Document:

Unassociated Document

    

     

    Exhibit
10.1

     

    Haights
Cross Communications, Inc.

    2009
Annual Management/Employee Incentive Plan

    

    I.           Purpose

    

    Haights
Cross Communications, Inc. (together with its direct and indirect subsidiaries,
“Haights Cross”) has historically provided its managers and employees, including
its named executive officers (collectively, “Participants”), with an
opportunity to earn cash bonuses pursuant to an incentive plan in effect for
each fiscal year known as the “Annual Management / Employee Incentive
Plan.”  This plan sets forth the Annual Management/Employee Incentive
Plan, as currently in effect (as of the date of adoption set forth below), that
has been approved by the Board of Directors of Haights Cross, acting through its
Compensation Committee, for fiscal 2009 (the “Incentive Plan”).  As
provided herein, the Incentive Plan will be administered by the Haights Cross
Board of Directors or duly authorized committee thereof (the “Board of
Directors”).

    

    II.           Performance
Based Targets

    

    Subject
to the terms and conditions set forth herein (including without limitation the
discretionary authority of the Board of Directors), payouts to Participants
under the Incentive Plan will be determined based upon Haights Cross’
achievement of defined objectives (the “Performance Based Targets”) and such
Participant’s applicable Target Incentive (as defined below), as such
Performance Based Targets and Target Incentive are established by the Board of
Directors.

    

    III.           Target
Bonuses and Incentive Payouts

    

    The
amount of a Participant’s target bonus under the Incentive Plan is determined as
a percentage of the Participant’s annual base compensation as established for
such Participant (the “Target Bonus ”).  Unless otherwise expressly
provided for, each Participant’s Target Bonus is determined by such individual’s
title and/or role.  Provided that there has been 100% compliance with
the financial covenant targets to be included in the Performance Based Targets
(the “Financial Covenant Targets”), bonus payments, if any, under the Incentive
Plan range from 25% to 125% of the Target Bonus as set forth in the following
table:

    

    
      
        
          	
                  Percentage of Achievement of

                  Performance Based Target*

                	
                  Percentage of

                  Target Bonus

                
	
                  Less
      than 90%

                	
                  0%

                
	
                  90%

                	
                  25%

                
	
                  100%

                	
                  100%

                
	
                  110%
      or greater

                	
                  125%

                

        

      

    

    _____

    * Does
not include any Financial Covenant Targets which must be 100% achieved as a
condition to paying any bonus.

    

    The
amount of a Participant’s payout under the Incentive Plan is subject to
proportional adjustment for achievement of Performance Based Targets within the
ranges set forth in the above table. For example the achievement of 95% of a
Performance Based Target will result in a bonus payout to a Participant of 95%
of such Participant’s Target Bonus, and the achievement of 105% of the
Performance Based Target will result in a bonus payout of 112.5% of the
Participant’s Target Bonus.  For the avoidance of doubt, in no event
will a Participant’s payout exceed 125% of the Participant’s Target
Bonus.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Notwithstanding
anything to the contrary in this plan, the Board of Directors reserves the
right, in its sole and absolute discretion, from time to time and at any time,
to change the eligibility for participation under the Incentive Plan, to revise,
eliminate or otherwise modify any Performance Based Targets, to modify any
Participant’s Target Bonus, or otherwise to increase, decrease or eliminate any
bonus payouts to any Participant under the Incentive Plan, regardless of the
level of Performance Based Targets that have been achieved, including to provide
for no bonus payout to a Participant even though one or more Performance Based
Targets have been achieved.

    

    Haights
Cross may make such provisions and take such action as it may deem necessary or
appropriate for the withholding of any taxes that it believes to be required by
any law or regulation of any governmental authority, whether federal, state or
local, to withhold in connection with any bonus.

    

    IV.           Eligibility

    

    Determination
of goal achievement and payouts under the Incentive Plan are made upon
completion of the fiscal year audit, generally in March following the end
of the applicable fiscal year. Unless otherwise determined by the Board of
Directors, or otherwise provided for certain non-executives under special
payment provisions, Incentive Plan payouts will be made on the later to occur
of April 15, 2010 or fifteen days after the Company’s completion of its
audited financial statements (such date of payment, as it may be modified by the
Board of Directors, the “Payment Date”).  An individual must be a
current employee in good standing on the Payment Date to be eligible to receive
a bonus for the prior year.  Bonus calculations and payouts may (but
shall not be required to) be accelerated if sale events occur. In certain cases,
new employees hired during a fiscal year will be required to wait until the
following fiscal year before participating in the Incentive Plan.  In
no event will a Participant earn, accrue or otherwise become entitled to a
payout under the Incentive Plan prior to the Payment Date.

    

    Neither
the Incentive Plan, nor any action taken pursuant to the Incentive Plan, will be
construed as giving any employee any right to be retained by Haights
Cross.

    

    V.           Administration

    

    The
Incentive Plan will be administered by the Board of Directors. In addition to
the other discretionary rights set forth herein, the Board of Directors, in its
sole discretion, shall have the authority to adopt, amend and repeal rules
relating to the Incentive Plan and to interpret and correct the provisions of
the Incentive Plan.  The Board of Directors shall have authority,
subject to the express limitations of the Incentive Plan, (i) to prescribe,
amend and rescind rules and regulations relating to the Incentive Plan,
(ii) to make all other determinations and calculations in the judgment of
the Board of Directors necessary or desirable for the administration and
interpretation of the Incentive Plan, and (iv) amend, repeal or cancel the
Incentive Plan.  The Board of Directors may correct any defect or
supply any omission or reconcile any inconsistency in the Incentive Plan in the
manner and to the extent it shall deem expedient to carry out the Incentive
Plan, and it shall be the sole and final judge of such expediency. All decisions
by the Board of Directors, in its sole and final discretion, shall be final,
binding and conclusive on all interested persons.  Neither Haights
Cross nor any member of the Board of Directors shall be liable for any action or
determination relating to the Incentive Plan.

    

    

    Date of
Adoption:  August 10, 2009Exhibit
10.1

          

        

      

    

     

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

       

    

    AMENDED
AND RESTATED SUBLICENSE AGREEMENT

    

    THIS AMENDED AND RESTATED SUBLICENSE AGREEMENT
(the “Agreement”), effective this 8th day of June, 2009 (the
“Effective Date”), by and between KERYX BIOPHARMACEUTICALS, INC., with offices
at 750 Lexington Avenue, 20th Floor,
New York, NY  10022, U.S.A. (“Keryx” or “Sublicensor”) and JAPAN
TOBACCO INC., with offices at JT Building, 2-1, Toranomon 2-Chome, Minato-ku,
Tokyo 105-8422, Japan (“JT”) and TORII PHARMACEUTICAL CO., LTD., with offices at
Torii Nihonbashi Bldg., 4-1, Nihonbashi-Honcho 3-chome, Chuo-ku, Tokyo 103-8439,
Japan (“TORII”) (JT and TORII collectively referred to herein as
“Sublicensee”);

    WHEREAS, Sublicensor acquired
an exclusive license under the Patent Rights and Know-How to sublicense,
develop, have developed, make, have made, use, have used, offer to sell, sell,
have sold, import and export the Product in the Sublicense Territory for all
Indications (all capitalized terms as hereinafter defined) pursuant to (i) a
License Agreement, dated as of November 7, 2005, which was amended and restated
as of March 14, 2008, and further amended on November 14, 2008 (as amended, the
“Panion License Agreement”) by and between Sublicensor and Panion & BF
Biotech, Inc. (“Panion”) which, in turn, is based upon a Patent License
Agreement, dated July 20, 2001 as amended pursuant to Amendment No. 1 thereto
dated as of August 29, 2005 (the “Hsu License Agreement”) between Dr. Chen Hsing
Hsu (“Dr. Hsu”) and Panion and (ii) an Exclusive License Agreement, dated as of
November 7, 2005 (the “GloboAsia License Agreement”) by and between Panion and
GloboAsia, LLC (“GloboAsia”);

    WHEREAS, effective as of
September 26, 2007 Sublicensor and Sublicensee entered into a Sublicense
Agreement under which Sublicensee obtained an exclusive sublicense to the
Compound and Product for all Indications in the Sublicense
Territory;

    WHEREAS, Sublicensee has
received delivery of two Consent Documents and paid to Sublicensor initial
license fee payments totaling $20,000,000;

    WHEREAS, Sublicensee has
initiated the first Phase II clinical trial in the Sublicense Territory and paid
to Sublicensor the applicable milestone payment of three million
dollars ($3,000,000);

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    WHEREAS, Sublicensor and
Sublicensee now wish to amend and restate the Sublicense Agreement in its
entirety on the terms and conditions set forth herein in order to reflect
certain of the amended and restated terms in the Panion License Agreement;
and

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

    

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

    

    ARTICLE
1.  DEFINITIONS

    

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

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

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

    1.3           “Compound”
means ferric citrate:  FeC6H5O7 • xH2O.

    1.4            Intentionally
omitted.

    1.5            Intentionally
omitted.

    
      
         

      

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

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

    1.8           “Indication”
means any therapeutic application for a Product that is covered by the Patent
Rights.

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

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

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

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

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

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

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

    
      
         

      

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

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

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

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

    

    
      	
               
      

            	
              i)

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

            

    

    
      	
               
      

            	
              ii)

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

            

    

    
      	
               
      

            	
              iii)

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

            

    

    
      
         

      

      
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              iv)

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

            

    

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

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

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

    
      
         

      

      
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    1.11           “Patent
Rights” means the patents and patent applications set forth in Exhibit 1, all other patents
and patent applications that are directed to the Compound or its manufacture or
use and in which Sublicensor holds rights, including, without limitation, those
patents and patent applications that are directed to Sublicensor’s interest in
Improvements, and any and all patents in which Sublicensor holds rights and that
may issue from any of the foregoing patent applications, including any and all
divisions, continuations, continuations-in-part, extensions, substitutions,
renewals, registrations, supplementary protection certificates, revalidations,
reissues or additions of or to any of the aforesaid patents and patent
applications, and any additional patents or patent applications to which
Sublicensor acquires rights, including rights to license, during the term of
this Agreement which pertain in any way to the Compound or the Product or their
manufacture or use.

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

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

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

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

    1.16           “Sublicense
Territory” means Japan.

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

    
      
         

      

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

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

    1.20           “Sublicensor
Know-How” means all information and materials to which Sublicensor has rights,
including but not limited to, discoveries, processes, formulas, instructions,
data, inventions, know-how and trade secrets, patentable or otherwise, in each
case, which as of September 26, 2007 and during the term of this Agreement are
necessary or useful to Sublicensee in connection with the development,
registration, manufacture, marketing, use or sale of a Product. Sublicensor
Know-How shall also include without limitation, Sublicensor Development Data and
all biological, chemical, pharmacological, toxicological, pharmaceutical,
physical, analytical, clinical, safety, manufacturing and quality control data
and information related thereto, and all applications, registrations, licenses,
authorizations, documents, approvals and correspondence relating to a Compound
or a Product. Sublicensor Know-How shall also include Sublicensor’s interest in
Improvements.

    
      
         

      

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

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

    

    ARTICLE
2.  REPRESENTATIONS AND WARRANTIES

    

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

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

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

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

    
      
         

      

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

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

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

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

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

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

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

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

    
      
         

      

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

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

    

    ARTICLE
3.  LICENSE GRANT AND GOVERNANCE

    

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

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

    
      
         

      

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

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

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

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

    
      
         

      

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

    As of the
Effective Date, the parties agree that participation on, and any duties
associated with, the JSC shall be voluntary, and no penalty under this Agreement
shall apply for non-participation.

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

    As of the
Effective Date, the parties agree that participation on, and any duties
associated with, the JDT shall be voluntary, and no penalty under this Agreement
shall apply for non-participation.

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

     

    
      
        
        

      

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

    

     

    3.9          activities
and responsibilities in furtherance of the development and commercialization of
Product in the Sublicense Territory.

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

     

    ARTICLE
4.  LICENSE FEE; MILESTONE PAYMENTS

    

    4.1           Intentionally
omitted.

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

    (a) Intentionally
omitted.

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

    (c)
Within thirty (30) days following filing of a first marketing approval
application to MHLW in the Sublicense Territory: ******; and

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

    
      
         

      

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

       

    

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

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

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

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

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

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

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

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

    
      
         

      

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

       

    

    ARTICLE
5.  ROYALTIES

    

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

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

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

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

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

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

    
      
         

      

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

       

    

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

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

    5.5           Third Party
Royalties.  Sublicensor shall be responsible for payment of
Third Party royalties owed on sales of Product in the Sublicense Territory
with respect to any issued patent or patent application that has been published
by the applicable patent office anywhere in the world prior to and including the
date that is two (2) years after September 26, 2007 that are required to secure
Freedom to Operate in the Sublicense Territory.  For the purposes of
this Agreement, “Freedom to Operate” shall mean such valid patents that, but for
a license, would be infringed by the development, manufacture, use or sale of a
Product for the Indication.  With respect to patents or patent
applications that are published by the applicable patent office anywhere in the
world more than two (2) years after September 26, 2007 that are required to
secure Freedom to Operate in the Sublicense Territory, then (a) if a license to
such patent is limited to the Sublicense Territory, then Sublicensor and
Sublicensee shall each be responsible for ****** of such license fees and
royalty obligations; and (b) if a license to such patent includes countries
outside the Sublicense Territory, then Sublicensor shall be responsible for
****** of such license fees and royalty obligations and Sublicensee shall be
responsible for ****** of such license fees and royalty
obligations.  Notwithstanding the foregoing, Sublicensor’s obligation
to pay Third Party royalties, including, without limitation, royalties owed to
Panion, shall not exceed the sales milestone payments and royalties to which
Sublicensor is entitled under Sections 4.3 and 5.1 of this
Agreement

     

    
      
        
        

      

      
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    5.6          Withholding Tax.  If
any payment due to Sublicensor hereunder is subject to withholding taxes or
similar governmental charge (“Withholding Tax”) required to be paid or withheld
thereon by applicable law in Japan, then Sublicensee shall deduct such
Withholding Tax from such payment due Sublicensor hereunder at a rate not to
exceed the then-prevailing rate provided for in applicable provisions of the
Conventions between the Governments of the United States and Japan for the
Avoidance of Double Taxation and the Evasion of Taxes (the
“Convention”).  Sublicensee shall provide Sublicensor, as soon as
possible, a certificate evidencing withholding or payment of any such
Withholding Tax by Sublicensee, its Affiliates or its sublicensees for the
benefit of Sublicensor.  The parties understand as of September 26,
2007 that under the provisions of the current Convention, payments to
Sublicensor under this Agreement are not subject to withholding, provided that
Sublicensor provide Sublicensee with appropriate certificates of residency as
required by Japanese law.

    

    ARTICLE
6.  ROYALTY REPORTS AND ACCOUNTING

    

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

    
      
         

      

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

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

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

    
      
         

      

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

     

    ARTICLE
7. CLINICAL, PRE-CLINICAL, REGULATORY

    AND
COMMERCIAL DEVELOPMENT

    

    7.1           Clinical and Pre-Clinical
Development Program.  Sublicensee will have sole responsibility
for the clinical development of the Product in the Sublicense Territory, and
shall be solely responsible for all costs associated
therewith.  Sublicensee will have final decision-making authority to
decide the protocols for all clinical and pre-clinical studies to be conducted
by Sublicensee to support the approval of the Product in the Sublicense
Territory.  Notwithstanding the foregoing, Sublicensee shall consult
with Sublicensor regarding protocol design for all clinical and pre-clinical
studies. Sublicensee shall use commercially reasonable best efforts (a) to
conduct a clinical development program directed to obtaining regulatory approval
of the Product in the Sublicense Territory (the “Development Program”), and (b)
if, in the opinion of Sublicensee, the results of the Development Program so
justify, to diligently seek regulatory and pricing approval for such Product for
such Indication.  For purposes of this Section, “commercially
reasonable best efforts” shall mean efforts and timelines consistent with those
used by Sublicensee in its own priority development projects with its own
products deemed to have high commercial potential.  Preliminary
timelines are attached hereto as Exhibit 2 and shall be subject to
adjustment in consultation with the JDC.  Notwithstanding anything
herein contained to the contrary, in the event the results of two toxicity
studies conducted by Sublicensee, that is, i) A 6-Month Oral (Dietary)
Toxicity Study in Rats with a 1-Month Recovery Period and ii) A 42-Week Oral
(Dietary) Toxicity Study in Dogs with a 60-Day Recovery Period
(collectively, the “Long-Term Toxicity Studies”) is sufficient to meet
Sublicensor’s long-term toxicology needs, as accepted by
FDA,  Sublicensor shall reimburse JT for one-half (1/2) of the costs
of the Long-Term Toxicity Studies or for one-half (1/2) of any portion of
the Long-Term Toxicity Studies accepted by FDA as satisfying such toxicology
requirements.

    
      
         

      

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

    7.3          Regulatory
Matters.

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

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

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

    
      
         

      

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

    7.3.2       Assistance by
Sublicensee.

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

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

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

    
      
         

      

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

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

    7.5           Intentionally
Omitted.

     

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

    
      
         

      

      
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    ARTICLE
8.  PATENTS AND IMPROVEMENTS

    

    8.1           Patent Prosecution and
Maintenance.   For the purpose of securing for the benefit
to Sublicensee the Patent Rights in the Sublicense Territory, Sublicensor shall
maintain the bridge between Panion, Dr. Hsu and GloboAsia and Sublicensee by:
(i) promptly passing along to Sublicensee any and all copies of relevant
materials received from Panion, Dr. Hsu and GloboAsia with respect to
prosecution and maintenance of the Patent Rights in the Sublicense Territory;
and (ii) promptly passing along back to Panion, Dr. Hsu and GloboAsia any and
all comments, opinions, requests, suggestions and so forth received from
Sublicensee.  Sublicensor shall also promptly pass along to
Sublicensee any relevant rights obtained from Panion, Dr. Hsu or GloboAsia with
respect to prosecution and maintenance of Patent Rights in the Sublicense
Territory.  Notwithstanding the foregoing, Sublicensee may make direct
contact with Panion, Dr. Hsu and GloboAsia upon written consent by Keryx,
which consent shall not be unreasonably withheld or delayed, and provide to
Sublicensor in a timely manner i) summaries of meetings held with Panion, Dr.
Hsu or GloboAsia, as the case may be, without the presence of Sublicensor’s
employees or representatives, and ii) copies of relevant
documents exchanged with Panion, Dr. Hsu or GloboAsia, as the case may
be, without being copied to Sublicensor.  Sublicensor shall
obtain from Panion, Dr. Hsu and GloboAsia the authority in the Sublicense
Territory for Sublicensee to prosecute or to cause the prosecution of the patent
applications that are enumerated in Exhibit 1 of this Agreement, to obtain
patents thereon and to maintain patents, including any correction trials and
invalidation trials,  included in the Patent Rights in effect during
the term of this Agreement using outside patent counsel, selected by
Sublicensee, that is agreed upon by Sublicensor and Panion, which agreement
shall not be unreasonably withheld or delayed by
Sublicensor.  Sublicensee shall be solely responsible for said
prosecution of the patent applications that are enumerated in Exhibit 1 of this
Agreement, to obtain patents thereon and to maintain patents, including any
correction trials and invalidation trials, included in the Patent Rights in
effect during the term of this Agreement using outside patent counsel that is
mutually agreed upon by Sublicensor and Sublicensee.  Sublicensor and
Sublicensee agree as of the Effective Date that Albert Wai-Kit Chan, Esq.
is acceptable.  Sublicensee shall be solely responsible for all costs
and expenses relating to such patent applications and
patents.  Sublicensor shall make reasonably appropriate arrangements
to enable Sublicensee to: (i) obtain registration under the name of Sublicensee
in the Sublicense Territory of the exclusive license granted to Sublicensee
under Section 3.1 of this Agreement as a “Senyo Jisshiken” in
accordance with Article 77 of the Japanese Patent Law within sixty (60) days
after issuance or registration of the relevant patents, and (ii) fully secure
Sublicensee’s right as a primary licensee in the Sublicense Territory until said
registration of “Senyo
Jisshiken.”  Sublicensee shall keep Sublicensor advised of the
status of all patent applications and patents relating to the Patent Rights by
providing Sublicensor with copies of such patent applications and patents and
copies of all patent office correspondence relating thereto including any office
actions received by Sublicensee and responses or other papers filed by
Sublicensee.  Sublicensee specifically agrees to provide Sublicensor
with copies of patent office correspondence in sufficient time for Sublicensor
to review and comment on such correspondence and submit to Sublicensee any
proposed response thereto.  Sublicensee further agrees to provide
Sublicensor with sufficient time and opportunity, but in no event less than ten
(10) days, to review and comment on all proposed responses to patent office
correspondence relating to such patent applications and
patents.  Sublicensor agrees that all final decisions regarding the
preparation and prosecution of such patent applications and patents, reissues,
reexaminations, interferences and oppositions relating thereto shall be made by
Sublicensee.  Notwithstanding the foregoing, in the event of a
decision regarding a Significant Event, Sublicensee will provide Sublicensor
with notice of such Significant Event and Sublicensor shall have thirty (30)
working days in which to assent or refuse to assent to such action, with such
assent not to be unreasonably withheld.  For purposes of this Section
8.1, “Significant Event” shall mean abandonment of an application, the filing of
divisional or continuation applications, or a significant narrowing of the scope
of patent application claims. Sublicensee shall have the right in its sole
discretion, to discontinue the prosecution of any such patent applications or
the maintenance of any such patents, and Sublicensor shall have the right to
assume responsibility for the prosecution of such patent applications or the
maintenance of such patents at its own expense. If Sublicensee elects not to
prosecute, and Sublicensor elects not to assume, any such patent applications or
not to maintain any such patents in the Sublicense Territory, Sublicensee’s
license rights and its obligations under this Agreement, with respect to such
patent applications and patents in the Sublicense Territory shall terminate,
without affecting its license rights and other obligations to pay with respect
to any other patent applications or patents included in the Patent
Rights.  After the Effective Date of this Agreement, in the event
Exhibit 1 of the Panion License Agreement is amended to add additional patents
related to the Compound (“Additional Patents”), the parties shall amend Exhibit
1 hereof to add such Additional Patents.  Upon the written amendment
of Exhibit 1, such additional Patents shall be prosecuted and maintained in
accordance with the provisions of this Section 8.1.

    
      
         

      

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

    

     

    8.2           Improvements and Use of
Development Data.

     

    (a)           Each
party shall notify the other party promptly of any sole or joint inventions
directed to Improvements under such party’s control. As between the parties,
Sublicensee shall own all right, title and interest in and to Improvements
invented solely by Sublicensee’s employees or contractors and Sublicensor shall
own all right, title and interest in and to Improvements invented solely by
Sublicensor’s employees or contractors.  Patent applications and
patents directed to jointly invented Improvements shall be jointly assigned to
and owned by Sublicensee and Sublicensor.  Subject to the provisions
of Article 12 with respect to Follow-on Products, during the term of this
Agreement, i) in the Sublicense Territory, to such extent as granted to
Sublicensee under Section 3.1 Sublicensee shall have the liberty to freely
practice Improvements, or license to any third party in connection with a
sublicense to sell Products, provided that such sublicensees agree to share any
Improvements with Sublicensor and Sublicensee, and ii) outside the Sublicense
Territory, the Sublicensor shall have the liberty to freely practice
Improvements, or license to any third party in connection with a sublicense to
sell Products, provided that such sublicensees agree to share any Improvements
with Sublicensor and Sublicensee.  In the event of a termination of
this Agreement by Sublicensor for breach by Sublicensee or by Sublicensee in the
absence of a breach by Sublicensor, then Sublicensor’s rights under this Section
8.2 related to Improvements shall survive but Sublicensee’s rights shall be
terminated and Sublicensor shall have a perpetual, exclusive, royalty-free,
sublicensable license for the purpose of commercialization of Product to
any patented Improvements solely or jointly invented by
Sublicensee.  If this Agreement is terminated by Sublicensee for
breach by Sublicensor, then Sublicensor may continue to have the rights set
forth herein to non-patented Improvements outside the Sublicense
Territory without any consideration therefor and shall have the option
to acquire a license for the use outside the Sublicense Territory of patented
Improvements that were solely invented by Sublicensee at a royalty rate of
****** of net sales of the relevant products which, but for the license, would
infringe a valid patent owned by Sublicensee.  Upon expiration of this
Agreement, Sublicensor may continue to have the rights set forth herein to
non-patented and jointly-invented Improvements outside the Sublicense
Territory without any consideration therefor and shall have the option
to acquire an exclusive, except as to Sublicensee, license for the use outside
the Sublicense Territory of patented Improvements which were solely
invented by Sublicensee at a royalty rate of ****** of net sales of the relevant
products which, but for the license, would infringe a valid patent owned by
Sublicensee.   The formula for calculating net sales for
Sublicensor’s products under this Section 8.2(a) shall be consistent with the
provisions of Section 1.10 of this Agreement.

    
      
         

      

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

     

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

     

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

    
      
         

      

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

     

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

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

    

    
      
        
        

      

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

    

     

    ARTICLE
9.  INFRINGEMENT

    

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

    

    9.2           Infringement by
Sublicensee.   In the event that it is determined by any
court of competent jurisdiction that the import, manufacture, use or sale of any
Product or Compound by Sublicensee or its sublicensees in accordance with the
terms and conditions of this Agreement infringes, or Sublicensee and Sublicensor
reasonably determine and agree that the import, manufacture, use or sale of such
Product or Compound is likely to infringe, a Third Party patent or related
intellectual property right in the Sublicense Territory, Sublicensee shall in
consultation with Sublicensor use its reasonable best efforts to: (i) procure at
Sublicensor’s expense a license from such Third Party
authorizing Sublicensee to continue to import, manufacture, use or sell
such Product or Compound; or (ii) modify such Product or Compound or its
manufacture so as to render it non-infringing.

     

    
      
        
        

      

      
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    9.3          In
the event that neither of the foregoing alternatives is reasonably available or
commercially feasible, Sublicensee may at its option (i) either cease the
import, manufacture, use and sale of such Product or Compound for so long as and
to the extent that such activities are infringing the relevant Third Party
patents, in which case the obligation of Sublicensee hereunder to pay royalties
shall also cease, or (ii) terminate the rights and licenses granted in the
Sublicense Territory in which the infringement of Third Party patents has
occurred or is likely to occur, in which case the obligation of Sublicensee
hereunder to pay royalties shall also terminate in the Sublicense
Territory.  With regard to damages caused to Sublicensee by a Third
Party patent or related intellectual property right for which Sublicensor would
otherwise have been solely responsible for payment of royalties under Section
5.5, Section 14.2 will apply.

    

    ARTICLE
10.  MANUFACTURE & SUPPLY

    

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

    10.1.1     Supply.  As
of September 26, 2007, and until the date on which Sublicensee establishes its
own supply of Product, whether through Sublicensee’s manufacture or through a
Direct Supply Agreement with a Third Party as provided in Section 10.2.3 (such
end date of Sublicensor’s obligation to supply Product shall be hereinafter
referred to as the “Supply End Date”), Sublicensor agrees to supply Sublicensee
necessary quantities of Compound, formulated Compound (interim product) (if
any) and/or Product for Sublicensee’s use in preclinical studies and clinical
studies (“Development Supplies”) in the Sublicensee
Territory.  As of the Effective Date, Sublicensor and Sublicensee
agree that the Supply End Date has occurred and Sublicensee has established a
direct supply contract with a Third Party contractor Sublicensor may obtain
Development Supplies from its Third Party contract manufacturers (“Third Party
Manufacturers”) that are then manufacturing Compound, formulated Compound
(interim product) (if any) and/or Product for Sublicensor’s or its other
licensees’ use in its non-clinical studies or clinical trials of the
Product outside the Sublicensee Territory.  Development Supplies
provided to Sublicensee shall be manufactured in the same formulation and to the
same specifications as the Compound and/or Product such Third Party
Manufacturers are supplying to Sublicensor or its other licensees for
use in pre-clinical studies or clinical trials in the United States as of
September 26, 2007 or such subsequent date as may be specified by Sublicensee
unless Sublicensee agrees otherwise in writing.

    
      
         

      

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

       

    

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

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

     

    
      
        
        

      

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

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

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

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

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

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

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

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

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

    
      
         

      

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

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

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

    
      
         

      

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

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

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

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

    
      
         

      

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

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

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

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

    (e)           any
other matters related to manufacturing or storage to be agreed on by the
parties.

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

    
      
         

      

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

    10.2.3     Direct Supply Agreement with
Third Party Manufacturers.

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

    
      
         

      

      
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    (b)           Sublicensor
grants Sublicensee and its sublicensees the exclusive right, without any
restrictions, to manufacture (and have manufactured) the active pharmaceutical
ingredient for purposes of developing and supplying the same solely in the
Sublicensee Territory, provided that Sublicensee and its sublicensees shall bear
all costs associated with such production.  Sublicensee shall pay to
Sublicensor a fee (the “Manufacturing Fee”) equal to seven and one half percent
(7.5%) of the manufacturing and procurement cost of all batches of active
pharmaceutical ingredient that are manufactured by or on behalf of Sublicensee
or its sublicensees, except for when those manufactured batches are for
commercial use by Sublicensee or its sublicensees in which case the
Manufacturing Fee shall not apply.  Sublicensee shall provide to
Sublicensor copies of all invoices for such manufacture and
procurement of active pharmaceutical ingredient that are manufactured by or on
behalf of Sublicensee or its sublicensees where the Manufacturing Fee
applies at the same time that Sublicensee provides its Progress
Reports.  The parties herby confirm and agree that said seven and
one half percent (7.5%) Manufacturing Fee shall be retroactively applied to
Development Supplies manufactured by a Third Party Manufacturer for and on
behalf of Sublicensee under direct contract between such Third Party
Manufacturer and Sublicensee on or after November 14, 2008.

     (c)          It
shall be the responsibility of Sublicensee to ensure that the quality of
intermediates, Compound, formulated Compound (interim product) (if any) and/or
Product in the Sublicense Territory is in compliance with the standards of the
applicable Regulatory Authority.

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

    
      
         

      

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

       

    

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

     

    ARTICLE
11.  NON-COMPETITION

    

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

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

    
      
         

      

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

       

    

    ARTICLE
12.  FOLLOW-ON PRODUCTS

    

    12.1        Follow-on
Products.  For a period of ****** from September 26, 2007,
Sublicensee will have a right of first negotiation to any Follow-on Products
which Sublicensor develops or otherwise obtains rights to as
follows:  (i) Following completion of the first Phase II clinical
study of such Follow-on Product, Sublicensor shall describe the Follow-on
Product in writing in reasonable detail, and such description shall be protected
as Proprietary Information under this Agreement (a “Confidential Disclosure”);
(ii) Sublicensor shall provide the Confidential Disclosure to Sublicensee; and
(iii) during the period commencing upon Sublicensee’s receipt of the
Confidential Disclosure and expiring ****** days thereafter (the “Discussion
Period”), the parties shall discuss in good faith a license and
commercialization agreement with respect to the Follow-on Product in the
Sublicense Territory.  If the parties do not reach agreement during
the Discussion Period, then the Right of First Negotiation shall expire, and
Sublicensor shall be free to exploit the Follow-on Product on its own, or to
market the Follow-on Product to others, on terms no less favorable to
Sublicensor than the final terms offered by Sublicensor.  In the event
Sublicensor receives an offer from any Third Party to license or commercialize
the Follow-on Products (an “Outside Offer”), Sublicensor shall promptly so
notify to Sublicensee before accepting or rejecting such Third Party
offer.

     

    12.2        Other Compounds in the Field of
Nephrology.  For a period of ******  from September
26, 2007, in the event that Sublicensor (a) acquires, licenses, obtains
licenses, or develops a compound for use in the field of nephrology; and (b) is
considering a development and/or marketing partner or licensee in the Sublicense
Territory, then Sublicensor and Sublicensee shall meet (before or at
substantially the same time as Sublicensor meets with other potential partners)
to discuss in good faith the possibility of collaborating in connection with
such compound in the Sublicense Territory.

     

    ARTICLE
13.  PRICING

     

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

    
      
         

      

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

     

    ARTICLE
14.  INDEMNIFICATION

    

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

    
      
         

      

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

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

     

    
      
        
        

      

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

       

    

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

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

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

    
      
         

      

      
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    ARTICLE
15.  CONFIDENTIALITY

    

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

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

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

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

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

    
      
         

      

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

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

     

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

     

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

    
      
         

      

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

     

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

     

    15.8        
Permitted
Disclosures.

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

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

     

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

    
      
         

      

      
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    ARTICLE
16.  TERM AND TERMINATION

    

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

    
      	
               
      

            	
              (i)

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

            

    

    
      	
            	
              (ii)

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

            

    

    
      	
               
      

            	
              (iii)

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

            

    

    
      	
            	
              (iv)

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

            

    

    
      
        	
              	
                16.2

              	
                Termination by
      Sublicensee.

              

      

    

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

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

    
      
         

      

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

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

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

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

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

    16.4         Rights Following
Termination.

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

    
      
         

      

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

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

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

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

    
      
         

      

      
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    ARTICLE
17.  ASSIGNMENT

    

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

    

    ARTICLE
18  PATENT MARKINGS

    

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

    
      
         

      

      
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    ARTICLE
19.  ARBITRATION

    

    In the event any dispute or difference
of any kind whatsoever shall arise between the parties in connection with or
arising out of this Agreement or the carrying out of its obligations, except as
provided in Section 3.9, it shall first be brought to negotiation between the
parties and in case no agreement is reached within a period of sixty (60) days
from the day on which such dispute or difference was brought to the attention of
the other party, it shall then be referred to arbitration.  The
arbitration shall be conducted in London, United Kingdom in English and in
accordance with the arbitration rules of International Chamber of
Commerce.  The parties shall request the arbitrators to render award
within eighteen (18) months. The award shall be final, binding and enforceable
upon the parties.

    

    ARTICLE
20.  PATENT TERM EXTENSION

    

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

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

    

    ARTICLE
21. FORCE MAJEURE

    

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

     

    ARTICLE
22. NEGATION OF AGENCY

     

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

     

    ARTICLE
23.  PUBLICITY

    

    Each
party shall give notice to the other party prior to issuing any press release
relating to this Agreement within due time to allow for reasonable
consideration. The party issuing the press release shall give due consideration
and weight to any comments or concerns raised by the other
party.  Notwithstanding the foregoing, neither party shall issue a
press release announcing the execution of this Agreement outside of a joint
press release which has been prepared jointly by the parties.

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

     

    ARTICLE
24. FILING OF THE AGREEMENT

     

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

    

    ARTICLE
25. SEVERABILITY

    

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

    
      
         

      

      
        50

        
          

        

      

      
         

      

    

    ARTICLE
26.  NOTICES

    

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

    

    In the case of
Sublicensor:

     

    Keryx
Biopharmaceuticals, Inc

    750
Lexington Ave, 20th
Floor

    New York,
NY 10022 U.S.A.

    Attn:
James Oliviero

    Fax:
1-212-531-5970

    Email:
joliviero@keryx.com

    

    with a copy to:

     

    Keryx
Biopharmaceuticals, Inc

    750
Lexington Ave, 20th
Floor

    New York,
NY 10022 U.S.A.

    Attn:
Kenneth Hoberman

    Fax:
1-212-531-5977

    Email:
khoberman@keryx.com

    

    In the case of
Sublicensee:

     

    Japan Tobacco Inc.

    JT
Building, 2-1, Toranomon 2-Chome

    Minato-ku,
Tokyo 105-8422, Japan

    Attn:   Vice
President, Pharmaceutical Business Development

    Fax:     81-3-5572-1449

    Email:
takashi.kamiya@jt.com

    

    and

     

    Torii
Pharmaceutical Co., Ltd.

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

    Chuo-ku,
Tokyo 103-8439, Japan

    Attn:  General
Manager, Business Development Dept.

    Fax:    81-3-5203-7334

    Email:
kiyoshi.sato@torii.co.jp

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

    

    with a copy to:

     

    Holland
& Knight LLP

    195
Broadway

    New York,
NY 10007 U.S.A.

    Attn:
Neal Beaton, Esq.

    Fax:  1-212-341-7103

    Email:
neal.beaton@hklaw.com

    

    ARTICLE
27.  GOVERNING LAW

    

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

    

    ARTICLE
28. AFFILIATES

    

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

    

    ARTICLE
29.  ENTIRE AGREEMENT

    

    This Agreement and the Exhibits hereto
which are a part hereof, contain the entire understanding of the parties with
respect to the subject matter hereof.  All express or implied
agreements and understanding, either oral or written, heretofore made are
expressly merged in and made a part of this Agreement.  The parties
hereto may not alter, amend, modify, terminate or waive any of the provisions of
this Agreement, but only by a written instrument duly executed and delivered by
authorized officers of the parties.  This agreement may be executed in
three (3) counterparts, each of which will be deemed an original, but all of
which together will constitute one agreement.

    
      
         

      

      
        52

        
          

        

      

      
         

      

    

    

    ARTICLE
30.  WAIVER

    

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

    

    ARTICLE
31.  CAPTIONS

    

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

    
      
         

      

      
        53

        
          

        

      

      
         

      

    

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

    

    

    
      
        
          
            
              	
                      KERYX
      BIOPHARMACEUTICALS, INC.

                    	
                      JAPAN
      TOBACCO INC.

                    
	 
      	 
      	 
      	 
      
	
                      By:  

                    	/s/
      Ron Bentsur 	
                      By:  

                    	/s/
      Noriaki
      Okubo
	 
      	
                      Ron
      Bentsur

                    	 
      	
                      Noriaki
      Okubo

                    
	 
      	
                      Chief
      Executive Officer

                    	 
      	
                      President,
      Pharmaceutical
Business

                    

            

          

        

      

    

     

    
      
        
          
            	 
      	
                    TORII
      PHARMACEUTICAL CO., LTD.

                  
	 
      	 
      	 
      
	 
      	
                    By:  

                  	/s/
      Norihiko
      Matsuo
	 
      	 
      	
                    Norihiko
      Matsuo

                  
	 
      	 
      	
                    President
      and Representative
Director

                  

          

        

      

    

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    List of
Exhibits

     

    Exhibit
1:  List of Patent and Patent Applications

     

    Exhibit
2:  Preliminary Timelines for the Development Program

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

     

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

    

     

    [Exhibit
1]  List of Patent and Patent Applications

    

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

    
      
        
          
            
              	
                      DOCKET
      #

                    	 
      	
                      MATTER

                    	 
      	
                      NOTE

                    
	
                      Dkt.
      #859-PCT-JP

                    	 
      	
                      FERRIC
      ORGANIC COMPOUNDS, USES THEREOF AND METHODS OF MAKING SAME

                    	 
      	
                       

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

                    	 
      	****** 
	 
      	
                        

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

                      Applicant:
      GloboAsia

                    	
                        

                    	 
      

            

          

        

      

    

    

    Patent
Dkt#859C (CHAN and TOWN., 2006)

    
      
        
          
            
              	
                      DOCKET
      #

                    	 
      	
                      MATTER

                    	 
      	
                      NOTE

                    
	
                      Dkt.
      #859-C-PCT-JP

                    	
                        

                    	
                      PHARMACEUTICAL-GRADE
      FERRIC ORGANIC COMPOUNDS, USES THEREOF AND METHODS OF MAKING
      SAME

                      Japanese
      App’l No. 2008-527177, Filed February 18, 2008, National Stage of Int’l
      App’l No. PCT/US2006/032385, Filed August 18, 2006

                       

                       

                       

                      Inventors:
      Keith CHAN and Winston TOWN

                      Applicant:
      GLOBOASIA, LLC

                    	
                        

                    	
                       

                       

                      ******
      

                       

                    

            

          

        

      

    

    

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

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

     

    Patent
Dkt#1092 (HSU, 1997)

    
      
        
          
            
              
                	
                        DOCKET
      #

                      	 
      	
                        MATTER

                      	 
      	
                        NOTE

                      
	
                        Dkt.
      #1092-PCT-JP

                      	 
      	
                        METHOD
      FOR TREATING RENAL FAILURE

                      	 
      	
                         

                      
	 
      	 
      	
                        Japanese
      App’l No. 10-527705, Filed June 15, 1999, now Japanese Patent No. 4173553,
      issued August 22, 2008, National Stage App’l of Int’l App’l No.
      PCT/US97/20977, filed November 14, 1997, which is a continuation of U.S.
      Serial No. 08/794,328, filed February 3, 1997, and U.S. Serial No.
      60/032,745, filed December 16, 1996

                         

                        Applicant:
      Chen Hsing HSU

                         

                         

                      	 
      	
                        ******
      

                      
	 	 	 	 	 
	
                        Dkt.
      #1092-Z-PCT-JP

                        (Divisional)

                      	
                          

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

                         

                        Applicant:
      Chen Hsing HSU

                         

                      	
                          

                      	
                        ******
      

                      

              

            

          

        

      

    

    

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

     

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

     

    Patent
Dkt#1148 (CHAN et al., 2007)

    
      
        
          
            
              	
                      DOCKET
      #

                    	 
      	
                      MATTER

                    	 
      	
                      NOTE

                    
	
                      Dkt.
      #1148-A-PCT-JP

                    	
                        

                    	
                      METHOD
      OF REVERSING, PREVENTING OR STABILIZING SOFT TISSUE
      CALCIFICATION

                      Japanese
      App’l No. 2008-552435, Filed July 30, 2008, National Stage of Int’l App’l
      No. PCT/US2007/002157, filed January 26, 2007 claiming priority of
      U.S. Serial 60/763,253, filed January 30, 2006, and Int’l App’l
      No.PCT/US2006/032385, filed August 18, 2006,

                       

                      Inventors:
      Keith CHAN, Winston TOWN, Shou Shan CHIANG

                      Applicant:
      GloboAsia, LLC

                    	
                        

                    	
                       

                       

                      ******

                    

            

          

        

      

    

    

    Patent
Dkt#1231 (CHAN & TOWN, 2007)

    
      
        
          
            
              	
                      DOCKET
      #

                    	 
      	
                      MATTER

                    	 
      	
                      NOTE

                    
	
                      Dkt.
      #1231-PCT-JP

                    	
                        

                    	
                      METHOD
      OF TREATING CHRONIC KIDNEY DISEASE

                      Japanese
      Patent Application No. 2008-552431, filed July 30, 2008, National
      Stage of Int’l App’l No. PCT/US2007/002151, filed January 26, 2007, claiming priority of
      U.S. Serial No. 60/763,253, filed January 30, 2006, and Int’l App’l No.
      PCT/US2006/032385, filed August 18, 2006

                       

                      Inventors:
      Keith CHAN and Winston TOWN

                      Applicant:
      GloboAsia, LLC

                    	
                        

                    	
                       

                      ****** 

                       

                    

            

          

        

      

    

    
      
         

      

      
        58

        
          

        

      

      
         

      

    

     

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

     

    [Exhibit
2]  Preliminary Timelines for the Development Program

    

    ******

    
      
         

      

      
        59

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