***] percent ([***]%) of all income from sublicensees including (i) sublicense fees,
(ii) sublicense maintenance fees, (iii) milestone payments and (iv) premiums over fair market value in the sale of LICENSEE's equity pursuant to Article 2.7, but excluding
(i) verifiable research and development support and expense reimbursement, (ii) royalties, (iii) sale of equity at fair market value, and, (iv) in cases where SKI Patents
are sublicensed in combination with non-SKI technology, the pro-rata contribution of the non-SKI technology.

	(j)
	Annual
minimum royalty payments, starting in the Royalty Year commencing January 1 after the Execution Date, in the amount of [***] dollars
($[***]). The minimum royalty payments shall be credited against the earned royalty payments required in Section 4.1(c), 4.1(d) and 4.1(e) above for
the same Royalty Year, and shall be paid within thirty days following the end of the Royalty Year.

	(k)
	Patent
expenses according to the terms of Article VI.

	4.2
	No
multiple royalties shall be payable because any Licensed Products, its manufacture, use, lease or sale are or shall be covered by more than one of the SKI Patents patent
applications or SKI Patents patents licensed under this Agreement. 

6

 
	4.3
	Royalty
payments shall be paid in United States dollars in New York, NY, or at such other place as SKI may reasonably designate consistent with the laws and regulations
controlling in any foreign country, but not in any other currency. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by
using the exchange rate prevailing at the J.P. Morgan Chase Bank (N.A.) on the last business day of the calendar quarterly reporting period to which such royalty payments relate.

	4.4
	Interest

	(a)
	LICENSEE
shall pay to SKI interest on any amounts not paid when due. Such interest will accrue from the forty-fifth (45th) day after the payment was due at a rate two
percent (2%) above the daily prime interest rate, as determined by J.P. Morgan Chase or its successor entity, on each day the payment is delinquent, and the interest payment will be due and
payable on the first day of each month after interest begins to accrue, until full payment of all amounts due SKI is made.

	(b)
	SKI's
rights to receive such interest payments shall be in addition to any other rights and remedies available to SKI.

	(c)
	If
the interest rate required in this Subsection exceeds the legal rate in a jurisdiction where a claim for such interest is being asserted, the required interest rate shall be
reduced, for such claim only, to the maximum interest rate allowable in the jurisdiction. 

 
 

ARTICLE V—REPORTS AND RECORDS    
    

	5.1
	LICENSEE
shall keep full, true and accurate books of account containing all particulars that may be necessary for the purpose of showing the amounts payable to SKI hereunder. Said
books and records shall be maintained for a period of no less than five (5) years following the period to which they pertain. For the term of this Agreement, upon thirty (30) days prior
written notice, LICENSEE shall allow SKI's own accountants or independent accountants selected by SKI, which independent accountants shall be reasonably acceptable to LICENSEE and after entering into
a confidentiality agreement with LICENSEE, to inspect such books and records for the sole purpose of verifying LICENSEE's royalty statement or compliance in other respects with this Agreement. In the
case of independent accountants, such accountants shall report to SKI only whether there has been a royalty underpayment and, if so, the amount thereof. Such inspections shall be during normal working
hours of LICENSEE, and shall occur no more frequently than once per calendar year. Should such inspection lead to the discovery of a greater than ten percent (10%) discrepancy in reporting to SKI's
detriment, LICENSEE agrees to pay the full cost of such inspection.

	5.2
	LICENSEE,
within thirty (30) days after June 30 and December 31 of each year, shall deliver to SKI true and accurate reports, giving such particulars of the
business conducted by LICENSEE and its sublicensees during the preceding three-month period under this Agreement as shall be pertinent to a royalty accounting hereunder. These shall include at least
the following, to be itemized per Licensed Product:

	(a)
	Number
of Licensed Products commercially used, manufactured and sold, rented or leased.

	(b)
	Total
billings for Licensed Products commercially used, sold, rented or leased.

	(c)
	Deductions
applicable as provided in Paragraph 1.8.

	(d)
	Total
royalties due.

	(e)
	Names
and addresses of all sublicensees of LICENSEE.

	(f)
	Total
royalty income from all revenues subject to sublicensees' royalties. 

7

 

	(g)
	Total
sublicensing fee income.

	5.3
	With
each such report submitted, LICENSEE shall pay to SKI the royalties due and payable under this Agreement. If no royalties shall be due, LICENSEE shall so report.

	5.4
	Milestone
payments shall be reported and paid with each such report submitted. 

 
 

ARTICLE VI—PATENT PROSECUTION    
    

	6.1
	LICENSEE
shall be responsible for and pay all past and future costs and expenses incurred by SKI for the preparation, filing, prosecution, issuance, and maintenance of SKI Patents A
and SKI Patents B. Such costs and expenses incurred prior to December 31, 2001 shall be reimbursed to SKI by LICENSEE in four equal semiannual payments beginning on July 1, 2002. Such
costs and expenses incurred subsequent to January 1, 2002 and prior to the Effective Date of this Agreement shall be paid by LICENSEE within forty-five (45) days of the
Effective Date. Such costs and expenses incurred after the Effective Date shall be paid by LICENSEE as they are incurred. SKI shall be solely responsible for all past and future costs and expenses
incurred for the preparation, filing, prosecution, issuance, and maintenance of SKI Patents C and SKI Patents D.

	6.2
	SKI
shall diligently prosecute and maintain the SKI Patents in the United States and in such countries as are determined by SKI and agreed to by LICENSEE, using counsel of its
choice. If LICENSEE declines in writing to bear the expense of filing patent applications in any foreign countries in which SKI wishes to obtain patent protection, then SKI may file and prosecute such
applications at its own expense and any license granted hereunder shall exclude such countries.

	6.3
	SKI
shall provide LICENSEE with copies of all relevant documentation so that LICENSEE may be informed and to give LICENSEE reasonable opportunity to advise SKI and comment on the
continuing prosecution. LICENSEE agrees to keep this documentation confidential. 

 
 

ARTICLE VII—INFRINGEMENT    
    

	7.1
	LICENSEE
shall assume primary responsibility for enforcing SKI Patents A and SKI Patents B within relevant commercial markets in Field I and Field II, respectively. In exercising
these responsibilities, LICENSEE shall promptly contact alleged third party infringers and take all reasonable steps to persuade such third parties to desist from infringing the SKI Patents, including
initiating and prosecuting an infringement action if necessary, or defending a challenge to the validity of the SKI Patents. LICENSEE also shall notify SKI of each instance of alleged infringement and
shall keep SKI informed of all stages of SKI Patents enforcement. LICENSEE may use the name of SKI as party plaintiff. All costs of any action to enforce SKI Patents A and SKI Patents B taken by
LICENSEE shall be borne by LICENSEE and LICENSEE shall keep any recovery of damages derived therefrom, the excess of such recovery over such costs shall be included in LICENSEE's Net Sales. No
settlement, consent judgment or other voluntary final disposition of the suit may be entered into without the prior written consent of SKI, which consent shall not unreasonably be withheld.

	7.2
	In
the event LICENSEE becomes aware of unlicensed infringement of SKI Patents A or SKI Patents B, either through notice from SKI or by other means, and does not, within six
(6) months (a) secure cessation of the infringement; or (b) enter suit against the infringer; or (c) provide SKI with evidence of pendency of a bona fide negotiation for
sublicensing the infringer, then, thirty (30) days after giving written notice to LICENSEE, SKI shall have the right to (a) sue for the infringement at SKI's own expense, and to collect
for its own use any damages, profits and awards of whatever nature that it may recover for such infringement; and (b) terminate this Agreement according to terms of Article XII. 

8

 
	7.3
	Each
party shall promptly notify the other in writing in the event that a third party shall bring a claim of infringement against SKI or LICENSEE, either in the United States
or in any foreign country in which there are SKI Patents.

	7.4
	In
the event LICENSEE is sued for patent infringement, threatened with such suit, or enjoined from exercising its license rights granted hereunder, LICENSEE may terminate this
Agreement according to Article XII or contest the action against it. In any such action, LICENSEE shall be fully responsible for all its costs, including expenses, judgements and
settlements, and shall be entitled to proceeds that it may recover, including judgements, settlements and awards, the excess of such recovery over such costs shall be included in LICENSEE's Net Sales.

	7.5
	In
any infringement suit as either party may institute to enforce the SKI Patents against third parties pursuant to this Agreement, or in any infringement action brought against
either party by a third party, each party hereto shall, at the request and expense of the other party, cooperate in all respects and, to the extent possible, have its employees testify when requested
and make available relevant records, papers, information, samples, specimens, and the like. 

 
 

ARTICLE VIII—INDEMNIFICATION, PRODUCT LIABILITY, WARRANTIES    
    

	8.1
	LICENSEE
shall at all times during the term of this Agreement and thereafter, indemnify, defend and hold SKI and its Affiliates, their Board of Managers, officers, employees and
affiliates, harmless against all claims and expenses, including legal expenses and reasonable attorneys' fees, arising out of the death of or injury to any person or persons or out of any damage to
property and against any other claim, proceeding, demand, expense and liability of any kind whatsoever resulting from the production, manufacture, sale, use, lease, consumption or advertisement of the
Licensed Products arising from any obligation of LICENSEE hereunder, except to the extent such claims or expenses are caused by the gross negligence or willful misconduct of SKI, and its Affiliates,
their Board of Managers, officers, or employees.

	8.2
	For
the term of this Agreement, upon the commencement of clinical use, production, sale, or transfer, whichever occurs first, of any Licensed Products, LICENSEE shall obtain and carry
in full force and effect general liability insurance which shall protect LICENSEE and SKI in regard to events covered by Section 8.1 above. Such insurance shall be written by a reputable
insurance company, shall list SKI as an additional named insured thereunder, shall be endorsed to include liability coverage, and shall require thirty (30) days written notice to be given to
SKI prior to any cancellation or material change thereof. The limits of such insurance shall not be less than one million dollars ($1,000,000) per occurrence with an annual aggregate of three million
dollars ($3,000,000) for personal injury, death or property damage. LICENSEE shall provide SKI with Certificates of Insurance evidencing the same.

	8.3
	SKI
represents and warrants that: (i) it is a New York membership corporation duly organized validly existing and in good standing under the laws of New York;
(ii) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of SKI; (iii) to SKI's best knowledge, SKI is the
sole and exclusive owner of all right, title and interest in and to the SKI Patents and Know-How, with the exception of SK625B, listed in Exhibit A, which is jointly owned with the
Trustees of Columbia University in the City of New York; (iv) SKI has the right to grant the rights and licenses granted herein; (v) the SKI Patents and Know-How are
free and clear of any lien, encumbrance, or security interest; (viii) there are no threatened or pending actions, suits, investigations, claims or proceedings in any way relating to the SKI
Patents or Know-How.

	8.4
	In
the event that any indemnitee intends to claim indemnification under this Article VIII it shall promptly notify the other party in writing of such potential liability. The
indemnifying party shall have the right to control the defense thereof. The affected indemnitees shall cooperate fully with 

9

 

the
indemnifying party and its legal representatives in the investigation and conduct of any liability covered by this Article VIII. Notwithstanding the foregoing, neither party shall have
indemnity obligations for any claim if the indemnitee seeking indemnification makes any admission, settlement or other communication regarding such claim without the prior written consent of the
indemnifying party. 

	8.5
	Except
as otherwise expressly set forth in this Agreement, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF SKI PATENTS CLAIMS, ISSUED OR PENDING. 

 
 

ARTICLE IX—EXPORT CONTROLS    
    

        It is understood that SKI is subject to United States Laws and regulations controlling the export of technical data, computer software, laboratory
prototypes and other commodities (including the Arms Export Control Act, as amended and the Export Administration Act of 1979), and that its obligations hereunder are contingent on compliance with
applicable United States export laws and regulations. The transfer of certain technical data and commodities may require a license from the cognizant agency of the United States
Government and/or written assurances by LICENSEE that LICENSEE shall not export data or commodities to certain foreign countries without prior approval of such agency. SKI neither represents that a
license shall not be required nor that, if required, it shall be issued. 

 
 

ARTICLE X—NON-USE OF NAMES    
    

        LICENSEE shall not use the names of SKI or its Affiliates, nor any of their employees, nor any adaptation thereof, in any advertising, promotional or sales
literature without prior written consent obtained from SKI in each case; provided that once a particular disclosure has been approved, further disclosures which do not differ materially therefrom may
be made by LICENSEE without obtaining any further consent of SKI. 

 
 

ARTICLE XI—ASSIGNMENT    
    

	11.1
	This
Agreement may not be assigned by LICENSEE without prior written consent from SKI.

	11.2
	Notwithstanding
the foregoing prohibition, LICENSEE may without SKI's consent assign this Agreement to any entity that it may merge into, consolidate with, or transfer substantially
all of its assets ("substantially" being EIGHTY PERCENT (80%) or more thereof) to which this Agreement relates, so long as the successor surviving corporation in any such merger, consolidation,
transfer or reorganization assumes in writing the obligations of this Agreement. Such merger, consolidation, transfer or reorganization shall not in itself be a breach of this Article XI,
nor be any default under this Agreement. 

 
 

ARTICLE XII—TERMINATION    
    

	12.1
	Unless
earlier terminated pursuant to this Article XII, this Agreement shall terminate upon the later to occur of (a) the last to expire of the SKI Patents or
(b) twenty (20) years.

	12.2
	SKI
may terminate this Agreement if LICENSEE becomes insolvent or, a petition in bankruptcy is filed against LICENSEE and is consented to, acquiesced in or remains undismissed for
thirty (30) days; or makes a general assignment for the benefit of creditors, or a receiver is appointed for LICENSEE, and LICENSEE does not return to solvency before the expiration of a thirty
(30) day period. 

10

 
	12.3
	Should
LICENSEE fail to pay SKI license fees, royalties and patent expenses due and payable hereunder for more than thirty (30) days, SKI shall have the right to terminate
this Agreement on thirty (30) days written notice, unless LICENSEE shall pay SKI within the thirty (30) day period, all such license fees, royalties and patent expenses and interest due
and payable. Upon the expiration of the thirty (30) day period, if LICENSEE shall not have paid all such royalties, patent expenses and interest due and payable, the rights, privileges and
license granted hereunder shall terminate.

	12.4
	As
set out in Section 3.2, should the parties fail to agree upon a Timeline within sixty (60) days of the Effective Date, of if LICENSEE should fail to meet a
development milestone as specified in the Timeline, SKI shall have the right to terminate this Agreement and the rights, privileges and license granted hereunder by sixty (60) days' notice to
LICENSEE. Such termination shall become effective unless mutual agreement is reached, or LICENSEE shall have reached the necessary milestone prior to the expiration of the sixty (60) day
period.

	12.5
	Upon
any material breach of this Agreement by LICENSEE, other than those occurrences set out in Sections 12.1, 12.2 and 12.3, hereinabove, which shall always take
precedence in that order over any material breach or default referred to in this Section 12.3, SKI shall have the right to terminate this Agreement and the rights, privileges and license
granted hereunder by sixty (60) days' notice to LICENSEE. Such termination shall become effective unless LICENSEE shall have cured any such breach prior to the expiration of the sixty
(60) day period.

	12.6
	Upon
written notice to the LICENSEE for the material breach of the Common Stock Issuance Agreement by the LICENSEE and the failure to cure such material breach within sixty
(60) days, the licenses granted under this Agreement may be terminated by SKI.

	12.7
	LICENSEE
shall be entitled to terminate this Agreement upon (i) sixty (60) days advance written notice to SKI, (ii) in the event of SKI's material breach of any
of the provisions of this Agreement, which breach is not cured (if capable of being cured) within this sixty (60) day period, or (iii) if conditions of Section 7.4 apply.

	12.8
	Upon
termination of this Agreement for any reason, nothing herein shall be construed to release either party from any obligation that matured prior to the effective date of such
termination.

	12.9
	Other
than any claim arising from LICENSEE's failure to pay undisputed license fees or patent expenses due under this contract, any controversy or bona fide disputed claim arising
between the parties to this Agreement, which dispute cannot be resolved by mutual agreement shall, by the election of either party, be resolved by submitting to dispute resolution before a
fact-finding mediation body composed of one or more experts in the field, selected by mutual agreement within thirty days of written request by either party. Said dispute resolution shall
be held in New York at such place as shall be mutually agreed upon in writing by the parties. The fact-finding body shall determine who shall bear the cost of said resolution. In
the event that the parties cannot mutually agree within said thirty (30) days on the dispute resolution body, the parties will go to arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association.

	12.10
	In
the event of any termination of this Agreement any sublicenses granted by LICENSEE shall remain in force and effect and shall be assigned by LICENSEE to SKI, provided, that such
sublicensee is currently in good standing with regard to its obligations under the sublicense or has cured any default or breach within the period provided in such sublicense, and further provided,
that the financial obligations of each such sublicensee shall be limited to those due SKI hereunder for the practice of such a sublicense.

	12.11
	Article VIII,
and Article X of this Agreement shall survive termination. 

11

 
 
 

ARTICLE XIII—PAYMENTS, NOTICES AND OTHER COMMUNICATIONS    
    

        Any payment, notice or other communication pursuant to this Agreement shall be sufficiently made or given when delivered by courier or other means providing proof
of delivery to such party at its address below or as it shall designate by written notice given to the other party: 

        In
the case of SKI: 

Sloan-Kettering
Institute for Cancer Research

1275 York Avenue

New York, New York 10021 

Attention:
James S. Quirk

Senior Vice President

Research Resources Management 

        In
the case of LICENSEE: 

Optimer
Pharmaceuticals, Inc.

10110 Sorrento Valley Road, Suite C

San Diego, California, 92121

Attention: Michael N. Chang, CEO 

 
 

ARTICLE XIV—MISCELLANEOUS PROVISIONS    
    

	14.1
	This
Agreement shall be construed, governed, interpreted and applied in accordance with the laws of the State of New York, except that questions affecting the construction and
effect of any patent shall be determined by the law of the country in which the patent was granted.

	14.2
	Except
as expressly provided in this Agreement, neither party shall use for its own benefit or the benefit of any third party, or disclose to any third party, any confidential,
proprietary or trade secret information (the "Confidential Information") received from the other party hereto, during the term of this Agreement and for five (5) years thereafter. All
Confidential Information must be designated as such by disclosing party in writing at or before the disclosure is made in writing, or within thirty (30) days of such disclosure.

	14.3
	Notwithstanding
Section 14.2 above, Confidential Information shall not include any of the following information which the receiving party can demonstrate by contemporaneous
written evidence:

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

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

	c)
	became
generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving party in breach of this
Agreement;

	d)
	was
independently developed by the receiving party without reference to any information or materials disclosed by the disclosing party; or

	e)
	was
subsequently disclosed to the receiving party by a person other than a party without breach of any legal obligation to the disclosing party. 

In
addition, either party may disclose Confidential Information of the other (i) to their legal representatives, employees and Affiliates, and legal representatives and employees of Affiliates, 

12

 

consultants
and sublicensees, to the extent such disclosure is reasonably necessary to achieve the purposes of this Agreement; (ii) in connection with the filing and support of patent
applications as necessary; or (iii) if disclosure is compelled to be disclosed by a court order or applicable law or regulation, provided that the party compelled to make such disclosure
(x) requests confidential treatment of such information, and (y) provides the other party with reasonable advance notice of the compelled disclosure to provide adequate time to seek a
protective order. 

	14.4
	The
provisions of this Agreement are severable, and in the event that any provisions of this Agreement shall be determined to be invalid or unenforceable under any controlling body
of the law, such invalidity or unenforceability shall not in any way affect the validity or enforceability of the remaining provisions hereof.

	14.5
	The
failure of either party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or
excuse a similar subsequent failure to perform any such term or condition by the other party.

	14.6
	The
relationship of the parties hereto is that of independent contractors. The parties hereto are not deemed to be agents, partners or joint ventures of the other for any purpose as
a result of this Agreement or the transactions contemplated thereby.

	14.7
	Neither
party shall lose any rights hereunder or be liable to the other party for damages or losses (except for payment obligations) on account of failure of performance by the
defaulting party if the failure is occasioned by war, strike, fire, Act of God, earthquake, flood, lockout, embargo, governmental acts or orders or restrictions, failure of suppliers, or any other
reason where failure to perform is beyond the reasonable control and not caused by the negligence, intentional conduct or misconduct of the nonperforming party and the nonperforming party has exerted
all reasonable efforts to avoid or remedy such force majeure; provided, however, that in no event shall a party be required to settle any labor dispute or disturbance.

	14.8
	NEITHER
PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OF THE PERFORMANCE OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY
THEORY OF LIABILITY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

	14.9
	At
any time or from time to time on and after the date of this Agreement, Licensor shall at the written request of LICENSEE (i) deliver to LICENSEE such records, data or other
documents in compliance with the provisions of this Agreement, (ii) execute, and deliver or cause to be delivered, all such consents, documents or further instruments of transfer or license,
and (iii) take or cause to be taken all such actions, as LICENSEE may reasonably deem necessary or desirable in order for LICENSEE to obtain the full benefits of this Agreement and the
transactions contemplated hereby.

	14.10
	This
Agreement sets forth the entire agreement and understanding of the parties with respect to the subject matter hereof, and supersedes all prior discussions, agreements and
writings in relating thereto. This Agreement may not be altered, amended or modified in any way except by a writing signed by both parties.

	14.11
	This
Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be an original and all such counterparts shall together constitute
but one and the same agreement. 

13

 

        IN
WITNESS WHEREOF, authorized representatives of the parties have signed and dated this Agreement below. 

	 	Sloan-Kettering Institute

for Cancer Research	 	 	Optimer Pharmaceuticals, Inc.
	
 	

 	
 	

 	

 
	By:	/s/ James S. Quirk
	 	By:	/s/ Michael N. Chang

	 	James S. Quirk

Senior Vice President

Research Resources Management	 	 	Michael N. Chang

CEO

	
 	

 	
 	

 	

 
	Date:	6/17/02
	 	Date:	7/31/02

14

  

 
 

EXHIBIT A    
    

        SKI Patents A, SKI Patents B, SKI Patents C, and SKI Patents D shall mean the United States patents and patent applications listed under the respective
subheadings below and their continuations, continuations-in-part, divisionals; and other continuing applications; reissues; re-examinations; extensions of any kind;
substitutions; registrations and corresponding foreign patents and patent applications: 

	SKI Patents A
	SK625A	 	US patent 5,708,163 "Synthesis of the Breast Tumor-Associated Antigen Defined by Monoclonal Antibody MBrl and Uses Thereof"
	SK625AZ	 	US patent 6,090,789 "Synthesis of the Breast Tumor-Associated Antigen Defined by Monoclonal Antibody MBrl and Uses Thereof"
	SK625C	 	US patent application 09/017,611 "Synthesis of Glycoconjugates of the Globo-H Epitope and Uses Thereof"
	SKI Patents B
	SK759	 	US patent application 09/083,776 "alpha-O-Linked Glycoconjugates With Clustered (2, 6)-Epitopes, Methods of Preparation and Uses Thereof"
	SK816	 	US patent application 09/276,595 "Trimeric Antigenic O-Linked Glycopeptide Conjugates, Methods of Preparation and Uses Thereof"
	SK 893	 	US patent application 09/641,742 "Novel Glycoconjugates, Glycoamino Acids, Intermediates Thereto, and Uses Thereof"
	SKI Patents C
	SK625	 	US patent 5,543,505 "Synthetic Compounds Which Bind to H. Pylori, and Uses Thereof"
	SK625B	 	US patent 6,303,120 "Synthesis of Glycoconjugates of the Lewis Y Epitope and Uses Thereof," which is jointly owned by SKI and The Trustees of Columbia University in the City of New York.
	SK719	 	US patent 6,238,668 "Colon Cancer KH-1 and N3 Antigens"
	SK719Z	 	US patent application 09/833,327 "Colon Cancer KH-1 and N3 Antigens"
	SK760	 	US patent application 09/534,712 "Fucosyl GM1-KLH Conjugate Vaccine Against Small Cell Lung Cancer"
	SKI Patents D
	SK883	 	US patent application 09/794,905 "Affinity Matrix Bearing Tumor-Associated Carbohydrate- or Glycopeptide-Based Antigens and Uses Thereof"

15

 
 
 

EXHIBIT B
  
    Clinical Development Milestones—Timeline    
    

16

 
 
 

EXHIBIT C
  
    Common Stock Issuance Agreement    
    

17

QuickLinks

Exhibit 10.5

Text Omitted and Filed Separately CONFIDENTIAL TREATMENT REQUESTED Under 17 C.F.R. §§ 200.80(b)(4) and 230.406

FIRST AMENDMENT TO LICENSE AGREEMENT Between Optimer Pharmaceuticals, Inc. and Sloan-Kettering Institute for Cancer Research

LICENSE AGREEMENT for SKI's technology "Carbohydrate Cancer Vaccines" (SK#6637)

TABLE OF CONTENTS

WITNESSETH

ARTICLE I—DEFINITIONS

ARTICLE II—GRANT

ARTICLE III—DUE DILIGENCE, REGULATORY MATTERS

ARTICLE IV—PAYMENTS

ARTICLE V—REPORTS AND RECORDS

ARTICLE VI—PATENT PROSECUTION

ARTICLE VII—INFRINGEMENT

ARTICLE VIII—INDEMNIFICATION, PRODUCT LIABILITY, WARRANTIES

ARTICLE IX—EXPORT CONTROLS

ARTICLE X—NON-USE OF NAMES

ARTICLE XI—ASSIGNMENT

ARTICLE XII—TERMINATION

ARTICLE XIII—PAYMENTS, NOTICES AND OTHER COMMUNICATIONS

ARTICLE XIV—MISCELLANEOUS PROVISIONS

EXHIBIT A

EXHIBIT B Clinical Development Milestones—Timeline

EXHIBIT C Common Stock Issuance Agreement

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