LICENSE AGREEMENT

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act Of 1933, as amended.

Exhibit 10.14

LICENSE AGREEMENT

     This License Agreement (hereinafter referred to as the “ Agreement ”) made and entered into as of March 15, 2004 (hereinafter referred to as the “ Effective Date ”) by and between DAIICHI SUNTORY PHARMA CO., LTD., a corporation organized and existing under the laws of Japan and having its registered office at 7-2, Kojimachi 5-chome, Chiyoda-ku, Tokyo 102-8530, Japan (hereinafter referred to as “ DSP ”) and REPLIDYNE, INC., a corporation organized and existing under the laws of the State of Delaware, having its principal business office at 1450 Infinite Drive, Louisville, Colorado 80027, U.S.A. (hereinafter referred to as “ REPLIDYNE ”). DSP and REPLIDYNE are sometimes referred to collectively herein as the “ Parties ” or individually as a “ Party ”.

WITNESSETH

WHEREAS, Suntory Ltd., Tokyo, Japan (hereinafter referred to as “ SUNTORY ”) has developed a pharmaceutical compound known as faropenem daloxate (hereinafter referred to as the “ Drug Substance ”); and

WHEREAS, SUNTORY has licensed the Drug Substance to Wyeth-Ayerst (hereinafter referred to as “ WYETH ”) for certain territories in the world under the license agreement dated May 27, 1992, which was subsequently terminated on March 22, 1996; and

WHEREAS, SUNTORY has licensed the Drug Substance to Bayer AG (hereinafter referred to as “ BAYER ”) for certain territories in the world under the license agreement dated June 28, 1999 (hereinafter referred to as “ SUNTORY-BAYER License Agreement ”); and

WHEREAS, SUNTORY has assigned all of its pharmaceutical business to DSP as of December 27, 2002, including, without limitation, its rights and obligations under the SUNTORY-BAYER License Agreement; and

WHEREAS, BAYER has developed certain scientific information and data relating to Drug Substance and to Drug Products (as hereinafter defined) under the SUNTORY-BAYER License Agreement; and

WHEREAS, DSP and BAYER have terminated the SUNTORY-BAYER License Agreement under the termination agreement dated November 19, 2003, (hereinafter referred to as the “ TERMINATION AGREEMENT ”); and

WHEREAS, BAYER has agreed to disclose and have DSP or its third party licensee use the BAYER KNOW-HOW (as hereinafter defined) under the TERMINATION AGREEMENT; and

WHEREAS, DSP has developed certain scientific information and data relating to the Drug Substance and to the Drug Products; and

WHEREAS, DSP has transmitted certain information relating to Drug Substance and Drug Products to REPLIDYNE, pursuant to the confidentiality agreements entered into as of June 25, 2003 and October 15, 2003 by and between DSP and REPLIDYNE and the letter of intent entered into as of October 23, 2003, as amended, effective November 30, 2003, between DSP and REPLIDYNE (collectively hereinafter referred to as the “ LOI ”) for the purpose of REPLIDYNE’s performance of due diligence with respect to the Drug Substance and Drug Products (hereinafter referred to as “ Prior Agreements ”); and

WHEREAS, REPLIDYNE has expressed its desire to DSP to obtain an exclusive license under the Patents (as hereinafter defined) and the Know-How (as hereinafter defined) to develop and commercialize Drug Products in the Territory (as hereinafter defined) under the terms and conditions of this Agreement, and DSP is willing to grant such a license to REPLIDYNE under such terms and conditions; and

NOW, THEREFORE, for and in consideration of the premises and covenants contained herein, DSP and REPLIDYNE agree as follows:

ARTICLE 1. DEFINITIONS.

     In this Agreement, the following terms shall have the meanings respectively indicated in this Article:

      1.1 “Act” means the United States Federal Food Drug and Cosmetic Act (21 U.S.C. Section 301 et seq.), as amended from time to time.

      1.2 “Affiliates” means any entity which directly or indirectly controls, is controlled by, or is under common control with a specified entity. For purposes of this Section 1.2 , an entity is deemed to be in control of another entity if the former has the direct or indirect power to control the management and policies of the latter, whether through ownership of voting securities, by contract, or otherwise.

      1.3 “Applicable Law(s)” means the Act, Regulations and all other applicable laws, rules, regulations and guidelines that apply to the import, export, development, marketing, distribution or sale of Drug Products in the Territory or the performance of either Party’s obligations under this Agreement, to the extent applicable and relevant, including without limitation cGMP (as hereinafter defined) and current Good Clinical Practices standards or similar guidelines promulgated by the Regulatory Authorities.

      1.4 “Approval Letter” means a letter issued by the FDA notifying the approval of a product for commercialization as defined in 21 CFR (hereinafter defined) Section 314.105 in the U.S. or equivalent letter issued by the applicable Regulatory Authority in any other country in the Territory, pursuant to Applicable Laws in each country in the Territory.

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act of 1933, as amended.

      1.5 “BAYER KNOW-HOW” means the data, information, documentation, know-how and technology, relating to Drug Substance and/or Drug Products which has been generated or acquired, if any, at any time by BAYER and/or its Affiliates, including, but not limited to, (a) regulatory filings, (b) pre-clinical and clinical development protocols, data, and reports, (c) manufacturing process development technical reports and (d) toxicology reports.

      1.6 “CFR” means the United States Code of Federal Regulations, as amended from time to time.

      1.7 “Ciba-Geigy (Novartis) Patents” means the patents owned by Ciba-Geigy (currently Novartis) as listed in Appendix B hereof.

      1.8 “cGMP” means current good manufacturing practices as defined in 21 CFR Sections 210 and 211 and established under the Act and the Regulations, as amended from time to time.

      1.9 “Combination Product(s)” means a Drug Product containing one or more other therapeutically active ingredients in addition to the Drug Substance.

      1.10 “Commercially Reasonable Efforts” means, except as otherwise explicitly set forth in this Agreement, those diligent efforts that an ordinary biotechnology company or pharmaceutical company would reasonably devote to a product of similar market potential, profit potential or strategic value resulting from its own research efforts, based on conditions then prevailing, consistent with the exercise of prudent scientific and/or business judgment in accordance with generally accepted practices in the pharmaceutical industry.

      1.11 “Competitive Product” has the meaning set forth in Article 15 .

      1.12 “Control” or “Controlled” means, with respect to particular information or intellectual property, that the applicable Party owns or has a license to such information or intellectual property and has the right to grant to the other Party access and a license to such information or intellectual property as provided in this Agreement without violating any prior obligations to any Third Party.

      1.13 “Co-Promotion” means the activities of both REPLIDYNE (or REPLIDYNE’s Affiliates) and a Third Party, including if applicable, pursuant to any agreement between the Parties pursuant to Section 8.2 , DSP or DSP’s Affiliates, in promoting the Drug Products under the same Trademark (as hereinafter defined) in accordance with the terms and conditions of this Agreement.

      1.14 “Development Plan” means the development plan that provides a written summary description of all planned activities for the Development (as defined in Section 4.1 ) of the Drug Product to be performed by REPLIDYNE or on behalf of REPLIDYNE within a defined time schedule, based on an initial plan to be prepared by REPLIDYNE within three (3) months of the Effective Date, as may be modified by the Parties pursuant to Section 4.2 .

      1.15 “Drug Master File” means the drug master file, as defined in 21 CFR Section 314.420 or successor provision, filed with the U.S. FDA with respect to Drug Substance, and other

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act of 1933, as amended.

filings in other countries in the Territory similar to such drug master file which permit DSP to authorize others to rely on the information in such file to support an application for Regulatory Approval of Drug Products.

      1.16 “ Drug Product Contract Manufacturer ” means a Third Party engaged by or on behalf of REPLIDYNE to produce Drug Product from Drug Substance.

      1.17 “Drug Product(s)” means finished pharmaceutical preparations for human use in all dosage forms containing the Drug Substance as a sole active ingredient or in a Combination Product.

      1.18 “Drug Substance” means the chemical substance identified as faropenem daloxate as its generic name (code number: SUN A0026) and having the chemical structure: (5-Methyl-2-oxo-1,      3-dioxolen-4-yl)      methyl      (5R, 6S)-6-[(R)-1-hydroxyethyl]-2-[(R)-2-tetrahydro-furyl] penem-3-carboxylate.

      1.19 “Drug Substance in the Potency Basis” means the quantity of the Drug Substance divided by one point three nine three (1.393), representing the quantity of active faropenem.

      1.20 “DSP Improvement” means any and all developments, enhancements, modifications, inventions or discoveries in the Field relating to Drug Products for use in the Field, that are developed or created by or on behalf of DSP (other than by REPLIDYNE or its Representatives) at any time during the Term of this Agreement, whether patentable or not, including but not limited to, developments, inventions or discoveries intended to enhance the safety or efficacy of Drug Substance and/or Drug Products, and all intellectual property rights thereto which are necessary or useful for REPLIDYNE to exercise the rights licensed to it under Section 2.1 of this Agreement, but excluding those related specifically to manufacturing of Drug Substance.

      1.21 “DSP KNOW-HOW” means any and all data, information, documentation, know-how and technology, whether patentable or not, relating to Drug Substance and /or Drug Products, including, without limitation, information regarding their stability, pharmacology, toxicology, clinical use, compositions and formulations for administration and any scientific information and data developed by WYETH relating to Drug Substance and to Drug Products; in each case which was generated or acquired by DSP and/or its Affiliates prior to the Effective Date or is generated by DSP and/or its Affiliates during the Term of this Agreement, but excluding those related specifically to manufacturing of Drug Substance.

      1.22 “DSP Logogram” means DSP’s logogram adopted by DSP at any time during the Term of this Agreement.

      1.23 “DSP Patents” means the patent applications and patents listed in Appendix A attached hereto, and patents issuing from such patent applications, and any and all patents and patent applications covering DSP Improvements, in each case including any continuations, continuations-in-part, provisionals, divisionals, reissues, reexaminations, extensions, substitutions, restorations, additions, revalidations, registrations, confirmations, renewals and

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act of 1933, as amended.

counterparts thereof in all countries of the Territory which are necessary or useful for REPLIDYNE in the use, development, manufacture, marketing, promotion, distribution, sale and/or commercialization of Drug Products in the Territory for use in the Field.

      1.24 “FDA” means the United States Food and Drug Administration, or any successor entity thereto.

      1.25 “Field” means all uses of the Drug Product to treat, ameliorate or prevent infectious diseases in humans.

      1.26 “Good Clinical Practices” means the then current standards for the performance of clinical trials for pharmaceuticals, as set forth in the Act, applicable Regulations and guidance documents promulgated thereunder, as amended from time to time.

      1.27 “Know-How” means the BAYER KNOW-HOW and the DSP KNOW-HOW collectively.

      1.28 “Launch” means the first invoiced sale of a Drug Product by REPLIDYNE, its Affiliates or sublicensees, on a commercial basis to a Third Party (hereinafter defined) (other than a REPLIDYNE sublicensee) in a country of the Territory after Regulatory Approval has been granted by the Regulatory Authority of that country as part of a comprehensive, nationwide commercial introduction of the Drug Product in a manner comparable to the commercial introduction of other community antibiotics in the pharmaceutical industry.

      1.29 “NDA” means New Drug Application filed with the FDA for Regulatory Approval, along with any supplements and/or amendments to any NDA, or any other equivalent application in any country in the Territory other than the U.S.

      1.30 “Net Sales” means with respect to Drug Products which only contain the Drug Substance and no other therapeutically active ingredients, gross sales of REPLIDYNE or its sublicensees of the Drug Products to unaffiliated Third Parties in the applicable country, less:

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act of 1933, as amended.

     Amounts received by REPLIDYNE or its Affiliates or sublicensees for the sale of Drug Products among REPLIDYNE and its Affiliates or sublicensees for resale shall not be included in the computation of Net Sales hereunder.

     In the case of the Combination Products, the Net Sales shall be calculated by multiplying actual Net Sales of the Combination Product (calculated as if such Combination Product did not contain other therapeutically active ingredients) by the fraction A/(A+B) where A is the invoice price of the Drug Product containing only Drug Substance, if sold separately, and B is the total invoice price of the other active ingredient or ingredients in the combination, if sold separately. If, on a country-by-country basis, the other active ingredient or ingredients in the combination are not sold separately in said country, Net Sales shall be calculated by multiplying actual Net Sales thereof by the fraction A/C where A is the invoice price of the Drug Product containing only Drug Substance, if sold separately, and C is the invoice price of the Combination Product.

     If, on a country-by-country basis, the Drug Product containing only Drug Substance is not sold separately in said country, the Parties shall, in good faith, negotiate and agree upon how to calculate the Net Sales on sales of the Combination Product, with a view to achieving to the greatest extent possible the economic balance and mutual understanding already established between the Parties for calculation of Net Sales on the Combination Product.

      1.31 “NISSO” means Nippon Soda Co., Ltd. which is the contract manufacturer of the Drug Substance for DSP.

      1.32 “Patents” means the Ciba-Geigy (Novartis) Patents and the DSP Patents collectively.

      1.33 “Regulations” means regulations, statutes, rules, guidelines and procedures promulgated by the FDA and any other Regulatory Authority pursuant to the Act or other law applicable to the manufacture, use or sale of the Drug Products in the Territory, including without limitation those regulations currently contained in Title 21 of the CFR.

      1.34 “Regulatory Approval” means authorization granted by a Regulatory Authority to market and sell Drug Products in a country in the Territory that is required before Drug Products may be commercially marketed and sold in such country, including without limitation any pricing and/or reimbursement approval(s) which must be obtained before placing a Drug Product on the market in any country in the Territory in which such approval(s) is required.

      1.35 “Regulatory Authority(ies)” means any regulatory agency, department, bureau, or other governmental entity, including without limitation the FDA, which is responsible for issuing approvals, licenses, registrations, clearances, or authorizations necessary for the manufacture, use, storage, import, transport, marketing or sale of Drug Substance and/or Drug Products in a country in the Territory.

      1.36 “REPLIDYNE Improvement” means any and all developments, enhancements, modifications, inventions or discoveries in the Field relating to Drug Products (but excluding those related to Drug Substance) for use in the Field and under the Control of REPLIDYNE that are developed or created by or on behalf of REPLIDYNE at any time during the Term of this

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act of 1933, as amended.

Agreement, whether patentable or not, including, but not be limited to, developments, inventions or discoveries intended to enhance the safety or efficacy of Drug Products, and all intellectual property rights thereto which are necessary or useful for REPLIDYNE to exercise the rights licensed to it under Section 2.1 of this Agreement.

      1.37 “Representatives” means, in respect of a Party, its Affiliates, licensees, sublicensees, and their respective employees, agents, consultants, subcontractors and other representatives. DSP’s Representatives shall include NISSO. REPLIDYNE’s Representatives shall include the Drug Product Contract Manufacturer, its sublicensees and other collaborators with respect to the Drug Products.

      1.38 “Sales and Marketing Plan” means the written description of all planned sales and marketing activities for the Drug Product in the Territory in the Field, including the sublicensing strategy, the personnel plan (including its time schedule) related to the recruitment, allocation, and the budget plan necessary to carry out such activities, and commencing at least three (3) months before Launch, a rolling five (5) year sales forecast for Drug Product.

      1.39 “Supply Agreement” means the agreement setting forth the terms and conditions for the supply of Drug Substance from NISSO to REPLIDYNE to be entered into, based upon the terms set forth in the Supply LOI (as hereinafter defined).

      1.40 “Supply LOI” means the supply letter of intent dated March 15, 2004 among DSP, NISSO and REPLIDYNE.

      1.41 “Term of this Agreement” shall mean the period during which this Agreement is in effect with respect to any country in the Territory, on a country-by-country basis, pursuant to Section 16.1 .

      1.42 “Territory” means the United States of America and Canada.

      1.43 “Third Party” means any entity other than DSP or REPLIDYNE or an Affiliate of DSP or REPLIDYNE.

      1.44 “Trademark” or “Trademarks” means the trademark or trademarks used solely for Drug Products in any or all countries of the Territory as selected in accordance with the terms of Article 9 , whether registered or not in any such countries.

      1.45 “U.S.” or “United States of America” means the fifty (50) states, the District of Columbia, all territories, possessions and commonwealths of the United States, Puerto Rico, Guam and the U.S. Virgin Islands.

ARTICLE 2. LICENSE GRANT.

      2.1 License Grant. Subject to the terms and conditions set forth herein, DSP hereby grants to REPLIDYNE an exclusive (even as to DSP) license, with the right to sublicense as provided in Section 2.4 , in the Field, under the Patents and the Know-How:

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act of 1933, as amended.

(a) to use the Drug Substance to conduct development of the Drug Product in the Territory and to conduct any development in the Territory;

(b) to use the Drug Substance to conduct development of Drug Products in Other Territories (hereinafter defined), solely for the purpose of obtaining Regulatory Approvals in the Territory, provided that REPLIDYNE obtains the prior written consent of DSP which consent shall not be unreasonably withheld or delayed, until the later of the expiration of the sole negotiation right in Section 2.2 or the completion of any development of Drug Products by REPLIDYNE, its Affiliates or sublicensees, commenced prior to such expiration;

(c) to manufacture, and have manufactured the Drug Products, within the Territory below, from the Drug Substance; and

(d) to use, promote, offer to sell, sell, have sold, import, and export Drug Products in the Territory.

It is also expressly understood that REPLIDYNE is not granted any rights under the Patents or the Know-How except as expressly licensed in the foregoing sentence. It is further expressly understood that said license shall not in any way be interpreted as granting REPLIDYNE a license to manufacture or have manufactured the Drug Substance or to sell the Drug Substance or export the Drug Substance or Drug Products to locations outside of the Territory, except as the Parties may otherwise agree pursuant to Section 2.2 or as provided in Section 2.3 .

      2.2 REPLIDYNE Right of Sole Negotiation for Other Territories. DSP also hereby grants REPLIDYNE the sole negotiation right (meaning DSP will not negotiate with any Third Party) to enter into any agreement(s) with DSP regarding the grant of exclusive rights to develop and commercialize Drug Substance and Drug Products in countries outside the Territory but excluding Japan (hereinafter referred to as “ Other Territories ”). Such sole negotiation right shall commence on the Effective Date and expire two (2) years after the first Launch of the Drug Product in the Territory. In addition, DSP will not itself, or through its Affiliates, commercialize the Drug Product in Other Territories during that time. REPLIDYNE may choose when to commence negotiations regarding such rights by written notice to DSP, with the understanding that DSP will require REPLIDYNE to use diligent efforts regarding the development in Other Territories, Regulatory Approval, launch, and marketing the Drug Product to pursue commercialization in Other Territories promptly following the grant of such rights. If the Parties are able to agree on the terms and conditions of such commercialization rights in Other Territories which terms and conditions shall be independent of the terms and conditions in this Agreement, the Parties will amend this Agreement to reflect such terms. If the Parties are unable to reach an agreement within [ *** ] after REPLIDYNE has elected to commence negotiations with DSP, then DSP may, following the end of such negotiation, itself commercialize Drug Products or negotiate with Third Parties regarding such rights, in each case solely in any country for which DSP and REPLIDYNE were unable to reach agreement. If DSP successfully enters into a license agreement with a Third Party for a country or countries for which DSP and REPLIDYNE were unable to reach agreement, then the Parties shall negotiate in good faith regarding the reasonable terms and conditions relating to DSP’s or its other licensee’s potential

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act of 1933, as amended.

use for commercialization in Other Territories of information, know-how, and documentation generated by REPLIDYNE under this Agreement, and reasonable compensation to REPLIDYNE for such access and the coordination of the parties’ activities within and outside the Territory.

      2.3 REPLIDYNE’s Manufacturing of Drug Products in Other Territories. REPLIDYNE may, on a non-exclusive basis, manufacture Drug Products, or have a Drug Product Contract Manufacturer manufacture Drug Products in Other Territories but solely for the purpose of commercialization of Drug Products inside the Territory.

      2.4 Sublicense by REPLIDYNE. REPLIDYNE may sublicense some or all of the rights licensed under Section 2.1 and 2.3 hereof to REPLIDYNE’s Affiliates or Third Parties, with [ *** ] . REPLIDYNE shall include in its agreements with any of REPLIDYNE’s Affiliates and any such Third Party sublicensed under this Section 2.4 , provisions that impose obligations that are consistent with the applicable obligations of REPLIDYNE under this Agreement. It is expressly understood that any sublicensing hereunder to any of REPLIDYNE’s Affiliates shall be subject to prior written notice to DSP and any sublicensing hereunder to any Third Parties shall be subject to the prior written approval of DSP, which approval shall not be unreasonably withheld or delayed. REPLIDYNE will notify DSP promptly following REPLIDYNE’s reaching an agreement in principle with a proposed Third Party sublicensee. At DSP’s request, REPLIDYNE will discuss with DSP REPLIDYNE’s proposed arrangement with such Third Party, excluding [ *** ] . It shall be reasonable for DSP to withhold its approval with respect to (a) any proposed Third Party sublicensee that also commercializes Competitive Product within the Territory, (b) any proposed Third Party sublicensee that also commercializes a Competitive Product outside the Territory (if such commercialization outside the Territory could reasonably have a material adverse effect on commercialization of Drug Product within the Territory), or (c) any proposed sublicensing arrangement which DSP reasonably concludes that such sublicensing arrangement will not provide for sufficient development and marketing capabilities to commercialize Drug Product to perform the Sales and Marketing Plan as stipulated in Section 8.1 of this Agreement.

      2.5 Extension of Patents. DSP and REPLIDYNE shall reasonably cooperate in obtaining an extension or restoration of the term of any of the DSP Patents, or in obtaining protection under a supplementary protection certificate or the like, where possible in the Territory. DSP shall bear expenses of such activities.

      2.6 Observance of Applicable Laws. The Parties shall exercise and perform their respective rights and obligations under this Agreement in accordance with the Applicable Laws.

      2.7 Sales Outside the Territory. To the extent not otherwise prohibited by law, REPLIDYNE shall not sell Drug Products to customers outside the Territory or to any party in the Territory which REPLIDYNE has reasonable grounds to believe is likely to export Drug Products outside the Territory. If REPLIDYNE becomes aware that a Third Party in the Territory is exporting Drug Products acquired from REPLIDYNE to a country outside the Territory, then REPLIDYNE shall use Commercially Reasonable Efforts within its legal rights and the remedies afforded by Applicable Laws to deter such Third Party from continuing such

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act of 1933, as amended.

exportation. All inquiries or orders received by REPLIDYNE for Drug Products to be delivered to outside Territory shall be referred to DSP.

ARTICLE 3. TECHNOLOGY TRANSFER.

      3.1 Disclosure of Know-How. The Parties acknowledge and agree that DSP shall disclose to REPLIDYNE within two (2) months after the Effective Date the DSP KNOW-HOW which DSP possesses as of the Effective Date and all BAYER KNOW-HOW which has been disclosed to DSP as of the Effective Date, which is necessary or useful for REPLIDYNE to exercise its rights under this Agreement, including, without limitation, the use, development, manufacture, marketing, promotion, distribution, sale and/or commercialization of Drug Products in the Territory. From time to time thereafter, DSP shall disclose promptly to REPLIDYNE any additional DSP KNOW-HOW that comes into DSP’s possession or Control during the Term of this Agreement. It is expressly understood that prior to the Effective Date hereof, DSP has already disclosed and provided to REPLIDYNE and REPLIDYNE received from DSP a part of the DSP KNOW-HOW and the BAYER KNOW-HOW under the Prior Agreements.

ARTICLE 4. DEVELOPMENT.

      4.1 Development. REPLIDYNE shall use its Commercially Reasonable Efforts to conduct all development activities necessary for obtaining Regulatory Approvals for the Launch and for any subsequent launch of the Drug Product in the Territory in the Field pursuant to the Development Plan (hereinafter referred to as “ Development ”). The Parties shall have a scientific meeting semi-annually to discuss the scientific matters related to the Development. Development in the United States shall satisfy REPLIDYNE’s obligation to use Commercially Reasonable Efforts with respect to Development in the Territory.

     The Development shall be the responsibility of REPLIDYNE and shall be conducted by REPLIDYNE or its sublicensee(s) or commercial partners at its or their own discretion, expense, and cost, including, but not limited to, the payment of any amounts required to be paid [ *** ] . [ *** ] .

      4.2 Modification of Development Plan. If, as the results of Development dictate, REPLIDYNE intends to substantially modify the Development Plan, REPLIDYNE shall notify DSP of such intention and the Parties shall promptly discuss, in good faith, such modification; provided, however , that if the Parties are unable to reach an agreement within sixty (60) days, REPLIDYNE shall have the right to make the final decision with respect to any such modifications.

      4.3 Reports on Development. Commencing six (6) months after a Development Plan is adopted, and every six (6) months thereafter during Development, REPLIDYNE shall furnish DSP with reports in English on the progress and the results of the Development under the then-current Development Plan being carried out by or on behalf of REPLIDYNE, its Affiliates,

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act of 1933, as amended.

or its Third Party sublicensees. Such report shall be deemed REPLIDYNE Confidential Information.

      4.4 Use of Data for Development in Other Territories. If DSP desires to commercialize the Drug Product in Japan or in Other Territories, subject to Section 2.2 , either itself or through an Affiliate or a Third Party, then upon DSP’s request to REPLIDYNE, the Parties shall negotiate in good faith regarding reasonable terms and conditions under which DSP, DSP’s Affiliates, or any Third Party licensee potentially may use the data, results or information from the Development conducted by REPLIDYNE under this Agreement including the documents for Regulatory Approval in the Territory as further provided in Section 2.2 .

      4.5 Compensation [ *** ] for Delay in Launch. The Parties recognize that [ *** ] Delay Compensation (hereinafter defined) in connection with [ *** ] . If it becomes necessary [ *** ] , as between DSP and REPLIDYNE, DSP shall be responsible for [ *** ] (which the Parties acknowledge has been caused by BAYER’s halting of development) and REPLIDYNE shall be responsible for [ *** ] (which the Parties acknowledge would be caused by the REPLIDYNE’s development). For the purpose of this Section 4.5 , the term “Delay Compensation” shall mean any compensation for [ *** ] in connection with the delay of launch from the date planned by BAYER to a later date, such as, but not limited to, amounts for [ *** ] . DSP represents and warrants that, as of the Effective Date, [ *** ] . Notwithstanding anything that may be interpreted to the contrary in this Section 4.5 , in no event will either Party be responsible for payment of any compensation [ *** ] pursuant to this Section 4.5 unless it has individually approved the amount and timing of such compensation pursuant to negotiations and discussions among both Parties [ *** ] .

ARTICLE 5. GOVERNMENTAL APPROVAL, REGULATORY ISSUES, PRODUCT REGISTRATION.

      5.1 Filing for Regulatory Approvals. Subject to the terms and conditions of this Agreement, REPLIDYNE shall, in the event that the Development shall be successfully completed, submit to the Regulatory Authorities in such countries of the Territory as REPLIDYNE deems appropriate, application(s) to obtain Regulatory Approval for Drug Products, using Commercially Reasonable Efforts to achieve the timelines set forth in the Development Plan. After submitting any such application, REPLIDYNE shall use its Commercially Reasonable Efforts to obtain such Regulatory Approval from the applicable Regulatory Authorities within the time period set forth in the applicable Development Plan.

      5.2 Amendments or Supplements. Whenever REPLIDYNE submits any application for the Regulatory Approval of a Drug Product, or amends or supplements any such application, REPLIDYNE shall give notice to DSP of the date of such application, amendment or supplement. Within one (1) month of any such notice, REPLIDYNE shall also furnish DSP with a copy of any such application, amendment, or supplement submitted to the applicable Regulatory Authorities in each country in the Territory. Any application, amendment or supplement provided by REPLIDYNE to DSP is for informational purposes only, and may not be used by DSP for any purpose or provided by DSP to a Third Party without the prior written consent of REPLIDYNE except for the case as provided in Section 4.4 .

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act of 1933, as amended.

      5.3 Launch. Within six (6) months after obtaining the Regulatory Approval in a country of the Territory for a particular indication, REPLIDYNE shall use Commercially Reasonable Efforts to Launch Drug Products in such country for such indication.

      5.4 Ownership of Approvals. REPLIDYNE shall own and control all Regulatory Approvals and applications, amendments or supplements underlying any such Regulatory Approval. It is expressly understood that the Drug Master File for the Drug Substance shall be registered and controlled by DSP and/or NISSO and DSP and/or NISSO shall give a reference letter to the Regulatory Authorities in connection with REPLIDYNE’s efforts in seeking Regulatory Approvals and submitting any such applications, amendments, or supplements for Drug Products.

      5.5 Assistance by REPLIDYNE. If DSP desires to commercialize the Drug Product in Japan or in Other Territories, subject to Section 2.2 , either itself or through an Affiliate or a Third Party, then at DSP’s request the Parties shall negotiate in good faith regarding reasonable terms and conditions under which REPLIDYNE would potentially provide reasonable assistance to DSP and/or DSP’s Affiliates or DSP’s licensees in obtaining the Regulatory Approvals from Regulatory Authorities for the use, sale or promotion of Drug Products in Other Territories, as further provided in Section 2.2 .

ARTICLE 6 . LICENSE FEES AND ROYALTIES.

      6.1 License Fees. In consideration of the rights and benefits granted hereunder, REPLIDYNE shall pay to DSP the following license fees in Japanese yen (hereinafter referred to as “ JPY ”):

(a) Four hundred million Japanese Yen (JPY 400,000,000) within thirty (30) days after execution of this Agreement;

(b) [ *** ] ;

(c) [ *** ] ,

(d) Five hundred million Japanese Yen (JPY 500,000,000) within ninety (90) days after the Launch.

[ *** ]

      6.2 Royalty Payments. In consideration of the rights and benefits granted hereunder, and in addition to the license fees under Section 6.1 , REPLIDYNE shall pay to DSP the following royalties:

           6.2.1 Rate of Royalty for the Territory. During the Term of this Agreement, REPLIDYNE shall pay DSP royalties on the Net Sales of Drug Products in the Territory as follows:

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act of 1933, as amended.

(i) [ *** ] percent ( [ *** ] %) of the Net Sales for the aggregated portion of the Net Sales of the Drug Product in the Territory in a calendar year below [ *** ] U.S. dollars (US$ [ *** ] );

(ii) [ *** ] percent ( [ *** ] %) of the Net Sales for the aggregated portion of the Net Sales of the Drug Product in the Territory in a calendar year equivalent to or exceeding [ *** ] U.S. dollars (US$ [ *** ] ) and below [ *** ] U.S. dollars (US$ [ *** ] );

(iii) [ *** ] percent ( [ *** ] %) of the Net Sales for the aggregated portion of the Net Sales of the Drug Product in the Territory in a calendar year equivalent to or exceeding [ *** ] U.S. dollars (US$ [ *** ] ) and below [ *** ] U.S. dollars (US$ [ *** ] ); and

(iv) [ *** ] percent ( [ *** ] %) of the Net Sales for the aggregated portion of the Net Sales of the Drug Product in the Territory in a calendar year [ *** ] U.S. dollars (US$ [ *** ] ) or more;

       For purposes of calculating the applicable royalty rate in Section 6.2.1 , Net Sales from those countries in the Territory for which REPLIDYNE is no longer paying royalties shall be excluded from such calculation.

6.2.2 Sustained Release Formulation.

(a) In the event that REPLIDYNE develops a sustained release formulation of the Drug Product (hereinafter referred to as “Sustained Release Formulation” ) and pays any royalties and/or license fees for the Third Party’s patent necessary for commercialization of the Sustained Release Formulation, then REPLIDYNE may credit [ *** ] percent ( [ *** ] %) of such amounts against the royalties owed to DSP with respect to the Sustained Release Formulation pursuant to Section 6.2.1 during the Term of this Agreement; provided, however , that such credit shall not result in a reduction of such royalties by more than [ *** ] percent ( [ *** ] %) of the Net Sales of the Sustained Release Formulation, on an annual basis.

(b) In the event that REPLIDYNE develops the Sustained Release Formulation by using the DSP Know-How, and thereby obtains a Sustained Release Formulation patent registered by REPLIDYNE that effectively excludes all other faropenem products from the market, then,

(i) following the expiration of this Agreement pursuant to Section 16.1 , and until the expiration of such Sustained Release Formulation patent, REPLIDYNE shall pay DSP a royalty for such DSP Know-How equal to [ *** ] percent ( [ *** ] %) of the Net Sales of such Sustained Release Formulation covered by the REPLIDYNE Sustained Release Formulation patent, and

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act of 1933, as amended.

(ii) following the expiration of this Agreement, pursuant to Section 16.1 , if REPLIDYNE pays any royalties and/or license fees for the Third Party’s patent necessary for commercialization of the Sustained Release Formulation, then REPLIDYNE may credit [ *** ] percent ( [ *** ] %) of such amounts against the royalties owed to DSP with respect to the Sustained Release Formulation pursuant to Section 6.2.2.(b)(i) ; provided, however , that such credit shall not result in a reduction of such royalties by more than [ *** ] percent ( [ *** ] %) of the Net Sales of the Sustained Release Formulation, on an annual basis.

(c) Appendix A includes DSP patent applications claiming a Sustained Release Formulation. Patents issuing from such application would have an expiry date later than the other DSP Patents listed on Appendix A . To clarify, the term described in Section 16.1(a) shall only extend beyond the expiry of such other DSP Patents on Appendix A if and so long as REPLIDYNE actually manufactures, uses or sells a Sustained Release Formulation that is covered by a DSP Sustained Release Formulation patent in such country. REPLIDYNE shall promptly inform DSP or have its sublicensees inform DSP in case it ceases commercialization of the Sustained Release Formulation that is covered by a DSP Sustained Release Formulation patent in Drug Product in such country. Thus, if REPLIDYNE obtains its own Sustained Release Formulation patent and sells a Sustained Release Formulation as described in Section 6.2.2(b) , but the product sold by REPLIDYNE does not practice a DSP Sustained Release Formulation patent in such country, then after the other DSP Patents in Appendix A expire and Section 16.1(b) expires the Term of this Agreement shall have expired and royalties, if any, will be due under Section 6.2.2(b) and not under Section 6.2.1 .

             6.2.3 Royalty for Ciba-Geigy (Novartis) Patents. In addition to REPLIDYNE’s payments under Section 6.2.1 , REPLIDYNE shall pay any royalties owed to Novartis, to be paid through DSP, if any, for the practice by REPLIDYNE of the Ciba-Geigy (Novartis) Patents as listed in Appendix B of this Agreement; provided, however , that the rate of royalty on such patents to be paid by REPLIDYNE for Net Sales in the U.S. shall not exceed [ *** ] percent ( [ *** ] %) and that such royalties shall be payable only on Net Sales occurring until the end of the year 2007. DSP shall timely make all such payments due to Novartis in respect of Net Sales of Drug Product.

             6.2.4 Reduction of Royalty Rate. Upon the expiration date of all valid claims of the DSP Patents in a given country that would be infringed by the manufacture, use or sale of the Drug Product actually sold by REPLIDYNE in such country but for the license granted herein, the royalty rate in such country shall be reduced to [ *** ] percent ( [ *** ] %) of the royalty rates pursuant to Sections 6.2.1 and 6.2.2(a) . Additionally, if during the Term of this Agreement any product containing any form of faropenem as an active ingredient is sold in any country in the Territory by a company other than REPLIDYNE, its Affiliates or sublicensees, then the royalty rate for such country shall be reduced to [ *** ] percent ( [ *** ] %) of the royalty rates pursuant to Sections 6.2.1 and 6.2.2(a) ; provided that if such other product is sold before the expiration of all valid claims of the DSP Patents in such country and such other product infringes at least one such

[ *** ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Exchange Act of 1933, as amended.

claim, REPLIDYNE is using Commercially Reasonable Efforts to assert any relevant Patents to terminate such sales.

                6.2.5 Rate of Exchange for Royalties. For the purpose of converting to U.S. dollars any other currency in the Territory in which Net Sales are made in order to determine the amount of the royalty payable by REPLIDYNE to DSP under Section 6.2 , the rate of exchange to be applied shall be the rate published in The Wall Street Journal , East Coast edition, on the last business day of the applicable calendar quarter during the Term of this Agreement.

                6.2.6 Reports. Each royalty payment under Section 6.2 shall be accompanied by a report showing the total of the REPLIDYNE’s Net Sales during the three (3) month period for which such royalty payment is being made and the calculation of the total royalty payable for such three (3) month period, together with such information as is reasonably necessary to determine how the amount of such royalty payment was calculated.

                6.2.7 Inspection of Records. REPLIDYNE shall keep and maintain accurate and complete records with respect to Net Sales, royalties and the calculation thereof with respect to Drug Products manufactured, distributed and sold by REPLIDYNE in sufficient detail to enable the determination of the royalties payable to DSP. At DSP’s request, REPLIDYNE shall make such records for the preceding three (3) year period available for inspection and audit at a mutually convenient time within normal business hours by an independent auditor appointed by DSP subject to the reasonable approval of REPLIDYNE, and who shall enter into a confidentiality agreement in favor of REPLIDYNE, for the purpose of verifying the reports and payments submitted to DSP. Said inspection and audit shall be limited to no more than one (1) time during each twelve (12) month period. DSP shall bear the cost of any such inspection and audit, provided that if the inspection and audit shows an underpayment of royalties of more than five percent (5%) of the amount paid for the audited period, then REPLIDYNE shall promptly reimburse DSP for all costs incurred in connection with such inspection and audit and shall promptly pay the amount of the underpayment.

      6.3 Payment of License Fees and Royalties. REPLIDYNE shall pay to DSP in a bank account as designated by DSP license fees and royalties due and payable under Sections 6.1 and 6.2 . REPLIDYNE shall pay the total royalty accrued under Section 6.2 during each of the three (3) month periods ending on March 31, June 30, September 30 or December 31 of each year, within sixty (60) days after the last business day of such three (3)-month period or portion thereof during the Term of this Agreement. Payment of the royalty under Section 6.2 shall be made in U.S. dollars. Any and all bank charges and other fees incurred by REPLIDYNE in processing such payments shall be borne by REPLIDYNE.

      6.4 Withholding Tax. If any of the payments made or to be made by REPLIDYNE to DSP pursuant to Sections 6.1 and 6.2 of this Agreement become subject to withholding taxes under the laws of the U.S., then REPLIDYNE shall withhold the amount of such taxes for the account of DSP to the extent required by l