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    Exhibit 4.1    
    

	COMMON STOCK

  

NUMBER
 0001	 	

	 	COMMON STOCK

  

SHARES
	 	 	 	 	CUSIP 68401H 10 4
	

 	
 	
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE	
 	
SEE REVERSE FOR

CERTAIN DEFINITIONS

THIS CERTIFIES THAT  

PROOF  

is the record holder of  

	FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, $0.001 PAR VALUE PER SHARE, OF
	

	OPTIMER PHARMACEUTICALS, INC.	

	transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this Certificate properly endorsed.
	This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar.
	 	 WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.
	

DATED:
	OPTIMER PHARMACEUTICALS, INC.

INCORPORATED NOVEMBER 18, 1998

DELAWARE
	[SIGNATURE TO APPEAR HERE]	 	[SIGNATURE TO APPEAR HERE]
	

SECRETARY	

 	

PRESIDENT

	

 	
 	

COUNTERSIGNED AND REGISTERED:
	 	 	AMERICAN STOCK TRANSFER & TRUST COMPANY
	 	 	TRANSFER AGENT AND REGISTRAR
	 	 	BY:	 	 
	

 	
 	

AUTHORIZED SIGNATURE

OPTIMER PHARMACEUTICALS, INC.  

        The Corporation will furnish without charge to each stockholder who so requests a statement of the powers, designations, preferences, and relative, participating,
optional or other special rights of each class of stock or series thereof of the Corporation, and the qualifications, limitations or restrictions of such preferences and/or rights. 

        The
following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or
regulations: 

	TEN COM	=	 	as tenants in common	 	UNIF GIFT MIN ACT	-	  
	Custodian	  

	TEN ENT	=	 	as tenants by the entireties	 	 	 	(Cust)	 	(Minor)
	JT TEN	=	 	as joint tenants with right	 	 	 	under Uniform Gifts to Minors	 	 
	 	 	 	of survivorship and not as tenants in common	 	 	 	Act

	 	 	 	 	 	 	 	 	(State)
	 	 	 	 	 	UNIF TRF MIN ACT	-	  
	Custodian	(until age                   )
	 	 	 	 	 	 	 	(Cust)	 	 
	

 	

 	
 	

 	
 	

 	

 	

  
	

under Uniform Transfers
	 	 	 	 	 	 	 	(Minor)	 
	 	 	 	 	 	 	 	to Minors Act

	 	 	 	 	 	 	 	 	(State)

Additional abbreviations may also be used though not in the above list. 

	For Value received,	 	 	hereby sell, assign and transfer unto
	 	
	 	 

	

PLEASE INSERT SOCIAL SECURITY

OR OTHER IDENTIFYING NUMBER OF ASSIGNEE	
 	

 
	  
	 	 
	 	 	 
	  
	 	 

	

  
 (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
	

  

	

  

	

  
	

Shares
	of the Common Stock represented by the within Certificate, and do(es) hereby irrevocably constitute and appoint	 
	

  
	

Attorney
	to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.	 

	

Dated	

  
	
 	
X	

  

	

 	

 	
 	
X	

  

	

 	

 	
 	

NOTICE:	

THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
	

SIGNATURES GUARANTEED:	
 	

 	

 

	

By	
 	

  
	
 	

 
	 	 	THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.	 	 

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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 ($50,000) 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 (20%) 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:

	•
	Five
hundred thousand dollars ($500,000) upon commencement of Phase III clinical studies; 

5

 

	•
	Seven
hundred and fifty thousand dollars ($750,000) upon first New Drug Application (NDA) filing;

	•
	One
million five hundred thousand dollars ($1,500,000) upon marketing approval in the United States;

	•
	One
million dollars ($1,000,000) 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
  
    [Not Attached]    
    

16

 
 
 

EXHIBIT C
  
    Common Stock Issuance Agreement    
    

        THIS COMMON STOCK ISSUANCE AGREEMENT (this "Agreement") is entered into as of June 14, 2002, by and between Optimer Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), and Sloan-Kettering Institute for Cancer Research, a membership corporation organized under the laws of New York ("Investor"). 

        THE
PARTIES HEREBY AGREE AS FOLLOWS: 

        1.    Purchase and Sale of Common Stock.    Subject to the terms and conditions of this Agreement, Investor agrees to
purchase and the Company agrees to issue and sell to Investor one hundred and twenty thousand (120,000) shares (the "Shares") of the Common Stock of the Company, par value $0.001 (the "Common Stock")
in partial consideration for Investor's entering into a License Agreement with the Company dated the date hereof, in the form attached hereto as  Exhibit A (the "License Agreement"). The Company
shall deliver a certificate to Investor representing the Shares hereunder upon the Company's
receipt of a duly executed copy of the License Agreement from Investor. 

        2.    Representations and Warranties of the Company.    The Company hereby represents and warrants to Investor that,
except as set forth in the Schedule of Exceptions attached hereto as Exhibit B, the statements in the following paragraphs of this
Section 2 are true and correct as of the date hereof: 

        2.1    Organization and Good Standing.    The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which it is required to do so, except to the extent
that any failure or failures to so qualify would not, either singly or in the aggregate, have a material adverse effect on its business or properties. True, correct and complete copies of the Restated
Certificate of Incorporation (the "Restated Certificate") and Bylaws of the Company as in effect on the date hereof are annexed hereto as Exhibits C and
D, respectively. 

        2.2    Authorization.    All corporate action on the part of the Company, its officers, directors and stockholders
necessary for the authorization, execution and delivery of this Agreement and the License Agreement, the performance of all obligations of the Company hereunder and thereunder, including, without
limitation, the authorization, sale and issuance of the Shares being sold hereunder has been taken. Each of this Agreement and the License Agreement constitutes a valid and legally binding obligation
of the Company, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies. 

        2.3    Valid Issuance of Shares.    The Shares that are being issued to the Investor hereunder, when issued, sold and
delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable and will be free of restrictions on
transfer, other than restrictions on transfer under this Agreement and under applicable state and federal securities laws. 

        2.4    Capitalization.    The authorized and issued capital and rights to purchase securities of the Company will
consist immediately prior to the sale of the Shares of: 

        2.4.1    Preferred Stock.    19,000,000 shares of preferred stock, par value $0.001 (the "Preferred Stock"), 5,000,000
of which have been designated Series A Convertible Preferred Stock (the "Series A Preferred Stock"), 3,400,000 of which are issued and outstanding, and 14,000,000 of which have been
designated Series B Convertible Preferred Stock (the "Series B 

17

 

Preferred
Stock"), 8,954,431 of which are issued and outstanding. The outstanding shares of Preferred Stock are convertible as of the date hereof into an aggregate of Common Stock at a ratio of 1.2
shares of Common Stock for each share of Preferred Stock; provided, however, that the conversion ratio of the Preferred Stock may be subject to adjustment in the future. 

        2.4.2    Common Stock.    29,000,000 shares of Common Stock, par value $0.001 of which 4,046,973 shares are issued and
outstanding and 120,000 shares of which will be issued pursuant to this Agreement. 

        2.4.3    Other Rights.    Except for (a) the conversion privileges of the Preferred Stock, (b) options
to purchase up to 2.5 million shares of Common Stock granted or reserved for grant to employees, consultants, officers or directors, and (c) 30,000 warrants, there are not outstanding
any options, warrants, rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from the Company of any shares of its capital stock. 

        The
designations, rights, preferences and limitations in respect of the Common Stock, the Series A Preferred Stock and the Series B Preferred Stock are as set forth in the
Company's Amended and Restated Certificate of Incorporation (the "Restated Certificate") and as provided by law. All outstanding shares of capital stock of the Company are duly authorized, fully paid
and non-assessable. 

        2.5    No Conflict.    To the Company's knowledge, the execution, delivery and performance of, and the consummation of
the transactions contemplated by, this Agreement and the License Agreement, including, without limitation, the offer, sale, issuance and delivery of the Shares pursuant to this Agreement, have not
resulted and will not result in (a) any violation of, or default under, or conflict with, or constitute, with or without the passage of time, the giving of notice, any violation of, or default
under or give rise to any right of termination, cancellation or acceleration under (i) any term or provision of the Restated Certificate or Bylaws, (ii) any material term or provision of
any (A) contract, agreement, instrument, arrangement or understanding, or (B) judgment, order, writ, injunction or decree of any court, government agency or any arbitrator, in each case,
to which the Company is a party or by which it or its properties or assets are bound, or (iii) any statute, rule or regulation applicable to the Company or its properties or assets, except for
such violations, defaults or conflicts which could not, either singly or in the aggregate, reasonably be expected to have a material adverse effect on the business or properties of the Company or
(b) the creation of any security interest, mortgage, pledge, lien, charge or other encumbrance (each, an "Encumbrance") upon any of the properties or assets of the Company, except for such
Encumbrances which could not, either singly or in the aggregate, reasonably be expected to have a material adverse effect on the business or properties of the Company. 

        2.6    Governmental Consents.    To the Company's knowledge, no consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the consummation of
the transactions contemplated by this Agreement, except for such filings as are required pursuant to applicable federal and state securities laws and blue sky laws, which filings will be effected
within the required statutory period. 

        2.7    Offering.    Subject to the accuracy of Investor's representations in Section 3, the offer and sale of
the Shares to be issued in conformity with the terms of this Agreement constitute transactions exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended
(the "Act"), and in compliance with all applicable state securities or blue sky laws. 

        2.8    Compliance with Law and Charter Documents and Agreements.    The Company is not, in any materially adverse
effect, in violation or default of any provisions of its Restated Certificate or 

18

 

Bylaws,
as amended to date. To the Company's knowledge, the Company is in compliance with all applicable statutes, laws, rules, regulations, orders, judgments, writs, injunctions or decrees of the
United States of America and all states, foreign countries or other governmental bodies and agencies and all courts or arbitrators having jurisdiction over the Company's business or properties, except
where any failure or failures to be in compliance therewith could not, either singly or in the aggregate, reasonably be expected to have a material adverse effect on the business or properties of the
Company. 

        2.9    Registration Rights.    Except as provided in the Investors' Rights Agreement, the Company has not granted or
agreed to grant to any person or entity any rights (including piggyback registration rights) to have any securities of the Company registered with the United States Securities and Exchange Commission
or any other governmental authority. 

        2.10    Intellectual Property.    To the Company's knowledge and inclusive of the License Agreement, the Company has
all right, title and interest in, or a valid and binding license or other right to use, all of the intellectual property which is currently used by the Company in the conduct of its business, except
to the extent that any failure or failures to have such rights has not had and would not, either singly or in the aggregate, be reasonably likely to have a material adverse effect on the business or
properties of the Company. 

        2.11    No Defaults; Contracts.    To the Company's knowledge, the Company has performed all obligations required to
be performed by it and is not in breach or default under any contract, commitment or instrument, which breach or default (or breaches or defaults), would, either singly or in the aggregate, have a
material adverse effect on the business or properties of the Company, and no event or condition
has occurred which, with the giving of notice or passage of time, or both, would constitute such a breach or default. 

        2.12    Litigation.    To the Company's knowledge, there is no action, suit, proceeding or investigation pending, or
to the Company's knowledge, currently threatened against the Company or its assets or properties or that questions the validity of this Agreement or the License Agreement or the right of the Company
to enter into this Agreement or the License Agreement or to consummate the transactions contemplated hereby or thereby. 

        2.13    Financial Statements.    Exhibit E sets forth the
following financial statements of the Company (collectively, the "Financial Statements"): (i) the audited consolidated balance sheet as of December 31, 2001 (the "Balance Sheet") and
(ii) the audited consolidated statements of operations, stockholders' equity and cash flows of the Company for the twelve (12) month period ended December 31, 2001. 

        2.13.2    Integrity of Financial Statements; No Undisclosed Liabilities.    The Financial Statements:
(i) present fairly the financial position and the results of operations, stockholders' equity and cash flows of the Company at the dates and for the periods indicated, except that they are
subject to normally recurring year-end and audit adjustments, which adjustments, individually or in the aggregate, will not be material, (ii) are in accordance with the books and
records of the Company and (iii) have been prepared in accordance with generally accepted accounting principles consistently applied ("GAAP). To the Company's knowledge, except as set forth in
the Financial Statements, the Company has no material liabilities, contingent or otherwise, other than (A) liabilities incurred in the ordinary course of business subsequent to
December 31, 2001 and (B) obligations under contracts and commitments incurred in the ordinary course of business and not required under GAAP to be reflected in the Financial Statements,
which, either singly or in the aggregate, are not material to the financial condition or operating results of the Company. 

19

 

        2.13.3    No Material Adverse Change.    To the Company's knowledge, since the date of the Balance Sheet, there has
not been any material adverse change in the condition (financial or otherwise), assets, liabilities, operations, earnings, stockholders' equity, cash flows or prospects of the Company. 

        2.14    Solvency.    The Company has not admitted in writing its inability to pay its debts generally as they become
due, filed or consented to the filing against it of a petition in bankruptcy or a petition to take advantage of any insolvency act, made an assignment for the benefit of creditors, consented to the
appointment of a receiver for itself or for the whole or any substantial part of its property, or had a petition in bankruptcy filed against it, been adjudicated a bankrupt, or filed a petition or
answer seeking reorganization or arrangement under the federal bankruptcy laws or any other laws or of the United States or any other jurisdiction. 

        2.15    Related Party Transactions.    All agreements between the Company and its officers, directors or affiliates
(as defined in Rule 405 of the Act) have been authorized in accordance with Delaware law. 

        3.    Representations and Warranties of the Investor.    

        Investor
hereby represents, warrants and covenants that: 

        3.1    Authorization.    Investor has full power and authority to enter into this agreement and such agreement
constitutes its valid and legally binding obligation, enforceable in accordance with its terms. 

        3.2    Purchase Entirely for Own Account.    This Agreement is made with Investor in reliance upon Investor's
representation to the Company, which by Investor's execution of this Agreement Investor hereby confirms, that the Shares to be received by Investor will be acquired for investment for Investor's own
account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that Investor has no present intention of selling, granting any participation in or
otherwise distributing the same. By executing this Agreement, Investor further represents that Investor does not have any contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with respect to any of the Shares. Notwithstanding the foregoing, the Company acknowledges that the inventors of the patent
rights that are the subject of the License Agreement may share with Investor the proceeds from the ultimate sale of the Shares. 

        3.3    Disclosure of Information.    Investor believes it has received all the information it considers necessary or
appropriate for deciding whether to purchase the Shares. Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and
conditions of the offering of the Shares and the business, properties, prospects and financial condition of the Company. 

        3.4    Investment Experience.    Investor is an investor in securities of companies in the development stage and
acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating
the merits and risks of the investment in the Shares. Investor also represents it has not been organized for the purpose of acquiring the Shares. 

        3.5    Restricted Securities.    Investor understands that the Shares it is purchasing are characterized as
"restricted securities" under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable
regulations the Shares may be resold without registration under the Act only in certain limited circumstances. In the absence of an effective registration statement covering the Shares or an available
exemption from registration under the Act, the Shares must be held 

20

 

indefinitely.
In this regard, Investor represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Act, including
without limitation the Rule 144 condition that current information about the Company be available to the public. 

        3.6    Further Limitations on Disposition.    Without in any way limiting the representations set forth above,
Investor further agrees not to make any disposition of all or any portion of the Shares unless and until the transferee has agreed in writing for the benefit of the Company to be bound by all terms of
this Agreement and the License Agreement (if any) applicable to the Shares, and: 

        3.6.1 There
is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with such registration
statement; 

        3.6.2 Such
disposition is to be made pursuant to SEC Rule 144 or any successor rule (provided that the Company is furnished with satisfactory evidence of compliance
with SEC Rule 144 or such successor rule); or 

        3.6.3 (i) If
such proposed disposition is prior to the initial public offering of securities of the Company or is not made pursuant to Section 3.6.1 or 3.6.2
hereof, Investor shall have notified the Company of the proposed disposition and shall have furnished the Company with a reasonably detailed statement of the circumstances surrounding the proposed
disposition, and (ii) if requested by the Company, Investor shall have furnished the Company with an opinion of counsel reasonably satisfactory to the Company that such disposition will not
require registration of such shares under the Act. The parties agree that the Company may restrict the transfer of the Shares pursuant to this Section 3.6.3 in its discretion unless furnished
with such an opinion. 

        3.7    Restrictive Legends.    It is understood that the certificates evidencing the Shares may bear one or all of the
following legends in substantially the following form(s): 

        3.7.1     These
securities have not been registered or qualified under the securities act of 1933, as amended (the "act") or the securities or blue sky laws of
CALIFORNIA or any other state and may not be
offered and sold unless registered and/or qualified pursuant to the relevant provisions of federal and state securities or blue sky laws or an exemption from such registration or qualification is
applicable. Therefore, no sale or transfer of this security shall be made, no attempted sale or transfer shall be valid, and the issuer shall not be required to give any effect to any such transaction
unless (a) such transaction shall have been duly registered under the act and qualified or approved under applicable state or blue sky laws, or (b) such transaction is pursuant to
rule 144 promulgated under the act or (c) the issuer shall have received an opinion of counsel reasonably satisfactory to it that such registration, qualification or approval is not
required. 

        3.7.2    Removal of Legend.    Notwithstanding anything herein to the contrary, the restrictions imposed by
Section 3.6 hereof and this Section 3.7 on the transferability of any of the Shares shall cease and terminate when: (a) any such Shares are transferred or otherwise disposed of in
accordance with the intended method of disposition set forth in a registration statement or such other method that does not require that the securities transferred bear the legend set forth in
Section 3.7.1 hereof; or (b) the holder of such Shares has met the requirements for transfer pursuant to subparagraph (k) of Rule 144 (or any successor rule) promulgated by
the Commission under the Securities Act. Whenever the restrictions imposed by Section 3.6 hereof and this Section 3.7 have terminated as described in the immediately preceding sentence
or, in the opinion (reasonably acceptable to the Company) of counsel to the holder of the Shares, have otherwise terminated, a holder of a certificate for such Shares as to which such restrictions
have terminated shall be entitled to receive from the Company, 

21

 

without
expense, a new certificate not bearing the restrictive legend set forth in Section 3.7.1 hereof and not containing any other reference to the restrictions imposed by this Agreement. 

        3.7.3     Any
legend required by the laws of the State of California, including any legend required by the California Department of Corporations and Sections 417
and 418 of the California Corporations Code. 

        3.8    Tax Advisors.    Investor has reviewed with its own tax advisors the federal, state foreign and local tax
consequences of this investment, where applicable, and the transactions contemplated by this Agreement. With respect to such tax consequences, Investor is relying solely on such advisors and not on
any statements or representations of the Company or any of its agents and understands that Investor (and not the Company) shall be responsible for Investor's own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement. 

        3.9    Investor's Counsel.    Investor acknowledges that Investor has had the opportunity to review this Agreement,
the exhibits attached hereto and the transactions contemplated by this Agreement with Investor's own legal counsel. Investor is relying solely on Investor's legal counsel and not on any statements or
representations of the Company or any of the Company's agents, including Wilson Sonsini Goodrich & Rosati, for legal advice with respect to this investment or the transactions contemplated by
this Agreement. 

        3.10    Market Stand-off Agreement.    Investor hereby agrees that, during the period of duration
specified by the Company and the lead underwriter in the initial public offering of the Company's Common Stock pursuant to a registration statement filed under the Act, it shall not, to the extent
requested by the Company or such underwriter, directly or indirectly sell, offer to sell, contract to sell (including, without limitation, any short sale), grant any option to purchase or otherwise
transfer or dispose of (other than to donees who agree to be similarly bound) any securities of the Company held by it at any time during such period except Common Stock included in such registration;
provided, however, that in no event shall such period exceed one hundred eighty (180) days following the effective date of the registration statement. 

        In
the event of any stock dividend, stock split, recapitalization or other change affecting the Company's outstanding Common Stock effected without receipt of consideration, then any
new, substituted or additional securities distributed with respect to the Shares shall be immediately subject to the provisions of this Section 3.10. 

        In
order to enforce the foregoing covenant, the Company and Investor agree that the Company may impose stop-transfer instructions with respect to the securities of Investor
until the end of such period. 

        Notwithstanding
the foregoing, the obligations described in this Section 3.10 shall not apply to a registration relating solely to employee benefit plans on
Form S-l or Form S-8 or similar forms which may be promulgated in the future, or a registration relating solely to an SEC Rule 144 transaction on
Form S-4 or similar forms which may be promulgated in the future. 

        The
obligations of Investor under this Section 3.10 shall be conditioned upon similar agreements with at least the same duration being in effect with each other stockholder who is
an officer, director or holder of at least 120,000 shares (subject to appropriate adjustments for stock splits, stock dividends, combinations and other recapitalizations) of Common Stock (directly or
on a Common Stock equivalent basis). In addition, if any such officer, director or shareholder of the Company is released from any such agreement, Investor shall be so released with respect to a
number of Shares that bears the same proportion to the total number of Shares held by the Investor as the number of shares of Common Stock that are released from such lock up bears to 

22

 

the
total number of shares of Common Stock held by such officer, director or stocker, as the case may be. 

        3.11    Rule 144 Compliance.    With a view to making available the benefits of certain rules and regulations
of the Securities and Exchange Commission (the "Commission") which may at any time permit the sale of
the Shares to the public without registration, ninety (90) days after any registration statement covering a public offering of securities of the Company under the Act shall have become
effective and at all times thereafter when any Shares are not eligible for sale under SEC Rule 144(k), the Company agrees to: (i) make and keep public information available, as those
terms are understood and defined in SEC Rule 144; (ii) use its commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and (iii) furnish to each holder of the Shares forthwith upon request a written
statement by the Company as to Company "s compliance with the reporting requirements of SEC Rule 144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed by the Company as such holder may reasonably request in availing itself of any rule or regulation of the Commission
allowing such holder to sell any Shares without registration. 

        4.    California Commissioner of Corporations    

        4.1    Corporate Securities Law.    

        THE
SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION
25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. 

        5.    COVENANTS    

        5.1    Financial Statements; Access to Officers; Confidentiality.    So long as Investor holds at least a majority of
the Shares issued hereunder (subject to appropriate adjustments for stock splits, stock dividends, combinations and other recapitalizations), the Company shall provide to Investor, as soon as
practicable after the end of each fiscal year, and in any event within 120 days thereafter, a consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of such
fiscal year, and consolidated statements of income, stockholders' equity and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with generally accepted
accounting principles, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and all audited and certified by a public accounting firm of
nationally recognized standing selected by the Company. In addition, from time to time, during regular business hours and upon reasonable prior written notice, the Company shall permit representatives
of Investor to discuss Company affairs with Company officers; provided, that the Company is not obligated to discuss any matters to the extent necessary to preserve the attorney-client privilege, to
protect proprietary information or for other similar reasons. Investor agrees, and agrees to cause its representatives to agree, to hold in confidence and trust and not to use or disclose any
confidential or proprietary information of Company disclosed to Investor hereunder. Notwithstanding the foregoing, this Section 5.1 shall not be applicable to disclosures made to Investor
pursuant to the License Agreement, as to which the License Agreement shall govern. 

23

 

        5.2    Termination.    The rights set forth in Section 5.1 shall terminate and be of no further force or effect
upon the earlier of (a) the date of which the sale of securities pursuant to a registration statement filed by the Company under the Act in connection with the firm commitment underwriting of
its securities to the general public is consummated; (b) the date on which the Company first becomes subject to the periodic reporting requirements of Sections 12(g) or 15(d) of the Securities
Exchange Act, as amended; or (c) the first date on which Investor no longer holds a majority of the Shares issued hereunder. 

        5.3    Put Right.    

        If
the Company and Investor agree that the Investor or any Affiliate of the Investor (as defined in the License Agreement) shall conduct clinical trials in connection with Licensed
Product I and/or Licensed Product II (as such term is defined in the License Agreement) then, in any such event, Investor shall have the right (the "Put Right"), at any time thereafter, exercisable by
notice to the Company, from time to time, to require the Company to purchase any or all of the Shares at a purchase price (the "Put Price") equal to the Appraised Value (as hereinafter defined) of the
Shares as of the date of such notice (the "Put Date"), determined in accordance with this section 4.3. The Put Price shall be payable by bank or cashier's check payable in New York Clearing
House funds or by wire transfer of immediately available federal funds to an account designated by Investor. 

        For
purposes of this Agreement, "Appraised Value" shall mean, the fair market value of the Shares if publicly traded. If the Shares are not public traded, the Appraised Value shall be
determined in a good faith determination by the Company's Board of Directors. 

        6.    Miscellaneous    

        6.1    Survival.    The warranties, representations and covenants of the Company and Investor contained in or made
pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing for a period of one (1) year. 

        6.2    Successors and Assigns.    Except as otherwise provided herein, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any Shares). Nothing in this Agreement, express or implied, is intended
to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. 

        6.3    Governing Law.    This Agreement shall be governed by and construed under the laws of the State of California
as applied to agreements among California residents entered into and to be performed entirely within California. 

        6.4    Dispute Resolution.    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 (30) days of written request by either party. Said dispute resolution shall be held in California 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. 

        6.5    Titles and Subtitles.    The titles and subtitles used in this Agreement are used for convenience only and are
not to be considered in construing or interpreting this Agreement. 

24

 

        6.6    Notices.    All notices required or permitted hereunder shall be in writing and shall be deemed effectively
given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the
next business day; (iii) three days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one day after deposit with a nationally
recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be sent to the address as set forth on the signature page hereof or at such other address as such party may designate by ten
days advance written notice to the other parties hereto. 

        6.7    Finder's Fee.    Each party represents that it neither is nor will be obligated for any finders' fee or
commission in connection with this transaction. Investor agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finders' fee (and
the costs and expenses of defending against such liability or asserted liability) for which Investor or any of its officers, partners, employees or representatives is responsible. The Company agrees
to indemnify and hold harmless Investor from any liability for any commission or compensation in the nature of a finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which the Company or any of its officers, employees or representatives is responsible. 

        6.8    Expenses.    Each party shall pay all costs and expenses that it incurs with respect to the negotiation,
execution, delivery and performance of this Agreement. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 

        6.9    Amendments and Waivers.    Any term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investor. 

        6.10    Severability.    If one or more provisions of this Agreement are held to be unenforceable under applicable
law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its
terms. 

        6.11    Entire Agreement.    This Agreement and the License Agreement (including any schedules and exhibits hereto or
thereto) constitute the entire agreement among the parties and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically
set forth herein or therein. 

        6.12    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. 

        [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK] 

25

 

        IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. 

	

 	
 	

 	
 	
OPTIMER PHARMACEUTICALS, INC.
	

 	
 	

 	
 	

By:	
 	

 
	 	 	 	 	 	 	
 Michael N. Chang

CEO
	

 	
 	

Address:	
 	

10110 Sorrento Valley Road, Suite C

San Diego, California 92121
	

 	
 	

 	
 	
INVESTOR:
	

 	
 	

 	
 	
SLOAN-KETTERING INSTITUTE FOR

CANCER RESEARCH
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	 	 	
 James S. Quirk

Senior Vice President

Research Resources Managment
	

 	
 	

Address:	
 	

1275 York Avenue

New York, NY 10021

26

 
 

EXHIBIT A
  
    LICENSE AGREEMENT    
    

 
 

[Please see, "License Agreement for SKI's Technology, "Carbohydrate Cancer Vaccines"' attached
  as this Exhibit 10.5 to this Amendment No. 4 to
  Optimer Pharmaceuticals, Inc.'s
Form S-1 Registration Statement]    

 
 

EXHIBIT B
  
    SCHEDULE OF EXCEPTIONS
  
    [No Attachment]    

 
 

EXHIBIT C
  
    RESTATED CERTIFICATE OF INCORPORATION    
    

 
 

AMENDED AND RESTATED
  
    CERTIFICATE OF INCORPORATION
  
    OF
  
    OPTIMER PHARMACEUTICALS, INC.    
    

        (Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware) 

The
original Certificate of Incorporation of the Corporation was filed with the Secretary of the State of Delaware on November 18, 1998. 

 
 

ARTICLE I    

        The
name of this corporation is Optimer Pharmaceuticals, Inc. (the "Corporation"). 

 
 

ARTICLE II    

        The
name and address of the registered office of the corporation in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, County of New Castle, Wilmington, Delaware
19801. 

 
 

ARTICLE III    

        The
purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law. 

 
 

ARTICLE IV    

        The
aggregate number of shares that the corporation shall have authority to issue is 48,000,000 shares divided into 29,000,000 shares of Common Stock, each with $.001 par value ("Common
Stock"), and 19,000,000 shares of Preferred Stock, each with $.001 par value. The first series of Preferred Stock shall be designated Series A Preferred Stock ("Series A Preferred") and
shall consist of 5,000,000 shares. The second series of Preferred Stock shall be designated Series B Preferred Stock ("Series B Preferred") and shall consist of 14,000,000 shares. 

        The
relative powers, preferences, special rights, qualifications, limitations and restrictions granted to or imposed or the respective classes of the shares of capital stock or the
holders thereof are as follows: 

        1.    Dividends.    

        (a)    Dividend Preference.    The holders of outstanding shares of Series A Preferred and Series B
Preferred shall be entitled to receive dividends, on a pari-passu basis and out of any assets at the time legally available therefor, prior and in preference to any declaration or payment
of any dividend (payable other than in Common Stock) on the Common Stock, at the rate of $0.08 per annum and $0.29 per annum, respectively (as adjusted for any stock dividends, combinations or stock
splits), or, if greater (as determined on an as-converted basis for the Preferred Stock), an amount equal to that paid on the outstanding shares of Common Stock, when, as and if declared
by the Board of Directors of the Corporation; provided, however, that the Board of Directors is under no
obligation to pay dividends to such holders, and such dividends, if any, shall be noncumulative. No rights shall accrue to the holders of the Preferred Stock if dividends are not declared in any prior
year. Such dividends may be payable quarterly or otherwise as the Board of Directors may from time to time determine. All dividends per share on the Preferred Stock shall be declared and paid pro rata
(1) such that the ratio of dividends being declared and paid per share of Series A Preferred to dividends being declared and paid per share of Series B Preferred is the same as
the ratio of $0.08 to $0.29 (as adjusted for any stock dividends, combinations or stock splits), and (2) as among the holders of each series based on the number of shares of such series so
held. 

 

        (b)    Priority of Dividends.    The Corporation shall make no Distribution (as defined below) to the holders of
shares of Common Stock in any fiscal year unless and until dividends shall have been paid, or declared and set apart, upon all shares of Preferred Stock. 

        (c)    Distribution.    As used in this section, "Distribution" means the transfer of cash or property without
consideration, whether by way of dividend or otherwise (except a dividend in shares of the Corporation) or the purchase of shares of the Corporation (other than in connection with the repurchase of
shares of Common Stock issued to or held by employees, consultants, officers and directors upon termination of their employment or services pursuant to agreements providing for the right of said
repurchase) for cash or property. 

        (d)    Consent to Certain Distributions.    The holders of outstanding shares of Preferred Stock shall be deemed to
have consented to all distributions or payments to existing or terminated employees, consultants, officers and directors of the Corporation in connection with the termination of employment by or
services to the Corporation and relating to the repurchase of shares of capital stock issued to or held by such individuals pursuant to agreements with the Corporation for such repurchases that have
been approved by the Board of Directors. 

        2.    Liquidation Rights.    

        (a)    Liquidation Preference.    In the event of any liquidation, dissolution or winding up of the Corporation,
either voluntary or involuntary, the holders of Series A Preferred and Series B Preferred shall be entitled to receive, out of the assets of the Corporation, an amount equal to $1.00 and
$3.60 per share, respectively (as adjusted for any stock dividends, combinations or stock splits) plus an amount equal to all declared and unpaid dividends thereon, if any, to the date that payment is
made, before any payment shall be made or any assets distributed to the holders of Common Stock (The foregoing preferential amount payable to the holders of Preferred Stock referred to as the
"Liquidation Preference"). 

        (b)    Priority.    If upon the liquidation, dissolution or winding up of the Corporation, the assets to be
distributed among the holders of the Preferred Stock are insufficient to permit the payment to such holders of the full Liquidation Preference for their shares, then the entire assets of the
Corporation legally available for distribution shall be distributed with equal priority and pro rata among the holders of the Preferred Stock in
proportion to the numbers of shares of Preferred Stock held by them multiplied by the Liquidation Preference for such shares of Preferred Stock. 

        (c)    Deemed Liquidation.    A liquidation shall include (i) a sale, lease or disposition of all or
substantially all of the assets of the Corporation, or (ii) a merger or consolidation (in a single transaction or a series of related transactions) of the Corporation with or into any other
corporation or corporations or other entity, or any other corporate reorganization, where the stockholders of the Corporation immediately prior to such event do not retain more than fifty percent
(50%) of the voting power of and interest in the successor entity (such events being referred to hereinafter as an "Acquisition of the Corporation"). 

        (d)    Distribution after Payment of Liquidation Preference.    After payment has been made to the holders of the
Preferred Stock of the full preferential amount set forth in Section 3(a) above, the entire remaining assets and funds of the Corporation legally available for distribution, if any, shall be
distributed ratably among the holders of Preferred Stock, subject to the limitations set forth below, and the holders of Common Stock in a manner such that the amount distributed to each holder of
Common Stock and Preferred Stock shall equal the amount obtained by multiplying the entire assets and funds of the Corporation legally available for distribution pursuant to this Section 3(d)
by a fraction, the numerator of which shall be the sum of the number of shares of Common Stock then held by the holder and the number of shares of Common Stock issuable upon conversion of the shares
of Preferred Stock then held by the holder, and the denominator of which 

2

 

shall
be the sum of the total number of shares of Common Stock then outstanding and the total number of shares of Common Stock issuable upon conversion of the total number of shares of Preferred Stock
then outstanding; provided, however, that at such time as the distribution of liquidation preferences
pursuant to this Section 3(d) shall equal two (2) times the Liquidation Preference of the Preferred Stock, such holders of Preferred Stock shall not be entitled to any further
distribution pursuant to this subsection 2(d) with respect to shares of Preferred Stock. Thereafter, any remaining assets and funds legally available for distribution hereunder shall be distributed
solely to the holders of the Common Stock in a manner such that the remaining amount distributed to each holder of Common Stock shall equal the amount obtained by multiplying the entire assets and
funds of the Corporation legally available for distribution hereunder by a fraction, the numerator of which shall be the number of shares of Common Stock then held by such holder, and the denominator
of which shall be the total number of shares of Common Stock then outstanding. 

        (e)    Shares not Treated as Both Preferred Stock and Common Stock in any Distribution.    Shares of Preferred Stock
shall not be entitled to be converted into shares of Common Stock in order to participate in any distribution, or series of distributions, as shares of Common Stock, without first foregoing
participation in the distribution, or series of distributions, as shares of Preferred Stock pursuant to paragraph (a) above. 

        (f)    Noncash Distributions.    If any of the assets of the Corporation are to be distributed other than in cash
under this Section 2 or for any purpose, then the Board of Directors of the Corporation shall promptly engage independent competent appraisers to determine the fair market value of the assets
to be distributed to the holders of Preferred Stock or Common Stock. The Corporation shall, upon receipt of such appraiser's valuation, give prompt written notice to each holder of shares of Preferred
Stock or Common Stock of the appraiser's valuation. Notwithstanding the above, any securities to be distributed to the stockholders shall be valued as follows: 

          (i)  If
traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the 30-day
period ending three (3) business days prior to the closing; 

         (ii)  If
actively traded over-the-counter, the value shall be deemed to be the average of the closing bid prices over the 30-day period
ending three (3) business days prior to the closing; and 

        (iii)  If
there is no active public market, the value shall be the fair market value thereof, as mutually determined by the Corporation and the holders of not less than a
majority of the outstanding shares of Preferred Stock, provided that if the Corporation and the holders of a majority of the outstanding shares of Preferred Stock are unable to reach agreement, then
by independent appraisal by an investment banker hired and paid by the Corporation, but acceptable to the holders of a majority of the outstanding shares of Preferred Stock. 

        (g)    Notice of Transaction.    The Corporation shall give each holder of record of Preferred Stock written notice of
such impending transaction not later than ten (10) days prior to the stockholders' meeting called to approve such transaction, or ten (10) days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the
impending transaction and the provisions of this Section 3, and the Corporation shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take
place sooner than ten (10) days after the Corporation has given the first notice provided for herein or sooner than ten (10) days after the Corporation has given notice of any material
changes provided for herein; provided, however, that such periods may be shortened upon 

3

 

the
written consent of the holders of Preferred Stock that are entitled to such notice rights or similar notice rights and that represent at least a majority of the voting power of all then
outstanding shares of such Preferred Stock. 

        (i)    Effect of Noncompliance.    In the event the requirements of this Section 3(g) are not complied with,
the Corporation shall forthwith cause the closing of the transaction to be postponed until such notice requirements have been complied with. 

        3.    Redemption.    

        (a)   Subject
to the rights of series of Preferred Stock which may from time to time come into existence, at the written request of holders representing a majority of the
Series B Preferred Stock, this corporation shall redeem, commencing with the ninth anniversary of the first issuance of the Series B Preferred Stock and continuing annually on the first
and second anniversary date thereafter (each a "Redemption Date"), that number of shares of Series B Preferred Stock equal to one-third, one-half, and all, respectively,
of the remaining outstanding shares of Series B Preferred Stock that are outstanding on each of those respective dates. The
redemption price for each share of Series B Preferred Stock shall be the sum of (i) $3.60 per share of Series B Preferred Stock (as adjusted for any stock dividends, combinations
or splits with respect to such shares) plus (ii) the amount of all declared but unpaid dividend thereon, less (iii) any dividend
previously paid thereon, through the respective Redemption Date (the "Series B Redemption Price"). Any redemption effected pursuant to this subsection 3(a) shall be made on a prorata
basis among the holders of the Series B Preferred Stock in proportion to the number of shares of Series B Preferred Stock then held by such holders. 

        (b)   Subject
to the rights of series of Preferred Stock which may from time to time come into existence, at least fifteen (15) but no more than thirty (30) days
prior to each Redemption Date, written notice shall be mailed, first class postage prepaid, to each holder of record (at the close of business on the business day next preceding the day on which
notice is given) of the Series B Preferred Stock to be redeemed, at the address last shown on the records of this corporation for such holder, notifying such holder of the redemption to be
effected, specifying the number of shares to be redeemed from such holder, the Redemption Date, the Redemption B Redemption Price, the place at which payment may be obtained and calling upon such
holder to surrender to this corporation, in the manner and at the place designated, his, her or its certificate or certificates representing the shares to be redeemed (the "Redemption Notice"). On the
Redemption Date, each holder of Series B Preferred Stock to be redeemed shall surrender to this corporation the certificate or certificates representing such shares, in the manner and at the
place designated in the Redemption Notice, and thereupon the Series B Redemption Price of such shares shall be payable to the order of the person whose name appears on such certificate or
certificates as the owner thereof and each surrendered certificate shall be cancelled. In the event less than all the shares represented by any such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares. 

        (c)   From
and after each Redemption Date, unless there shall have been a default in payment of the Series B Redemption Price, all rights of the holders of shares of
Series B Preferred Stock designated for redemption on such Redemption Date in the Redemption Notice as holders of Series B Preferred Stock (except the right to receive the
Series B Redemption Price, without interest, upon surrender of their certificate or certificates) shall cease with respect to such shares, and such shares shall not thereafter be transferred on
the books of this corporation or be deemed to be outstanding for any purpose whatsoever. Subject to the rights of series of Preferred Stock which may from time to time come into existence, if the
funds of the corporation legally available for redemption of shares of Preferred Stock on any Redemption Date are insufficient to redeem the total number of shares of Preferred Stock to be redeemed on
such date, those funds which are 

4

 

legally
available will be used to redeem the maximum possible number of such shares ratably among the holders of such shares to be redeemed based upon their holdings of Series B Preferred
Stock. The shares of Series B Preferred Stock not redeemed shall remain outstanding and entitled to all the rights and preferences provided herein. Subject to the rights of series of Preferred
Stock which may from time to time come into existence, at any time thereafter when additional funds of the corporation are legally available for the redemption of shares of Series B Preferred
Stock, such funds will immediately be used to redeem the balance of the shares which the corporation has become obliged to redeem on any Redemption Date but which it has not redeemed. 

        (d)   On
or prior to each Redemption Date, this corporation shall deposit the Series B Redemption Price of all shares of Series B Preferred Stock designated for
redemption in the Redemption Notice, and not yet redeemed or converted, with a bank or trust corporation having aggregate capital and surplus in excess of $100,000,000 as a trust fund for the benefit
of the respective holders of the shares designated for redemption and not yet redeemed, with irrevocable instructions and authority to the bank or trust corporation to publish the notice of redemption
thereof and pay the Series B Redemption Price for such shares to their respective holders on or after the Redemption Date, upon receipt of notification from the corporation that such holder has
surrendered his, her or its share certificate to the corporation pursuant to subsection (3)(b) above. As of the date of such deposit (even if prior to the applicable Redemption Date), the deposit
shall constitute full payment of the shares to their holders, and from and after the date of the deposit the shares so called for redemption on the applicable Redemption Date shall be redeemed and
shall be deemed to be no longer outstanding, and the holders thereof shall cease to be stockholders with respect to such shares and shall have no rights with respect thereto except the rights to
receive from the bank or trust corporation payment of the Series B Redemption Price of the shares, without interest, upon surrender of their certificates therefor, and the right to convert such
shares as provided in Article IV(B)(4) hereof. Such instructions shall also provide that any moneys deposited by the corporation pursuant to this subsection (3)(d) for the redemption of shares
thereafter converted into shares of the corporation's Common Stock pursuant to Article IV(B)(4) hereof prior to the Redemption Date shall be returned to the corporation forthwith upon such
conversion. The balance of any moneys deposited by this corporation pursuant to this subsection (3)(d) remaining unclaimed at the expiration of two (2) years following the Redemption Date shall
thereafter be returned to this corporation upon its request expressed in a resolution of its Board of Directors. 

        4.    Conversion.    The holders of the Preferred Stock shall have conversion rights as follows (the "Conversion
Rights"): 

        (a)    Right to Convert.    Each share of Preferred Stock shall be convertible, at the option of the holder thereof,
at any time after the date of issuance of such share at the office of the Corporation or any transfer agent for the Preferred Stock, into that number of fully-paid and nonassessable shares
of Common Stock that is equal to the Original Issue Price divided by the appropriate Conversion Price (as hereinafter defined). The Original Issue Price per share of Series A Preferred shall be
$1.00 and the Original Issue Price per share of Series B Preferred shall be $3.60. The initial Conversion Price for the Series A Preferred Stock shall be $1.00 and the initial Conversion
Price for the Series B Preferred shall be $3.00. The initial Conversion Prices for the Preferred Stock shall be subject to adjustment as provided herein. (The number of shares of Common Stock
into which each share of Preferred Stock may be converted is hereinafter referred to as the "Conversion Rate" for each such series.) Upon any decrease or increase in the Conversion Price or the
Conversion Rate for a series, as described in this Section 4, the Conversion Rate or Conversion Price for such series, as the case may be, shall be appropriately increased or decreased. 

5

 

        (b)    Automatic Conversion.    Each share of Preferred Stock shall automatically be converted into shares of Common
Stock at the then-effective Conversion Rate for such share immediately upon
either (i) the consummation of a firmly underwritten public offering that results in proceeds to the Corporation in the public offering of at least $20,000,000 (net of underwriting discounts
and commissions and offering expenses) and is at a price greater than $6.00 per share, as adjusted for stock splits, combinations and recapitalizations (a "Qualifying Public Offering"); or
(ii) the receipt by the Corporation of the consent to such conversion by the holders of not less than fifty-one (51%) percent of the then outstanding shares of Preferred Stock. 

        (c)    Mechanics of Conversion.    No fractional shares of Common Stock shall be issued upon conversion of Preferred
Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the then fair market value of such
fractional shares as determined by the Board of Directors of the Corporation. Before any holder of Preferred Stock shall be entitled to convert the same into full shares of Common Stock, and to
receive certificates therefor, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Preferred Stock, and shall
give written notice to the Corporation at such office that he elects to convert the same; provided, however, that in the event of an automatic conversion pursuant to paragraph 4(b) above, the
outstanding shares of Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent; provided further, however, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon
such automatic conversion unless either the certificates evidencing such shares of Preferred Stock are delivered to the Corporation or its transfer agent as provided above, or the holder notifies the
Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection with such certificates. 

        The
Corporation shall, as soon as practicable after such delivery, or after such agreement and indemnification, issue and deliver at such office to such holder of Preferred Stock, a
certificate or certificates for the number of shares of Common Stock to which he shall be entitled as aforesaid and a check payable to the holder in the amount of any cash amounts payable as the
result of a conversion into fractional shares of Common Stock, plus any declared and unpaid dividends on the converted Preferred Stock. Such conversion shall be deemed to have been made immediately
prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date; provided, however, that if the conversion is in connection with an
underwritten offer of securities registered pursuant to the Securities Act of 1933, as amended, the conversion may, at the option of any holder tendering Preferred Stock for conversion, be conditioned
upon the closing of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive the Common Stock issuable upon such conversion of the Preferred Stock shall not
be deemed to have converted such Preferred Stock until immediately prior to the closing of the sale of such securities. 

        (d)    Adjustments to Conversion Price.    

        (i)    Special Definitions.    For purposes of this Section 4(d), the following definitions shall apply: 

        (1)   "Options"
shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire either Common Stock or Convertible Securities. 

        (2)   "Convertible
Securities" shall mean any evidences of indebtedness, shares or other securities convertible into or exchangeable for Common Stock. 

6

 

        (3)   "Additional
Shares of Common Stock" shall mean all shares of Common Stock issued (or, pursuant to Section 4(d)(iii), deemed to be issued) by the Corporation after
the Original Issue Date for such series of Preferred Stock, other than shares of Common Stock issued or issuable: 

        (A)  upon
conversion of shares of Preferred Stock; 

        (B)  to
officers, directors or employees of, or consultants to, the Corporation pursuant to a stock grant, option plan or purchase plan or other employee stock incentive
program or agreement approved by the Board; 

        (C)  upon
approval of the Board, to lending institutions in connection with debt financings or to equipment leasing institutions; 

        (D)  as
a dividend or distribution on Preferred Stock; 

        (E)  in
an event for which adjustments is otherwise made pursuant to Section 4(d)(vi); 

        (F)  as
a dividend on Common Stock where the Corporation declares or pays a similar Common Stock dividend per share of Preferred Stock (on an
as-converted-into-Common Stock basis) in the same manner as declared or paid on the Common Stock; and 

        (G)  pursuant
to a Qualifying Public Offering 

        (4)   "Original
Issue Date" shall mean, the date on which the first share of such series of Preferred Stock was issued. 

        (ii)    No Adjustment of Conversion Price.    No adjustment in the Conversion Price of a series of Preferred Stock
shall be made in respect of the issuance of Additional Shares of Common Stock unless the consideration per share for an Additional Share of Common Stock issued or deemed to be issued by the
Corporation is less than the Conversion Price for such series of Preferred Stock in effect immediately prior to such issue. 

        (iii)    Deemed Issue of Additional Shares of Common Stock.    In the event the Corporation at any time or from time
to time after the Original Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any
such Options or Convertible Securities, then the maximum number of shares (as set forth in the instrument relating thereto without regard to any provisions contained therein for a subsequent
adjustment of such number) of Common Stock issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the exercise of such Options and conversions or
exchange of such Convertible Securities shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue, or, in case such a record date shall have been fixed, as of the
close of business on such record date, provided that in any such case in which Additional Shares of Common Stock are deemed to be issued: 

        (1)   except
as provided in Section 4(d)(iii)(2), no further adjustment in the Conversion Price shall be made upon the subsequent issue of Convertible Securities or
shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities; and 

        (2)   if
such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any change in the consideration payable to the Corporation,
or change in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof (other than under or by reason of provisions 

7

 

designed
to protect against dilution), the Conversion Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto) and any subsequent adjustments based
thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange
under such Convertible Securities; and 

        (3)   no
readjustment pursuant to clause (2) above shall have the effect of increasing the Conversion Price for any series of Preferred Stock to an amount which exceeds
the lower of (A) the Conversion Price for such series of Preferred Stock on the original adjustment date or (B) the Conversion Price for such
series of Preferred Stock that would have resulted from any issuance of Additional Shares of Common Stock between the original adjustment date and such readjustment date. 

        (iv)    Adjustment of Conversion Price Upon Issuance of Additional Shares of Common Stock.    In the event this
Corporation shall issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 4(d)(iii)) without consideration or for a
consideration per share less than the Conversion Price of the any series of Preferred Stock in effect on the date of and immediately prior to such issue, then and in each such event the Conversion
Price of such series of Preferred Stock shall be reduced to a price (calculated to the nearest cent) determined by multiplying such Conversion Price by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such issue plus the number of shares of Common Stock issuable upon exercise, conversion or exchange of Options or Convertible
Securities, as the case may be, that are outstanding immediately prior to such issue plus the number of shares of Common Stock which the aggregate consideration received by the Corporation for the
total number of Additional Shares of Common Stock so issued would purchase at such Conversion Price and the denominator of which shall be the number of shares of Common Stock outstanding immediately
prior to such issue plus the number of shares of Common Stock issuable upon exercise, conversion or exchange of Options or Convertible Securities, as the case may be, that are outstanding immediately
prior to such issue plus the number of such Additional Shares of Common Stock so issued; provided that for purposes of this Section 4(d)(iv) all shares of Common Stock issuable upon
conversion of Preferred Stock shall be deemed to be outstanding. 

        (v)    Determination of Consideration.    For purposes of this Section 4(d), the consideration received by the
Corporation for the issuance of any Additional Shares of Common Stock shall be computed as follows: 

        (1)    Cash and Property.    Such consideration shall: 

        (A)  insofar
as it consists of cash, be computed at the aggregate amount of cash received by the Corporation before deducting any reasonable discounts, commissions or other
expenses allowed, paid or incurred by the Corporation for any underwriting or otherwise in connection with the issuance and sale thereof; and 

        (B)  insofar
as it consists of property other than cash, be computed at the fair value thereof at the time of such issue, as determined by Board in the good faith exercise of
its reasonable business judgment; and 

        (C)  in
the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Corporation for consideration which converts
both, be the proportion of such consideration so received, computed as provided in clauses (A) and (B) above, as determined in good faith by the Board. 

8

 

        (2)    Options and Convertible Securities.    The consideration per share received by the Corporation for Additional
Shares of Common Stock deemed to have been issued pursuant to Section 4(d)(iii)(1), relating to Options and Convertible Securities, shall be determined by dividing 

        (A)  the
total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate
amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to
the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such Convertible Securities, by 

        (B)  the
maximum number of shares of Common Stock as set forth in the instruments relating thereto (without regard to any provisions contained therein for a subsequent
adjustment of such number) issuable upon the exercise of such Options or their conversion or exchange of such Convertible Securities. 

        (vi)    Adjustments for Subdivisions or Combinations of Common Stock.    In the event the outstanding shares of Common
Stock shall be subdivided (including by stock split or payment of a dividend in Common Stock) into a greater number of shares of Common Stock, the Conversion Prices in effect immediately prior to such
subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of Common Stock shall be combined (including by reverse
stock split or reclassification) into a lesser number of shares of Common Stock, the Conversion Prices in effect immediately prior to such combination shall, concurrently with the effectiveness of
such combination, be proportionately increased. Adjustments to Conversion Prices then in effect shall become effective retroactively with respect to conversions made subsequent to the record date in
the case of a dividend, and shall become effective after the effective date in the case of a subdivision or combination. 

        (vii)    Adjustments for Other Distributions.    In the event the Corporation at any time or from time to time makes
or fixes a record date for the determination of holders of Common Stock entitled to receive any distribution payable in securities of the Corporation other than shares of Common Stock and other than
as otherwise adjusted in this Section 4, then and in each such event provision shall be made (including, if applicable, an adjustment to one or more Conversion Prices after such record date) so
that the holders of Preferred Stock shall receive upon conversion thereof, in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Corporation which
they would have received had their Preferred Stock then converted into Common Stock immediately prior to such event and had they thereafter, during the period from the date of such event to and
including the date of conversion, retained such securities receivable by them as aforesaid during such period, subject to all other adjustments called for during such period under this
Section 4 with respect to the rights of the holders of the Preferred Stock. 

        (viii)    Adjustments for Reclassification, Exchange and Substitution.    If the Common Stock issuable upon conversion
of the Preferred Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other
than a subdivision or combination of shares provided for above), the Conversion Prices then in effect shall, concurrently with the effectiveness of such reorganization or reclassification, be
proportionately adjusted such that the Preferred Stock shall be convertible into, in lieu of the number of shares of Common Stock which the holders 

9

 

would
otherwise have been entitled to receive, a number of shares of such other class or classes of stock equivalent to the number of shares of Common Stock that would have been subject to receipt by
the holders upon conversion of the Preferred Stock immediately before that change. 

        (e)    Certificate as to Adjustments.    Upon the occurrence of each adjustment or readjustment of any Conversion
Price pursuant to this Section 4, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of
Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written
request at any time of any holder of Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Prices at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of
Preferred Stock. 

        (f)    Notices of Record Date.    In the event that the Corporation shall propose at any time: 

          (i)  to
declare any dividend or distribution upon its Common Stock, whether in cash, property, stock or other securities, whether or not a regular cash dividend and whether
or not out of earnings or earned surplus; 

         (ii)  to
offer for subscription pro rata to the holders of any class or series of its stock any additional shares of stock of
any class or series or other rights; 

        (iii)  to
effect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or 

        (iv)  to
merge with or into any other corporation, or sell, lease or convey all or substantially all its property or business, or to liquidate, dissolve or wind up; 

then,
in connection with each such event, the Corporation shall send to the holders of the Preferred Stock at least 20 days' prior written notice of the date on which a record shall be taken
for such dividend, distribution or subscription rights (and specifying the date on which the holders of Common Stock shall be entitled thereto) or for determining rights to vote in respect of the
matters referred to in (iii) and (iv) above. 

        Each
such written notice shall be given by first class mail, postage prepaid, addressed to the holders of Preferred Stock at the address for each such holder as shown on the books of the
Corporation. 

        (g)    Reservation of Stock Issuable Upon Conversion.    The Corporation shall at all times reserve and keep available
out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of the Preferred Stock, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. 

        (h)    Miscellaneous.    

          (i)  All
calculations under this Section 4 shall be made to the nearest cent or to the nearest one hundredth (1/100) of a share, as the case may be. 

10

 

         (ii)  No
adjustment in the Conversion Prices of the Preferred Stock need to be made if such adjustment would result in a change in such Conversion Price of less than $0.01.
Any adjustment of less than $0.01 which is not made shall be carried forward and shall be made at the time of and together with any
subsequent adjustment which, on a cumulative basis, amounts to an adjustment of $0.01 or more in such Conversion Price. 

        5.    Voting.    Except as otherwise expressly provided herein or as required by law, the holders of Preferred Stock
and the holders of Common Stock shall vote together and not as separate classes. 

        (a)    General Voting Rights.    Each holder of shares of Preferred Stock shall be entitled to the number of votes
equal to the number of shares of Common Stock into which such shares of Preferred Stock held by such holder of Preferred Stock could then be converted. The holders of shares of the Preferred Stock
shall be entitled to vote on all matters on which the Common Stock shall be entitled to vote, unless otherwise required by applicable law. The holders of the Preferred Stock shall be entitled to
notice of any stockholders' meeting in accordance with the Bylaws of the Corporation. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above
formula (after aggregating all shares into which shares of Preferred Stock held by each holder could be converted) shall be disregarded. Each holder of shares of Common Stock shall be entitled to one
vote for each share thereof held. 

        (b)    Board of Directors.    The Board of Directors of the Corporation shall consist of seven (7) members. 

        (i)    Voting for the Election of Series A Director.    As long as at least fifty percent (50%) of the shares
of Series A Preferred Stock that have been issued remain outstanding, the holders of Series A Preferred Stock, voting together as a series, shall be entitled to elect one
(1) member of the Corporation's board of directors (the "Series A Directors") at each meeting or pursuant to each consent of the Corporation's stockholders for the election of directors. 

        (ii)    Voting for the Election of Series B Director.    As long as at least fifty percent (50%) of the shares
of Series B Preferred Stock that have been issued remain outstanding, the holders of Series B Preferred Stock, voting together as a series, shall be entitled to elect three
(3) members of the Corporation's board of directors (the "Series B Directors") at each meeting or pursuant to each consent of the Corporation's stockholders for the election of
directors. 

        (iii)    Voting for Election of Directors.    The holders of outstanding Common Stock shall be entitled to elect two
(2) directors of the Corporation at each meeting or pursuant to each consent of the Corporation's stockholders for the election of directors. The holders of Preferred Stock and Common Stock
(voting together as a single class on an as-converted basis and not as a separate series) shall be entitled to elect any remaining directors of the Corporation. 

        (iv)    Voting of the Directors.    As long as at least fifty percent (50%) of the shares of Preferred Stock that have
been issued remain outstanding, approval of the following matters by the Board of Directors of
the Corporation shall require the consent of at least two-thirds (2/3) of the directors of the Corporation's Board of Directors: 

        (1)   Employment
of any senior executive of the Corporation; 

        (2)   Any
exclusive license of the Corporation's technology; 

        (3)   Any
consolidation or merger of the Corporation with or into any other corporation or other entity or person, or any other corporate reorganization, in which the
stockholders of the Corporation immediately prior to such consolidation, merger or 

11

 

reorganization,
own less than fifty percent (50%) of the Corporation's voting power immediately after such consolidation, merger or reorganization, or any transaction or series of related transactions
to which the Corporation is a party in which in excess of fifty percent (50%) of the Corporation's voting power is transferred; 

        (4)   Any
amendment or restatement of the Corporation's Certificate of Incorporation or Bylaws; 

        (5)   Any
increase in the number of shares of Common Stock reserved for issuance to officers, directors or employees of, or consultants to, the Corporation pursuant to a stock
grant, option plan or purchase plan or other employee stock incentive program or agreement; 

        (6)   Any
compensation agreement or plan for an executive of the Corporation; 

        (7)   Any
debt or lease financing agreement which would result in obligations of the Corporation in excess of $100,000; 

        (8)   Any
pledge of the Corporation's assets or the grant of a security interest in the Corporation's assets; or 

        (9)   A
sale, lease or other disposition of all or substantially all of the assets of the Corporation. 

        (v)    Removal of Series A Directors, Reduction of Number of Directors.    If at any time fewer than 50% of the
shares (appropriately adjusted for stock splits, stock dividends, recapitalizations, and similar events) of Series A Preferred Stock that have been issued are then outstanding, (i) the
stockholders shall be deemed to have voted, in accordance with Section 141 of the Delaware General Corporation Law, to remove the Series A Directors, (ii) the Series A
Directors shall be automatically removed, and (iii) the authorized number of directors shall be reduced by one. 

        (vi)    Removal of Series B Directors, Reduction of Number of Directors.    If at any time fewer than 50% of
the shares (appropriately adjusted for stock splits, stock dividends, recapitalizations, and similar events) of Series B Preferred Stock that have been issued are then outstanding,
(i) the stockholders shall be deemed to have voted, in accordance with Section 141 of the Delaware General Corporation Law, to remove the Series B Directors, (ii) the
Series B Directors shall be automatically removed, and (iii) the authorized number of directors shall be reduced by three. 

        Subject
to the preceding paragraph, in the case of any vacancy in the office of a director occurring among the directors elected by the holders of a class or series of stock pursuant to
this Section 5, the remaining directors so elected by that class or series may by affirmative vote of a majority thereof (or the remaining director so elected if there be but one, or if there
are no such directors remaining, by the affirmative vote of the holders of a majority of the shares of that class or series), elect a successor or successors to hold office for the unexpired term of
the director or directors whose place or places shall be vacant. Any director who shall have been elected by the holders of a class or series or stock or by any directors so elected as provided in the
immediately preceding sentence hereof may be removed during the aforesaid term of office, either with or without cause, by, and only by, the affirmative vote of the majority of the holders of the
outstanding shares of the class or series of stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a
written consent of stockholders, and any vacancy thereby created may be filled by the vote of a majority of the holders of that class or series of stock. 

12

 

        6.    Amendments and Changes.    

        (a)    No Series Voting.    Other than as expressly provided herein or provided by law, there shall be no series
voting. 

        (b)    Approval by Class.    As long as 1,500,000 shares of the Preferred Stock shall be issued and outstanding, the
Corporation shall not, without first obtaining the approval (by vote or consent as provided by law) of the holders of a majority of the total number of shares of the Preferred Stock then outstanding,
and such other consents as may be required by applicable law: 

          (i)  amend
or repeal any provision of, or add any provision to, the Corporation's Certificate of Incorporation or Bylaws, if such amendment would (x) alter or change
the rights, preferences, privileges of or powers of, or the restrictions provided for the benefit of a series of Preferred Stock, (y) increase or decrease (other than by conversion) the
authorized number of shares of the Preferred Stock or any series thereof or (z) authorize, create or issue shares of any class or series of stock having any preference or priority superior to
or in parity with the Preferred Stock; 

         (ii)  pay
or declare a dividend on shares of any class or series; 

        (iii)  merge
or consolidate with any other corporation, except into or with a wholly owned subsidiary of the Corporation with the requisite stockholder approval, or effect a
change in voting control; 

        (iv)  sell,
convey, or otherwise dispose of, all or substantially all of the property or business of the Corporation; 

         (v)  effect
an exchange, reclassification, or cancellation of shares of any class or series, other than (i) the repurchase of shares of Common Stock issued to or held
by employees, directors or consultants of or to the Corporation or any of its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right of such
repurchase between the Corporation and such persons and (ii) the repurchase of shares of Common Stock in connection with the exercise of the right of first refusal pursuant to agreements
providing for the right of first refusal between the Corporation and any of its stockholders; or 

        (vi)  amend
this Section 5(b). 

        7.    Notices.    Any notice required by the provisions of this Article IV to be given to the holders of
Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at such holder's address appearing on the books of the
Corporation. 

 
 

ARTICLE V    

        1.    Limitation of Directors' Liability.    

        The
liability of the directors of the Corporation for monetary damages shall be eliminated to the fullest extent permissible under the Delaware General Corporation Law or any other
applicable law as now in effect or as hereafter adopted or amended. 

        2.    Indemnification of Corporate Agents.    

        The
Corporation is authorized to provide indemnification to directors, officers, employees, fiduciaries and agents (as defined in Section 145 of the Delaware General Corporation
Law) through Bylaw provisions, agreements with agents, vote of shareholders or disinterested directors or otherwise. 

13

 

        3.    Repeal or Modification.    

        Any
repeal or modification of the foregoing provisions of this Article V shall not adversely affect any right of indemnification or limitation of liability of an agent of the
Corporation relating to acts or omissions occurring prior to such repeal or modification. 

14

 

        IN
WITNESS WHEREOF Optimer Pharmaceuticals, Inc., has caused this Amended and Restated Certificate of Incorporation to be signed by Michael Chang, its Chief Executive
Officer, this    day of July, 2001. 

	 	Optimer Pharmaceuticals, Inc.
	

 	

/s/  MICHAEL CHANG      
 Michael N. Chang, Chief Executive Officer

15

 
 

EXHIBIT D
  
    BYLAWS    
    

 
 

[Please see, "Amended and Restated Bylaws" attached as Exhibit 3.3 to Optimer Pharmaceuticals, Inc.'s
  Registration Statement on Form S-1 filed with the Securities and Exchange Commission on November 9,
2006]    

 
 

EXHIBIT E
  
    FINANCIAL STATEMENTS    
    

[* * *] 

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 [Not Attached]

EXHIBIT C Common Stock Issuance Agreement

EXHIBIT A LICENSE AGREEMENT

[Please see, "License Agreement for SKI's Technology, "Carbohydrate Cancer Vaccines"' attached as this Exhibit 10.5 to this Amendment No. 4 to Optimer Pharmaceuticals, Inc.'s Form S-1 Registration Statement]

EXHIBIT B SCHEDULE OF EXCEPTIONS [No Attachment]

EXHIBIT C RESTATED CERTIFICATE OF INCORPORATION

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF OPTIMER PHARMACEUTICALS, INC.

ARTICLE I

ARTICLE II

ARTICLE III

ARTICLE IV

ARTICLE V

EXHIBIT D BYLAWS

[Please see, "Amended and Restated Bylaws" attached as Exhibit 3.3 to Optimer Pharmaceuticals, Inc.'s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on November 9,
2006]

EXHIBIT E FINANCIAL STATEMENTS

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