Execution Copy LICENSE AGREEMENT

1

Definitions.

1.9

“Know-How” means any and all information, data and materials relating to Products known by Licensor but not generally known or available, which information, data and materials are necessary or useful in order to develop, market, use, distribute, import, export, offer to sell or sell (but not produce or manufacture) Products in accordance with this Agreement.

1.10

“LIBOR” means the London Inter Bank Offered Rate as quoted each day at 1600 GMT.

1.11

“Milestone Event” means the event that triggers the payment of a milestone, according to section 3.

1.12

“NDA” means a new drug application submitted to the FDA for approval to market, distribute and sell a pharmaceutical product in the Territory.

1.13

“NDA Acceptance” means the date on which the FDA or other Regulatory Authority accepts for filing Licensee’s application for Regulatory Approval for the applicable Product.

1.14

“Net Sales” means, with respect to the applicable period, the amount billed or invoiced by Licensee or its Affiliates to customers or unrelated third parties for each Product, less all allowances for discounts, rebates, charge-backs, which are reasonable and in good commercial practice, allowances for Product returns actually credited to third parties due to defective or expired Product, taxes and similar customary deductions, as calculated in accordance with Licensee’s standard accounting principles and GAAP and reported in Licensee’s filings with the Securities and Exchange Commission.

1.15

“Orange Book” means the listing published by the FDA that specifies patent rights applicable to approved drug products, which is available electronically at http://www.fda.gov/cder/ob/.

1.16

“Party” means either Licensor or Licensee and “Parties” shall mean both Licensor and Licensee, collectively.

1.17

“Patents” means:

as for Product A as hereinafter defined: (a) International Application WO/2000/76478, US App. No. 10/009,532 titled

“Controlled Release And Taste Masking Oral Pharmaceutical Compositions”, US App. No. 11, 268/500 titled “Controlled Release And Taste Masking Oral Pharmaceutical Compositions”, and related applications thereof, including all other provisional and other patent applications that Licensor, Cosmo Pharmaceuticals SpA or respective Affiliates own or control, as of the Effective Date, or at any time during the term of this Agreement in the Territory related to making, using, or selling or offering to sell (but not, for the purpose of this Agreement, producing or manufacturing), Product A, or that claim or cover the Product, including the patents listed on Schedule A hereto; (b) all patent applications filed either from such patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals, continued prosecution applications including, but not limited to, US App. No 12/210,969, (c) any and all patents that have issued or in the future issue from the foregoing patent applications, including utility, model and design patents and certificates of invention, including, but not limited to, US Patent No. 7,410,651 titled “Controlled release and taste masking oral pharmaceutical compositions”, US Patent No. 7.431,943 titled “Controlled release and taste masking oral pharmaceutical compositions”, (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, including substitutions, revalidations, reissues, renewals, re-examinations, extensions (including any supplementary protection certificates and the like), or any confirmation patent or registration patent or patent additions to any such foregoing patent applications and patents and (e) the inventions claimed or covered therein, for the sole part pertaining to Product A. The patents and patent applications listed in Schedule A shall inter alia be included in the term “Patents A”;

as for Product B as hereinafter defined: (a) International Application WO/2000/76478, International Application WO/2006/003043, US App. No. 10/009,532 titled “Controlled Release And Taste Masking Oral Pharmaceutical Compositions”, US Patent Application No. 11/571,044 titled “Oral Antimicrobial Pharmaceutical Compositions”, and related applications thereof, including provisional and other patent applications that Licensor, Cosmo Pharmaceuticals SpA or their respective Affiliates, own or control, as of the Effective Date, or at any time during the term of this Agreement in the Territory related to making, using, or selling or offering to sell (but not, for the purpose of this Agreement,

producing or manufacturing) Product B, or that claim or cover the Product, including the patents listed on Schedule B hereto, (b) all patent applications filed either from such patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals, continued prosecution applications, (c) any and all patents that have issued or in the future issue from the foregoing patent applications, including utility, model and design patents and certificates of invention, including, but not limited to, US Patent No. 7,431,943 titled “Controlled Release And Taste Masking Oral Pharmaceutical Compositions”, (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, including substitutions, revalidations, reissues, renewals, re-examinations, extensions (including any supplementary protection certificates and the like), or any confirmation patent or registration patent or patent additions to any such foregoing patent applications and patents and (e) the inventions claimed or covered therein, for the sole part pertaining to Products B. The patents and patent applications listed in Schedule B shall inter alia be included in the term “Patents B”.

Law in any jurisdiction in the Territory to exploit such Product or Improvements thereto in accordance with the licenses granted to Licensee hereunder.

through reissue, disclaimer, or otherwise (i.e., only to the extent the subject matter is disclaimed or is sought to be deleted or amended through reissue), or (b) a claim of a pending patent application within the Patents with respect to Product A or Product B, as applicable, that has not been abandoned, finally rejected, or expired without the possibility of appeal or refiling; provided, however, that “Valid Claim” shall exclude any such pending claim in an application that has not been granted within [***] years following the earliest priority filing date for such application (unless and until such claim is granted).

2.1

Licensor grants, and Licensee accepts, upon the terms set forth in this Agreement, an Exclusive, irrevocable right and license in the Territory, under the Patents and the Know-How, to develop, market, use, distribute, import, export, offer to sell and sell (but not produce or manufacture) the Products and any Improvements thereto.

2.2

Licensor grants, and Licensee accepts, upon the terms set forth in this Agreement, an Exclusive, irrevocable license to use the Trademarks to develop, market, use, distribute, import, export, offer to sell and sell the Products and any Improvements in the Territory.

2.3

Licensee is not entitled to sublicense the rights granted in this Section 2 without the prior written consent of Licensor.

2.4

The license is limited to the oral formulations of:

2.5

Licensor, in addition, reserves the right to use the Patents for research purposes, publish or otherwise disseminate any information about the Patents, provided that any research of the Products in the Territory shall be coordinated between the Parties. Diffusion of new information on the Products (including research papers, scientific posters, clinical trial data) shall be coordinated between the Parties.

3.1

In consideration for the rights and license granted by Licensor to Licensee herein, Licensee agrees to make the following payments to Licensor:

3.1.2

Regulatory Milestones

3.1.3

Commercial Milestones

3.1.4

At the election of Licensor (such election to be made within 30 (thirty) days from the receipt by Licensor of notice that a Milestone Event has occurred), each Regulatory Milestone and Commercial Milestone shall be paid in newly issued shares of Licensee’s common stock. Such shares shall be issued to Licensor at the Share Price within the following 10 working days from Licensor’s election. The amount of shares issued shall be calculated by dividing the Regulatory Milestone or Commercial Milestone due by the Share Price and rounded to the lower full share amount with the fraction paid in cash.

3.2

As additional consideration for the rights and licenses granted by Licensor to Licensee herein, Licensee agrees:

3.2.1

to pay a portion (as hereinafter provided) of direct third party costs of clinical trials and registration costs paid by Licensor (“Direct Costs”) before or after the Effective Date under Third Party Agreements necessary to achieve Regulatory Approval for Product A. Licensee in this respect acknowledges that Licensor has already undertaken certain obligations under the Third Party Agreements for phase III clinical trials of Product A and that such clinical trials design assumes that the relevant data shall be collected both from European and North-American countries, for the simultaneous use towards both FDA and EMEA for the scope of Regulatory Approval for Product A. Licensee accepts therefore under this section to reimburse Licensor 50% of all phase III clinical trials Direct Costs. In this respect and additionally, on or before January 31, 2009 and subject to Licensee receiving an invoice therefore, Licensee shall reimburse Licensor EUR 1.617.500 and USD 737.124 (equal to 50% of phase III clinical trial Direct Costs already borne for the current phase III clinical trials for Product A, amounting to, as of November 18, 2008, to EUR 3.235.000 and USD 1.474.248). Subsequent costs shall be reimbursed accordingly by Licensee to Licensor in the same proportion on a monthly basis within 30 (thirty) days following an invoice from Licensor, which shall be provided within 10 (ten) days following month’s end. If clinical work is required to obtain Regulatory Approval to market Product A in addition to that specifically contemplated in the Third Party Agreements, the Parties shall agree on the additional work to be performed and on an equitable division of the costs therefore, consistent with the equal division of expenses set forth under this section 3.2.1.

3.2.2

to pay the costs of one phase III clinical trial and registration costs necessary to achieve Regulatory Approval for Product B, provided that Licensor and/or its licensee in the EU shall be responsible for conducting a second phase III clinical trial in the same indication. If clinical work is required to obtain Regulatory Approval to market Product B in addition to the two contemplated pivotal phase III clinical studies, the Parties shall agree on the additional work to be performed and on an equitable division of the costs therefore, consistent

with the division of expenses set forth under this section 3.2.2. If, for whatever reason, additional pre-clinical studies should be required, Licensor shall be in charge of them at its own expense.

3.3

As additional consideration for the rights and licenses granted by Licensor to Licensee herein, subject to Sections 3.4 and 3.5. during the Royalty Term, Licensee agrees to pay to Licensor:

3.4

The royalties may be reduced at any time prior to the expiry of the last Valid Claim with respect to a Product in the Territory to account for any and all royalties or other payments paid by Licensee to any third party, under (a) any license that would be necessary for Licensee to resolve any claims that the Product infringes or misappropriates the intellectual property rights of any third party; or (b) any final judgment awarded against Licensee for damages for infringement of third party intellectual property rights consistent with the foregoing sub-section (a). Licensee shall

use commercially reasonable efforts to minimize any such royalties or other payments to third parties on account of sales of Product hereunder. The reduction shall not exceed an amount equal to 50% of the royalty payable to Licensor according to section 3.3.

4

Reports, Records and Payments.

4.2

Licensee shall keep accurate and correct records of all Products sold. Such records shall be retained by Licensee for at least 5 (five) years following a given reporting period.

4.3

All relevant records shall be available during normal business hours for inspection at the expense of Licensor by a certified public accountant selected by Licensor and in compliance with the other terms of this Agreement for the sole purpose of verifying reports and payments. Such inspections shall occur no more than once per calendar year and Licensor shall provide at least thirty (30) days written notice prior to such an inspection. Such inspector shall not disclose to Licensor any information other than information relating to the accuracy of reports and payments made under this Agreement or other compliance issues. In the event that any such inspection shows an under reporting and underpayment in excess of five percent (5%) for any twelve (12) month period, then Licensee shall pay the cost of the audit as well as any additional sum that would have been payable to Licensor had the Licensee reported correctly, plus an interest charge at a rate of LIBOR [***]. Such interest shall be calculated from the date the correct payment was due to Licensor up to the date when such payment is actually made by Licensee. For an underpayment not in excess of five percent (5%) for any twelve (12) month period, Licensee shall pay the difference within thirty (30) days without inspection cost charge but with interest charge of LIBOR [***]. With respect to any overpayment, Licensor shall credit the amount of such overpayment against any future amounts owed by Licensee pursuant to this Agreement, or if no further payments are due by Licensee hereunder, Licensor shall promptly refund the full amount of the overpayment to Licensee.

4.4

All cash fees and royalties due to Licensor shall be paid in USD. All payments due to Licensor shall be made by electronic transfer (wire-transfer) to the account that Licensor shall timely communicate to Licensee.

fulfilment of Licensor’s tax liability in any particular country may be credited against earned royalties or fees due to Licensor for that country. For the avoidance of doubt, if there is a royalty paid to Licensor subject to a withholding tax imposed on Licensor, Licensee is entitled to reduce royalties by such amount required to be remitted to a government on behalf of Licensor. Licensee shall pay all its bank charges resulting from the execution of such royalty payments.

4.6

In the event royalty, reimbursement and/or fee payments are not received by Licensor when due, Licensee shall pay to Licensor interest charges at a rate of LIBOR [***]. Such interest shall be calculated from the date