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Exhibit 10.6    
    

*** Text Omitted and Filed Separately

CONFIDENTIAL TREATMENT REQUESTED

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

  
 

    NM441 LICENSE AGREEMENT
  
    BETWEEN
  
    NIPPON SHINYAKU CO., LTD.
  
    AND
  
    OPTIMER PHARMACEUTICALS, INC.    
    

 

	ARTICLE 1	 	DEFINITIONS	 	1
	ARTICLE 2	 	GRANT OF LICENSE	 	4
	ARTICLE 3	 	DISCLOSURE OF INFORMATION	 	5
	ARTICLE 4	 	ADRs REPORTING	 	6
	ARTICLE 5	 	MILESTONE PAYMENTS	 	7
	ARTICLE 6	 	MINIMUM PURCHASING AMOUNT	 	7
	ARTICLE 7	 	REPORTS AND ACCOUNTING	 	8
	ARTICLE 8	 	DEVELOPMENT PROGRAM	 	9
	ARTICLE 9	 	SECRECY	 	10
	ARTICLE 10	 	REPRESENTATIONS	 	11
	ARTICLE 11	 	SUPPLY OF COMPOUNDS	 	14
	ARTICLE 12	 	SUPPLY PRICE	 	14
	ARTICLE 13	 	FORECAST AND FIRM ORDER	 	16
	ARTICLE 14	 	QUALITY	 	17
	ARTICLE 15	 	TITLE AND RISK OF LOSS	 	18
	ARTICLE 16	 	SALES PROMOTION	 	18
	ARTICLE 17	 	LIABILITIES	 	19
	ARTICLE 18	 	PATENT INFRINGEMENT AND EXTENSION	 	20
	ARTICLE 19	 	INFRINGEMENT ACTIONS BY THIRD PARTIES	 	20
	ARTICLE 20	 	COMPETITIVE PRODUCT	 	20
	ARTICLE 21	 	TRADEMARK	 	21
	ARTICLE 22	 	WITHHOLDING TAXES	 	21
	ARTICLE 23	 	DURATION AND TERMINATION	 	21
	ARTICLE 24	 	EFFECT OF TERMINATION	 	22
	ARTICLE 25	 	NOTICES	 	23
	ARTICLE 26	 	FORCE MAJEURE	 	24
	ARTICLE 27	 	ASSIGNMENT	 	24
	ARTICLE 28	 	WAIVER	 	24
	ARTICLE 29	 	GOVERNING LAW	 	25
	ARTICLE 30	 	ARBITRATION	 	25
	ARTICLE 31	 	ENTIRE AGREEMENT	 	25
	ARTICLE 32	 	MISCELLANEOUS	 	25
	ARTICLE 33	 	COUNTERPARTS	 	26
	

SCHEDULE 1(H)    DEVELOPMENT PROGRAM	
 	

28
	SCHEDULE 1(U)    SHINYAKU PATENT	 	35
	SCHEDULE 1(W)    SPECIFICATION

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LICENSE AGREEMENT    
    

This
Agreement is made on this 10th day of June, 2004 by and between 

NIPPON
SHINYAKU CO., LTD.,

a company organized and existing under the laws of Japan, having its principal office and place of business at 14, Nishinosho-monguchi-cho, Kisshoin, Minami-ku, Kyoto
601-8550, Japan (hereinafter referred to as "SHINYAKU") 

and

OPTIMER
PHARMACEUTICALS, INC.,

a company organized and existing under the laws of the State of Delaware, having its principal office and place of business at 10110 Sorrento Valley Road, Suite C, San Diego, CA 92121, U.S.A.
(hereinafter referred to as "OPTIMER"). 

WITNESSETH
THAT: 

        WHEREAS
(A), SHINYAKU is the proprietor of certain patents relating to the COMPOUND (hereinafter defined) and possesses technical information relating to the aforementioned
patents and the development, use and manufacture of the COMPOUND and the PRODUCT (hereinafter defined) formulated therefrom; 

        WHEREAS
(B), OPTIMER wishes to obtain an exclusive license in the TERRITORY (hereinafter defined) under the patents and technical information referred to in Recital
(A) above to develop, manufacture and commercialize the PRODUCT containing the COMPOUND referred to therein; 

        WHEREAS
(C), SHINYAKU represents it has the right to grant such license and is willing to grant to OPTIMER such license in the TERRITORY under the terms and conditions herein set
forth; 

        NOW
THEREFORE, it is hereby agreed as follows: 

 
 

ARTICLE 1
  
    DEFINITIONS    
    

	1.1
	The
following terms used in this Agreement shall have the meanings as defined hereunder:

	A.
	Adverse
Drug Reactions (ADR)s herein shall mean (i) any untoward medical occurrence in a patient or clinical investigation subject administered a pharmaceutical product and
which does not necessarily have a causal relationship to the treatment; and (ii) a response to a drug which is noxious and unintended and which occurs at doses normally used in man for
prophylaxis, diagnosis or therapy of disease or for modifications of physiological function.

	B.
	AFFILIATE
herein shall mean, with respect to either party, any corporation, partnership or other entity directly or indirectly owned by, owning, or under common ownership with such
party hereto, through common ownership of at least fifty percent (50%) of the stock or other equity interests having the power to vote for the election of directors, managers, or other executive
management of such corporation, partnership or other entity to be deemed as AFFILIATE but only for so long as such ownership of voting stock continues.

	C.
	AGREEMENT
TERM herein shall have the meaning set forth in ARTICLE 23 hereof.

	D.
	ANNUAL
NET SALES herein shall mean the aggregate amount of NET SALES (hereinafter defined) that are made in the TERRITORY during each calendar year that is included within the
AGREEMENT TERM.

	E.
	COMPETITIVE
PRODUCT herein shall mean any product containing a quinolone derivative other than the COMPOUND as a pharmaceutical active ingredient which is in the public domain 

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and
in and after the development stage of animal study as of the EFFECTIVE DATE of the Agreement. 

	F.
	COMPOUND
herein shall mean the chemical compound with a chemical name of
(±)6-Fluoro-1-methyl-7-[4-(5-methyl-2-oxo-1,3-dioxolen-4-yl)methyl-1-piperazinyl]-4-oxo-4H-
[1,3] thiazeto [3,2-a]quinoline-3-carboxylic acid, of which code name is designated as NM441.

	G.
	CONFIDENTIAL
INFORMATION herein shall mean information and data relating to the COMPOUND and/or the PRODUCT including, but not limited to the OPTIMER TECHNICAL INFORMATION and the
SHINYAKU TECHNICAL INFORMATION, and any information which is acquired, disclosed, exchanged or generated for the purposes of this Agreement.

	H.
	DEVELOPMENT
PROGRAM shall mean a development program including the timeline of each study as set forth in SCHEDULE 1(H), which is attached hereto and made a part hereof.

	I.
	DMF
shall mean the drug master file for the COMPOUND, and any amendments and supplements thereto, submitted by or on behalf of SHINYAKU, which shall contain all necessary information
concerning the composition, manufacture, control and storage of the COMPOUND.

	J.
	EFFECTIVE
DATE herein shall mean the date first appearing above.

	K.
	FDA
herein shall mean the United States Food and Drug Administration.

	L.
	FIELD
herein shall mean the prevention, treatment and cure for any diseases in human beings in all the therapeutic fields.

	M.
	FIRST
COMMERCIAL SALE herein shall mean the first sale of the PRODUCT in the TERRITORY by OPTIMER or its SUBLICENSEE to unrelated third parties after the HEALTH REGISTRATION
(hereinafter defined) has been granted in the TERRITORY.

	N.
	HEALTH
REGISTRATION herein shall mean governmental authorizations and/or approvals required by the competent authorities in the TERRITORY for manufacturing, marketing and selling of
the PRODUCT, and for importing of the COMPOUND in the TERRITORY, if necessary, including but not limited to, product registration(s) and price and marketing approvals, as applicable.

	O.
	NET
SALES herein shall mean the collected gross invoiced sales of the PRODUCT by OPTIMER and its SUBLICENSEES, including OPTIMER's AFFILIATES, to unrelated third parties, less the
following deductions from such gross invoiced sales in each case actually paid or taken with respect to the sale of the PRODUCT:

	(i)
	reasonable
and customary discounts, credits, rebates, allowances, and adjustments; and all rejections, recalls and returns;

	(ii)
	price
reductions or rebates retroactively or otherwise imposed by government authorities;

	(iii)
	sales,
excise, turnover, value-added, and similar taxes assessed on the sale of the PRODUCT (but excluding income taxes);

	(iv)
	transportation,
importation and insurance directly chargeable to the sale of the PRODUCT;

	(v)
	reasonable
and customary chargebacks granted to drug wholesalers based upon sales to their customers where there are no direct shipments to such customers by OPTIMER or
its SUBLICENSEES.

	P.
	OPTIMER
PATENT herein shall mean all patent applications filed and/or patents issued in any country relating to the COMPOUND and/or the PRODUCT which may be necessary or useful in
making the COMPOUND or in developing, making, using, selling or registering the PRODUCT and which OPTIMER owns, possesses and controls or has licensed from a third party (with the 

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right
to sublicense to SHINYAKU without breaching any contractual obligation with such third party) during the AGREEMENT TERM. OPTIMER PATENT shall include all provisional applications, divisions,
continuations, continuations-in-part, additions, registrations, confirmations, renewals, extensions, supplemental protection certificates, re-examinations and
reissues of the above patent applications and patents. 

	Q.
	OPTIMER
TECHNICAL INFORMATION herein shall mean all non-patented technical data and information, improvements, trade secrets, technology and/or know-how
relating to the COMPOUND and/or the PRODUCT which may be necessary or useful in making the COMPOUND or in developing, making, using, selling or registering the PRODUCT, and which OPTIMER and its
SUBLICENSEES have itself developed or discovered, own, or possess and control or have licensed from a third party (with the right to sublicense to SHINYAKU without breaching any contractual obligation
with such third party, including to SUBLICENSEES) during the AGREEMENT TERM. This term includes, without limitation;

	i)
	specifications
for the PRODUCT;

	ii)
	chemical
data on the COMPOUND;

	iii)
	processes,
instructions, procedures and techniques for the PRODUCT;

	iv)
	toxicological,
pharmacological, pharmacokinetic data on the COMPOUND and the PRODUCT;

	v)
	clinical
data including ADRs;

	vi)
	documents
used for the New Drug Application in the TERRITORY;

	vii)
	package
inserts for the PRODUCT; and

	viii)
	commercial
and marketing information.

	R.
	PRODUCT
herein shall mean any pharmaceutical preparation suitable for administration for human use containing the COMPOUND in the FIELD as an active ingredient.

	S.
	QUARTER
herein shall mean each period of three (3) consecutive calendar months, ending March 31, June 30, September 30, and December 31.

	T.
	REASONABLE
COMMERCIAL EFFORTS herein shall mean efforts which are consistent with those utilized by OPTIMER for its own internally developed pharmaceutical products of similar market
potential at a similar stage of its product life taking into account the existence of other competitive products in the marketplace or under development, the proprietary position of the product, the
profitability of the product and other relevant factors.

	U.
	SHINYAKU
PATENT herein shall mean all patent applications filed and/or patents issued in any country relating to the COMPOUND and/or the PRODUCT, which may be necessary or useful in
developing, making, using, selling or registering the PRODUCT and which SHINYAKU owns, possesses and controls or has licensed from a third party (with the right to sublicense to OPTIMER without
breaching any contractual obligation with such third party) during the AGREEMENT TERM. SHINYAKU PATENT shall include all provisional applications, divisions, continuations,
continuations-in-part, additions, registrations, confirmations, renewals, extensions, supplemental protection certificates, re-examinations and reissues of the
above patent applications and patents. A list of the SHINYAKU PATENTS as of the EFFECTIVE DATE is attached hereto as SCHEDULE 1(U) and the list shall be updated by SHINYAKU during the AGREEMENT
TERM.

	V.
	SHINYAKU
TECHNICAL INFORMATION herein shall mean all non-patented technical data and information, improvements, trade secrets, technology and/or know-how
relating to the 

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COMPOUND
and/or the PRODUCT, which may be necessary or useful in developing, making, using, selling or registering the PRODUCT, and which SHINYAKU has itself developed or discovers, owns, or possesses
and controls or has licensed from a third party (with the right to sublicense to OPTIMER without breaching any contractual obligation with such third party) during the AGREEMENT TERM. This term
includes, without limitation; 

	i)
	SPECIFICATION;

	ii)
	chemical
data on the COMPOUND;

	iii)
	processes,
instructions, procedures and techniques for the PRODUCT;

	iv)
	toxicological,
pharmacological, pharmacokinetic data on the COMPOUND and the PRODUCT;

	v)
	clinical
data including ADRs;

	vi)
	package
inserts for the PRODUCT; and

	vii)
	commercial
and marketing information.

	W.
	SPECIFICATION
herein shall mean tests and standards of COMPOUND described in SCHEDULE 1(W) which is attached hereto and made a part hereof and other items which shall
hereinafter be designated and/or modified in writing between the parties as necessary for manufacturing PRODUCT.

	X.
	SUBLICENSEE
herein shall mean any third party including an AFFILIATE of OPTIMER which is sublicensed by OPTIMER or, as the case may be, SHINYAKU, the rights hereafter set forth in
Sections 2.2 and 2.3, but excluding distributors and wholesalers.

	Y.
	TERRITORY
herein shall mean U.S.A.

	Z.
	TESTING
STANDARDS herein shall mean the testing standards specified in the HEALTH REGISTRATION.

	AA.
	TRADEMARK
herein shall mean any trademark to be owned and used for the PRODUCT in the TERRITORY under this Agreement by OPTIMER and its SUBLICENSEE.

	BB.
	VALID
CLAIM herein shall mean a claim of any unexpired SHINYAKU PATENT which has not been withdrawn, cancelled or disclaimed nor held invalid or unenforceable by a court or tribunal
of competent jurisdiction in an unappealed or unappealable decision.

	1.2
	Rules of Construction.    The singular includes the plural and vice versa, words denoting any gender include all genders.
Where the context so admits or requires, references to SHINYAKU, OPTIMER, their respective AFFILIATES and SUBLICENSEES shall include their respective employees and agents. The words "include" or
"including" shall be construed as incorporating, "without limitation".

	1.3
	References.    References to Recitals, ARTICLES, Sections and SCHEDULES are reference to Recitals, ARTICLES, Sections and
SCHEDULES of this Agreement.

	1.4
	Headings.    The headings are for ease of reference only and are not part of this Agreement for the purpose of construction.

 
 

ARTICLE 2
  
    GRANT OF LICENSE    
    

	2.1
	License Grant to OPTIMER.    Under the terms and conditions herein set forth, SHINYAKU hereby grants to OPTIMER an exclusive
(even as to SHINYAKU) right and license in the FIELD 

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in
the TERRITORY under SHINYAKU PATENT and SHINYAKU TECHNICAL INFORMATION (i) to import and purchase the COMPOUND from SHINYAKU and (ii) to develop, make, have made, use, offer to sell
and sell the PRODUCT. 

	2.2
	Right to Sublicense.    The license granted to OPTIMER under Section 2.1 hereof includes the right to sublicense to
its AFFILIATE(s) and/or independent third parties in the TERRITORY. It is understood and agreed that no such SUBLICENSEE shall have any right to grant further sublicenses and any such
sublicense shall be automatically terminated upon termination of this Agreement for any cause whatever. OPTIMER hereby warrants that each sublicense agreement between OPTIMER and its SUBLICENSEE shall
be in writing and shall include the provision acknowledging that such sublicense is subject to the license granted to OPTIMER by SHINYAKU. OPTIMER hereby warrants that OPTIMER shall be wholly
responsible for every act and omission of its SUBLICENSEE and that the quality of the PRODUCT sold by its SUBLICENSEE shall be under OPTIMER's full control. OPTIMER shall be responsible for the
submission and accuracy of all reports by or on behalf of SUBLICENSEE required or contemplated hereby. OPTIMER shall be responsible for the performance of obligations of its SUBLICENSEE set forth
herein. OPTIMER agrees to notify SHINYAKU of every name and address of such SUBLICENSEE.

	2.3
	Manufacturing License.    In the event Shinyaku is not able to supply OPTIMA with the COMPOUND as described in
Section 11.3 and 14.3, SHINYAKU hereby shall grant to OPTIMER a non-exclusive, worldwide right and license for the TERRITORY under the SHINYAKU PATENT and SHINYAKU TECHNICAL INFORMATION to make
or have made COMPOUND for OPTIMER and its SUBLICENSEES' requirements. However, OPTIMER hereby covenants not to exercise the foregoing right and license to make or have made COMPOUND except as
expressly permitted in this Agreement.

	2.4
	License Grant to SHINYAKU under Optimer PATENT.    Under the terms and conditions herein set forth, OPTIMER shall grant to
SHINYAKU, (a) a perpetual and exclusive license with a right to sublicense outside the TERRITORY during the term of this Agreement and non-exclusive license with a right to
sublicense in the world after the termination of this Agreement, under OPTIMER PATENT free of charge, in case the invention in OPTIMER PATENT is derived exclusively from OPTIMER's own research and
development and (b) a first refusal right for a license outside the TERRITORY under OPTIMER PATENT, in case the invention in OPTIMER PATENT is derived from the third party (i) to
develop, make, have made, use, offer to sell and sell the PRODUCT; and (ii) to make or have made the COMPOUND (such a license outside the TERRITORY, an "OPTIMER LICENSE"). If OPTIMER
contemplates entering into an OPTIMER LICENSE with a third party, OPTIMER shall first notify SHINYAKU and, for a period of sixty (60) days following such notice, negotiate in good faith the
terms of an OPTIMER LICENSE exclusively with SHINYAKU. Following the expiration of such sixty (60) day period, if OPTIMER and SHINYAKU have not reached agreement on the terms of an OPTIMER
LICENSE, then OPTIMER shall have the right to enter into an OPTIMER LICENSE with any third party without further obligation to SHINYAKU. 

 
 

ARTICLE 3
  
    DISCLOSURE OF INFORMATION    
    

	3.1
	SHINYAKU PATENT and SHINYAKU TECHNICAL INFORMATION.    Promptly after EFFECTIVE DATE and from time to time thereafter during
AGREEMENT TERM, SHINYAKU shall disclose to OPTIMER all information regarding SHINYAKU PATENT and SHINYAKU TECHNICAL INFORMATION which, in OPTIMER's reasonable opinion, is necessary or helpful for
OPTIMER (i) to carry out the DEVELOPMENT PROGRAM and to obtain HEALTH 

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REGISTRATION,
(ii) to manufacture the PRODUCT from the COMPOUND, and (iii) to generally fulfill the purposes of this Agreement. 

	3.2
	Grant of Access to DMF and Regulatory Applications.    SHINYAKU or its designee shall submit the DMF to the FDA and shall
authorize OPTIMER to petition the FDA to review the DMF as part of the HEALTH REGISTRATION process to be undertaken by OPTIMER. Upon OPTIMER's request, SHINYAKU shall provide to OPTIMER true and
complete versions of any applications or filings for regulatory approvals outside the TERRITORY with respect to the PRODUCT, and all written and other information in SHINYAKU's possession or control,
including information concerning the composition of the COMPOUND or the PRODUCT or other such information as may be required by governmental authorities to enable OPTIMER to file for, prosecute and
maintain the HEALTH REGISTRATION. Further, SHINYAKU shall provide all letters of authorization, instruments and/or documents as OPTIMER may reasonably request for purposes of filing for, prosecuting
and maintaining the HEALTH REGISTRATION. SHINYAKU will promptly notify OPTIMER of any changes, modifications or deletions to the DMF, as required by the FDA "Guidelines for Drug Master Files"
Section VIIA and applicable regulatory standards, and shall not implement any such changes that would cause a delay in obtaining the HEALTH REGISTRATION without prior written agreement
with OPTIMER. Such changes may include, but are not limited to, modifications in production, testing, packaging or storage procedures related to the COMPOUND or the PRODUCT.

	3.3
	OPTIMER TECHNICAL INFORMATION.    OPTIMER agrees to disclose to SHINYAKU from time to time during AGREEMENT TERM all
information regarding OPTIMER TECHNICAL INFORMATION which OPTIMER and its SUBLICENSEES have heretofore developed or acquired or may hereafter develop or acquire during AGREEMENT TERM and SHINYAKU has
the right to use such OPTIMER TECHNICAL INFORMATION free of charge outside the TERRITORY only. OPTIMER TECHNICAL INFORMATION to be provided by OPTIMER hereunder shall include, but not be limited to,
the following:

	i)
	during
the period before filing of an application for HEALTH REGISTRATION of the PRODUCT in the TERRITORY, progress report on all studies and tests carried out by or on
behalf of OPTIMER, and data and documents obtained on each of such studies and tests; and

	ii)
	upon
filing or submission of the Investigational New Drug Application in the TERRITORY or the application for HEALTH REGISTRATION of the PRODUCT in the TERRITORY,
a copy of the documents so submitted or filed;

	iii)
	any
other OPTIMER TECHNICAL INFORMATION which shall be made available to SHINYAKU upon reasonable specific written request of SHINYAKU, provided that it is, at the time
of the request, in OPTIMER's possession and control.

	3.4
	Reciprocal Disclosures.    SHINYAKU may provide OPTIMER TECHNICAL INFORMATION free of charge to specific SHINYAKU licensees
and its sublicensees of the COMPOUND outside the TERRITORY, who hold license rights to the COMPOUND at the time of execution of this definitive License Agreement, including only Angelini
ACRAF S.p.A., YuHan Corporation or Meiji Seika Kaisha, Ltd. 

 
 

ARTICLE 4
  
    ADR REPORTING    
    

	4.1
	Procedure.    During this AGREEMENT TERM, OPTIMER shall apprise SHINYAKU of its standard operating procedures for the
investigation and reporting of ADRs concerning the COMPOUND and the PRODUCT. The parties hereto shall then promptly develop and agree upon procedures for the exchange of ADRs concerning the COMPOUND
and the PRODUCT. 

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The
parties hereto shall immediately implement such agreed procedures and shall provide each other on a regular basis with any information which has become available to them and which is relevant to
the safe use of the COMPOUND or the PRODUCT to the extent specified in the agreed procedures. Such procedures shall also apply to OPTIMER's SUBLICENSEES. 

	4.2
	Further Provisions.    Both as an integral part of the procedures referred to in Section 4.1 and as a separate
obligation under this Agreement, further provisions concerning the reporting and notification of ADRs shall be separately agreed upon by the parties hereto promptly after the EFFECTIVE DATE to comply
with regulatory requirements. 

 
 

ARTICLE 5
  
    MILESTONE PAYMENTS    
    

	5.1
	Milestone Payments.    In consideration of the rights granted to OPTIMER by SHINYAKU hereunder, OPTIMER agrees to make the
following payment in US Dollars to SHINYAKU by bank wire transfer or electronic funds transfer to such account as SHINYAKU shall designate at least ten (10) days before such payment is due:

	i)
	The
sum of One Million US Dollars (US$ 1,000,000), on the later of (a) July 2, 2004, or (b) within thirty (30) days after EFFECTIVE
DATE;

	ii)
	The
sum of One Million US Dollars (US$ 1,000,000), within thirty (30) days after the date of the first New Drug Application filing in the TERRITORY.

	5.2
	Non-Refundability.    Except as specifically provided in this Agreement, the payments by OPTIMER as set forth in
ARTICLE 5 shall not be creditable or refundable for any reason. 

 
 

ARTICLE 6
  
    MINIMUM PURCHASING AMOUNT    
    

In
the event that the total amount of COMPOUND to be purchased by OPTIMER pursuant to Article 11 for each Period (as hereinafter defined) does not reach Minimum Purchasing Amount
for such period as set forth below, OPTIMER shall pay SHINYAKU the balance between such Minimum Purchasing Amount and the actual purchasing amount accrued during the said Period. 

Minimum Purchasing Amount  

	Period 1	Million Dollar (Dollar  ,000,000)
	Period 2 (Full Calendar Year following Period 1)	Million Dollar (Dollar  ,000,000)
	Period 3 (Full Calendar Year following Period 2)	Million Dollar (Dollar  ,000,000)
	Period 4 (Full Calendar Year following Period 3 and thereafter)	Million Dollar (Dollar  ,000,000)

These
amount shall be fixed through mutual consultation between the parties, before the FIRST COMMERCIAL SALE of PRODUCT in the TERRITORY. 

In
this paragraph, Period 1 shall mean the period starting on and from the date of the FIRST COMMERCIAL SALE of PRODUCT by OPTIMER or its SUBLICENSEES in the TERRITORY and ending on
December 31 of the following year including the first anniversary date of such FIRST COMMERCIAL SALE. No Minimum Purchasing Amount shall be required by SHINYAKU for any Period in the event that
OPTIMER's failure to achieve the Minimum Purchasing Amount for such Period is due to an event of force majeure or due to the failure of SHINYAKU either to deliver a 

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sufficient
quantity of COMPOUND as ordered by OPTIMER or to deliver COMPOUND that conforms to the SPECIFICATION. 

 
 

ARTICLE 7
  
    REPORTS AND ACCOUNTING    
    

	7.1
	Reports.    During the term of this Agreement following the FIRST COMMERCIAL SALE of PRODUCT, OPTIMER shall furnish to
SHINYAKU a written report within sixty (60) days of the end of each QUARTER showing NET SALES and the gross sales of all PRODUCTS sold by OPTIMER and its SUBLICENSEES in the TERRITORY during
the QUARTER to which the report is applicable and the calculation of NET SALES from such gross sales, including the deductions set forth in Section 1.1(O), as further described in
Section 12.1.

	7.2
	Audits.
	(i)
	Upon
the written request of SHINYAKU and not more than once in each calendar year, OPTIMER shall permit an independent certified public accounting firm of
internationally recognized standing, selected by SHINYAKU and reasonably acceptable to OPTIMER, at SHINYAKU's expense, to have access during normal business hours to such records of OPTIMER and its
SUBLICENSEES as may be reasonably necessary to verify the accuracy of the reports hereunder for any year ending not more than twenty-four (24) months prior to the date of such
request. The accounting firm shall disclose to SHINYAKU only whether the records are correct or not and, if applicable, the specific details concerning any discrepancies. The accounting firm shall
provide a copy of its report to OPTIMER.

	(ii)
	If
the accounting firm concludes that OPTIMER overpaid for the COMPOUND during such period, OPTIMER shall be entitled to a credit for such overpayment against future
payment for the COMPOUND. If such accounting firm concludes that additional payment for the COMPOUND was owed to SHINYAKU during such period, OPTIMER shall pay the additional payment within thirty
(30) days of the date SHINYAKU delivers to OPTIMER such accounting firm's written report so concluding. The fees charged by such accounting firm shall be paid by SHINYAKU; provided, however, if
the audit discloses that the amount payable by OPTIMER for the audited period is more than one hundred five percent (105%) of the amount actually paid for such period, then OPTIMER shall pay the
reasonable fees and expenses charged by such accounting firm.

	(iii)
	OPTIMER
shall include in each permitted sublicense granted by it pursuant to this Agreement a provision requiring the SUBLICENSEE to make reports to OPTIMER, to keep
and maintain records of sales made pursuant to such sublicense and to grant access to such records by SHINYAKU's accounting firm to the same extent required of OPTIMER under this Agreement. Upon the
expiration of twenty-four (24) months following the end of any year, the calculation of the payment for the COMPOUND payable with respect to such year shall be binding and
conclusive upon SHINYAKU, OPTIMER and its SUBLICENSEES, and OPTIMER and its SUBLICENSEES shall be released from any liability or accountability with respect to the payment for the COMPOUND for such
year, except with respect to price reductions or rebates retroactively imposed by government authorities, including, but not restricted to, Medicare, Medicaid, and other government-run or
controlled entities who may be involved in transactions involving the PRODUCT.

	7.3
	Confidential Financial Information.    SHINYAKU shall treat all financial information subject to review under this
Article 7 or under any sublicense agreement as confidential, and shall cause its accounting firm to retain all such financial information in confidence as required by this Agreement. 

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ARTICLE 8
  
    DEVELOPMENT PROGRAM    
    

	8.1
	OPTIMER Responsibility.    OPTIMER shall be solely responsible, and shall bear the full cost and expense and the liability
(except insofar as such liability arises as a result of actions or omissions of, or defects in information or materials supplied by, SHINYAKU) for the performance of pre-clinical studies
and clinical studies, governmental approval for clinical studies, HEALTH REGISTRATION, manufacturing, marketing and sales of the PRODUCT in the TERRITORY. According to the timeline in DEVELOPMENT
PROGRAM, OPTIMER shall use REASONABLE COMMERCIAL EFFORTS to pursue the performance of pre-clinical studies, clinical studies, governmental approval for clinical studies, HEALTH
REGISTRATION, manufacturing, marketing and sales of the PRODUCT in the TERRITORY. The obligations of OPTIMER with respect to the PRODUCT under this ARTICLE 8 are expressly conditioned upon the
safety, efficacy or commercial feasibility of the PRODUCT, and such obligations shall be delayed, limited or suspended for so long as any condition or event exists which causes OPTIMER to question the
safety, efficacy or commercial feasibility of the PRODUCT. SCHEDULE 1(H) contains OPTIMER's current DEVELOPMENT PROGRAM for the PRODUCT in the TERRITORY. Prior to finalizing any clinical trial
protocol or filing a New Drug Application in the TERRITORY, OPTIMER shall advise SHINYAKU and reasonably consult with SHINYAKU regarding such matter.

	8.2
	Steering Committee
	(a)
	OPTIMER
and SHINYAKU shall establish a Steering Committee (the "Steering Committee") consisting of three (3) members from OPTIMER and two (2) members from
SHINYAKU. The function of the Steering Committee will be purely advisory and to provide a forum for exchanging information between and coordinating activities of the parties. The Steering Committee
will review the clinical development issues for the PRODUCT in the TERRITORY and advise OPTIMER and SHINYAKU of any step in the DEVELOPMENT PROGRAM which may have an adverse effect on the development
of any PRODUCT in the TERRITORY. Each party shall be responsible for its own members' costs associated with attending the Steering Committee meetings.

	(b)
	Within
thirty (30) days after the EFFECTIVE DATE, OPTIMER and SHINYAKU shall each appoint its initial representatives to serve on the Steering Committee. Each party may change
its representatives upon notice to the other party. A representative from OPTIMER shall chair the Steering Committee.

	(c)
	The
Steering Committee shall meet at least semiannually during the AGREEMENT TERM, at such dates and times as agreed to by the parties. Meetings shall take place in person or by
teleconference. The Steering Committee may also convene or be polled or consulted from time to time by means of telecommunications or correspondence.

	8.3
	Progress Reports.    OPTIMER shall regularly inform, not less than once every six (6) months, SHINYAKU of reports on
any and all ongoing studies and procedures for HEALTH REGISTRATION conducted by OPTIMER as specified in the DEVELOPMENT PROGRAM and the parties will exchange relevant information as required. The
Steering Committee shall convene to communicate and discuss the progress of DEVELOPMENT PROGRAM at least twice a year. The place of the Steering Committee meetings shall be agreed upon by the parties
hereto, basically on an alternate basis between the United States and Japan.

	8.4
	Publication of Clinical and Preclinical Data.    OPTIMER shall refrain from directly or indirectly or otherwise disclosing
the results of clinical or preclinical studies conducted by OPTIMER with respect to the COMPOUND and/or the PRODUCT, without previously obtaining a written 

9

 

approval
of SHINYAKU, such approval not to be unreasonably withheld, delayed or conditioned. SHINYAKU shall refrain from directly or indirectly or otherwise disclosing the results of clinical or
preclinical studies conducted by SHINYAKU or OPTIMER with respect to the COMPOUND and/or the PRODUCT, without previously obtaining a written approval of OPTIMER, such approval not to be unreasonably
withheld, delayed or conditioned. 

	8.5
	COMPOUND for DEVELOPMENT PROGRAM AND PHYSICIAN SAMPLES.    SHINYAKU shall supply OPTIMER at [***] yen
(¥[***]) per kilogram with reasonable quantity of the COMPOUND meeting the SPECIFICATION manufactured by SHINYAKU necessary to carry out the studies as specified in
the DEVELOPMENT PROGRAM. OPTIMER shall use such COMPOUND only for development purposes pursuant to this Agreement. For the avoidance of doubt, OPTIMER shall agree that the COMPOUND used for the
process validation and the like necessary for HEALTH REGISTRATION is supplied under this Section 8.5, provided that the PRODUCT manufactured by process validation and the like shall be used
only as the physician samples as per the commercial development program.

	8.6
	HEALTH REGISTRATIONS.    OPTIMER shall be responsible for preparing and filing the application for HEALTH REGISTRATION to be
submitted to the regulatory authorities in the TERRITORY. As of the EFFECTIVE DATE, OPTIMER shall use REASONABLE COMMERCIAL EFFORTS to submit a New Drug Application for the PRODUCT within
twenty four (24) months following the EFFECTIVE DATE in the TERRITORY and to obtain HEALTH REGISTRATION approval in the TERRITORY. However, OPTIMER shall not be responsible for any delays
caused by circumstances beyond its reasonable control, including guidance from the FDA to conduct a longer than expected clinical development program. In the event of any such delay, the time periods
set forth above and in Section 16.1 will be extended for a reasonable period as agreed to in good faith by SHINYAKU and OPTIMER. If any delay is anticipated, OPTIMER will inform SHINYAKU of the
reasons for the delay and the Steering Committee will discuss whether reasonable measures may be undertaken to minimize or eliminate the delay.

	8.7
	Alteration of Development Plan.    It is understood by the parties hereto that the DEVELOPMENT PROGRAM may be unattainable if
unforeseen material problems arise beyond the Optimer's reasonable control. In the event that OPTIMER believes it necessary or desirable to alter or amend the DEVELOPMENT PROGRAM, it shall promptly
advise SHINYAKU and provide details to SHINYAKU regarding the reasons for the proposed alteration or amendment prior to its adoption, and such revised DEVELOPMENT PROGRAM shall thereafter be the
DEVELOPMENT PROGRAM. No alteration or amendment shall be made which does not take into account any reasonable suggestions made by the Steering Committee.

	8.8
	Meeting with FDA.    When OPTIMER meets with the FDA as to the development of the PRODUCT and organizes an investigator
meeting in relation to the clinical trials in the TERRITORY, OPTIMER shall in reasonable advance inform SHINYAKU of the purpose and schedule of such a meeting and arrange, at OPTIMER's sole
discretion, such that SHINYAKU may also attend such a meeting as an observer, provided that such attendance is acceptable to the FDA as appropriate. OPTIMER shall promptly provide to SHINYAKU a report
of the proceedings of any such meeting that SHINYAKU does not attend. 

 
 

ARTICLE 9
  
    SECRECY    
    

During
the AGREEMENT TERM and for a period of five (5) years thereafter or fifteen (15) years from EFFECTIVE DATE hereof, whichever is longer, both parties shall, and shall cause its
SUBLICENSEE to hold in confidence the other party's CONFIDENTIAL INFORMATION and shall not disclose such CONFIDENTIAL INFORMATION to any third party nor use such 

10

 

CONFIDENTIAL
INFORMATION for any purpose other than the purpose of this Agreement, without first obtaining the written consent of the other party. However, this ARTICLE 9 shall not apply to the
following information: 

	i)
	such
CONFIDENTIAL INFORMATION which is a part of the public domain prior to the disclosure by the disclosing party to the receiving party hereunder;

	ii)
	such
CONFIDENTIAL INFORMATION which becomes a part of public domain after the disclosure by the disclosing party hereunder without any breach of this Agreement by the
receiving party;

	iii)
	such
CONFIDENTIAL INFORMATION which the receiving party can demonstrate was already in its possession prior to the disclosure by the disclosing party hereunder and at
its free disposal;

	iv)
	such
CONFIDENTIAL INFORMATION which is disclosed to the receiving party by a third party who has the right to make such disclosure; or

	v)
	such
CONFIDENTIAL INFORMATION which the receiving party can demonstrate was developed by it without reference to the CONFIDENTIAL INFORMATION disclosed to it by the
disclosing party. 

Nothing
contained herein shall prevent either party and its SUBLICENSEE from disclosing such CONFIDENTIAL INFORMATION to the extent that (a) such CONFIDENTIAL INFORMATION is disclosed in
connection with the securing of HEALTH REGISTRATION in the TERRITORY and/or other governmental approval required to commercially market the PRODUCT provided that the disclosing party shall take all
reasonable steps to seek confidential treatment thereof; (b) disclosure of CONFIDENTIAL INFORMATION is reasonably necessary in prosecuting or defending litigation, or complying with applicable
governmental laws, regulations or court order; provided that such party shall
give the other party prior written notice thereof and adequate opportunity to object to any such disclosure or to take all reasonable steps to seek confidential treatment thereof; or (c) such
CONFIDENTIAL INFORMATION is disclosed under appropriate secrecy agreement to potential SUBLICENSEES, SUBLICENSEES, consultants, outside contractors, clinical investigators and outside research
institutions performing experiments, tests and studies on the COMPOUND and/or the PRODUCT so as to perform the purpose of this Agreement, notwithstanding such disclosures shall not jeopardize HEALTH
REGISTRATIONS by either SHINYAKU or OPTIMER. 

In
addition, each of the parties hereto agrees not to disclose the terms of this Agreement to any third party without the prior written consent of the other party hereto, which consent shall not be
unreasonably withheld, except to such party's attorneys, advisors and others on a need to know basis under circumstances that reasonably ensure the confidentiality thereof, or to the extent required
by law. Notwithstanding such disclosures shall not jeopardize HEALTH REGISTRATIONS by either SHINYAKU or OPTIMER. 

 
 

ARTICLE 10
  
    REPRESENTATIONS    
    

	10.1
	SHINYAKU Representations and Warranties.    SHINYAKU represents and warrants that:

	(i)
	SHINYAKU
has the full right, power and corporate authority to enter into this Agreement and to make the promises set forth in this Agreement and that there are no
outstanding agreements, assignments or encumbrances in existence in breach of the provisions of this Agreement or which would otherwise conflict with the rights granted and obligations assumed in
terms of this Agreement; 

11

 

	(ii)
	to
the best of its knowledge, no SHINYAKU patent has been or will be obtained through any intentional activity, omission or representation by SHINYAKU that would limit
or destroy the validity and/or enforceability of the SHINYAKU PATENT, and SHINYAKU has no knowledge or information as of the EFFECTIVE DATE that would have a material adverse effect on the validity
and/or enforceability of any SHINYAKU PATENT;

	(iii)
	the
performance by SHINYAKU of any of the terms and conditions of this Agreement on its part to be performed does not and will not constitute a breach of any other
material agreement or understanding, written or oral, to which it is a party;

	(iv)
	SHINYAKU
is the sole owner or exclusive licensee of the SHINYAKU PATENT and SHINYAKU TECHNICAL INFORMATION, and SHINYAKU has not authorized and will not authorize any
third party to practice any SHINYAKU PATENT and/or SHINYAKU TECHNICAL INFORMATION or otherwise grant rights to make, have made, import, use, offer to sell or sell the COMPOUND or the PRODUCT in the
FIELD in the TERRITORY in breach of this Agreement;

	(v)
	there
are no adverse proceedings, claims or actions pending or threatened, to the best of SHINYAKU's knowledge, relating to any SHINYAKU PATENT and SHINYAKU TECHNICAL
INFORMATION and at the time of disclosure and delivery thereof to OPTIMER, SHINYAKU shall, to the best of its knowledge, have the full right and legal capacity to disclose and deliver the SHINYAKU
PATENT and SHINYAKU TECHNICAL INFORMATION without violating the rights of third parties;

	(vi)
	as
of the EFFECTIVE DATE, SHINYAKU has not received any notices of infringement or any written communications relating in any way to the possible infringement of any
third party patent by the activities of SHINYAKU prior to the EFFECTIVE DATE or the activities of SHINYAKU and OPTIMER contemplated by this Agreement, and is not otherwise aware of any such possible
infringement;

	(vii)
	the
patents and patent applications listed in SCHEDULE 1(U) constitute all of the SHINYAKU PATENT as of the EFFECTIVE DATE;

	(viii)
	as
of the EFFECTIVE DATE, SHINYAKU has no knowledge of any DATA concerning the PRODUCT that SHINYAKU has not disclosed to OPTIMER that would demonstrate the PRODUCT
is not approvable or commercially viable;

	(ix)
	As
of the EFFECTIVE DATE, SHINYAKU has not, nor to SHINYAKU's knowledge, has any third party acting under authority of SHINYAKU, made an untrue statement of a material
fact to any regulatory authority with respect to the COMPOUND or the PRODUCT, or knowingly failed to disclose a material fact required to be disclosed to any regulatory authority with respect to the
COMPOUND or the PRODUCT. SHINYAKU has, and to SHINYAKU'S knowledge such third parties have, complied and will comply with all regulatory requirements with respect to the COMPOUND and the PRODUCT; 

12

  

	(x)
	clinical
and preclinical data within the SHINYAKU TECHNICAL INFORMATION have been generated in compliance with applicable laws and regulations;

	(xi)
	The
facilities used to manufacture the COMPOUND, and the COMPOUND supplied hereunder meet all applicable regulatory requirements; and

	(xii)
	Title
to all COMPOUND delivered hereunder will pass as provided herein free and clear of any security interest, lien or other encumbrance.

	10.2
	OPTIMER Representations and Warranties.    OPTIMER represents and warrants that:

	(i)
	OPTIMER
has the full right, power and corporate authority to enter into this Agreement and to make the promises set forth in this Agreement and that there are no
outstanding agreements, assignments or encumbrances in existence in breach of the provisions of this Agreement or which would otherwise conflict with the rights granted and obligations assumed in
terms of this Agreement;

	(ii)
	to
the best of its knowledge, no OPTIMER patent will be obtained through any intentional activity, omission or representation by OPTIMER that would limit or destroy the
validity and/or enforceability of the OPTIMER PATENT;

	(iii)
	the
performance by OPTIMER of any of the terms and conditions of this Agreement on its part to be performed does not and will not constitute a breach of any other
material agreement or understanding, written or oral, to which it is a party;

	(iv)
	OPTIMER
will not authorize any third party to practice any OPTIMER PATENT and/or OPTIMER TECHNICAL INFORMATION or otherwise grant rights to make, have made, import,
use, offer to sell or sell the PRODUCT outside the TERRITORY in breach of this Agreement;

	(v)
	there
are no adverse proceedings, claims or actions pending or threatened, to the best of OPTIMER's knowledge, relating to any OPTIMER PATENT and OPTIMER TECHNICAL
INFORMATION, and at the time of disclosure thereof to SHINYAKU, OPTIMER shall, to the best of its knowledge, have the full right and legal capacity to disclose the OPTIMER PATENT and OPTIMER TECHNICAL
INFORMATION without violating the rights of third parties; and

	(vi)
	OPTIMER
will not employ (or, to the best of its knowledge, use any contractor or consultant that employs) any individual or entity debarred by the FDA or, to the
best knowledge of OPTIMER, any individual who or entity which is the subject of an FDA debarrment investigation or proceeding, in the conduct of pre-clinical studies or clinical studies of
the COMPOUND or the PRODUCT.

	10.3
	Compliance with Law.    OPTIMER and SHINYAKU each represent and warrant that it shall use its best efforts to comply with
all applicable laws and regulations in connection with that party's performance of its obligations and rights pursuant to this Agreement, including the regulations of the U.S.A. and Japan concerning
any export or other transfer of technology, services or products.

	10.4
	No Representations on Patent Validity.    Nothing in this Agreement or any license pursuant to this Agreement shall be
construed or implied as a representation or warranty by SHINYAKU that any SHINYAKU PATENT is valid or enforceable, or that manufacture, exercise, use or sale of the PRODUCT under this Agreement is not
an infringement of any patent owned by third parties or that such manufacture, exercise, use or sale of the PRODUCT does not otherwise infringe the rights of third parties.

	10.5
	Non-Warranty of Marketability.    Neither SHINYAKU nor OPTIMER represents or warrants that HEALTH REGISTRATION
will be obtained and the PRODUCT can be commercially or legally 

13

 

marketed
in the TERRITORY. SHINYAKU further represents that it is not in possession of any information, other than what has been disclosed to OPTIMER, which indicates that the PRODUCT may not be
legally marketed in the TERRITORY. 

	10.6
	Disclaimers and Liability Limitations.
	(i)
	Except
as explicitly stated in this Agreement, all warranties including warranties of merchantability and fitness for any particular purpose are excluded.

	(ii)
	Except
for a breach of ARTICLE 9 (SECRECY), neither party will be liable for consequential, incidental or special damages of any nature arising from such party's
activities under this Agreement; provided, however, that this limitation shall not limit the indemnification or obligation of such party under ARTICLE 17 below for consequential, incidental or
special damages recovered by a third party. 

 
 

ARTICLE 11
  
    SUPPLY OF COMPOUND    
    

	11.1
	SUPPLY.    To the extent that any applicable laws allow, SHINYAKU shall manufacture and supply the COMPOUND meeting the
SPECIFICATION in bulk form for all of OPTIMER's and its SUBLICENSEES' requirements for formulating the PRODUCT in the TERRITORY. Subject to the terms and conditions of the AGREEMENT, OPTIMER agrees to
purchase all of OPTIMER's and its SUBLICENSEES' requirements of the COMPOUND exclusively from SHINYAKU during the AGREEMENT TERM.

	11.2
	ALLOCATION.    In the event that SHINYAKU cannot supply OPTIMER's requirements of the COMPOUND, SHINYAKU shall allocate the
COMPOUND that it has in inventory, or is able to produce, on a reasonable pro-rated basis, among SHINYAKU and SHINYAKU's licensees of the COMPOUND throughout the world based on reasonable
forecasts (taking into consideration past sales and sales performance against forecast) of OPTIMER (including its sublicensees), SHINYAKU, and SHINYAKU's other licensees.

	11.3
	RIGHT TO MANUFACTURE.    In the event that SHINYAKU actually fails to supply OPTIMER's requirements exclusively due to an
event of force majeure as described in ARTICLE 26 and which failure lasts longer than 45 days, then (a) OPTIMER shall have the right to exercise its manufacturing license under
Section 2.3, and (b) SHINYAKU shall promptly transfer all of the manufacturing information, know-how, protocols and the like necessary or useful for OPTIMER to
manufacture the COMPOUND and generally assist OPTIMER in the establishment of such manufacturing capabilities without charge as reasonably necessary to enable OPTIMER to manufacture the COMPOUND. Upon
thirty (30) days after the occurrence of an event of force majeure herein above, SHINYAKU shall take reasonable actions to accumulate such manufacturing information for deposit in an escrow
account with an independent third party agent reasonably acceptable to SHINYAKU. Such escrow account shall be maintained at OPTIMER's expense, and such manufacturing information will only be released
to OPTIMER in connection with the exercise of its manufacturing rights above. In case OPTIMER is granted the manufacturing license under Section 2.3 and actually manufacture and market
the PRODUCT without being supplied with COMPOUND from SHINYAKU, OPTIMER shall pay to SHINYAKU [***] percent ([***]) of NET SALES as a royalty. 

 
 

ARTICLE 12
  
    SUPPLY PRICE    
    

	12.1
	Formula.    For quantities of COMPOUND not used for development purposes, the supply price (CIP OPTIMER's designated
airport) of the COMPOUND per kilogram shipped to OPTIMER by 

14

 

SHINYAKU
in US Dollars, including royalty, shall be calculated pursuant to this Section 12.1. The price invoiced on OPTIMER's purchase orders shall be [***] Japanese
yen([***]) per kilogram. 

	(i)
	The
Supply Price of COMPOUND per kilogram for a calendar year will equal the aggregate amount of ANNUAL NET SALES in the TERRITORY for that year divided by the number of
kilograms of COMPOUND actually contained in PRODUCT sold by OPTIMER and its SUBLICENSEES in the TERRITORY during the said calendar year, and multiplied by the appropriate percentage "A" specified in
the following table: 

	Level of ANNUAL NET SALES
 
	 	A%

	portion of NET SALES between US$[***] and US$[***]	 	[***]%
	portion of NET SALES above US$[***] to US$[***]	 	[***]%
	portion of NET SALES above US$[***]	 	[***]%

By way of example only, if ANNUAL NET SALES total US$[***], then the percentage "A" would be [***] for
the first US$[***] of ANNUAL NET SALES, [***] for the next US$[***] of ANNUAL NET SALES, and [***]% for
the remaining US$[***] of ANNUAL NET SALES. 

	(ii)
	On
a quarterly basis, the aggregate invoiced amount for shipments of COMPOUND to OPTIMER will be reconciled with the Supply Price as follows. Within sixty
(60) days after the last day of each QUARTER, OPTIMER shall provide SHINYAKU with a statement setting forth the calculation of the Supply Price and the difference between (A) the Supply
Price, and (B) the amount invoiced for the quantity of the COMPOUND actually contained in the PRODUCTS sold by OPTIMER in that QUARTER plus a reasonable allocation for normal manufacturing
shrinkage, yield variances, quality assurance and quality control samples and retention samples (the "Shrinkage Allowance"), such Shrinkage Allowance not to exceed
[***]% of COMPOUND shipped to OPTIMER. If the Supply Price in (A) is greater than the amounts invoiced for (B), then OPTIMER shall provide SHINYAKU with payment
for such difference together with such statement. 

By way of example only, if: 

	•
	the
exchange rate is one hundred Japanese yen (¥100) to one United States dollar (US$1), such that the invoiced price of COMPOUND is
US$[***] per kilogram;

	•
	each
pill of PRODUCT contains 500mg of COMPOUND;

	•
	in
the first QUARTER of the calendar year, OPTIMER sells ten million pills for NET SALES of US$[***]; and

	•
	the
Shrinkage Allowance for that QUARTER is 150 kilograms of COMPOUND; 

then: 

	•
	the
Supply Price for that QUARTER would be (US$ [***]%) = US$[***];

	•
	the
amount of COMPOUND in kilograms actually contained in pills sold would be [[***] pills * (500mg/pill)] = 5,000kg
of COMPOUND;

	•
	the
amount invoiced for COMPOUND contained in pills sold would be [5,000kg * (US$[***]/kg)] =
US$[***];

	•
	the
amount invoiced for COMPOUND contained in the Shrinkage Allowance would be [150kg * (US$[***]/kg)] =
US$[***]; 

15

 

	•
	the
difference between the Supply Price and the amount invoiced for COMPOUND contained in pills sold plus the Shrinkage Allowance would be
[US$[***]—(US$[***] + US$[***])] =
US$[***] ;

	•
	Therefore,
OPTIMER would provide payment to SHINYAKU for US$[***] million along with the statement described in
Section 12.1(ii) for that QUARTER.

	12.2
	Payment Terms.    The payment for COMPOUND hereunder shall be made to SHINYAKU by OPTIMER in US Dollars within thirty
(30) days following the relevant invoice date, which shall not be earlier than the shipment date of COMPOUND. For the purpose of this ARTICLE, the shipment shall be deemed to be made on the
date of the Airway Bill for the COMPOUND.

	12.3
	Generic Version of Product.    In the event of ANDA approval for generic version of PRODUCT in the TERRITORY during the
AGREEMENT TERM and the Supply Price of the COMPOUND per kilogram including royalty becomes less than [***] Japanese yen (¥[***]) per
kilogram, the parties agree to negotiate in good faith the Supply Price, set forth in this Article 12, which are mutually favorable to both parties. This negotiation shall be completed within
60 days of said ANDA approval for a generic version of the PRODUCT in the TERRITORY, during which time SHINYAKU shall be allowed to propose to OPTIMER terms and conditions of an agreement to
supply COMPOUND to OPTIMER at a newly negotiated supply price. In the event such negotiations are not completed within 60 days, OPTIMER shall be free to seek an alternate manufacturing partner
for the production of the COMPOUND. In case OPTIMER actually manufacture and market the PRODUCT without being supplied with COMPOUND from SHINYAKU, OPTIMER shall pay SHINYAKU
[***] percent ([***]) of NET SALES as a royalty. 

 
 

ARTICLE 13
  
    FORECAST AND FIRM ORDER    
    

	13.1
	Forecast and Firm Order.    During the AGREEMENT TERM, OPTIMER shall submit to SHINYAKU the following Forecast and Firm
order:

	i)
	By
June 30 of each calendar year, OPTIMER shall submit SHINYAKU the Firm Order for the COMPOUND required during October 1 of the said year to
March 31 of next year and the Forecast of the COMPOUND anticipated during April 1 to September 30 following the aforementioned period; and

	ii)
	By
December 31 of each calendar year, OPTIMER shall submit SHINYAKU the Firm Order for the COMPOUND required during April 1 to September 30 of next
year and the Forecast of COMPOUND anticipated during October 1 to March 30 following the aforementioned period. 

Each
Forecast of OPTIMER's anticipated requirements for the COMPOUND is nonbinding and should attach a description of supply quantities and supply time taking into account the minimum order size of
150±12 kg(MINIMUM ORDER SIZE). Within two(2) weeks upon receipt of each Forecast, SHINYAKU will submit to OPTIMER a written
confirmation that it is able to supply OPTIMER with its requirements according to OPTIMER's Forecast. 

All
Firm Orders for the COMPOUND shall be made on OPTIMER's purchase order. The only function of OPTIMER's purchase order shall be to communicate the desired quantities of the COMPOUND, shipping dates
and delivery location. All other terms shall be void and of no effect, and the terms of this Agreement shall be applied. Should a Firm Order differ in quantity from the immediately preceding Forecast
for the same period communicated to SHINYAKU by OPTIMER by an amount not higher than [***] [***] the Firm Order is deemed accepted by SHINYAKU. If 

16

 

the
Firm Order differs by more than this limit, SHINYAKU will notify OPTIMER within one week upon receipt of the Firm Order if it accepts the Firm Order. SHINYAKU shall use its best efforts to supply
the amounts in excess of this limit. 

	13.2
	Delivery Terms.    The delivery terms and conditions for the supply of the COMPOUND shall be CIP (Carriage and Insurance
Paid) to an airport destination to be named at the sole discretion of OPTIMER under Incoterms (2000). The manner of supply of the shipment of the COMPOUND shall be agreed upon between the parties
hereto in due time. SHINYAKU shall deliver the COMPOUND on OPTIMER's designated delivery date and pay for all shipping, handling, and insurance expenses related to sending the COMPOUND to OPTIMER's
designated airport delivery location. In the event of an OPTIMER order to SHINYAKU equal to the MINIMUM ORDER SIZE, SHINYAKU shall fill each said order of COMPOUND from a single manufacturing lot of
the COMPOUND. If such an order exceeds the MINIMUM ORDER SIZE of COMPOUND, SHINYAKU shall not be so restricted, and may provide COMPOUND to OPTIMER from more than one manufacturing lot of the
COMPOUND, such lots not to be less than 150 ± 12 kg of COMPOUND. 

 
 

ARTICLE 14
  
    QUALITY    
    

	14.1
	Conformance with SPECIFICATION/TESTING STANDARDS.    SHINYAKU warrants that the quality of the COMPOUND supplied hereunder,
when delivered by SHINYAKU to the carrier at the point of shipment, shall comply with the SPECIFICATION when tested according to the agreed TESTING STANDARDS.

	14.2
	Documentation.    Each shipment of the COMPOUND shall be accompanied by the following written documentation:

	(i)
	invoice;

	(ii)
	packing
list; and

	(iii)
	a
certificate of analysis setting forth the results of tests performed by SHINYAKU or its contract manufacturer in accordance with the TESTING STANDARDS and
SPECIFICATION.

	14.3
	Non-conformity with the SPECIFICATION.    In the event that OPTIMER has found that any quantity of the COMPOUND
supplied by SHINYAKU hereunder does not comply with the SPECIFICATION and if SHINYAKU has confirmed the defectiveness of such quantity of the COMPOUND, OPTIMER shall have the right to request the
replacement thereof by the quantity of the COMPOUND of the quality specified in the SPECIFICATION and return to SHINYAKU such defective quantity of the COMPOUND at SHINYAKU's expense, provided that
OPTIMER shall notify, within a period of thirty (30) days after receipt of such quantity of the COMPOUND (where the quality does not meet the SPECIFICATION or the defect is apparent on
reasonable inspection), or as soon as reasonably practicable after becoming aware of the defect (where the defect is not apparent on reasonable inspection), SHINYAKU of such defectiveness. Such
notification to SHINYAKU of the defective nature of delivered COMPOUND shall be made in any event before OPTIMER has utilized such defective quantity of the COMPOUND into production. 

In
the event that SHINYAKU is unable to replace within 45 days the defective quantity of the COMPOUND by the COMPOUND complying with the SPECIFICATION, which is not due to FORCE MAJEURE,
OPTIMER will be freed from Supply Price payment obligations for such 

17

 

defective
COMPOUND under Article 12 and may exercise its manufacturing rights under Section 11.3. In case OPTIMER is granted the manufacturing license under Section 2.3
and actually manufacture and market the PRODUCT without being supplied with COMPOUND from SHINYAKU, OPTIMER shall pay to SHINYAKU [***] percent
([***]%) of NET SALES as a royalty. 

	14.4
	Independent Laboratory Analysis.    In the event that the concurrent quality control testing conducted by the parties leads
to significant differences of the results between the parties, the parties shall endeavor to settle such matter amicably and constructively between themselves. In the event that the parties fail to
settle, the parties shall agree to refer such defective quantity of the COMPOUND to independent laboratory as agreed upon between the parties for analysis. The results of the independent laboratory
shall be final and binding upon the parties. All expenses incurred by both parties on such analysis will be borne by the party whose quality control results do not conform to the results of the
independent laboratory. In the event that the independent laboratory upholds the results of OPTIMER relating to quality of the COMPOUND being defective, then SHINYAKU shall replace, at its cost and
expense, the entire defective quantity of the COMPOUND as soon as possible and also reimburse OPTIMER all cost and expense incurred by OPTIMER in the testing and handling of such defective quantity of
the COMPOUND. It is agreed and understood that SHINYAKU's responsibility on the COMPOUND shall be limited to such replacement of the defective quantity of the COMPOUND and such reimbursement and
OPTIMER's right to manufacture under Section 11.3, and that other remedies or responsibilities are disclaimed.

	14.5
	Recalls.    In the event that any PRODUCT is quarantined or recalled, or is subject to stop-sale action, whether
voluntary or by governmental action, any expenses, including reasonable fees of any experts or attorneys that may be utilized by either party hereto, government fines or penalties, related to such
recall, quarantine or stop-sale, shall be borne by the party hereto determined to have been responsible for the basis upon which said recall, quarantine or stop-sale was
initiated. Such determination may be made by the governmental agency involved, or by mutual agreement of the parties hereto following examination and review of all records pertinent to the manufacture
of the PRODUCT subject to such recall. 

 
 

ARTICLE 15
  
    TITLE AND RISK OF LOSS    
    

Title
and risk of loss to the COMPOUND sold hereunder shall pass to OPTIMER upon delivering into the custody of OPTIMER or its designee at the airport delivery location specified by OPTIMER,
notwithstanding any term herein unless otherwise agreed upon. 

 
 

ARTICLE 16
  
    SALES PROMOTION    
    

	16.1
	Marketing.    OPTIMER will use REASONABLE COMMERCIAL EFFORTS to commence (itself or through SUBLICENSEES) marketing and
commercial activities for the PRODUCT in the TERRITORY within six (6) months following the date of HEALTH REGISTRATION (including pricing approval) in the TERRITORY.

	16.2
	Sales Organization.    Upon obtaining HEALTH REGISTRATION in the TERRITORY, OPTIMER shall use REASONABLE COMMERCIAL EFFORTS
to enable OPTIMER or its SUBLICENSEES to establish a sufficient sales organization with qualified personnel for sales 

18

 

promotion
of the PRODUCT and use REASONABLE COMMERCIAL EFFORTS, at its sole responsibility and expense, to market and promote the PRODUCT in the TERRITORY. 

	16.3
	Sales Reports.    OPTIMER agrees to give SHINYAKU every six (6) months general information of the market situation
including the progress of implementation of the sales and promotion in the TERRITORY.

	16.4
	Samples.    OPTIMER shall undertake to furnish SHINYAKU with reasonable quantities of samples of the PRODUCT at no cost,
specimens of all packages, labels and package inserts, as used in the TERRITORY. 

 
 

ARTICLE 17
  
    LIABILITIES    
    

	17.1
	OPTIMER Liability.    OPTIMER shall assume any and all liabilities arising out of or associated with the development,
manufacture, use or distribution of the PRODUCT by OPTIMER or its SUBLICENSEES in the TERRITORY, except to the extent that such liability is the responsibility of SHINYAKU in accordance with
Section 17.2, or where OPTIMER can demonstrate that SHINYAKU is responsible for any such liabilities by its actions or omissions. 

Unless
otherwise provided in this Agreement, OPTIMER hereby expressly undertakes to indemnify, defend and hold SHINYAKU harmless from and against any and all claims, losses, damages or liabilities
asserted against or sustained by SHINYAKU in respect of the development, manufacture, use or distribution of the PRODUCT by OPTIMER or its SUBLICENSEES in the TERRITORY, except to the extent that such
claims are the responsibility of SHINYAKU in accordance with Section 17.2. 

	17.2
	SHINYAKU Liability.    SHINYAKU shall assume any and all liabilities arising out of or associated with (a) failure of
the COMPOUND to conform to SPECIFICATION at the time of delivery from SHINYAKU or failure to be manufactured in compliance with GMP or applicable laws, or (b) failure of SHINYAKU's
representations and warranties to be true, and shall indemnify, defend and hold OPTIMER harmless from and against any and all claims, losses, damages or liabilities asserted against or sustained by
OPTIMER in respect of such failure.

	17.3
	INDEMNITY CONDITION.    WHERE INDEMNITIES ARE GRANTED HEREUNDER THEY SHALL BE SUBJECT TO THE FOLLOWING CONDITIONS:

	(I)
	THAT
THE INDEMNIFIED PARTY NOTIFIES THE INDEMNIFYING PARTY AS SOON AS REASONABLY PRACTICABLE OF ANY CLAIM OR POTENTIAL CLAIM;

	(II)
	THAT
THE INDEMNIFYING PARTY HAS THE RIGHT TO TAKE OVER THE DEFENCE OF ANY CLAIM OR SETTLEMENT NEGOTIATIONS IN THE INDEMNIFIED PARTY'S NAME BUT AT THE INDEMNIFYING
PARTY'S COST;

	(III)
	THAT
THE INDEMNIFIED PARTY PROVIDES THE INDEMNIFYING PARTY WITH ALL REASONABLE ASSISTANCE IN DEFENDING OR SETTLING THE CLAIM AND DOES NOTHING WHICH WOULD ADVERSELY
AFFECT THE DEFENCE OR SETTLEMENT OF THE CLAIM; AND

	(IV)
	THAT
THE INDEMNIFYING PARTY NOT COMPROMISE OR SETTLE ANY CLAIM OR SUIT IN A MANNER THAT ADMITS FAULT OR NEGLIGENCE ON THE PART OF THE INDEMNIFIED PARTY OR THAT
OTHERWISE MATERIALLY AFFECTS THE INDEMNIFIED PARTY'S RIGHTS OR REQUIRES ANY PAYMENT BY THE INDEMNIFIED PARTY WITHOUT THE PRIOR WRITTEN CONSENT OF THE INDEMNIFIED PARTY. 

19

 

 
 

ARTICLE 18
  
    PATENT INFRINGEMENT AND EXTENSION    
    

	18.1
	Third Party Infringers.    If either party hereto becomes aware of any third party infringement of any SHINYAKU PATENT in
the TERRITORY, it shall promptly inform the other party and shall supply the other party with all evidence possessed by the notifying party pertaining to such infringement. OPTIMER shall have the sole
right and opportunity to enforce any SHINYAKU PATENT in the TERRITORY and shall bear the full cost and expense of such enforcement action. OPTIMER shall reasonably consult with SHINYAKU prior to
beginning and during such enforcement action. All money recovered upon the final judgment or settlement of any such suit shall be retained by OPTIMER. OPTIMER may deduct its out of pocket costs and
expenses of such enforcement action from amounts payable to SHINYAKU under Section 12.1(ii), up to [***]% of the amount payable each QUARTER, until all such out of
pocket costs and expenses have been so deducted. In the event OPTIMER should receive monies due to successful resolution of such a patent dispute, at such time OPTIMER shall reimburse SHINYAKU for all
such out of pocket costs and expenses of such enforcement action previously deducted from amounts payable to SHINYAKU under Section 12.1(ii).

	18.2
	Patent Extensions.    OPTIMER agrees to reasonably assist SHINYAKU in taking all and any steps necessary to seek extension
of any SHINYAKU PATENT in the TERRITORY wherever possible upon request of SHINYAKU thereof. If SHINYAKU fails to take any steps necessary to seek extension of any SHINYAKU PATENT, then OPTIMER shall
have the right, following the expiry of one hundred and eighty (180) days notice requesting SHINYAKU to take action, to seek extension and SHINYAKU will provide all reasonable assistance to
OPTIMER for this purpose free of charge. 

 
 

ARTICLE 19
  
    INFRINGEMENT ACTIONS BY THIRD PARTIES    
    

If
OPTIMER, or any of its SUBLICENSEES or customers, shall be sued by a third party for infringement of a patent because of the development, manufacture, import, use or sale of the COMPOUND or the
PRODUCT in the TERRITORY, OPTIMER shall promptly notify SHINYAKU in writing of the institution of such suit. In such occasion, SHINYAKU shall cooperate in the defense of such suit and furnish to
OPTIMER available evidence and assistance in its control. OPTIMER agrees to keep SHINYAKU informed with respect to all material developments in such lawsuit and to reasonably consult with SHINYAKU
regarding the defense and any settlement of such lawsuit. OPTIMER may deduct its out of pocket costs and expenses of such defense or settlement from amounts payable to SHINYAKU under
Section 12.1(ii), up to [***]% of the amount payable each QUARTER, until all such out of pocket costs and expenses have been so deducted. 

 
 

ARTICLE 20
  
    COMPETITIVE PRODUCT    
    

During
AGREEMENT TERM, (a) OPTIMER shall not sell, and shall cause SUBLICENSEES not to sell COMPETITIVE PRODUCT in the TERRITORY without the prior written consent of SHINYAKU except for any
products for which OPTIMER or SUBLICENSEES have already begun clinical testing as of the EFFECTIVE DATE, and (b) SHINYAKU and its AFFILIATES will not, nor authorize any third party to, develop,
market or import COMPETITIVE PRODUCT in the TERRITORY. 

20

 
 
 

ARTICLE 21
  
    TRADEMARK    
    

	21.1
	Selection.    OPTIMER shall be responsible for the selection, registration and maintenance of all TRADEMARKS which it
employs in connection with the PRODUCT in the TERRITORY and shall own and control such TRADEMARKS and pay all related costs thereto.

	21.2
	Third party Infringers.    Each party shall notify the other promptly upon learning of any actual, alleged or threatened
infringement of the TRADEMARKS applicable to the PRODUCT or of any unfair trade practices, trade dress imitation, passing off of counterfeit goods, or like offences. Only OPTIMER will be authorized to
initiate at its own discretion legal proceedings against any infringement or threatened infringement of TRADEMARKS applicable to the PRODUCT. 

 
 

ARTICLE 22
  
    WITHHOLDING TAXES    
    

Where
any sum to be paid to SHINYAKU hereunder is subject to any withholding or similar tax, the parties shall use their reasonable best efforts to do all such acts and things and to sign all such
deeds and documents as will enable them to take advantage of any exemption from or reduction in such taxes under any applicable double taxation agreement or treaty. In the event there is no applicable
double taxation agreement or treaty, or if an applicable double taxation agreement or treaty reduces but does not eliminate such withholding or similar tax, OPTIMER shall pay such withholding or
similar tax, deduct the amount paid from the amount due SHINYAKU, and secure and send to SHINYAKU proof of such withholding or similar tax as evidence of such payment. 

 
 

ARTICLE 23
  
    DURATION AND TERMINATION    
    

	23.1
	AGREEMENT TERM.    This Agreement shall come into force on the EFFECTIVE DATE and shall, unless sooner terminated pursuant
to any provision of this Agreement, continue to be in full force for a period of ten (10) years from the date of FIRST COMMERCIAL SALE in the TERRITORY or until the last to expire VALID CLAIM
under the SHINYAKU PATENTS in the TERRITORY, whichever is longer. The AGREEMENT TERM shall mean the time period that this Agreement is effective prior to its termination under the provisions of this
ARTICLE 23.

	23.2
	Renewal Terms.    Following expiration of the AGREEMENT TERM, at OPTIMER's request, SHINYAKU and OPTIMER shall negotiate
within sixty (60) days in good faith the terms and conditions of a continuation of the relationship established hereunder. If no such continuation is established within 60 days, OPTIMER
shall be released from any obligations to renew its relationship with SHINYAKU.

	23.3
	Breach.    If either party fails to fulfill any material obligation hereunder, the party aggrieved by such breach or
violation may give to the other party written notification of such breach or violation and after sixty (60) days from the date of such notification, the notified party fails or refuses to
remedy, the notifying party shall be entitled to terminate this Agreement forthwith by written notice sent by registered mail.

	23.4
	No HEALTH REGISTRATION.    In the event that, despite OPTIMER's REASONABLE COMMERCIAL EFFORTS to obtain HEALTH REGISTRATION
from FDA, FDA refuses to grant HEALTH REGISTRATION, OPTIMER shall give full explanation and evidences of the circumstance, including the reasons alleged for such refusal, to SHINYAKU so that SHINYAKU
may supply arguments and documentation such as to remove said refusal. In case that FDA should 

21

 

maintain
its position, OPTIMER shall have the right to terminate this Agreement forthwith in the TERRITORY by giving a written notice of termination of this Agreement to SHINYAKU. In no event may
either party claim against other party any right or any compensation of damages or losses caused by the termination pursuant to this paragraph. 

	23.5
	Stoppage of PRODUCT Sales.    In the event that, despite OPTIMER's REASONABLE COMMERCIAL EFFORTS to maintain sales of the
PRODUCT in the TERRITORY, FDA should order OPTIMER to stop the sales of the PRODUCT in the TERRITORY, OPTIMER shall have the right to terminate this Agreement in the TERRITORY forthwith by giving a
written notice of termination of this Agreement to SHINYAKU, provided that OPTIMER gives SHINYAKU sufficient reports thereof and reasonable explanation of such OPTIMER's decision. In no event may
either party claim against the other party any right or any compensation of damages or losses caused by the termination pursuant to this paragraph.

	23.6
	Bankruptcy.    Either party shall have the right to terminate this Agreement immediately by delivering written notice to the
other party, in the event that the other party is bankrupt (not to include reorganizations) or insolvent and such bankruptcy or insolvency materially and adversely affects such party's ability
to perform its obligations hereunder, provided that applicable bankruptcy laws shall apply.

	23.7
	Termination by OPTIMER.    OPTIMER may terminate this Agreement at any time for convenience upon sixty (60) days
written notice to SHINYAKU.

	23.8
	Dispute.    Notwithstanding anything in this Article 23 to the contrary, if a party disputes in good faith by
written notice the other party's right to terminate this Agreement prior to the effective date of such termination, then the other party will not have the right to terminate this Agreement until such
dispute has been settled in accordance with Article 30 and the first party fails to cure, to the extent possible, the condition giving rise to such right to terminate within sixty
(60) days thereafter. 

 
 

ARTICLE 24
  
    EFFECT OF TERMINATION    
    

	24.1
	Effect of Termination.    The termination of this Agreement shall:

	(i)
	be
without prejudice of the obligation of OPTIMER to pay to SHINYAKU any sums accrued, due and payable under ARTICLES 5, 6 and 12 hereof (except that
OPTIMER shall have the right to cancel without charge any purchase orders for which shipment has not occurred as of the date of termination);

	(ii)
	be
without prejudice to any right of, or remedy available to, either party against the other in respect of anything done or omitted hereunder prior to such termination;
and

	(iii)
	not
release either party from the confidentiality or liability obligations set forth in ARTICLES 9 and 17.

	24.2
	SHINYAKU's Rights.    If this Agreement is terminated by SHINYAKU pursuant to Sections 23.3 or 23.6 or by
OPTIMER pursuant to Section 23.7 hereof:

	(i)
	OPTIMER
shall promptly return or furnish to SHINYAKU all written SHINYAKU TECHNICAL INFORMATION and OPTIMER TECHNICAL INFORMATION in OPTIMER's and its SUBLICENSEES'
possession. In addition, OPTIMER and its SUBLICENSEES shall immediately cease to use and thereafter refrain from using OPTIMER 

22

 

PATENT,
SHINYAKU PATENT, OPTIMER TECHNICAL INFORMATION, SHINYAKU TECHNICAL INFORMATION and TRADEMARK; 

	(ii)
	except
as expressly provided herein, all rights and licenses granted to OPTIMER by SHINYAKU shall forthwith cease and terminate; and

	(iii)
	at
the option of SHINYAKU, OPTIMER shall either (a) transfer, free of charge, to SHINYAKU or the company designated by SHINYAKU, HEALTH REGISTRATION and other
relevant authorizations, permits or licenses which OPTIMER and its SUBLICENSEE hold in connection with the PRODUCT on the date of termination if and to the extent permissible under the laws of the
TERRITORY, or (b) cancel the HEALTH REGISTRATION in the TERRITORY. 

OPTIMER
will make its personnel and other resources reasonably available to SHINYAKU as necessary to effect an orderly transition of development or commercialization responsibilities with the cost of
such resources and personnel to be borne by SHINYAKU after the effective date of termination. 

	24.3
	OPTIMER's Rights.    If this Agreement is terminated by OPTIMER pursuant to Section 23.3 or 23.6 hereof:

	(i)
	SHINYAKU
shall promptly return or furnish to OPTIMER all written OPTIMER TECHNICAL INFORMATION in SHINYAKU's possession; and

	(ii)
	except
as expressly provided herein, all rights and licenses granted to SHINYAKU by OPTIMER shall forthwith cease and terminate.

	24.4
	OPTIMER's obligation.    If this Agreement is terminated by SHINYAKU pursuant to Section 23.3 and by OPTIMER
pursuant to SECTION 23.7, OPTIMER shall agree to finish any clinical trials for the PRODUCT in progress at OPTIMER's cost, but OPTIMER shall have no obligation to recruit or enroll any additional
patients after the date of termination.

	24.5
	Termination pursuant to 23.4 or 23.5.    If this Agreement is terminated pursuant to Sections 23.4
or 23.5 hereof, 24.2 (i) and (ii) shall be applied.

	24.6
	Right to Sell Inventory.    Except in the case of termination pursuant to Sections 23.4 or 23.5 hereof, for
six (6) months following termination of this Agreement, OPTIMER may sell PRODUCT inventory on hand as of the effective date of termination, provided that ARTICLE 12 shall apply to such
inventory sales.

	24.7
	Survival.    The following provisions of this Agreement will survive termination or expiration of this Agreement:
Articles 9, 10, 17, 22 and 24 and Sections 7.3 and 14.5. In addition, upon expiration (but not earlier termination), OPTIMER's license under the SHINYAKU
TECHNICAL INFORMATION shall become non-exclusive, fully-paid and irrevocable. 

 
 

ARTICLE 25
  
    NOTICES    
    

Any
notice, request, demand or other communication to be given or made to either party shall, unless otherwise expressly provided herein or subsequently agreed to in writing, be deemed to have been
delivered upon the fifth (5th) business day after having been deposited in first class airmail, postage 

23

 

prepaid,
in an envelope addressed, or if sent by confirmed telefax (with a mailed copy as aforesaid), the next business day after transmitted, to the following: 

	 	If to SHINYAKU:	 	Licensing & Business Development Dept.

NIPPON SHINYAKU CO., LTD.

14, Nishinosho-monguchi-cho

Kisshoin, Minami-ku,

Kyoto 601-8550, JAPAN

Telefax: +81-75-321-9019
	 	
 If to OPTIMER:	
 	

Optimer Pharmaceuticals, Inc.

ATTN: Chief Executive Officer

10110 Sorrento Valley Road, Suite C

San Diego, CA 92121

Telefax: +1 858-909-0737

The
parties shall designate contact persons to communicate with respect to normal activities associated with the DEVELOPMENT PROGRAM, the supply of the COMPOUND, ADRs and marketing activities. 

 
 

ARTICLE 26
  
    FORCE MAJEURE    
    

Neither
party hereto shall be liable to the other party for any failure or delay in the performance of any of its obligations hereunder for the period and to the extent such failure or delay is caused
by riots, civil commotion, wars, hostilities, laws, orders, regulations, embargoes, action by the government or any government agency, acts of God, earthquakes, floods, storms, fires, accidents,
explosions, epidemics, quarantine restrictions, or other similar or different contingencies beyond the reasonable control of the respective parties. The party affected shall immediately notify the
other of the circumstances and shall take such reasonable action as may be necessary to avoid, minimize or remove the cause of such non-performance. 

 
 

ARTICLE 27
  
    ASSIGNMENT    
    

This
Agreement, licenses granted hereby or any of rights, duties and obligations hereof shall not be assigned by either party hereto either totally or in part, to any third party without the prior
written consent of the other party, such consent not to be unreasonably withheld. However, OPTIMER or SHINYAKU may without such consent but with written notice to the other party, assign this
Agreement and its rights and obligations hereunder in connection with the transfer or sale of all or substantially all of its business pertaining to this Agreement or in the event of its merger,
consolidation, change in control or similar transaction. Any permitted assignee shall assume all obligations of its assignor under this Agreement. The rights and obligations of the parties under this
Agreement shall inure to the benefit of and shall be binding upon the successors and assignees of the parties. 

 
 

ARTICLE 28
  
    WAIVER    
    

The
failure on the part of SHINYAKU or OPTIMER to exercise or enforce any rights conferred upon it hereunder shall not be deemed to be a waiver of any such rights nor a bar of the exercise or
enforcement thereof at any time or times thereafter. 

24

 
 
 

ARTICLE 29
  
    GOVERNING LAW    
    

This
Agreement shall be governed and construed under the laws of Japan. 

 
 

ARTICLE 30
  
    ARBITRATION    
    

The
parties shall attempt to amicably resolve disputes arising between them regarding the validity, construction, enforceability or performance of the terms of this Agreement, and any differences or
disputes in the interpretation of the rights, obligations, liabilities and/or remedies hereunder, which have been identified in written notice from one party to the other, by good faith settlement
discussions. The parties agree that any dispute that arises in connection with this Agreement, which cannot be amicably resolved by such settlement discussions, shall be finally settled by arbitration
in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce. The arbitration shall be held in English in San Diego, USA if initiated by SHINYAKU, and in
Osaka, Japan if initiated by OPTIMER. 

 
 

ARTICLE 31
  
    ENTIRE AGREEMENT    
    

This
Agreement constitutes the entire agreement by and between the parties hereto with respect to any and all subject matter covered herein and shall supersede all previous negotiations,
understandings and agreements between the parties relating thereto. This Agreement may be amended, modified, altered, or changed only by written instrument duly executed by authorized representatives
of the parties hereto. 

 
 

ARTICLE 32
  
    MISCELLANEOUS    
    

	32.1
	Publicity.    Neither party shall issue any press release or other publicity material or make representation which refers to
the terms of this Agreement without the prior written consent of the other party. However, this restriction shall not apply to announcements required by law or regulations including without limiting
announcements to be made to the shareholders of either party and to any Stock Exchange on which the shares or other securities of such party are quoted or listed. It is, however, the parties' intent
that they shall co-ordinate to such extent as may be reasonably possible with respect to the wording of any such announcements.

	32.2
	Agreement and Documentation Language.    The English language version of this Agreement shall be controlling in all
respects, notwithstanding any translation hereof made for any purpose whatever. All communications and notices, documentation, assistance, disclosure and technical information exchanged hereunder
among the parties shall be in English.

	32.3
	Late Payments.    Unless otherwise provided in this Agreement, OPTIMER shall pay interest to SHINYAKU on the aggregate
amount of any payments by OPTIMER that are not paid on or before the date such payments are due under this Agreement, at a rate of five percent (5%) per annum, calculated on the number of days
such payment is delinquent.

	32.4
	Conflict with Applicable Law.    Should any part of this Agreement be in conflict with any applicable law, all other
provisions of this Agreement shall remain in force and the parties hereto shall 

25

 

mutually
and in good faith modify the conflicting provisions so as to maintain essentially the spirit hereof and the original intent of the parties. 

 
 

ARTICLE 33
  
    COUNTERPARTS    
    

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

        IN
WITNESS WHEREOF, the parties have made out two originals in English and have executed them by their duly authorized representatives. 

	NIPPON SHINYAKU CO., LTD.	 	OPTIMER PHARMACEUTICALS, INC.
	
 By:	

Kazuto Hatsuyama
	
 	

By:	

Michael N. Chang, PhD

	 	Kazuto Hatsuyama	 	 	Michael N. Chang, PhD
	

Title: President	
 	

Title: President & CEO
	

Date:    June 10, 2004
	
 	

Date:    6/10/2004

26

  

 
 

SCHEDULE 1(H)
  
    GENERAL INVESTIGATIONAL PLAN OF NM441
  FOR BACTERIAL PROSTATITIS
  (Draft May 5, 2004)    
    

        This study plan reflects the current development concept toward NDA filing and eventual marketing approval of  NM441, a fluoroquinolone
antibiotic. It is not the sponsor's intent to present a fully-detailed development plan, because continuing progress will
depend on the results of the preceding work. The studies described below address the crucial issues related to the approval of NM441 as a therapy for bacterial prostatitis. 

Introduction  

        The activity and profile of NM441 support its use in both chronic and acute bacterial prostatitis. There is no satisfactory short nor long term therapy to
cure chronic bacterial prostatitis, although the pathogens may be highly sensitive to the drugs.1 Upon absorption, NM411 (prulifloxacin) is metabolized in the intestinal epithelium and
the liver to the active metabolite, NM394.8,12,13 NM394 inhibits bacterial DNA
replication11,14,15 with a rapid bacterial killing activity5,6,11,16 (faster than other quinolones
including ciprofloxacin, gatifloxacin, levofloxacin, ofloxacin, and tosufloxacin), and has a long half-life compatible with once-daily
dosing.12,17-19 

        NM441 offers
both an excellent safety profile and broad spectrum coverage of gram-positive and gram-negative bacteria, including the Enterobacteriaceae
most likely to cause prostatitis.5-11 The compound's safety was established in Japanese18,20,21 and European22 clinical trials
which involved 1,649 evaluable patients, and by post-marketing experience since its 2002 approval in Japan. NM441's gastrointestinal side effects have been similar to those
associated with comparators (ciprofloxacin, ofloxacin, or amoxicillin and clavulonic acid) albeit typically at lower frequencies.18,20-22 Although NM394 penetrates
well into bacteria16, phagocytes23-25, and tissues including the prostate10,19,26-29, the possibility of CNS30-33
and cardiovascular34-37 side effects associated with some competing fluoroquinolones are minimized by NM441's limited penetration into cerebrospinal fluid38 and its very
low potential to prolong the QT interval.35,39 

        Drug
entry into the nonacutely inflamed prostate occurs primarily by passive diffusion across a barrier between the stroma of the prostate gland and the
microcirculation,2,3 thereby allowing antimicrobial agents with proper hydrophobicity, such as N394 (the active metabolite) to reach therapeutic levels within the
gland.4 NM394 concentrations in the prostate are as high or higher than serum levels. The pH of prostatic secretions increases with inflammation4 to reach the mildly
alkaline pH range where NM394 is most effective. 

Phase 1 and 2 Studies  

        The objectives of the Phase 1 studies are to determine the safety, tolerability, and pharmacokinetics of NM441 in volunteers. The Phase 1
program has been divided into Phase 1A (single dose) in healthy male volunteers and the second study will be a combined Phase 1B-2A (multiple dose) trial to be conducted in
patients. 

        An
ex-US single-dose safety study including dosages up to 600 mg has been completed.12 This was a single-center, crossover,
single-dose, escalating study of NM441 administered orally to 12 healthy male subjects. Each group of four subjects received three different, escalating doses. The details of
the study are summarized in the Study Details section below. We anticipate that this study will satisfy the need to conduct a redundant single-dose safety study in the US. 

        The
Phase 1A will be a bridging safety and pharmacokinetic study of our formulation in healthy volunteers. Two groups of 4 volunteers (8 subjects total) will receive
a single oral dose of 600 mg in 

27

 

either
a fasted or an unfasted state, and plasma will be sampled at various time points in order to determine the pharmacokinetic profile. 

        The
combined Phase 1B-2A multiple-dose safety and efficacy study will be a multicenter, controlled, double-blind, multiple-dose study of orally
administered NM441 or levofloxacin. The study will require a minimum of 40 evaluable subjects with confirmed chronic bacterial prostatitis. Because the safety of the NM441 at the
600 mg/day dose level for up to two weeks has been established in clinical trials and by post marketing clinical experience, and because we do not feel ethically justified in giving an extended
course of antibiotics to healthy subjects that will receive no benefit, we feel that patients may be used in this study if they are carefully monitored. Subjects will be randomized into two groups of
20 patients, and will receive 600 mg of NM441 qd or levofloxacin 500 mg qd for
42 consecutive days. The details of the study are summarized in the Study Details. 

Phase 3 Study  

        The primary objective of the Phase 3 study will be to determine the efficacy of NM441 as therapy for chronic bacterial prostatitis in comparison to
conventional therapy with levofloxacin. Demonstration of non-inferiority to an established therapy is a common approach in active-controlled clinical trials. In addition, the safety
database will be expanded. The Phase 3 will be a multi-center, randomized, double-blind, double-dummy trial to compare the effects of NM441 (taken for 42 days) with an equivalent course
of ciprofloxacin (500 mg bid) in patients with chronic bacterial prostatitis. The study will require a minimum of 300 evaluable subjects
with confirmed chronic bacterial prostatitis. 

Study Details  

COMPLETED (EX-US):  

A SINGLE DOSE-ESCALATING SAFETY STUDY OF NM441 IN HEALTHY VOLUNTEERS  

	•
	Objective:  To determine the safety, tolerability, and pharmacokinetics of
NM441 in healthy volunteers.

	•
	Study Population:  A total of 12 healthy male volunteers between 18 and
34 years of age were enrolled in the study. Each group of four subjects received single doses at each of three different, escalating dose levels.

	•
	Study Endpoints:  Safety, tolerance and pharmacokinetics.

	•
	Study Design:  This was a single-center, randomized, crossover, single-dose
study of orally administered NM441. A total of 12 healthy Caucasian male subjects (three groups of 4 subjects) between 18-34 years of age were enrolled in the study.
Each group received three different, escalating doses.

	•
	Status:  Complete.12

	•
	Results:  The pharmacokinetic properties and tolerability of three different strengths of
NM441 (prulifloxacin) were investigated in a randomized, cross-over study.12 NM441 was administered as a single oral dose at dose levels of 300, 450 and
600 mg to 12 Caucasian male subjects (age range 19-34 years). Plasma concentrations of the active metabolite (NM394) were determined in blood samples collected
before the administration (pre-dose) and at 15, 30, 45 min, 1, 1.5, 2, 3, 4, 6, 8, 10, 12, 16, 24, 36 and 48 h after dosing. Urine samples were also collected.
Determination in biological samples was performed using validated and specific HPLC methods. The following parameters were calculated: Cmax, tmax, AUC0-t,
AUC0-00, t1/2, V/F, Aeut, CLren and fe. The analysis of variance performed on dose-normalized data after logarithmic
transformation evidenced no statistically significant differences between the three doses concerning Cmax and AUC. Friedman's test applied to tmax and t1/2 did not
show any statistically 

28

 

significant
difference between doses. A significant linear relationship between doses and AUC0-00 was detected (p< 0.05). Very high urinary concentrations and the relatively
long terminal half-life (10-12 h) suggest that a once-daily application would show adequate clinical efficacy, especially in urinary tract infections.
The safety profile was very good at all three dose levels. 

Phase 1A:  

A Safety and Pharmacokinetic evaluation of a single oral dose of NM441 in healthy volunteers  

	•
	Objective:  To determine the pharmacokinetics of NM441 in healthy volunteers.

	•
	Study Population:  A total of 4 healthy male volunteers between 18 and
65 years of age will be enrolled in the study.

	•
	Study Endpoints:  Safety, pharmacokinetic profiling.

	•
	Study Design:  This will be an open-label, single-center,
single-dose pharmacokinetic study of orally administered NM441. A total of 8 male subjects will be enrolled in the study. They will be admitted on the evening prior to a morning
administration of 600 mg NM441 (fasted or unfasted, in groups of four), and will maintained on site for 24 hours following dosing. Blood and urine samples will be collected at various
time points to allow pharmacokinetic measurements.

	•
	Study parameters:  Plasma concentrations of the active metabolite (NM394) will be
determined in blood samples collected before the administration (pre-dose) and at 0.5, 1, 2, 3, 4, 6, 12, 18, and 24 h after dosing. Urine samples will also be collected.
Determination in biological samples will be performed using validated and specific HPLC methods. The following parameters will be calculated: Cmax, tmax, AUC0-t,
AUC0-00, t1/2, V/F, Aeut, CLren, and fe. 

PHASE 1B/2A:  

A DOUBLE-BLINDED, MULTIPLE DOSE, 42-DAY SAFETY AND COMPARATIVE EFFICACY STUDY OF NM411 IN PATIENT VOLUNTEERS WITH CHRONIC BACTERIAL
PROSTATITIS  

	•
	Objectives:  To determine the safety, tolerability, pharmacokinetics, and comparative
efficacy of NM441 versus levofloxacin in patients with chronic bacterial prostatitis, following a series of oral doses for 42 consecutive days.

	•
	Study Population:  A minimum of 40 evaluable patients with chronic bacterial
prostatitis will be enrolled in the study. The subjects (20 per group) will be treated with either NM441 or levofloxacin for 42 consecutive days.

	•
	Study Design:  Patients will be randomized to receive either NM441 (600 mg/day) or
levofloxacin (500 mg/day) daily for 42 days. Each subject will receive one capsule each morning. Laboratory assessments and clinical evaluations will be performed at screening and Days
7, 14, 28, and 42 of the 42-day study period. Pharmacokinetic profiling will take place on days 42. Microbiological assessment (the four-glass test) will be
performed at screening and on Day 42. Clinical symptoms will be assessed at the end of the treatment course in order to determine the efficacies of the medications in treating the infection.

	•
	Inclusion criteria

	1.
	Male
subjects 18 years and above who have chronic bacterial prostatitis, documented using the four glass procedure

	2.
	All
subjects will be required to sign an Informed Consent Form 

29

 

	•
	Exclusion criteria

	1.
	Life-threatening
or serious disease

	2.
	Concurrent
use of antibiotics unrelated to the study

	3.
	Unable
or unwilling to comply with study

	4.
	Participation
in other IND studies within 1 month prior to screening or within 5 half-lives of the investigational agent, whichever is longer.

	•
	Study Endpoints:  

	•
	Primary Study Endpoints:

	•
	Safety

	•
	Complete
relief of symptoms of bacterial prostatitis by the final day of therapy

	•
	Secondary Study Endpoints:

	•
	Culture-negative
assessment by the four glass method

	•
	Dose:  Levofloxacin was well tolerated at the 500 mg/day dose level for the
6 week duration of this study in a Canadian clinical trial.40 The 600 mg/day NM441 dose to be used in this study has been well-tolerated as a multiple
dose regimen in Japanese and European clinical trials and in clinical practice in Japan. In a closely-monitored (6.5 day) multiple dose study, the mean plasma concentrations of active
metabolite NM394 peaked between 0.5 and 1.0 hours; the maximum concentration was 1.88 mg/mL at a dose of 400 mg/day; the mean half-life was approximately
8.5 hours, and was not affected by the dose. The mean urinary excretion rates of NM394 was 30.6% of the doses within 48 hours at 400 mg/day, and other metabolites were
excreted in urine as 7% of the dose. The mean fecal excretion rates of NM394 and NM441 were 52.9 and 4.2%, respectively within 72 hours after dosing of 400 mg.
NM441 and NM394 did not accumulate. 

Phase 3:  

A Multi-center, Randomized, Double-blind Study to Compare the Effects of NM441 Taken for 6 Weeks with Equivalent Treatment with
Levofloxacin as Therapy for Chronic Bacterial Prostatitis  

	•
	Objectives:  To compare the efficacy and recurrence rate of a 6-week course
of NM441 (600 mg/day) with a 6-week course of levofloxacin (500 mg/day) in the treatment of chronic bacterial prostatitis.

	•
	Study Endpoints:  

	•
	Primary Study Endpoints:

	•
	Complete
relief of symptoms of bacterial prostatitis by the final day of therapy

	•
	Secondary Study Endpoints:

	•
	Culture-negative
assessment by the four glass method

	•
	Recurrence
of symptoms at day 70

	•
	Study Population:  A multi-center, randomized, double-blind trial will involve a total of
about 300 patients, aged 18 years and above, with chronic bacterial prostatitis.

	•
	Study Design:  Patients will be randomized to receive either NM441 (600 mg  qd) or
levofloxacin (500 mg qd). Each subject will receive one capsule each morning. 

30

 

Laboratory
assessments and clinical evaluations will be performed at screening and Days 21 and 42 of the 42-day study period. Microbiological assessment
(the four-glass test) will be performed at screening and on Day 42. In addition, clinical evaluation and microbiological assessment will be performed on Day 70, four weeks after the
final antibiotic dose. 

	•
	Inclusion criteria

	1.
	Male
subjects 18 years and above who have chronic bacterial prostatitis, documented using the four glass procedure

	2.
	All
subjects will be required to sign an Informed Consent Form

	•
	Exclusion criteria

	1.
	Life-threatening
or serious disease

	2.
	Concurrent
use of antibiotics unrelated to the study

	3.
	Unable
or unwilling to comply with study

	4.
	Participation
in other IND studies within 1 month prior to screening or within 5 half-lives of the investigational agent, whichever is longer. 

REFERENCES  

	1.
	Aagaard
J, Madsen, PO. Bacterial prostatitis: New methods of treatment. Urology. 1991;37(3 Suppl):4.

	2.
	Fulmer
BR, Turner TT. A blood-prostate barrier restricts cell and molecular movement across the rat ventral prostate epithelium. J Urol.
May 2000;163(5):1591-1594.

	3.
	El-Alfy
M, Pelletier G, Hermo LS, Labrie F. Unique features of the basal cells of human prostate epithelium. Microsc Res
Tech. Dec 1 2000;51(5):436-446.

	4.
	Charalabopoulos
K, Karachalios G, Baltogiannis D, Charalabopoulos A, Giannakopoulos X, Sofikitis N. Penetration of antimicrobial agents into the prostate.  Chemotherapy. Dec 2003;49(6):269-279.

	5.
	Araake
M, Hara T, Watabe H, Nishino T. In vitro antibacterial activity of prulifloxacin, a new oral fluoroquinolone. Jpn J Antibiot. Dec
2002;55(6):778-790.

	6.
	Inoue
M, Kuga A, Kaieda S, et al. [In vitro antibacterial activity of prulifloxacin, a new oral quinolone, and comparative susceptibility rate at clinical breakpoint
MIC]. Jpn J Antibiot. Sep 2000;53(9):593-608.

	7.
	Ozaki
M, Matsuda M, Tomii Y, et al. In vitro antibacterial activity of a new quinolone, NM394. Antimicrob Agents Chemother. Dec
1991;35(12):2490-2495.

	8.
	Ozaki
M, Matsuda M, Tomii Y, et al. In vivo evaluation of NM441, a new thiazeto-quinoline derivative. Antimicrob Agents
Chemother. Dec 1991;35(12):2496-2499.

	9.
	Prats
G, Roig C, Miro E, Navarro F, Mirelis B. In vitro activity of the active metabolite of prulifloxacin (AF 3013) compared with six other fluoroquinolones.  Eur J Clin Microbiol Infect Dis. Apr
2002;21(4):328-334.

	10.
	Tomii
Y, Ozaki M, Matsuda M, et al. Therapeutic effect of the quinolone prodrug prulifloxacin against experimental urinary tract infections in mice.  Arzneimittelforschung. Dec 1996;46(12):1169-1173.

31

 
	11.
	Yoshida
T, Mitsuhashi S. Antibacterial activity of NM394, the active form of prodrug NM441, a new quinolone. Antimicrob Agents
Chemother. Apr 1993;37(4):793-800.

	12.
	Picollo
R, Brion N, Gualano V, et al. Pharmacokinetics and tolerability of prulifloxacin after single oral administration.  Arzneimittelforschung. 2003;53(3):201-205.

	13.
	Okuyama
Y, Morino A. Pharmacokinetics of prulifloxacin. 3rd communication: metabolism in rats, dogs and monkeys. Arzneimittelforschung.
Mar 1997;47(3):293-298.

	14.
	Drlica
K, Zhao X. DNA gyrase, topoisomerase IV, and the 4-quinolones. Microbiol Mol Biol Rev. Sep
1997;61(3):377-392.

	15.
	Tani
M, Maebashi K, Araake M, Watabe H. [Inhibitory activity of NM394, the active form of prodrug prulifloxacin against type II topoisomerase from Pseudomonas
aeruginosa]. Jpn J Antibiot. Dec 2002;55(6):882-885.

	16.
	Shimizu
M, Tabata M, Hara T, Araake M, Watabe H, Nishino T. [In vitro short-term bactericidal activity and accumulation of NM394, the active metabolite of
prulifloxacin, for Staphylococcus aureus, Escherichia coli and Pseudomonas aeruginosa: comparison with ciprofloxacin, levofloxacin, and gatifloxacin]. Jpn J
Antibiot. Dec 2002;55(6):791-799.

	17.
	Nakashima
M, Uematsu T, Kosuge K, et al. Pharmacokinetics and safety of NM441, a new quinolone, in healthy male volunteers. J Clin
Pharmacol. Sep 1994;34(9):930-937.

	18.
	Kumazawa
J MT, Kumamoto Y, and Hirose T, et al. A Double-Blind Comparative Trial of Prulifloxacin and Ofloxacin for the Treatment of Complicated Urinary Tract Infections.  Nishinihon J. Urolology.
1997;59:357-372.

	19.
	Okuyama
Y, Momota K, Morino A. Pharmacokinetics of prulifloxacin. 1st communication: absorption, distribution and excretion in rats, dogs and monkeys after a single administration.  Arzneimittelforschung. Mar
1997;47(3):276-284.

	20.
	Kobayashi
H KS, Sakayori S, Miura H, Koike T, Ohnishi K, et al. A double-blind comparative study on prulifloxacin and ofloxacin in bacterial pneumonia.

	21.
	Kobayashi
H KS, Sakayori S, Miura H, Kawakami Y, Yamaguchi E et al. A double-blind comparative study of prulifloxacin and ofloxacin in lower chronic respiratory tract
infections.

	22.
	Grassi
C, Salvatori E, Rosignoli MT, Dionisio P. Randomized, double-blind study of prulifloxacin versus ciprofloxacin in patients with acute exacerbations of chronic bronchitis.  Respiration. 2002;69(3)
:217-222.

	23.
	Ozaki
M, Komori K, Matsuda M, et al. Uptake and intracellular activity of NM394, a new quinolone, in human polymorphonuclear leukocytes. Antimicrob
Agents Chemother. Mar 1996;40(3):739-742.

	24.
	Tullio
V, Cuffini AM, Bonino A, Ianni Palarchio A, Rossi V, Carlone NA. Cellular uptake and intraphagocytic activity of the new fluoroquinolone AF 3013 against Klebsiella
pneumoniae. Drugs Exp Clin Res. 1999;25(1):1-11.

	25.
	Tullio
V, Cuffini AM, Bonino A, et al. Influence of a new fluoroquinolone, AF3013 (the active metabolite of prulifloxacin), on macrophage functions against Klebsiella
pneumoniae: an in vitro comparison with pefloxacin. J Antimicrob Chemother. Aug 2000;46(2):241-247.

	26.
	Mikamo
H, Kawazoe K, Izumi K, Ito K, Tamaya T. NM441: penetration into gynaecological tissues and in vitro activity against clinical isolates from obstetric and gynaecological
patients. Drugs. 1995;49 Suppl 2:326-330. 

32

 
	27.
	Tanimura
H, Ishimoto K, Murakami K, Uchiyama K, Iwakura S. Penetration of NM441, a new quinolone, into human bile and gallbladder tissue.  Drugs. 1995;49 Suppl 2:337-340.

	28.
	Pharmacokinetic
study of NAD-441A (II) -Tissue distribution in rats. Nippon Shinyaku confidential report
H—11.

	29.
	Pharmacokinetic
study of NAD-441A (III) -Repeated administration study in rats. Nippon Shinyaku confidential report
H-12.

	30.
	Ball
P, Mandell L, Niki Y, Tillotson G. Comparative tolerability of the newer fluoroquinolone antibacterials. Drug Saf. Nov
1999;21(5):407-421.

	31.
	Halliwell
R, Davey, PG, Lambert, JJ. Antagonism of GABAA receptors by 4-quinolones. J Antimicrob Chemother. 1993
1993;31:457.

	32.
	Hori
S, Shimada, S. Effects of quinolones on the central nervous system. In: Hooper D, Volfson, JS, ed. Quinolone antimicrobial agents.
2nd ed. Washington, DC: American Society for Microbiology; 1993:513.

	33.
	Lipsky
BA, Baker CA. Fluoroquinolone toxicity profiles: a review focusing on newer agents. Clin Infect Dis. Feb
1999;28(2):352-364.

	34.
	Ball
P. Quinolone-induced QT interval prolongation: a not-so-unexpected class effect. J Antimicrob Chemother.
May 2000;45(5):557-559.

	35.
	Akita
M, Shibazaki Y, Izumi M, et al. Comparative assessment of prurifloxacin, sparfloxacin, gatifloxacin and levofloxacin in the rabbit model of proarrhythmia.  J Toxicol Sci. Feb 2004;29(1):63-71.

	36.
	Jaillon
P, Morganroth J, Brumpt I, Talbot G. Overview of electrocardiographic and cardiovascular safety data for sparfloxacin. Sparfloxacin Safety Group. J
Antimicrob Chemother. May 1996;37 Suppl A:161-167.

	37.
	Stahlmann
R, Schwabe R. Safety profile of grepafloxacin compared with other fluoroquinolones. J Antimicrob Chemother. Dec
1997;40 Suppl A:83-92.

	38.
	Time
course of NM394 concentration in plasma and cerebrospinal fluid after intravenous administration in beagle dogs. Nippon Shinyaku confidential
report H-14.

	39.
	Lacroix
P, Crumb WJ, Durando L, Ciottoli GB. Prulifloxacin: in vitro (HERG current) and in vivo (conscious dog) assessment of cardiac risk. Eur J
Pharmacol. Sep 5 2003;477(1):69-72.

	40.
	Nickel
JC, Downey J, Clark J, et al. Levofloxacin for chronic prostatitis/chronic pelvic pain syndrome in men: a randomized placebo-controlled multicenter trial.  Urology. Oct 2003;62(4):614-617.

33

  

 
 

SCHEDULE 1(U)
  
    PATENT ON NM441    
    

	Country
 
	 	Application Date
	 	Application No.
	 	Publn. Date of unexamined application
	 	Publn. No. of unexamined application
	 	Registration Date
	 	Patent No.
	 	Expiration Date

	Japan	 	'88.10.19	 	63-263568	 	'89.11.28	 	1-294680	 	'96.02.19	 	2015708	 	'08.10.19 A)
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	U.S.A.	 	'88.11.07	 	267940	 	 	 	 	 	 	 	 	 	 
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	 	 —CIP	 	'91.04.08	 	682434	 	 	 	 	 	'92.02.04	 	5086049	 	'09.02.04
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	Canada	 	'88.11.07	 	582460	 	 	 	 	 	'93.04.27	 	1316925	 	'10.04.27
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	EP	 	'88.10.26	 	88117810.7	 	'89.05.17	 	0315828	 	'92.04.08	 	0315828	 	'08.10.26
	 	Germany	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	France	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Italy	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	England	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Spain	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Belgium	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Holland	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Switzerland	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Sweden	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Austria	 	†EP	 	 	 	 	 	 	 	 	 	 	 	 
	 	Denmark	 	'88.11.04	 	6163/88	 	 	 	 	 	'97.10.13	 	172077	 	'08.11.04
	 	Norway	 	'88.11.07	 	884958	 	 	 	 	 	'95.12.20	 	177.934	 	'08.11.07
	 	Finland	 	'88.11.07	 	885121	 	 	 	 	 	'93.06.10	 	88618	 	'08.11.07
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	Israel	 	'88.11.07	 	088303	 	 	 	 	 	'93.08.15	 	88303	 	'08.11.07
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	Australia	 	'88.11.03	 	24673/88	 	 	 	 	 	'91.08.19	 	608911	 	'04.11.03
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	South Africa	 	'88.11.01	 	88/8186	 	 	 	 	 	'89.07.26	 	88/8186	 	'08.11.01
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	South Korea	 	'88.11.07	 	88-14591	 	'89.07.10	 	89-8150	 	'96.03.28	 	097577	 	'10.10.09
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	China	 	'88.11.05	 	88107689.9	 	'89.05.24	 	1033055A	 	'94.02.20	 	25863	 	'08.11.05
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

	Taiwan	 	'88.07.29	 	77105214	 	 	 	 	 	'90.05.15	 	36388	 	'05.01.10
	 	 	
	 	
	 	
	 	
	 	
	 	
	 	

        A): Expiration date of Japanese patent is extended to '13.10.19 

34

 
 
 

Specifications and Test Methods for NM441    

 
 

GRAPHIC    
    

C21H20FN3O6S
: 461-46 

Content  

NM441 contain
not less than 98.5% and not more than 101.0% of C21H20FN3O6S calculated on the anhydrous basis. 

Characteristics:  

White
to pale yellow crystals or crystalline powder. It is odourless or has a slight characteristic odour. 

Crystallinity:  

Determine
the X-ray diffraction pattern of NM441 by means of X-ray Powder Diffraction Method according to the following conditions, and compare the diffraction pattern
with the reference one: both diffraction pattern exhibit similar diffraction peaks at the same diffraction angle 2 ? Form III). 

	Operating conditions
 
	 	 

	Angular range:	 	4-60°
	
 Voltage and current:	
 	

40 kV, 20mA
	
 Target:	
 	

Cu
	
 Detector:	
 	

Graphite monochrometer
	
 Slit:	
 	

receiving slit (R.S.) 0.3 mm;

receiving slit (R.S.m.) 0.45 mm;

divergence slit (D.S.) 1°;

scatter slit (S.S.) 1°;
	
 Scan Speed:	
 	

4°/min.

Identification

	(1)
	UV spectrum

Determine
the absorption spectrum of a solution of NM441 in acetonitrile (1 in 100,000) as directed in the Spectrophotometry: it exhibits maxima between 279 ran and 283 nm,
and between 339 nm and 343 nm. 

	(2)
	Infrared spectrum

Determine
the infrared absorption spectrum of NM441, as directed in the potassium bromide disk method under the Infrared Spectrophotometry. Compare the spectrum with the Reference Spectrum: both
spectra exhibit similar intensities of absorption at the same wave numbers. 

Purity
test 

	(1)
	Clarity and colour of solution:

Dissolve
0.20 g of NM441 in 10 mL of N, N-dimethylformamide: the solution is clear and colourless to pale yellow in colour. When the absorbance of the solution at
450 nm using N, N-dimethylformamide as blank is determined, it is not more than 0.10. 

	(2)
	Halide

35

 

Transfer
0.5 g of NM441 to a Nessler tube, and dissolve it in a proper volume of dimethylsulphoxide to make 40 mL. Add 6 mL of dilute nitric acid and dimethylsulphoxide to
make 50 mL, and use this solution as the test solution. Transfer 0.30 mL of 0.01 mol/L hydrochloric acid VS, to another Nessler tube, add 6 mL of dilute nitric acid and
dimethylsulphoxide to make 50 mL, and use this as the control solution. When the solutions are not clear, filter both solutions by using a microfilter (0.45 μm). 

Add
1 mL of silver nitrate TS to the test solution and to the control solution, mix well, and allow to stand for 5 minutes protecting from direct sunlight. 

Compare
the opalescence developed in both solutions against a black background by viewing downward. The opalescence developed in the test solution is not more than that of the control solution
(not more than 0.021% chloride). Reagents 

	•
	Silver nitrate TS:

Dissolve 17.5 g of silver nitrate in water to make 1,000 mL (0.1 mol/L). Preserve in tight, light-resistant containers.

	•
	Dilute nitric acid:  

Dilute
10.5 mL of nitric acid with water to make 100 mL (10%). 

	(3)
	Heavy metals: 

Place
2.0 g of NM441 in a porcelain crucible, cover loosely with a lid, and carbonise by gentle ignition. After cooling, add 2 mL of nitric acid and 5 drops of sulphuric
acid, heat cautiously until white fumes no longer are evolved, and incinerate by ignition between 500°C and 600°C. 

Cool,
add 2 mL of hydrochloric acid, evaporate to dryness on a water bath, moisten the residue with 3 drops of hydrochloric acid, add 10 mL of hot water, and warm for
2 minutes. Then add 1 drop of phenolphthalein TS, and add ammonia TS dropwise until the solution develops a pale red colour, add 2 mL of dilute acetic acid, filter if necessary,
and wash with 10 mL of water. Transfer the filtrate and washings to a Nessler tube, and add water to make 50 mL. Designate it as the test solution. 

The
control solution is prepared as follows: Evaporate a mixture of 2 mL of nitric acid, 5 drops of sulphuric acid and 2 mL of hydrochloric acid on a water bath, further evaporate
to dryness on a sand bath, and moisten the residue with 3 drops of hydrochloric acid. Hereinafter, proceed as directed in the test solution, then add 2 mL of Standard Lead Solution and
water to make 50 mL. 

Add
1 drop of sodium sulphide TS to each of the test solution and the control solution, mix thoroughly, and allow to stand for 5 minutes. Then compare the colours of both solutions by
viewing the tubes downward or transversely against a white background. The test solution has no more colour than the control solution (not more than 10ppm). Reagents 

	•
	Standard Lead Stock Solution: 

Weigh exactly 159.8 mg of lead (II) nitrate, dissolve in 10 mL of dilute nitric acid, and add water to make exactly 1,000 mL(l mL of this solution contains
0.1 mg of lead). Prepare and store this solution using glass containers, free from soluble lead salts.

	•
	Standard Lead Solution:

Measure exactly 10 mL of Standard Lead Stock Solution, and add water to make exactly 100 mL. 1 mL of this solution contains 0.01 mg of lead (Pb). Prepare before use.

	•
	Sodium sulphide TS: 

Dissolve 5 g of sodium sulphide enneahydrate in a mixture of 10 mL of water and 30 mL of glycerine. Preserve in well-filled light-resistant bottles. Use within
3 months. 

36

 

	•
	Dilute acetic acid: 

Dilute 6 g of glacial acetic acid (100) with water to make 100 mL (1 mol/L). Phenolphthalein TS:

Dissolve 1 g of phenolphthalein in 100 mL of ethanol (95).

	•
	Ammonia TS: 

To 400 mL of ammonia solution (28) add water to make 1,000 mL (10%).

	(4)
	Related substances (Liquid Chromatography)

Dissolve
0.01 g of NM441 in 10 mL of acetonitrile and use this solution as the sample solution. Perform the test with 2 μL of the sample solution as
directed under the Liquid Chromatography according to the following two conditions. Determine each peak area of the sample by automatic integration method, and calculate the area of the peak of each
related substance by the area percentage method. 

Calculate
the content of each related substance according to the following expression. Content of NM394 (%) = Content of NM394 by the area percentage method (%)x 0.81 

Content
of NM672 (%) = Content of NM672 by the area percentage method (%) Content of NM603 (%) = Content of NM603 by the area percentage method (%) Content of
NM9009 (%) = Content of NM9009 by the area percentage method (%) Content of NM660 (%) = Content of NM660 by the area
percentage method (%) × 0.95 Content of NM9008 (%) = Content of NM9008 by the area percentage method (%) 

Response
factor by specific absorbance (Al%, lcm) between NM441 and NM394: 0.81 Response factor by specific absorbance (Al%, lcm) between NM441 and NM660: 0.95 

	(Specification)

Condition 1	 	 	 	 
	Condition 1	 	Total	 	not more than 1.0%
	 	 	NM394	 	not more than 0.3%
	 	 	NM672	 	not more than 0.1%
	 	 	NM603	 	not more than 0.1%
	 	 	Each other	 	less than 0.1%
	Condition 2	 	Total	 	not more than 1.0%
	 	 	NM9009	 	not more than 0.1%
	 	 	NM660	 	not more than 0.4%
	 	 	NM9008	 	not more than 0.1%
	 	 	Each other	 	less than 0.1%

Operating Conditions "1"  

        Detector: An ultraviolet absorption photometer (wavelength: 275 ran). 

Column:
A stainless steel column, about 4.0 mm in inside diameter and 150 mm in length, packed with 5 urn octadecylsilanised silica gel for Liquid Chromatography. 

Column
temperature: A constant temperature of about 40°C. 

Mobile
phase: A mixture of dilute phosphoric acid (1 in 1,000), acetonitrile and 1 mol/L sodium 1-pentanesuphonate solution in water (75:24:1). 

Flow
rate: Adjust the flow rate so that the retention time of NM441 is about 10 minutes. 

Selection
of column: Pipette 1 mL of the sample solution, add acetonitrile to make 100 mL. Pipette 2 mL of this solution and add 2 mL of a solution of ethylparaben in
acetonitrile (1 in 50,000). Proceed with 2 μL of this solution under the above operating condition, and calculate the resolution. Use a 

37

 

column
giving elution of NM441 and ethylparaben in this order with a resolution between their peaks being not less than 11. 

Detection
sensitivity: Pipette 1 mL of the sample solution, add acetonitrile to make 250 mL and use this solution as the standard solution. Adjust the detection sensitivity so that the
peak height of NM441, obtained from 2 μL of the standard solution, is about 2 - 4 cm. 

Time
span of measurement: About three times as long as the retention time of NM441. 

Operating Conditions "2"  

Detector:
An ultraviolet absorption photometer (wavelength 275 nm). 

Column:
A stainless steel column 4.0 mm in inside diameter and 150 mm in length, packed with 5 μm of octadecylsilanised silica gel for Liquid Chromatography. 

Column
temperature: A constant temperature of about 40°C. 

Mobile
phase: A mixture of dilute phosphoric acid (1 in 1,000) adjusted to pH 3.0 with triethylamine in water and acetonitrile (6:5). 

Flow
rate: Adjust the flow rate so that the retention time of NM441 is about 4 minutes. 

Selection
of column: Pipette 1 mL of the sample solution, add acetonitrile to make 250 mL. Pipette 2 mL of this solution, add 2 mL of a solution of thymol in acetonitrile
(1 to 25,000). Proceed with 2 μL of this solution under the above operating condition, and calculate the resolution. Use a column giving elution of NM441 and
thymol in this order with a resolution between their peaks being not less than 22. 

Detection
sensitivity: Pipette 1 mL of the sample solution, add acetonitrile to make exactly 500 mL and use this solution as the standard solution. Adjust the detection sensitivity so
that the peak height of NM441, obtained from 2 μL of the standard solution, is about 2 - 4cm. 

Time
span of measurement: About ten times as long as the retention time of NM441. 

	(5)
	Residual solvent (acetonitrile):

Dissolve
0.2 g of NM441 in 2 mL of 1 mol/L sodium hydroxide containing 10% of sodium chloride and let absorb into Extrelut 3 (Merck). Wash the container with 0.5 mL
of 1 mol/L sodium hydroxide containing 10% sodium chloride, and let absorb the washings to Extrelut 3, twice. After 15 minutes, elute with  n-hexane and collect the eluate to make exactly
20 mL, and use this solution as the sample solution. 

To
65 μL of acetonitrile (50.7mg; d=0.78) add water to make exactly 100 mL, pipette 1 mL of this solution, add 1 mol/L sodium hydroxide solution
containing 10% sodium chloride to make exactly 100 mL. Pipette 2 mL of this solution, let absorb into Extrelut 3 and add 1 mL of 1 mol/L sodium hydroxide solution
containing 10% sodium chloride to Extrelut 3. After 15 minutes elute with n-hexane and collect the eluate to make exactly 20 mL, and use this solution as the standard
solution. 

Perform
the test with 5 μL each of the sample solution and of the standard solution, as directed under the Gas Chromatography, according to the following conditions. Determine
the peak of acetonitrile in both solutions by the automatic integration method: the peak area of acetonitrile from the sample solution is not larger than the peak area of the acetonitrile from the
standard solution (not more than 50ppm). 

38

 

 Operating conditions:  

Detector:
A hydrogen flame ionization detector. Column: A glass column, about 3 mm inside diameter and about 2 m in length, packed with 150-180 μm
porous divinylbenzene copolymer for gas chromatography [Sunpak A (Shimadzu)]. 

Column
temperature: A constant temperature of about 180°C. 

Carrier
gas: Helium. 

Flow
rate: Adjust the flow rate so that the retention time of acetonitrile is about 2 minutes. 

Detection
sensitivity: Adjust the detection sensitivity so that the peak height of acetonitrile, obtained from 5 uL of the standard solution, is between 5 and 15 mm. 

Selection
of column: To 0.3 mL of acetonitrile add 0.15 mL of acetone and add water to make exactly 100 mL. Pipette 1 mL of this solution and add 1 mol/L sodium
hydroxide solution, containing 10% sodium chloride, to make exactly 100 mL. Hereinafter, proceed with 2mL of this solution as directed in the standard solution. Proceed with 5
μL of this solution under the above operating conditions, and calculate the resolution. Use a column giving elution of the acetonitrile and acetone in this order with a
resolution between their peaks being not less than 2.3. 

Water
content: 

Take
15 mL of a mixture of chloroform and propylene carbonate for Karl-Fischer Method in a dried titration flask, and titrate with the Karl-Fischer TS to make the
content of the flask anhydrous. 

Weigh
accurately about 0.05 g of NM441, transfer it quickly into the titration flask, dissolve by stirring, and titrate the solution to be examined with Karl-Fischer TS to the end
point under vigorous stirring (not more than 1.0%). 

Residue on ignition  

Previously
ignite a crucible of platinum to constant weight between 450°C and 550°C, and weigh accurately after cooling. 

Take
1.0 ± 0.1 g of NM441, transfer into above ignite container, and weigh it accurately. Moisten the sample with a few drops of sulphuric acid, then heat
slowly at a temperature as low as practicable until the sample is almost incinerated, and cool it. Moisten again with a small amount of sulphuric acid, heat gently until white fumes are evolved no
longer, and ignite between 450°C and 550°C until the residue is completely incinerated. Cool the crucible and reweigh accurately. Use a desiccator (silica gel) for the cooling:
not more than 0.10%. 

Particle size  

Accurately
weigh 10 mg of NM441 and place it in a 20 mL tube. Add 10 mL of silicone (Shin-Etsu silicone RF-96-10CS). Put the tube in the
ultrasonic wave bath to disperse the sample for 2 minutes at the room temperature. Transfer the sample solution to the apparatus and measure the median diameter three times according to the
following conditions. Use the mean value as the particle size: 

Median
particle size: Not more than 10 μm (<10 μm). 

Distribution:
95% of particles: Not more than 20 μm (<20 μm). 

39

 

Operating
condition: Dispersion medium viscosity:    10.00 cP 

	Dispersion medium density	 	0.94 g/cm3
	Sample density Maximum	 	1.46 g/cm3
	diameter Division of	 	30 urn
	diameter Minimum	 	2.00 μm
	diameter Centrifuge	 	2.00 μm
	sedimentation	 	1,500 rpm
	Measurement time	 	7 minutes and 48 seconds

Assay
(Non aqueous titration): 

Accurately
weigh about 0.10 g of NM441, and dissolve in 50 mL of glacial acetic acid; titrate with 0.02 mol/L perchloric acid (potentiometric titration). Perform a blank
determination in the same manner and make any necessary correction: not less than 98.5% and not more than 101.0% of C21H20FN3O6S calculated on the
anhydrous basis. 

Each
mL of 0.02 mol/L perchloric acid is equivalent to 9.229 mg of C21H20FN3O6S 

40

QuickLinks

Exhibit 10.6

NM441 LICENSE AGREEMENT BETWEEN NIPPON SHINYAKU CO., LTD. AND OPTIMER PHARMACEUTICALS, INC.

LICENSE AGREEMENT

ARTICLE 1 DEFINITIONS

ARTICLE 2 GRANT OF LICENSE

ARTICLE 3 DISCLOSURE OF INFORMATION

ARTICLE 4 ADR REPORTING

ARTICLE 5 MILESTONE PAYMENTS

ARTICLE 6 MINIMUM PURCHASING AMOUNT

ARTICLE 7 REPORTS AND ACCOUNTING

ARTICLE 8 DEVELOPMENT PROGRAM

ARTICLE 9 SECRECY

ARTICLE 10 REPRESENTATIONS

ARTICLE 11 SUPPLY OF COMPOUND

ARTICLE 12 SUPPLY PRICE

ARTICLE 13 FORECAST AND FIRM ORDER

ARTICLE 14 QUALITY

ARTICLE 15 TITLE AND RISK OF LOSS

ARTICLE 16 SALES PROMOTION

ARTICLE 17 LIABILITIES

ARTICLE 18 PATENT INFRINGEMENT AND EXTENSION

ARTICLE 19 INFRINGEMENT ACTIONS BY THIRD PARTIES

ARTICLE 20 COMPETITIVE PRODUCT

ARTICLE 21 TRADEMARK

ARTICLE 22 WITHHOLDING TAXES

ARTICLE 23 DURATION AND TERMINATION

ARTICLE 24 EFFECT OF TERMINATION

ARTICLE 25 NOTICES

ARTICLE 26 FORCE MAJEURE

ARTICLE 27 ASSIGNMENT

ARTICLE 28 WAIVER

ARTICLE 29 GOVERNING LAW

ARTICLE 30 ARBITRATION

ARTICLE 31 ENTIRE AGREEMENT

ARTICLE 32 MISCELLANEOUS

ARTICLE 33 COUNTERPARTS

SCHEDULE 1(H) GENERAL INVESTIGATIONAL PLAN OF NM441 FOR BACTERIAL PROSTATITIS (Draft May 5, 2004)

SCHEDULE 1(U) PATENT ON NM441

Specifications and Test Methods for NM441

GRAPHICQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.11    
    

*** Text Omitted and Filed Separately

CONFIDENTIAL TREATMENT REQUESTED

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

  
 

    Amendment of License Agreement between Optimer Pharmaceutical, Inc Delaware
  Corporation and Optimer Biotechnology, Inc., A Taiwan Corporation    
    

The
license agreement between Optimer Pharmaceuticals, Inc., USA (Optimer) and Optimer Biotechnology, Inc., Taiwan (OBI) was originally signed on December 8, 2003 with the goal to
spin off the Asian operation into an independent entity. Fund raising effort was postponed to focus on Optimer's late-stage pipeline products. OBI's current management team has made
contributions to the overall progress. We have made amendments to the original signed agreement, to give additional credit for OBI contributions and to reflect the spirit of the collaboration
relationship. 

In
addition, Optimer and OBI had agreed in December 2003 to treat all of OBI's post-agreement operational expenses from January 2004 to December 31, 2006, in the
amount of approximately US$2.0M, as an interest-free loan from Optimer to accurately reflect its "independent" status. This agreement will continue, and OBI is to pay back this loan in the
future. However, OBI will not use its raised fund to pay back the loan at this time. OBI will pay back this loan from its royalty income due from Optimer, projected to be starting in 2009. Both
parties have agreed that the loan will be paid back in two equal installments, projected to be on October 1, 2009 and October 1, 2010, respectively. 

This
amendment is effective on September 30, 2006, the projected closing date of OBI's Series A round. 

Article I—Definition  

	1.7
	"OPT-22 Patents
B" means those OPTIMER Patents under the corresponding heading in Exhibit A.

	1.8
	"OPT-22 Patents
C" means those OPTIMER Patents under the corresponding heading in Exhibit A.

	1.12
	"Candidate
Patents" means OPT-22 Patents A, OPT-22 Patents B, and OPT-80 Patents.

	1.26
	"Licensed
Products" means Chemzyme Products, OPopSTM Products, OPT-22 Products and OPT-80 Products. 

Amendment: Delete 1.7 and 1.8. Modify 1.2 and 1.26  

	1.12
	"Candidate Patents" means OPT-22 Patents A, OPT-22 Patents D, OPT-99 patens and
OPT-80 Patents.

 
	1.26
	 "Licensed Products" means OPT-99, OPT-22 Products and OPT-80 Products.  

  
 

    Article II—Grant    
    

Original:  

	2.2
	Candidate Licenses.    Subject to the terms of this Agreement, OPTIMER hereby grants to OBI:

	(i)
	an
exclusive royalty-bearing license in the Candidate Territory under the OPT-22 Patents A in the OPT-22 Field I to make, have
made, use, sell, have sold, import and develop OPT-22 Products I, with the right to grant and authorize sublicenses; 

 

	(ii)
	an
exclusive royalty-bearing license in the Candidate Territory under the OPT-22 Patents B in the OPT-22 Field II to make, have
made, use, sell, have sold, import and develop OPT-22 Products II, with the right to grant and authorize sublicenses;

	(iii)
	a
non-exclusive royalty-bearing license in the Candidate Territory under the OPT-22 Patents A and OPT-22 Patents C in
the OPT-22 Field II, and under OPT-22 Patents D in the OPT-22 Field I and OPT-22 Field II, to make, have made, use, sell,
have sold, import and develop OPT-22 Products I and OPT-22 Products II, with the right to grant and authorize sublicenses;

	(iv)
	an
exclusive license royalty-bearing license in the Candidate Territory under the OPT-80 Patents in the OPT-80 Field to make, have
made, use, sell, have sold, import and develop OPT-80 Products, with the right to grant and authorize sublicenses. 

Amendment: Delete (ii), revise (i), (iii) and (iv) and add (v)—Optimer, USA, has returned patents B and C
(Exhibit A) to MSKCC since June 30, 2005. They are not part of license agreement any more.

	(i)
	an
exclusive royalty-bearing license in the Candidate Territory under the OPT-22 Patents A in the OPT-22 Field I to  manufacture know how, make, have made, use, sell, have sold, import and develop
OPT-22 Products I, with the right to grant and
authorize sublicenses;

	(ii)
	an exclusive royalty-bearing license in the Candidate Territory under the
OPT-22 Patents B in the OPT-22 Field II to manufacturing know how, make, have made, use, sell, have sold, import and develop OPT-22 Products
II, with the right to grant and authorize sublicenses;

	(iii)
	a non-exclusive royalty-bearing license in the Candidate Territory under the OPT-22 Patents A in the
OPT-22 Field II, and under OPT-22 Patents D in the OPT-22 Field I and OPT-22 Field II, to manufacture know how, make, have
made, use, sell, have sold, import and develop OPT-22 Products I and OPT-22 Products II, with the right to grant and authorize sublicenses;

	(iv)
	an
exclusive license royalty-bearing license in the Candidate Territory under the OPT-80 Patents in the OPT-80 Field to  manufacture know how, make, have made, use, sell, have sold, import and
develop OPT-80 Products, with the right to grant and
authorize sublicenses.

	(v)
	an exclusive license or pass-through license in the Candidate Territory under the OPT-99 Patents in the
OPT-99 Field to manufacture know how, make, have made, use, sell, have sold, import and develop OPT-99 Products, with the right to grant and authorize
sublicenses.

 
 

Article III—Due Diligence. Regulatory Matters    
    

Original: Section 3.2 and 3.3  

	3.1
	Within
sixty (60) days of the Effective Date, OPTIMER and OBI shall mutually agree upon a timeline for preclinical and clinical development of Licensed Products with clinical
therapeutic or diagnostic applications ("Timeline") for which OPTIMER holds territorial rights. Agreement to the Timeline for such Licensed Products shall not be unreasonably withheld by OPTIMER. Such
Timeline shall be appended as an Exhibit to this Agreement, and may be amended from time to time as necessary and by mutual consent. In the event that agreement cannot be reached on the Timeline
within sixty (60) days of the Effective Date, or any developmental milestone specified in the Timeline is not met by OBI, OPTIMER shall have the right to terminate this Agreement in accordance
with Section 12.4. 

2

 

	3.2
	In
addition, OBI shall adhere to the following milestones: 

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

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

Amendment: Amend 3.2 and 3.3  

3.2 and 3.3—OBI had submitted updated Business Plan, Budge and Financial Projections, and Optimer agrees that OBI has full filled these
terms.

 
 

Article IV—Payments    
    

Original: Section 4.1 (a)  

4.1
(a)—20,400,000 shares (equivalent to $6 MM USD) of Optimer Biotechnology, Inc. Series A Common Stock, par value NT$10 (US$0.294) per share (the "Shares"),
issuable within thirty (30) days on the Effective Date of this Agreement. Shares will be subjected to final audit upon closing of financing. In connection with the issuance of the Shares,
OPTIMER shall enter into the Common Stock Issuance Agreement, attached hereto as Exhibit C ("Common Stock Issuance Agreement"). 

Amendment:  

4.1 (a)—In connection with the issuance of 20,400,000 shares related to technology valuation (equivalent to $6 MM USD) of Optimer Biotechnology, Inc.
Common Stock, par value NT$10 (US$0.294) per share (the "Shares"), OPTIMER and OBI shall enter into the Common Stock Issuance Agreement, attached hereto as Exhibit C ("Common Stock
Issuance Agreement") within sixty days (60) after the Effective Date of this agreement. Shares will be subjected to final auditing upon closing of OBI's Series A
financing.

Original: Section 4.1(b)  

4.1
(b)—For OPT-22 Products and OPT-80 Products, OBI will make payments to OPTIMER upon accomplishing (itself or through a sublicensee) the
following milestones: 

For OPT-22 Products:

	•
	$[***]
upon initiation of the first Phase II (or equivalent) efficacy study in the Discovery Territory

	•
	$[***]
upon commencement of the first pivotal studies in the Discovery Territory

	•
	$[***]
upon first New Drug Application or equivalent in the Discovery Territory

	•
	$[***]
upon the first marketing approval in the first Candidate Territory. 

3

 

For OPT-80 Products:

	•
	$[***]
upon completion of the first Phase II (or equivalent) efficacy study in the United States of America.

	•
	$[***]
upon commencement of the first pivotal studies in the Candidate Territory

	•
	$[***]
upon first New Drug Application or equivalent in the Candidate Territory

	•
	$[***]
upon the first marketing approval in the Candidate Territory. 

Amendment:  

For OPT-22 Products: OBI will proceed with Phase 2/3 pivotal trial directly, therefore the $[***] payment upon initiation of
the first Phase II does not apply.

4.1 (b)—The milestone payments will be deducted from the future royalty payment. The royalty commencing time is projected to be in January 1,
2009. 

Original: Section 4.1 (f)  

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

Amendment:  

4.1 (f)—There shouldn't be royalty responsibility before any product is approved or launched in the territory. Delete 4.1  

Original: Section 4.4 (a)  

4.4
(a)—OBI shall pay to OPTIMER interest on any amounts not paid when due. Likewise, OPTIMER shall pay to OBI interest on any amounts not paid when due. Such interest will accrue from the
forty-fifth (45th) day after the payment was due at a rate two percent (2%) above the daily prime interest rate, as determined by J.P. Morgan Chase or its successor entity, on
each day the payment is delinquent, and the interest payment will be due and payable on the first day of each month after interest begins to accrue, until full payment of all amounts due OPTIMER or
OBI is made. 

Amendment:  

4.4 (a)—This interest clause will be implemented from July 1, 2009.  

Original: Section 4.5 (a)  

4.5
(a)—A royalty in an amount equal to [***]% of monies received by OPTIMER for OPT-22 Product sales in any or all of the countries outside of
the Candidate Territories. 

Amendment:  

4.5 (a)—A royalty in an amount equal to [***]% (Not [***]%) of monies received by OPTIMER for
OPT-22 Product sales in any or all of the countries outside of the Candidate Territories.

4

 

Original: Section 4.5 (b)  

4.5
(b)—A royalty in an amount equal to [***]% of monies received by OPTIMER for OPT-80 Product sales in any or all of the countries outside of
the Candidate Territories. 

Amendment:  

4.5 (b)—A royalty in an amount equal to [***]% (Not [***]%) of monies received by OPTIMER for
OPT-80 Product sales in any or all of the countries outside of the Candidate Territories.

 
 

Article VI—Patent prosecution    
    

Original: Section 6.1  

6.1—OBI
shall be responsible for and pay all future costs and expenses incurred by OPTIMER for the preparation, filing, prosecution, issuance, and maintenance of Candidate Patents in the
Candidate Territory. For costs and expenses incurred prior to the Effective Date of this Agreement shall be reimbursed to OPTIMER by OBI as a one-time payment of
$[***] and shall be paid by OBI within forty-five (45) days of the Effective Date. Such costs and expenses incurred after the Effective Date shall be paid by
OBI as they are incurred. 

Amendment:  

6.1—OBI shall be responsible for the preparation, filing, prosecution, issuance, and maintenance of Candidate Patents in the Candidate Territory. For costs and
expenses incurred prior to the Effective Date of this Agreement shall be reimbursed to OPTIMER by OBI within 60 days of Series A closing.

 
 

Article X—Non-use of names    
    

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

Amendment:  

OBI shall not use the names of Optimer Pharmaceuticals, Inc. The official registered name of OBI is Optimer Biotechnology, Inc.

 
 

Article XI—Assignment    
    

	11.1
	This
Agreement may not be assigned by OBI without prior written consent from OPTIMER. OPTIMER may assign this Agreement freely. 

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

5

 

Amendment:  

Remove this article since OBI is independent from Optimer Pharmaceuticals, Inc., USA.

 
 

Article XIII—Payments, notices and other communications    
    

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

In
the case of OPTIMER: 

Optimer
Pharmaceuticals, Inc.

10110 Sorrento Valley Road, Suite C

San Diego, CA 92121 USA

Attention: Norman K. Orida, Ph.D.

Vice President, Business Development 

In
the case of OBI: 

Optimer
Biotechnology, Inc.

Suite D

14th Floor

207 Tun Hwa S. Road

Taipei 106, Taiwan

Attention: Ying-Cheun Lee

Executive Vice President, Commercial Operations 

Amendment:  

In the case of OPTIMER:  

Optimer Pharmaceuticals, Inc.

10110 Sorrento Valley Road, Suite C

San Diego, CA 92121 USA

Attention: Michael N. Chang, Ph.D.

President and CEO  

In the case of OBI:  

Optimer Biotechnology, Inc.

Nankang Software Park, Room D, 14F,

3 Yuan Qu Street

Taipei 115, Taiwan.

Attention: Youe-Kong Shue, Ph.D.

President and CEO  

6

 

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

	Optimer Pharmaceuticals, Inc.	 	Optimer Biotechnology, Inc.
	
/s/ Michael N. Chang, Ph.D.	
 	

/s/ Youe-Kong Shue, Ph.D.
	
  By: Michael N. Chang, Ph.D.

President and CEO	
 	

By: Youe-Kong Shue, Ph.D.

President and CEO
	
 	
 	

 	
 	

 	
 	

 
	

Date:	
 	

7/17/06
	
 	

Date:	
 	

7/17/06

7

 
 
 

EXHIBIT A—UPDATE    
    

"OPTIMER
Patents" means all the United States patents and patent applications listed below, and their continuations, continuations-in-part, divisionals, and other
continuing applications, all patents issuing on the foregoing, all reissues, re-examinations, extensions of any kind, substitutions, registrations and corresponding foreign patents and
patent applications: 

OPT-22 Patents A  

US
patent 5,708,163 "Synthesis of the Breast Tumor-Associated Antigen Defined by Monoclonal Antibody MBrl and Uses Thereof" 

US
patent 6,090,789 "Synthesis of the Breast Tumor-Associated Antigen Defined by Monoclonal Antibody MBrl and Uses Thereof" 

US
patent application 09/017,611 "Synthesis of Glycoconjugates of the Globo-H Epitope and Uses Thereof" 

OPT-22 Patents D—A nonexclusive in field I, see updated patent portfolio  

US
patent application 09/794,905 "Affinity Matrix Bearing Tumor-Associated Carbohydrate or Glycopeptide-Based Antigens and Uses Thereof" 

OPopSTM Category Patents—See attached patent portfolio.

US
provisional patent application #60/096/001. "Programmed One-Pot Multistep Assembly of Oligosaccharides." 

OPT-80 Patents-See attached patent portfolio  

US
provisional patent application #60/399,956. "Tiacumicin Production." 

OPT-99 NCE and process patent—See attached patent portfolio  

8

  

 
 

LICENSE AGREEMENT    
    

 
 

By and between    
    

 
 

Optimer Pharmaceuticals, Inc.
  A Delaware Corporation    
    

 
 

And    
    

 
 

Optimer Biotechnology, Inc.
  A Taiwan Corporation    
    

 
 

TABLE OF CONTENTS    
    

	PREAMBLE

ARTICLES:
 
	 	 
	 	 

	 	I	 	DEFINITIONS	 	9
	 	II	 	GRANT	 	11
	 	III	 	DUE DILIGENCE, REGULATORY MATTERS	 	13
	 	IV	 	PAYMENTS	 	14
	 	V	 	REPORTS AND RECORDS	 	16
	 	VI	 	PATENT PROSECUTION	 	17
	 	VII	 	INFRINGEMENT	 	17
	 	VIII	 	INDEMNIFICATION, PRODUCT LIABILITY, WARRANTIES	 	18
	 	IX	 	EXPORT CONTROLS	 	19
	 	X	 	NON-USE OF NAMES	 	19
	 	XI	 	ASSIGNMENT	 	19
	 	XII	 	TERMINATION	 	20
	 	XIII	 	PAYMENTS, NOTICES AND OTHER COMMUNICATIONS	 	21
	 	XIV	 	MISCELLANEOUS PROVISIONS	 	21

 
 

CONFIDENTIAL    
    

9

 

This
License Agreement ("Agreement") is effective on the date last subscribed below (the "Effective Date"), and is by and between Optimer Pharmaceuticals,
Incorporated (hereinafter referred to as "OPTIMER"), a Delaware corporation with principal offices at 10110 Sorrento Valley Road, Suite C, San Diego, California 92121,
and Optimer Biotechnology, Inc., a Taiwan corporation with principal offices located at Suite D, 14F, 207 Tun Hwa S. Road, Sec. 2,
Taipei, 106 Taiwan, ROC (hereinafter referred to as "OBI"). 

 
 

WITNESSETH    
    

        WHEREAS, OPTIMER is the owner or licensee of certain patents and know-how and has the right to grant licenses under said patents and
know-how; and 

        WHEREAS,
OPTIMER desires to have said patents and know-how utilized to develop commercial therapeutics in certain fields and territories and is willing to grant a license to
its interest thereunder; and 

        WHEREAS,
OBI seeks to commercially develop said patents and know-how through a thorough, vigorous and diligent program of commercializing the said patents and
know-how in said fields and territories. 

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

 
 

ARTICLE I—DEFINITIONS    
    

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

	1.1
	"Affiliate"
of a party means any person, firm, corporation or other entity controlling, controlled by, or under common control with that party. The term "control" wherever used
throughout this Agreement means ownership, directly or indirectly, of more than 50% of the equity capital.

	1.2
	"OBI"
as used in this Agreement shall include OBI's Affiliates.

	1.3
	"OPTIMER
Patents" shall have the meaning as defined in Exhibit A.

	1.4
	"Chemzyme
Patents" means those OPTIMER Patents under the corresponding heading in Exhibit A.

	1.5
	"OPopSTM
Patents" means those OPTIMER Patents under the corresponding heading in Exhibit A.

	1.6
	"OPT-22 Patents
A" means those OPTIMER Patents under the corresponding heading in Exhibit A.

	1.7
	"OPT-22 Patents
B" means those OPTIMER Patents under the corresponding heading in Exhibit A.

	1.8
	"OPT-22 Patents
C" means those OPTIMER Patents under the corresponding heading in Exhibit A.

	1.9
	"OPT-22 Patents
D" means those OPTIMER Patents under the corresponding heading in Exhibit A.

	1.10
	"OPT-22 Patents"
means OPT-22 Patents A, OPT-22 Patents B, OPT-22 Patents C and
OPT-22 Patents D.

	1.11
	"OPT-80 Patents"
means those OPTIMER Patents under the corresponding heading in Exhibit A.

 
 

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	1.12
	"Candidate
Patents" means OPT-22 Patents A, OPT-22 Patents B, and OPT-80 Patents.

	1.13
	"Chemzyme
Field" means the discovery and development using Chemzyme Patents of novel engineered proteins for use in human therapeutic drug applications.

	1.14
	"OPopSTM
Field" means the discovery and development using OPopSTM Patents of new analogs of tiacumicin B and other human therapeutic drugs for use in human
therapeutic drug applications.

	1.15
	"Clustered
Carbohydrate Antigen" means an immunogenic molecule consisting of two or more identical or different carbohydrate antigens attached to a common peptide backbone.

	1.16
	"OPT-22 Field
I" means the treatment or prevention of human cancer with a carbohydrate vaccine comprising Globo H as the sole antigen. Specifically excluded from
OPT-22 Field I are (i) vaccines comprising mixtures of more than one type of carbohydrate antigen, one of which may be Globo H, and (ii) vaccines comprising Clustered
Carbohydrate Antigens wherein the carbohydrate antigens have not been synthesized using OPTIMER's OPopSTM technology.

	1.17
	"OPT-22 Field
II" means the treatment or prevention of human cancer with a carbohydrate vaccine comprising Clustered Carbohydrate Antigens wherein the carbohydrate
antigens have been synthesized using OPTIMER's OPopSTM technology.

	1.18
	"OPT-80 Field"
means the treatment of human C. difficile-associated diarrhea with analogs of (tiacumicin B).

	1.19
	"Chemzyme
Products" means any and all products and services within the Chemzyme Field, whether or not covered by OPTIMER Patents.

	1.20
	"OPopSTM
Products" means any and all products and services within the OPopSTM Field, whether or not covered by OPTIMER Patents.

	1.21
	"OPT-22 Products
I" means any and all products and services within the OPT-22 Field I, whether or not covered by OPTIMER Patents.

	1.22
	"OPT-22 Products
II" means any and all products and services within the OPT-22 Field II, whether or not covered by OPTIMER Patents.

	1.23
	"OPT-22 Products"
means OPT-22 Products I and OPT-22 Products II.

	1.24
	"OPT-80 Products"
means any and all products and services within the OPT-80 Field, whether or not covered by OPTIMER Patents.

	1.25
	"Know-How"
means any technical information, know-how, processes, procedures, compositions, devices, methods, formulas, protocols, techniques, designs, data or
other subject matter owned or controlled by OPTIMER which is necessary for the manufacture, sale and/or use of Licensed Products, in each case, which is not in the public domain.

	1.26
	"Licensed
Products" means Chemzyme Products, OPopSTM Products, OPT-22 Products and OPT-80 Products. 

 
 

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	1.27
	"Net
Sales" of a Licensed Product means OBI's or its sublicensee's, as indicated, billings for sales of that product to an unaffiliated third party, less the sum of the following:

	a)
	Discounts
allowed in amounts customary in the trade;

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

	c)
	Outbound
transportation prepaid or allowed;

	d)
	Amounts
allowed or credited on returns; and

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

No
deductions shall be made for commissions paid to individuals whether they be with independent sales agencies or regularly employed by OBI or its Affiliates and on its payroll, or for cost of
collections. Licensed Products shall be considered "sold" when billed or invoiced. 

	1.28
	"Royalty
Year" means each twelve month period commencing January 1 and ending December 31 during the term of this Agreement. For the first year of this Agreement, the
Royalty Year shall be the period of time between the signing of the Agreement and December 31.

	1.29
	"Candidate
Territory" means the countries of Taiwan R.O.C., China, the territory of Hong Kong, and the ASEAN Secretariat countries, comprising Thailand, Vietnam, Laos, Cambodia,
Burma, Thailand, Malaysia, Singapore, Brunei, Indonesia, Philippines, Australia, and New Zealand.

	1.30
	"Discovery
Territory" means worldwide. 

 
 

ARTICLE II—GRANT    
    

        2.1    Discovery Licenses.    Subject to the terms of this Agreement, OPTIMER hereby grants to OBI: 

	(i)
	a
non-exclusive royalty-bearing license in the Discovery Territory under the OPopSTM Patents in the OPopSTM Field to make, have made,
use, sell, have sold, import and develop OPopSTM Products, with the right to grant and authorize sublicenses that do not include the right to grant further sublicenses; and

	(ii)
	a
non-exclusive royalty-bearing license in the Discovery Territory under the Chemzyme Patents in the Chemzyme Field to make, have made, use, sell, have
sold, import and develop Chemzyme Products, with the right to grant and authorize sublicenses that do not include the right to grant further sublicenses. 

 
 

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        2.2    Candidate Licenses.    Subject to the terms of this Agreement, OPTIMER hereby grants to OBI: 

	(i)
	an
exclusive royalty-bearing license in the Candidate Territory under the OPT-22 Patents A in the OPT-22 Field I to make, have
made, use, sell, have sold, import and develop OPT-22 Products I, with the right to grant and authorize sublicenses;

	(ii)
	an
exclusive royalty-bearing license in the Candidate Territory under the OPT-22 Patents B in the OPT-22 Field II to make, have
made, use, sell, have sold, import and develop OPT-22 Products II, with the right to grant and authorize sublicenses;

	(iii)
	a
non-exclusive royalty-bearing license in the Candidate Territory under the OPT-22 Patents A and OPT-22 Patents C in
the OPT-22 Field II, and under OPT-22 Patents D in the OPT-22 Field I and OPT-22 Field II, to make, have made, use, sell,
have sold, import and develop OPT-22 Products I and OPT-22 Products II, with the right to grant and authorize sublicenses;

	(iv)
	an
exclusive license royalty-bearing license in the Candidate Territory under the OPT-80 Patents in the OPT-80 Field to make, have
made, use, sell, have sold, import and develop OPT-80 Products, with the right to grant and authorize sublicenses.

	2.3
	OPTIMER
shall have the right of first refusal to exclusively license rights to new OPopSTM Products and Chemzyme Products (collectively, "New Candidates") outside of
the Candidate Territory arising from OBI's or its sublicensees' exercise of the licenses in Section 2.1. Prior to commercializing or granting rights to any third party with respect to
any New Candidates, OBI shall engage in good faith negotiations with OPTIMER for a period not to exceed 30 (thirty) days regarding an exclusive license for the New Candidates. Following
such negotiation period, OBI may enter into negotiations with a third party with respect to said New Candidates. Upon arriving at mutually acceptable license terms with a third party, OBI may
enter into a formal license agreement with a third party provided that: (1) OBI first presents the terms of such proposed third party license agreement to OPTIMER and offers to enter into an
agreement with OPTIMER on the same terms (2) OPTIMER has declined that offer, in writing, after a 14 (fourteen) day evaluation period.

	2.4
	Notwithstanding
any other provisions of this Agreement, it is agreed that OPTIMER and its Affiliates and licensors shall retain the right to practice the licensed rights granted under
Section 2.1 and 2.2 for their own teaching, research and patient care activities.

	2.5
	All
rights reserved to the United States Government and others under 35 USC §§200-212, as amended, shall remain and shall in no way
be affected by this Agreement.

	2.6
	OBI
agrees that every sublicensing agreement to which it shall be party and which shall relate to the rights, privileges and license granted hereunder shall contain a statement
describing the date upon which OBI'S exclusive rights, privileges and license hereunder shall terminate. 

 
 

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	2.7
	OBI
agrees that any sublicenses granted by it shall be subject to OPTIMER's prior written approval, not to be unreasonably withheld. OBI agrees that any sublicenses granted by it
shall provide that the obligations to OPTIMER of Sections 3.1 and 3.3 and Articles V, VII, VIII, IX, X, XI, XII, and XIV of this Agreement shall be binding upon the
sublicensees as if it were a party to this Agreement. OBI further agrees to attach copies of these Articles to sublicense agreements.

	2.8
	OBI
agrees to forward promptly to OPTIMER a copy of any and all fully executed sublicense agreements, and further agrees to timely forward to OPTIMER a copy of sublicensing revenue
reports received by OBI from its sublicensees during the preceding Royalty Year.

	2.9
	If
OBI receives from sublicensees anything of value in lieu of cash payments based upon payment obligations of any sublicense under this Agreement, OBI shall pay OPTIMER royalty or
other payments as required by Section 4.1, based on the fair market value of such payment, unless OPTIMER waives in writing such payment obligation.

	2.10
	The
license granted hereunder shall not be construed to confer any rights upon OBI by implication, estoppel or otherwise as to any technology not included in the OPTIMER Patents,
except as expressly set forth herein.

	2.11
	All
rights not specifically granted herein are reserved to OPTIMER. Without limitation, OPTIMER explicitly retains the right to grant to third parties exclusive rights outside of the
territories or fields of use granted to OBI hereunder.

	2.12
	OPTIMER
shall cooperate to transfer to OBI a copy of all documentation of Know-How in OPTIMER's possession or control, in a format reasonably acceptable to OBI. 

 
 

ARTICLE III—DUE DILIGENCE, REGULATORY MATTERS    
    

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

	3.2
	Within
sixty (60) days of the Effective Date, OPTIMER and OBI shall mutually agree upon a timeline for preclinical and clinical development of Licensed Products with clinical
therapeutic or diagnostic applications ("Timeline") for which OPTIMER holds territorial rights. Agreement to the Timeline for such Licensed Products shall not be unreasonably withheld by OPTIMER. Such
Timeline shall be appended as an Exhibit to this Agreement, and may be amended from time to time as necessary and by mutual consent. In the event that agreement cannot be reached on the Timeline
within sixty (60) days of the Effective Date, or any developmental milestone specified in the Timeline is not met by OBI, OPTIMER shall have the right to terminate this Agreement in accordance
with Section 12.4.

	3.3
	In
addition, OBI shall adhere to the following milestones: 
	(a)
	OBI
shall have delivered to OPTIMER prior to the execution of this Agreement, its detailed business, research and development plan including, for example, relevant schedules of
capital investments needed to implement the plan, financial, equipment, facility plans, number and kind of personnel and time planned for each phase of development of the OPTIMER Patents for a three
year period, to the extent formed by OBI. Similar reports shall be provided to OPTIMER annually to relay update and status information on OBI's business, research and development progress, including
projections of activity anticipated for the next reporting year. 

 
 

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14

 

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

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

	3.5
	OPTIMER
shall cooperate with OBI before the U.S. Food and Drug Administration, and any other governmental regulatory agencies in and outside of the U.S. in all matters
regarding Licensed Products. 

 
 

ARTICLE IV—PAYMENTS    
    

	4.1
	For
the rights, privileges and licenses granted hereunder, including the transfer of Know-How, OBI shall pay to OPTIMER, in the manner hereinafter provided, until the end
of the last to expire patent of the OPTIMER Patents or until this Agreement is terminated, whichever occurs first:

	(a)
	20,400,000 shares
(equivalent to $6 MM USD) of Optimer Biotechnology, Inc. Series A Common Stock, par value NT$10 (US$0.294) per share (the "Shares"),
issuable within thirty (30) days on the Effective Date of this Agreement. Shares will be subjected to final audit upon closing of financing. In connection with the issuance of the Shares,
OPTIMER shall enter into the Common Stock Issuance Agreement, attached hereto as Exhibit C ("Common Stock Issuance Agreement").

	(b)
	For
OPT-22 Products and OPT-80 Products, OBI will make payments to OPTIMER upon accomplishing (itself or through a sublicensee) the following
milestones: 

For OPT-22 Products:

	•
	$[***]
upon initiation of the first Phase II (or equivalent) efficacy study in the Discovery Territory

	•
	$[***]
upon commencement of the first pivotal studies in the Discovery Territory

	•
	$[***]
upon first New Drug Application or equivalent in the Discovery Territory

	•
	$[***]
upon the first marketing approval in the first Candidate Territory. 

For OPT-80 Products:

	•
	$[***]
upon completion of the first Phase II (or equivalent) efficacy study in the United States of America.

	•
	$[***]
upon commencement of the first pivotal studies in the Candidate Territory

	•
	$[***]
upon first New Drug Application or equivalent in the Candidate Territory

	•
	$[***]
upon the first marketing approval in the Candidate Territory.

	(c)
	For
Chemzyme Products and OPopSTM Products, a sublicense royalty equivalent to the amount owed by Optimer to The Scripps Research Institute as indicated in the attached
license agreement sections attached hereto as Exhibit C ("Optimer-TSRI License Agreements").

	(d)
	A
royalty in an amount equal to [***]% of Net Sales by OBI or any sublicensees in any or all of the countries within the Candidate Territories for all Licensed
Products in said countries. 

 
 

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15

 

	(e)
	[***]
percent ([***]%) of all income from sublicensees including (i) sublicense fees, (ii) sublicense maintenance fees,
(iii) milestone payments and (iv) other compensation described in Section 2.9, but excluding (i) verifiable research and development support and expense reimbursement,
(ii) royalties, (iii) sale of equity at fair market value, and, (iv) in cases where OPTIMER Patents are sublicensed in combination with non-OPTIMER patents, a mutually
agreed pro-rata contribution of the non-OPTIMER patents.

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

	4.2
	Royalty
payments to OPTIMER shall be paid in United States dollars in San Diego, CA, USA or at such other place as OPTIMER may reasonably designate consistent with the laws and
regulations controlling in any foreign country, but not in any other currency. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall
be made by using the exchange rate prevailing at the J.P. Morgan Chase Bank (N.A.) on the last business day of the calendar quarterly reporting period to which such royalty payments relate.

	4.3
	OPTIMER
shall have the right to appoint an independent public accountant, mutually acceptable to the Parties to verify all of OBI's calculations to determine royalty payments
(the "Audit"), to be conducted semiannually. OPTIMER shall bear the cost of such Audit unless the Audit reveals any intentional misstatement of material fact by OBI, or that OBI's calculation
of the Net Sales, Net Units Sold or Average Selling Price per Unit is more than 10% lower than the amounts determined by the Audit, in which case OBI shall bear the cost. If OBI disagrees with the
calculation of the Audit, and Distributor and Company cannot resolve their disagreement, the matter shall be submitted to arbitration in accordance with Section 12.9.

	4.4
	Interest

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

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

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

	4.5
	For
their contribution towards the development of OPT-22 and OPT-80, OPTIMER shall pay to OBI, in the manner hereinafter provided, until the end of the
last to expire patent of the OPTIMER Patents or until this Agreement is terminated, whichever occurs first:

	(a)
	A
royalty in an amount equal to [***]% of monies received by OPTIMER for OPT-22 Product sales in any or all of the countries outside of the
Candidate Territories. 

 
 

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16

 

	(b)
	A
royalty in an amount equal to [***]% of monies received by OPTIMER for OPT-80 Product sales in any or all of the countries outside of the
Candidate Territories.

	(c)
	[***]
percent ([***]%) of all income from sublicensees including (i) sublicense fees, (ii) sublicense maintenance fees,
(iii) milestone payments and (iv) other compensation described in Section 2.9, but excluding (i) verifiable research and development support and expense reimbursement,
(ii) royalties, (iii) sale of equity at fair market value, and, (iv) in cases where OPTIMER Patents are sublicensed in combination with non-OPTIMER patents, a mutually
agreed pro-rata contribution of the non-OPTIMER patents.

	4.6
	Royalty
payments shall be paid in United States dollars in Taiwan, R.O.C., or at such other place as OBI may reasonably designate consistent with the laws and regulations
controlling in any foreign country, but not in any other currency. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by
using the exchange rate prevailing at the J.P. Morgan Chase Bank (N.A.) on the last business day of the calendar quarterly reporting period to which such royalty payments relate.

	4.7
	OBI
shall have the right to appoint an independent public accountant, mutually acceptable to the Parties to verify all of OPTIMER's calculations to determine royalty payments
(the "Audit"), to be conducted semiannually. OBI shall bear the cost of such Audit unless the Audit reveals any intentional misstatement of material fact by OPTIMER, or that OPTIMER's
calculation of the Net Sales, Net Units Sold or Average Selling Price per Unit is more than 10% lower than the amounts determined by the Audit, in which case OBI shall bear the cost. 

If
OBI disagrees with the calculation of the Audit, and Distributor and Company cannot resolve their disagreement, the matter shall be submitted to arbitration in accordance with Section 12.9. 

 
 

ARTICLE V—REPORTS AND RECORDS    
    

	5.1
	OBI
shall keep full, true and accurate books of account containing all particulars that may be necessary for the purpose of showing the amounts payable to OPTIMER hereunder. Said
books and records shall be maintained for a period of no less than five (5) years following the period to which they pertain. For the term of this Agreement, upon thirty (30) days prior
written notice, OBI shall allow OPTIMER's own accountants or independent accountants selected by OPTIMER, which independent accountants shall be reasonably acceptable to OBI and after entering into a
confidentiality agreement with OBI, to inspect such books and records for the sole purpose of verifying OBI's royalty statement or compliance in other respects with this Agreement. In the case of
independent accountants, such accountants shall report to OPTIMER only whether there has been a royalty underpayment and, if so, the amount thereof. 

Such
inspections shall be during normal working hours of OBI, and shall occur no more frequently than once per calendar year. Should such inspection lead to the discovery of a greater than ten percent
(10%) discrepancy in reporting to OPTIMER's detriment, OBI agrees to pay the full cost of such inspection. 

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

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

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

	(c)
	Deductions
applicable as provided in Paragraph 1.8. 

 
 

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	(d)
	Total
royalties due.

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

	(f)
	Total
sublicensing fee income described in Section 4.1(d).

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

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

 
 

ARTICLE VI—PATENT PROSECUTION    
    

	6.1
	OBI
shall be responsible for and pay all future costs and expenses incurred by OPTIMER for the preparation, filing, prosecution, issuance, and maintenance of Candidate Patents in the
Candidate Territory. For costs and expenses incurred prior to the Effective Date of this Agreement shall be reimbursed to OPTIMER by OBI as a one-time payment of $10,000 and shall be paid
by OBI within forty-five (45) days of the Effective Date. Such costs and expenses incurred after the Effective Date shall be paid by OBI as they are incurred.

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

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

 
 

ARTICLE VII—INFRINGEMENT    
    

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

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

 
 

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

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

	7.5
	As
between OPTIMER and OBI, OPTIMER shall retain sole control over the enforcement of the OPTIMER Patents except with respect to the Candidate Patents as expressly provided in
Article VII.

	7.6
	In
any infringement suit as either party may institute to enforce the OPTIMER Patents against third parties pursuant to this Agreement, or in any infringement action brought against
either party by a third party, each party hereto shall, at the request and expense of the other party, cooperate in all respects and, to the extent possible, have its employees testify when requested
and make available relevant records, papers, information, samples, specimens, and the like. 

 
 

ARTICLE VIII—INDEMNIFICATION, PRODUCT LIABILITY, WARRANTIES    
    

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

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

	8.3
	OPTIMER
represents and warrants that: (i) it is a Delaware corporation duly organized validly existing and in good standing under the laws of Delaware; (ii) the
execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of OPTIMER; (iii) OPTIMER has the right to grant the rights and
licenses granted herein; (iv) to OPTIMER's knowledge, the OPTIMER Patents and Know-How are free and clear of any lien, encumbrance, or security interest; (viii) to OPTIMER's
knowledge, there are no threatened or pending actions, suits, investigations, claims or proceedings in any way relating to the OPTIMER Patents or Know-How. 

 
 

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19

 
	8.4
	In
the event that any indemnitee intends to claim indemnification under this Article VIII it shall promptly notify the other party in writing of such potential liability. The
indemnifying party shall have the right to control the defense thereof. The affected indemnitees shall cooperate fully with the indemnifying party and its legal representatives in the investigation
and conduct of any liability covered by this Article VIII. Notwithstanding the foregoing, neither party shall have indemnity obligations for any claim if the indemnitee seeking indemnification
makes any admission, settlement or other communication regarding such claim without the prior written consent of the indemnifying party.

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

 
 

ARTICLE IX—EXPORT CONTROLS    
    

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

 
 

ARTICLE X—NON-USE OF NAMES    
    

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

 
 

ARTICLE XI—ASSIGNMENT    
    

	11.1
	This
Agreement may not be assigned by OBI without prior written consent from OPTIMER. OPTIMER may assign this Agreement freely.

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

 
 

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20

 
 
 

ARTICLE XII—TERMINATION    
    

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

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

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

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

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

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

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

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

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

 
 

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21

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

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

 
 

ARTICLE XIII—PAYMENTS, NOTICES AND OTHER COMMUNICATIONS    
    

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

In
the case of OPTIMER: 

Optimer
Pharmaceuticals, Inc.

10110 Sorrento Valley Road, Suite C

San Diego, CA 92121 USA

Attention: Norman K. Orida, Ph.D.

Vice President, Business Development 

In
the case of OBI: 

Optimer
Biotechnology, Inc.

Suite D

14th Floor

207 Tun Hwa S. Road

Taipei 106, Taiwan

Attention: Ying-Cheun Lee

Executive Vice President, Commercial Operations 

 
 

ARTICLE XIV—MISCELLANEOUS PROVISIONS    
    

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

	14.2
	Except
as expressly provided in this Agreement, neither party shall use for its own benefit or the benefit of any third party, or disclose to any third party with the exception of
any governmental regulatory body, any confidential, proprietary or trade secret information (the "Confidential Information") received from the other party hereto, during the term of this
Agreement and for five (5) years thereafter. 

Disclosure
of Confidential Information to any local governmental regulatory body for grant of approval or marketing of a Licensed Product or in response to any inquiry from a local governmental
regulatory body shall be allowed by mutual written consent of both OPTIMER and OBI. All Confidential Information must be designated as such by disclosing party in writing at or before the disclosure
is made in writing, or within thirty (30) days of such disclosure. 

 
 

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22

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

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

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

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

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

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

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

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

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

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

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

 
 

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23

 
	14.8
	EXCEPT
IN CONNECTION WITH SECTION 8.1 OR A BREACH OF SECTION 14.2, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES
ARISING OUT OF THE PERFORMANCE OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

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

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

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

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

	 Optimer Biotechnology, Inc.	 	Optimer Pharmaceuticals, Inc.
	    	 	 	 	 
	By:	/s/ Ying-Cheun Lee	 	By:	/s/ Norman K. Orida, Ph.D.
	 	
	 	 	

	 	Ying-Cheun Lee

Executive Vice President	 	 	Norman K. Orida, Ph.D.

Vice President, Business Development
	    	 	 	 	 
	Date:	12/8/03	 	Date:	12/8/03
	 	
	 	 	

 
 

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24

  

 
 

EXHIBIT A    
    

        "OPTIMER Patents" means all the United States patents and patent applications listed below, and their continuations,
continuations-in-part, divisionals, and other continuing applications, all patents issuing on the foregoing, all reissues, re-examinations, extensions of any kind,
substitutions, registrations and corresponding foreign patents and patent applications: 

OPT-22 Patents A  

        US patent 5,708,163 "Synthesis of the Breast Tumor-Associated Antigen Defined by Monoclonal Antibody MBrl and Uses Thereof" 

        US
patent 6,090,789 "Synthesis of the Breast Tumor-Associated Antigen Defined by Monoclonal Antibody MBrl and Uses Thereof" 

        US
patent application 09/017,611 "Synthesis of Glycoconjugates of the Globo-H Epitope and Uses Thereof" 

OPT-22 Patents B  

        US patent application 09/083,776 "alpha-O-Linked Glycoconjugates With Clustered
(2, 6)-Epitopes, Methods of Preparation and Uses Thereof" 

        US
patent application 09/276,595 "Trimeric Antigenic O-Linked Glycopeptide Conjugates, Methods of Preparation and Uses Thereof" 

        US
patent application 09/641,742 "Novel Glycoconjugates, Glycoamino Acids, Intermediates Thereto, and Uses Thereof" 

OPT-22 Patents C  

        US patent 5,543,505 "Synthetic Compounds Which Bind to H. Pylori, and Uses Thereof" 

        US
patent 6,303,120 "Synthesis of Glycoconjugates of the Lewis Y Epitope and Uses Thereof," which is jointly owned by OPTIMER and The Trustees of Columbia University in the City of
New York. 

        US
patent 6,238,668 "Colon Cancer KH-1 and N3 Antigens" 

        US
patent application 09/833,327 "Colon Cancer KH-1 and N3 Antigens" 

        US
patent application 09/534,712 "Fucosyl GM1-KLH Conjugate Vaccine Against Small Cell Lung Cancer" 

OPT-22 Patents D  

        US patent application 09/794,905 "Affinity Matrix Bearing Tumor-Associated Carbohydrate- or Glycopeptide-Based Antigens and Uses Thereof" 

Chemzyme Category Patents  

        US provisional patent application #60/096,003 "Alpha 2,8/2,9 Polysialyltransferase" 

OPopSTM Category Patents  

        US provisional patent application #60/096/001. "Programmed One-Pot Multistep Assembly of Oligosaccharides." 

OPT-80 Patents  

        US provisional patent application #60/399,956. "Tiacumicin Production." 

 
 

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25

 
 
 

EXHIBIT B
  
    Optimer-Scripps Research Institute License Agreement    
    

 
 

[Please see Sections 2.7 through 2.12 of "License Agreement between The Scripps Research Institute and Optimer Pharmaceuticals, Inc."  attached as Exhibit 10.7 to this Amendment No. 3 to Optimer Pharmaceuticals,
Inc.'s Form S-1 Registration Statement]    

26

 
 

EXHIBIT C
  
    Stock Issuance Agreement
  
    [Not Attached]    
    

QuickLinks

Exhibit 10.11

Amendment of License Agreement between Optimer Pharmaceutical, Inc Delaware Corporation and Optimer Biotechnology, Inc., A Taiwan Corporation

Article II—Grant

Article III—Due Diligence. Regulatory Matters

Article IV—Payments

Article VI—Patent prosecution

Article X—Non-use of names

Article XI—Assignment

Article XIII—Payments, notices and other communications

EXHIBIT A—UPDATE

LICENSE AGREEMENT

By and between

Optimer Pharmaceuticals, Inc. A Delaware Corporation

And

Optimer Biotechnology, Inc. A Taiwan Corporation

TABLE OF CONTENTS

CONFIDENTIAL

WITNESSETH

ARTICLE I—DEFINITIONS

CONFIDENTIAL

CONFIDENTIAL

ARTICLE II—GRANT

CONFIDENTIAL

CONFIDENTIAL

ARTICLE III—DUE DILIGENCE, REGULATORY MATTERS

CONFIDENTIAL

ARTICLE IV—PAYMENTS

CONFIDENTIAL

CONFIDENTIAL

ARTICLE V—REPORTS AND RECORDS

CONFIDENTIAL

ARTICLE VI—PATENT PROSECUTION

ARTICLE VII—INFRINGEMENT

CONFIDENTIAL

ARTICLE VIII—INDEMNIFICATION, PRODUCT LIABILITY, WARRANTIES

CONFIDENTIAL

ARTICLE IX—EXPORT CONTROLS

ARTICLE X—NON-USE OF NAMES

ARTICLE XI—ASSIGNMENT

CONFIDENTIAL

ARTICLE XII—TERMINATION

CONFIDENTIAL

ARTICLE XIII—PAYMENTS, NOTICES AND OTHER COMMUNICATIONS

ARTICLE XIV—MISCELLANEOUS PROVISIONS

CONFIDENTIAL

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EXHIBIT A

CONFIDENTIAL

EXHIBIT B Optimer-Scripps Research Institute License Agreement

[Please see Sections 2.7 through 2.12 of "License Agreement between The Scripps Research Institute and Optimer Pharmaceuticals, Inc." attached as Exhibit 10.7 to this Amendment No. 3 to Optimer Pharmaceuticals,
Inc.'s Form S-1 Registration Statement]

EXHIBIT C Stock Issuance Agreement [Not Attached]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}]]