Common use of Payments and Royalties Clause in Contracts

Payments and Royalties. 4.1 In consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall pay to Zentaris the lump sum amount of EURO One Million ((euro)1,000,000) in cash payable on the Effective Date and [Intentionally Redacted] in common stock of Spectrum (the "Initial Shares") as soon as reasonably practicable after the Effective Date, but no later than 5 business days thereafter. The number of shares of common stock of Spectrum that shall constitute the Initial Shares shall be determined by (i) converting [Intentionally Redacted] to U.S. dollars at the exchange rate [Intentionally Redacted] as published in the Wall Street Journal [Intentionally Redacted], and then (ii) dividing the resulting dollar amount by [Intentionally Redacted] of Spectrum's common stock, as traded on the NASDAQ, [Intentionally Redacted], as set forth in the Wall Street Journal [Intentionally Redacted]. The Initial Shares shall be issued to Zentaris on the Effective Date, but shall be held by Zentaris and may not be assigned, transferred, sold or otherwise disposed of by Zentaris (with the exception only of an assignment or transfer to an Affiliate of Zentaris, provided that such Affiliate agrees to be bound by the restrictions on transfer of such Initial Shares set forth or referred to in Sections 4.1 and 13 of this Agreement) until December 31, 2005. The Initial Shares shall be subject to the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement. To Spectrum's present knowledge, except for the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement, the Shares shall be free of restrictions on transfer after December 31, 2005. 4.2 In addition to the lump sum payment specified in Section 4.1 hereof and as further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall make the following milestone payments to Zentaris, up to a maximum of [Intentionally Redacted]: (i) upon completion of the first Phase II study conducted by or on behalf of Spectrum, its Affiliates or Sublicensees [Intentionally Redacted] [Intentionally Redacted]; (ii) upon initiation of the first Phase III study conducted by or on behalf of Spectrum, its Affiliates or sublicensees and after the first patient in the Phase III trial has been dosed [Intentionally Redacted]; (iii) after [Intentionally Redacted] of the patients in the Phase III trial have been dosed [Intentionally Redacted]; (iv) upon acceptance by the FDA of submission for Regulatory Approval [Intentionally Redacted]; (v) upon the first grant of Regulatory Approval for marketing for a Contract Product in the Territory [Intentionally Redacted]; (vi) upon the first grant of Regulatory Approval for marketing for a product with D-63153 as an active ingredient in Japan [Intentionally Redacted]. Spectrum shall inform Zentaris on the occurrence of a milestone event as soon as possible, however, not later than within fourteen (14) days following the occurrence of such milestone event. Milestone payments are payable within thirty (30) days after Spectrum's receipt of an invoice issued by Zentaris for such milestone payment. 4.3 In case Spectrum grants sublicenses under Section 2.2 hereof, Spectrum shall pay to Zentaris [Intentionally Redacted] percent ([Intentionally Redacted]%) of any lump sum, periodic or other consideration (other than royalties based on Net Sales) received by Spectrum from sublicensees including, but not limited to, equity, any upfront fees, sublicense fees, marketing rights, or other consideration paid for the authorization to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made Contract Products. For the avoidance of doubt, the foregoing obligation shall not apply in respect of any sums received from sublicensees on which Spectrum has or is obliged to pay royalties pursuant to Section 4.5 hereof. 4.4 All fees payable by Spectrum to Zentaris under Sections 4.1, 4.2 and 4.3 hereof are non-refundable upon expiration or termination of this Agreement for any reason whatsoever assuming such fees have become due during the term of this Agreement. None of the fees payable by Spectrum to Zentaris under Sections 4.1, 4.2 and 4.3 may be credited against any of Spectrum's royalty obligations under Section 4.5 hereof. 4.5 As further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall pay royalties to Zentaris equal to [Intentionally Redacted] percent ([Intentionally Redacted]%) of Net Sales for annual Net Sales up to [Intentionally Redacted] US dollars ($[Intentionally Redacted]), [Intentionally Redacted]% of Net Sales for annual Net Sales between [Intentionally Redacted] US dollars ($[Intentionally Redacted]) and [Intentionally Redacted] US dollars ------- Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. ($[Intentionally Redacted]) and [Intentionally Redacted]% of Net Sales for annual Net Sales exceeding [Intentionally Redacted] US dollars ($[Intentionally Redacted]). 4.6 As consideration for the payment by Spectrum to Zentaris under Section 4.2 (vi), Zentaris shall pay to Spectrum for sales of products with D-63153 as an active ingredient in Japan either (i) fifty percent (50%) of profits on sales of products with D-63153 as an active ingredient in Japan, or (ii) fifty percent (50%) of any lump sum, periodic or other consideration received by Zentaris from sublicensees including, but not limited to, royalties, equity, sublicense fees, marketing rights, or other consideration paid for the authorization to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made products with D-63153 as an active ingredient in Japan. Sections 4.8 et seq. hereof shall apply mutatis mutandis regarding the payments of Zentaris to Spectrum under this Section 4.6. 4.7 In the event that a Contract Product is sold in the form of a combination-preparation for which Spectrum is required to pay a royalty for an active ingredient to a Third Party (that is not an Affiliate of Zentaris), the Net Sales attributable to such combination preparation shall be calculated on a country by country basis by multiplying actual Net Sales of the combination preparation by the fraction A/(A+B)*C, where "A" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for D 63153 and "B" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for the Third Party ingredient(s) when sold in a mono-preparation in the relevant country during the period to which the Net Sales calculation applies or the fair market price if sold to an Affiliate and "C" is Spectrum's (or its Affiliates', sublicensees' or distributors', as applicable) actual Net Sales of the combination preparation during such period or the fair market price if sold to an Affiliate. 4.8 Royalty payments shall be made on a country-by-country and a Contract Product-by-Contract Product basis, however, in countries of the Territory where the Contract Products are no longer covered by a valid claim of a Zentaris Patent Right and Spectrum does not have exclusive commercialization rights in respect of Contract Product as a result of generic competition by a Third Party (other than an Affiliate or sublicensee of Spectrum), Spectrum shall not pay any royalties on Net Sales for such Contract Product in such country, provided that in case of such generic competition in India the Parties agree to discuss a payment of royalties for such Contract Product. 4.9 All payments by Spectrum to Zentaris under this Agreement shall be paid in EURO to the following account: [Intentionally Redacted] For purposes of calculating the amounts payable by Spectrum under Sections 4.3 and 4.5 hereof, such payments shall be converted into Euros at the prevailing open market currency conversion rate (commercial selling rate) as quoted by the Wall Street Journal fixing rate, issued by Reuters at 3 pm on the last day of the calendar quarter in which such payments were received by Spectrum. 4.10 Participation payments and royalties under Sections 4.3 and 4.5 shall be paid on a calendar quarterly basis. Each quarterly payment by Spectrum under Sections 4.3 and 4.5 shall be paid within ninety (90) days after the close of the calendar quarter to which it corresponds. 4.11 In the event that any fee payable by Spectrum under Sections 4.1 and 4.2 is not paid to Zentaris on or before the due date therefore, as specified herein, or any quarterly participation or royalty payment under Sections 4.3 and 4.5 is overdue, the unpaid overdue amount shall bear interest at a rate equal to three (3) percentage points over LIBOR. 4.12 All payments by Spectrum to Zentaris under this Section 4 shall be paid in full, without deduction for any sales, use, excise or other similar taxes which shall be Zentaris' obligation. All payments are exclusive of value added tax, which shall, if applicable, be invoiced separately. In the event that Spectrum is required to withhold any taxes on any amount payable to Zentaris hereunder, under the applicable laws of any country within the Territory, Spectrum shall at Zentaris' request and cost use its best efforts to obtain and furnish Zentaris with official tax receipts, or other evidence of payment of such withholding taxes, sufficient to permit Zentaris to demonstrate the payment of such withholding taxes, in order to establish Zentaris' right to a credit for such withholding taxes against Zentaris' German income tax liability. Spectrum shall provide Zentaris with all assistance reasonably requested by Zentaris in connection with any application to any competent tax authorities in any country within the Territory to qualify for the benefit of a reduced rate of withholding taxation under any applicable Double Tax Treaty. 4.13 For the term of this Agreement and for a term of three (3) years thereafter, Spectrum shall maintain complete and accurate books and records of account, in accordance with generally accepted accounting principles, of all transactions and other business activities under this Agreement, sufficient to confirm the accuracy of all reports furnished by Spectrum to Zentaris under Section 3.3 hereof, and all payments by Spectrum to Zentaris under this Section 4. Upon reasonable written notice to Spectrum, Zentaris may request Spectrum's certified public accountant to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit. If Zentaris disagrees with the report provided by Spectrum's accountant, with reasonable justification for such disagreement, then upon reasonable written notice to Spectrum, a certified public accountant designated by Zentaris and acceptable to Spectrum shall have the right to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit; provided, however, that if any such audit reveals an underpayment of [Intentionally Redacted] percent ([Intentionally Redacted]%) or more between the amount of payments actually due and the amount of payments made to Zentaris for the audit period, then, in addition to paying the full amount of such underpayment, plus accrued interest, Spectrum shall reimburse Zentaris all such audit costs and expenses incurred. If the audit reveals an overpayment, Zentaris shall pay the full amount of the such overpayment to Spectrum.

Payments and Royalties. 4.1 In consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall pay to Zentaris the lump sum amount of EURO One Million ((euro)1,000,000) in cash payable on the Effective Date and [Intentionally Redacted] in common stock of Spectrum (the "Initial Shares") as soon as reasonably practicable after the Effective Date, but no later than 5 business days thereafter. The number of shares of common stock of Spectrum that shall constitute the Initial Shares shall be determined by (i) converting [Intentionally Redacted] to U.S. dollars at the exchange rate [Intentionally Redacted] as published in the Wall Street Journal [Intentionally Redacted], and then (ii) dividing the resulting dollar amount by [Intentionally Redacted] of Spectrum's common stock, as traded on the NASDAQ, [Intentionally Redacted], as set forth in the Wall Street Journal [Intentionally Redacted]. The Initial Shares shall be issued to Zentaris on the Effective Date, but shall be held by Zentaris and may not be assigned, transferred, sold or otherwise disposed of by Zentaris (with the exception only of an assignment or transfer to an Affiliate of Zentaris, provided that such Affiliate agrees to be bound by the restrictions on transfer of such Initial Shares set forth or referred to in Sections 4.1 and 13 of this Agreement) until December 31, 2005. The Initial Shares shall be subject to the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement. To Spectrum's present knowledge, except for the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement, the Shares shall be free of restrictions on transfer after December 31, 2005. 4.2 In addition to the lump sum payment specified in Section 4.1 hereof and as further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum 4.01 SB shall make the following milestone payments non refundable payment to Zentaris, up to a maximum of [Intentionally Redacted]: PTL : two million four hundred thousand pounds sterling (i) upon completion of the first Phase II study conducted by or on behalf of Spectrum, its Affiliates or Sublicensees [Intentionally Redacted] [Intentionally Redacted]; (ii) upon initiation of the first Phase III study conducted by or on behalf of Spectrum, its Affiliates or sublicensees and after the first patient in the Phase III trial has been dosed [Intentionally Redacted]; (iii) after [Intentionally Redacted] of the patients in the Phase III trial have been dosed [Intentionally Redacted]; (iv) upon acceptance by the FDA of submission for Regulatory Approval [Intentionally Redacted]; (vL2,400,000) upon the first Effective Date as consideration for the license and rights granted hereunder. In addition SB shall grant to PTL an interest free loan of Regulatory Approval for marketing []* for a Contract Product in duration of up to six (6) months. PTL shall at the Territory expiration of this loan sell SB [Intentionally Redacted]; * unencumbered ordinary shares of PTG at a price of three pounds and sixty xxxxx (viL3.60) upon per share and SB shall purchase these []* unencumbered ordinary shares of PTG at a price of three pounds and sixty xxxxx (L3.60) per share according to the first grant of Regulatory Approval for marketing for a product with D-63153 as an active ingredient in Japan [Intentionally Redacted]. Spectrum shall inform Zentaris on the occurrence terms of a milestone event Subscription Agreement attached hereto as soon Schedule C. As also provided for in Schedule C, PTL agrees to undertake its best efforts to obtain the necessary approvals of PTG including PTG's shareholder approval to make available these shares. In addition SB shall purchase to a value of []* unencumbered ordinary shares of PTG at a price of three pounds and sixty xxxxx (L3.60) per share, under the Subscription Agreement attached hereto as possibleSchedule C, however, not later than within fourteen (14) days following such shares to be tradeable only according to the occurrence provisions of such milestone event. Milestone payments are payable within thirty (30) days after Spectrum's receipt of an invoice issued by Zentaris for such milestone paymentthe Subscription Agreement. 4.3 In 4.02 If SB has not exercised its option after the expiration of the Research Program or the Extended Research Program, as the case Spectrum grants sublicenses under Section 2.2 hereofmay be, Spectrum shall pay to Zentaris [Intentionally Redacted] percent ([Intentionally Redacted]%) of any lump sum, periodic or other consideration (other than royalties based on Net Sales) received by Spectrum from sublicensees including, but not limited to, equity, any upfront fees, sublicense fees, marketing rights, or other consideration paid for the authorization to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made Contract Products. For the avoidance of doubt, the foregoing obligation shall not apply in respect of any sums received from sublicensees on which Spectrum has or is obliged to pay royalties pursuant to Section 4.5 hereof. 4.4 All fees payable by Spectrum to Zentaris under Sections 4.12.05 above, 4.2 SB shall immediately pay PTL a lump sum (`Licence Maintenance Fee') of []* and 4.3 hereof are non-refundable upon expiration or termination of this Agreement for any reason whatsoever assuming such fees have become due during the term of this Agreement. None shall * This portion of the fees payable by Spectrum to Zentaris under Sections 4.1, 4.2 and 4.3 may be credited against any of Spectrum's royalty obligations under Section 4.5 hereof. 4.5 As further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall pay royalties to Zentaris equal to [Intentionally Redacted] percent ([Intentionally Redacted]%) of Net Sales for annual Net Sales up to [Intentionally Redacted] US dollars ($[Intentionally Redacted]), [Intentionally Redacted]% of Net Sales for annual Net Sales between [Intentionally Redacted] US dollars ($[Intentionally Redacted]) and [Intentionally Redacted] US dollars ------- Certain information on this page Exhibit has been omitted and pursuant to a request for Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended. The Complete Exhibit, including the portions for which confidential treatment has been requested, has been filed separately with the Securities and Exchange Commission. 9 continue in full force and effect. []* []* []* 4.03 SB shall pay once only the following amounts to PTL upon achievement of the following Milestones: []* * This portion of the Exhibit has been omitted pursuant to a request for Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended. The Complete Exhibit, including the portions for which confidential treatment has been requested requested, has been filed separately with respect to the omitted portionsSecurities and Exchange Commission. ($[Intentionally Redacted]) and [Intentionally Redacted]% * For the avoidance of Net Sales for annual Net Sales exceeding [Intentionally Redacted] US dollars ($[Intentionally Redacted]). 4.6 As consideration for the payment by Spectrum to Zentaris under Section 4.2 (vi), Zentaris shall pay to Spectrum for sales of products with D-63153 as an active ingredient in Japan either (i) fifty percent (50%) of profits on sales of products with D-63153 as an active ingredient in Japan, or (ii) fifty percent (50%) of any lump sum, periodic or other consideration received by Zentaris from sublicensees including, but not limited to, royalties, equity, sublicense fees, marketing rights, or other consideration paid for the authorization to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made products with D-63153 as an active ingredient in Japan. Sections 4.8 et seq. hereof shall apply mutatis mutandis regarding the payments of Zentaris to Spectrum under this Section 4.6. 4.7 In the event that a Contract Product is sold in the form of a combination-preparation for which Spectrum is required to pay a royalty for an active ingredient to a Third Party (that is not an Affiliate of Zentaris)doubt, the Net Sales attributable to such combination preparation maximum Milestones payable, assuming all Milestones have been achieved, shall be calculated on a country by country basis by multiplying actual Net Sales of the combination preparation by the fraction A/(A+B)*C, where "A" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for D 63153 and "B" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for the Third Party ingredient(s) when sold in a mono-preparation in the relevant country during the period to which the Net Sales calculation applies or the fair market price if sold to an Affiliate and "C" is Spectrum's (or its Affiliates', sublicensees' or distributors', as applicable) actual Net Sales of the combination preparation during such period or the fair market price if sold to an Affiliate[]* . 4.8 Royalty payments shall be made on a country-by-country and a Contract Product-by-Contract Product basis, however, in countries of the Territory where the Contract Products are no longer covered by a valid claim of a Zentaris Patent Right and Spectrum does not have exclusive commercialization rights in respect of Contract Product as a result of generic competition by a Third Party (other than an Affiliate or sublicensee of Spectrum), Spectrum shall not pay any royalties on Net Sales for such Contract Product in such country, provided that in case of such generic competition in India the Parties agree to discuss a payment of royalties for such Contract Product. 4.9 All payments by Spectrum to Zentaris under this Agreement shall be paid in EURO to the following account: [Intentionally Redacted] For purposes of calculating the amounts payable by Spectrum under Sections 4.3 and 4.5 hereof, such payments shall be converted into Euros at the prevailing open market currency conversion rate (commercial selling rate) as quoted by the Wall Street Journal fixing rate, issued by Reuters at 3 pm on the last day of the calendar quarter in which such payments were received by Spectrum. 4.10 Participation payments and royalties under Sections 4.3 and 4.5 shall be paid on a calendar quarterly basis. Each quarterly payment by Spectrum under Sections 4.3 and 4.5 shall be paid within ninety (90) days after the close of the calendar quarter to which it corresponds. 4.11 In the event that any fee payable by Spectrum under Sections 4.1 and 4.2 is not paid to Zentaris on or before the due date therefore, as specified herein, or any quarterly participation or royalty payment under Sections 4.3 and 4.5 is overdue, the unpaid overdue amount shall bear interest at a rate equal to three (3) percentage points over LIBOR. 4.12 All payments by Spectrum to Zentaris under this Section 4 shall be paid in full, without deduction for any sales, use, excise or other similar taxes which shall be Zentaris' obligation. All payments are exclusive of value added tax, which shall, if applicable, be invoiced separately. In the event that Spectrum is required to withhold any taxes on any amount payable to Zentaris hereunder, under the applicable laws of any country within the Territory, Spectrum shall at Zentaris' request and cost use its best efforts to obtain and furnish Zentaris with official tax receipts, or other evidence of payment of such withholding taxes, sufficient to permit Zentaris to demonstrate the payment of such withholding taxes, in order to establish Zentaris' right to a credit for such withholding taxes against Zentaris' German income tax liability. Spectrum shall provide Zentaris with all assistance reasonably requested by Zentaris in connection with any application to any competent tax authorities in any country within the Territory to qualify for the benefit of a reduced rate of withholding taxation under any applicable Double Tax Treaty. 4.13 For the term of this Agreement and for a term of three (3) years thereafter, Spectrum shall maintain complete and accurate books and records of account, in accordance with generally accepted accounting principles, of all transactions and other business activities under this Agreement, sufficient to confirm the accuracy of all reports furnished by Spectrum to Zentaris under Section 3.3 hereof, and all payments by Spectrum to Zentaris under this Section 4. Upon reasonable written notice to Spectrum, Zentaris may request Spectrum's certified public accountant to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit. If Zentaris disagrees with the report provided by Spectrum's accountant, with reasonable justification for such disagreement, then upon reasonable written notice to Spectrum, a certified public accountant designated by Zentaris and acceptable to Spectrum shall have the right to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit; provided, however, that if any such audit reveals an underpayment of [Intentionally Redacted] percent ([Intentionally Redacted]%) or more between the amount of payments actually due and the amount of payments made to Zentaris for the audit period, then, in addition to paying the full amount of such underpayment, plus accrued interest, Spectrum shall reimburse Zentaris all such audit costs and expenses incurred. If the audit reveals an overpayment, Zentaris shall pay the full amount of the such overpayment to Spectrum.

Payments and Royalties. 4.1 In consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall pay to Zentaris the lump sum amount of EURO One Million ((euro)1,000,000) in cash payable on the Effective Date and [Intentionally Redacted] in common stock of Spectrum (the "Initial Shares") as soon as reasonably practicable after the Effective Date, but no later than 5 business days thereafter. The number of shares of common stock of Spectrum that shall constitute the Initial Shares shall be determined by (i) converting [Intentionally Redacted] to U.S. dollars at the exchange rate [Intentionally Redacted] as published in the Wall Street Journal [Intentionally Redacted], and then (ii) dividing the resulting dollar amount by [Intentionally Redacted] of Spectrum's common stock, as traded on the NASDAQ, [Intentionally Redacted], as set forth in the Wall Street Journal [Intentionally Redacted]. The Initial Shares shall be issued to Zentaris on the Effective Date, but shall be held by Zentaris and may not be assigned, transferred, sold or otherwise disposed of by Zentaris (with the exception only of an assignment or transfer to an Affiliate of Zentaris, provided that such Affiliate agrees to be bound by the restrictions on transfer of such Initial Shares set forth or referred to in Sections 4.1 and 13 of this Agreement) until December 31, 2005. The Initial Shares shall be subject to the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement. To Spectrum's present knowledge, except for the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement, the Shares shall be free of restrictions on transfer after December 31, 2005. 4.2 In addition to the lump sum payment specified in Section 4.1 hereof and as further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum 4.01 SB shall make the following milestone payments non refundable payment to Zentaris, up to a maximum of [Intentionally Redacted]: PTL : two million four hundred thousand pounds sterling (i) upon completion of the first Phase II study conducted by or on behalf of Spectrum, its Affiliates or Sublicensees [Intentionally Redacted] [Intentionally Redacted]; (ii) upon initiation of the first Phase III study conducted by or on behalf of Spectrum, its Affiliates or sublicensees and after the first patient in the Phase III trial has been dosed [Intentionally Redacted]; (iii) after [Intentionally Redacted] of the patients in the Phase III trial have been dosed [Intentionally Redacted]; (iv) upon acceptance by the FDA of submission for Regulatory Approval [Intentionally Redacted]; (vL2,400,000) upon the first Effective Date as consideration for the license and rights granted hereunder. In addition SB shall grant to PTL an interest free loan of Regulatory Approval for marketing []* for a Contract Product in duration of up to six (6) months. PTL shall at the Territory expiration of this loan sell SB [Intentionally Redacted]; * unencumbered ordinary shares of PTG at a price of three pounds and sixty xxxxx (viL3.60) upon per share and SB shall purchase these []* unencumbered ordinary shares of PTG at a price of three pounds and sixty xxxxx (L3.60) per share according to the first grant of Regulatory Approval for marketing for a product with D-63153 as an active ingredient in Japan [Intentionally Redacted]. Spectrum shall inform Zentaris on the occurrence terms of a milestone event Subscription Agreement attached hereto as soon Schedule C. As also provided for in Schedule C, PTL agrees to undertake its best efforts to obtain the necessary approvals of PTG including PTG's shareholder approval to make available these shares. In addition SB shall purchase to a value of []* unencumbered ordinary shares of PTG at a price of three pounds and sixty xxxxx (L3.60) per share, under the Subscription Agreement attached hereto as possibleSchedule C, however, not later than within fourteen (14) days following such shares to be tradeable only according to the occurrence provisions of such milestone event. Milestone payments are payable within thirty (30) days after Spectrum's receipt of an invoice issued by Zentaris for such milestone paymentthe Subscription Agreement. 4.3 In 4.02 If SB has not exercised its option after the expiration of the Research Program or the Extended Research Program, as the case Spectrum grants sublicenses under Section 2.2 hereofmay be, Spectrum shall pay to Zentaris [Intentionally Redacted] percent ([Intentionally Redacted]%) of any lump sum, periodic or other consideration (other than royalties based on Net Sales) received by Spectrum from sublicensees including, but not limited to, equity, any upfront fees, sublicense fees, marketing rights, or other consideration paid for the authorization to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made Contract Products. For the avoidance of doubt, the foregoing obligation shall not apply in respect of any sums received from sublicensees on which Spectrum has or is obliged to pay royalties pursuant to Section 4.5 hereof. 4.4 All fees payable by Spectrum to Zentaris under Sections 4.12.05 above, 4.2 SB shall immediately pay PTL a lump sum (`Licence Maintenance Fee') of two million pounds sterling (L 2,000,000) and 4.3 hereof are non-refundable upon expiration or termination of this Agreement for any reason whatsoever assuming such fees have become due during the term of this Agreement. None shall ---------- * This portion of the fees payable by Spectrum to Zentaris under Sections 4.1, 4.2 and 4.3 may be credited against any of Spectrum's royalty obligations under Section 4.5 hereof. 4.5 As further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall pay royalties to Zentaris equal to [Intentionally Redacted] percent ([Intentionally Redacted]%) of Net Sales for annual Net Sales up to [Intentionally Redacted] US dollars ($[Intentionally Redacted]), [Intentionally Redacted]% of Net Sales for annual Net Sales between [Intentionally Redacted] US dollars ($[Intentionally Redacted]) and [Intentionally Redacted] US dollars ------- Certain information on this page Exhibit has been omitted and pursuant to a request for Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended. The Complete Exhibit, including the portions for which confidential treatment has been requested, has been filed separately with the Securities and Exchange Commission. 9 continue in full force and effect. If SB has exercised its option to discontinue said collaboration pursuant to Section 2.05 above, PTL shall immediately pay SB a lump sum of two million pounds sterling (L 2,000,000) and all rights and licences granted by PTL hereunder shall revert back to PTL without prejudice to the provisions of Sections 2.08 and 2.09 above. PTL agrees that it will not raise debt senior to the above obligation to pay SB two million pounds sterling (L 2,000,000) and further agrees that existing debts and liabilities will not be accorded greater seniority than said obligation. PTL further agrees to maintain sufficient cash reserves on hand during the Research Program and Extended Research program as the case may be to meet said obligation. For the avoidance of doubt, on the expiration of any Extended Research Program, any funding provided by SB for the Extended Research Program shall not be refundable to SB. 4.03 SB shall pay once only the following amounts to PTL upon achievement of the following Milestones: []* * This portion of the Exhibit has been omitted pursuant to a request for Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended. The Complete Exhibit, including the portions for which confidential treatment has been requested requested, has been filed separately with respect to the omitted portionsSecurities and Exchange Commission. ($[Intentionally Redacted]) and [Intentionally Redacted]% * For the avoidance of Net Sales for annual Net Sales exceeding [Intentionally Redacted] US dollars ($[Intentionally Redacted]). 4.6 As consideration for the payment by Spectrum to Zentaris under Section 4.2 (vi), Zentaris shall pay to Spectrum for sales of products with D-63153 as an active ingredient in Japan either (i) fifty percent (50%) of profits on sales of products with D-63153 as an active ingredient in Japan, or (ii) fifty percent (50%) of any lump sum, periodic or other consideration received by Zentaris from sublicensees including, but not limited to, royalties, equity, sublicense fees, marketing rights, or other consideration paid for the authorization to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made products with D-63153 as an active ingredient in Japan. Sections 4.8 et seq. hereof shall apply mutatis mutandis regarding the payments of Zentaris to Spectrum under this Section 4.6. 4.7 In the event that a Contract Product is sold in the form of a combination-preparation for which Spectrum is required to pay a royalty for an active ingredient to a Third Party (that is not an Affiliate of Zentaris)doubt, the Net Sales attributable to such combination preparation maximum Milestones payable, assuming all Milestones have been achieved, shall be calculated on a country by country basis by multiplying actual Net Sales of the combination preparation by the fraction A/(A+B)*C, where "A" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for D 63153 and "B" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for the Third Party ingredient(s) when sold in a mono-preparation in the relevant country during the period to which the Net Sales calculation applies or the fair market price if sold to an Affiliate and "C" is Spectrum's (or its Affiliates', sublicensees' or distributors', as applicable) actual Net Sales of the combination preparation during such period or the fair market price if sold to an Affiliate[]* . 4.8 Royalty payments shall be made on a country-by-country and a Contract Product-by-Contract Product basis, however, in countries of the Territory where the Contract Products are no longer covered by a valid claim of a Zentaris Patent Right and Spectrum does not have exclusive commercialization rights in respect of Contract Product as a result of generic competition by a Third Party (other than an Affiliate or sublicensee of Spectrum), Spectrum shall not pay any royalties on Net Sales for such Contract Product in such country, provided that in case of such generic competition in India the Parties agree to discuss a payment of royalties for such Contract Product. 4.9 All payments by Spectrum to Zentaris under this Agreement shall be paid in EURO to the following account: [Intentionally Redacted] For purposes of calculating the amounts payable by Spectrum under Sections 4.3 and 4.5 hereof, such payments shall be converted into Euros at the prevailing open market currency conversion rate (commercial selling rate) as quoted by the Wall Street Journal fixing rate, issued by Reuters at 3 pm on the last day of the calendar quarter in which such payments were received by Spectrum. 4.10 Participation payments and royalties under Sections 4.3 and 4.5 shall be paid on a calendar quarterly basis. Each quarterly payment by Spectrum under Sections 4.3 and 4.5 shall be paid within ninety (90) days after the close of the calendar quarter to which it corresponds. 4.11 In the event that any fee payable by Spectrum under Sections 4.1 and 4.2 is not paid to Zentaris on or before the due date therefore, as specified herein, or any quarterly participation or royalty payment under Sections 4.3 and 4.5 is overdue, the unpaid overdue amount shall bear interest at a rate equal to three (3) percentage points over LIBOR. 4.12 All payments by Spectrum to Zentaris under this Section 4 shall be paid in full, without deduction for any sales, use, excise or other similar taxes which shall be Zentaris' obligation. All payments are exclusive of value added tax, which shall, if applicable, be invoiced separately. In the event that Spectrum is required to withhold any taxes on any amount payable to Zentaris hereunder, under the applicable laws of any country within the Territory, Spectrum shall at Zentaris' request and cost use its best efforts to obtain and furnish Zentaris with official tax receipts, or other evidence of payment of such withholding taxes, sufficient to permit Zentaris to demonstrate the payment of such withholding taxes, in order to establish Zentaris' right to a credit for such withholding taxes against Zentaris' German income tax liability. Spectrum shall provide Zentaris with all assistance reasonably requested by Zentaris in connection with any application to any competent tax authorities in any country within the Territory to qualify for the benefit of a reduced rate of withholding taxation under any applicable Double Tax Treaty. 4.13 For the term of this Agreement and for a term of three (3) years thereafter, Spectrum shall maintain complete and accurate books and records of account, in accordance with generally accepted accounting principles, of all transactions and other business activities under this Agreement, sufficient to confirm the accuracy of all reports furnished by Spectrum to Zentaris under Section 3.3 hereof, and all payments by Spectrum to Zentaris under this Section 4. Upon reasonable written notice to Spectrum, Zentaris may request Spectrum's certified public accountant to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit. If Zentaris disagrees with the report provided by Spectrum's accountant, with reasonable justification for such disagreement, then upon reasonable written notice to Spectrum, a certified public accountant designated by Zentaris and acceptable to Spectrum shall have the right to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit; provided, however, that if any such audit reveals an underpayment of [Intentionally Redacted] percent ([Intentionally Redacted]%) or more between the amount of payments actually due and the amount of payments made to Zentaris for the audit period, then, in addition to paying the full amount of such underpayment, plus accrued interest, Spectrum shall reimburse Zentaris all such audit costs and expenses incurred. If the audit reveals an overpayment, Zentaris shall pay the full amount of the such overpayment to Spectrum.

Payments and Royalties. 4.1 In consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall pay to Zentaris the lump sum amount of EURO One Million ((euro)1,000,000) in cash payable on the Effective Date and [Intentionally Redacted] in common stock of Spectrum (the "Initial Shares") as soon as reasonably practicable after the Effective Date, but no later than 5 business days thereafter. The number of shares of common stock of Spectrum that shall constitute the Initial Shares shall be determined by (i) converting [Intentionally Redacted] to U.S. dollars at the exchange rate [Intentionally Redacted] as published in the Wall Street Journal [Intentionally Redacted], and then (ii) dividing the resulting dollar amount by [Intentionally Redacted] of Spectrum's common stock, as traded on the NASDAQ, [Intentionally Redacted], as set forth in the Wall Street Journal [Intentionally Redacted]. The Initial Shares shall be issued to Zentaris on the Effective Date, but shall be held by Zentaris and may not be assigned, transferred, sold or otherwise disposed of by Zentaris (with the exception only of an assignment or transfer to an Affiliate of Zentaris, provided that such Affiliate agrees to be bound by the restrictions on transfer of such Initial Shares set forth or referred to in Sections 4.1 and 13 of this Agreement) until December 31, 2005. The Initial Shares shall be subject to the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement. To Spectrum's present knowledge, except for the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement, the Shares shall be free of restrictions on transfer after December 31, 2005. 4.2 In addition to the lump sum payment specified in Section 4.1 hereof and as further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum 4.01 SB shall make the following milestone payments non refundable payment to Zentaris, up to a maximum of [Intentionally Redacted]: PTL : two million four hundred thousand pounds sterling (i) upon completion of the first Phase II study conducted by or on behalf of Spectrum, its Affiliates or Sublicensees [Intentionally Redacted] [Intentionally Redacted]; (ii) upon initiation of the first Phase III study conducted by or on behalf of Spectrum, its Affiliates or sublicensees and after the first patient in the Phase III trial has been dosed [Intentionally Redacted]; (iii) after [Intentionally Redacted] of the patients in the Phase III trial have been dosed [Intentionally Redacted]; (iv) upon acceptance by the FDA of submission for Regulatory Approval [Intentionally Redacted]; (vL2,400,000) upon the first Effective Date as consideration for the license and rights granted hereunder. In addition SB shall grant to PTL an interest free loan of Regulatory Approval for marketing [ ]* for a Contract Product in duration of up to six (6) months. PTL shall at the Territory [Intentionally Redactedexpiration of this loan sell SB [ ]; * unencumbered ordinary shares of PTG at a price of three pounds and sixty xxxxx (viL3.60) upon per share and SB shall purchase these [ ]* unencumbered ordinary shares of PTG at a price of three pounds and sixty xxxxx (L3.60) per share according to the first grant of Regulatory Approval for marketing for a product with D-63153 as an active ingredient in Japan [Intentionally Redacted]. Spectrum shall inform Zentaris on the occurrence terms of a milestone event Subscription Agreement attached hereto as soon Schedule C. As also provided for in Schedule C, PTL agrees to undertake its best efforts to obtain the necessary approvals of PTG including PTG's shareholder approval to make available these shares. In addition SB shall purchase to a value of [ ]* unencumbered ordinary shares of PTG at a price of three pounds and sixty xxxxx (L3.60) per share, under the Subscription Agreement attached hereto as possibleSchedule C, however, not later than within fourteen (14) days following such shares to be tradeable only according to the occurrence provisions of such milestone event. Milestone payments are payable within thirty (30) days after Spectrum's receipt of an invoice issued by Zentaris for such milestone paymentthe Subscription Agreement. 4.3 In 4.02 If SB has not exercised its option after the expiration of the Research Program or the Extended Research Program, as the case Spectrum grants sublicenses under Section 2.2 hereofmay be, Spectrum shall pay to Zentaris [Intentionally Redacted] percent ([Intentionally Redacted]%) of any lump sum, periodic or other consideration (other than royalties based on Net Sales) received by Spectrum from sublicensees including, but not limited to, equity, any upfront fees, sublicense fees, marketing rights, or other consideration paid for the authorization to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made Contract Products. For the avoidance of doubt, the foregoing obligation shall not apply in respect of any sums received from sublicensees on which Spectrum has or is obliged to pay royalties pursuant to Section 4.5 hereof. 4.4 All fees payable by Spectrum to Zentaris under Sections 4.12.05 above, 4.2 SB shall immediately pay PTL a lump sum (`Licence Maintenance Fee') of two million pounds sterling (L 2,000,000) and 4.3 hereof are non-refundable upon expiration or termination of this Agreement for any reason whatsoever assuming such fees have become due during the term of this Agreement. None shall ---------- * This portion of the fees payable by Spectrum to Zentaris under Sections 4.1, 4.2 and 4.3 may be credited against any of Spectrum's royalty obligations under Section 4.5 hereof. 4.5 As further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall pay royalties to Zentaris equal to [Intentionally Redacted] percent ([Intentionally Redacted]%) of Net Sales for annual Net Sales up to [Intentionally Redacted] US dollars ($[Intentionally Redacted]), [Intentionally Redacted]% of Net Sales for annual Net Sales between [Intentionally Redacted] US dollars ($[Intentionally Redacted]) and [Intentionally Redacted] US dollars ------- Certain information on this page Exhibit has been omitted and pursuant to a Request for Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended. The complete Exhibit, including the portions for which confidential treatment has been requested, has been filed separately with the Securities and Exchange Commission. continue in full force and effect. If SB has exercised its option to discontinue said collaboration pursuant to Section 2.05 above, PTL shall immediately pay SB a lump sum of two million pounds sterling (L 2,000,000) and all rights and licences granted by PTL hereunder shall revert back to PTL without prejudice to the provisions of Sections 2.08 and 2.09 above. PTL agrees that it will not raise debt senior to the above obligation to pay SB two million pounds sterling (L 2,000,000) and further agrees that existing debts and liabilities will not be accorded greater seniority than said obligation. PTL further agrees to maintain sufficient cash reserves on hand during the Research Program and Extended Research program as the case may be to meet said obligation. For the avoidance of doubt, on the expiration of any Extended Research Program, any funding provided by SB for the Extended Research Program shall not be refundable to SB. 4.03 SB shall pay once only the following amounts to PTL upon achievement of the following Milestones: []* * This portion of the Exhibit has been omitted pursuant to a request for Confidential Treatment under Rule 406 of the Securities Act of 1933, as amended. The Complete Exhibit, including the portions for which confidential treatment has been requested requested, has been filed separately with respect to the omitted portionsSecurities and Exchange Commission. []* For the avoidance of doubt, the maximum Milestones payable, assuming all Milestones have been achieved, shall be twenty one million six hundred and seventy thousand pounds sterling ($[Intentionally Redacted]) and [Intentionally Redacted]% of Net Sales for annual Net Sales exceeding [Intentionally Redacted] US dollars ($[Intentionally Redacted]L21,670,000). 4.6 As consideration for the payment by Spectrum to Zentaris under Section 4.2 (vi), Zentaris shall pay to Spectrum for sales of products with D-63153 as an active ingredient in Japan either (i) fifty percent (50%) of profits on sales of products with D-63153 as an active ingredient in Japan, or (ii) fifty percent (50%) of any lump sum, periodic or other consideration received by Zentaris from sublicensees including, but not limited to, royalties, equity, sublicense fees, marketing rights, or other consideration paid for the authorization to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made products with D-63153 as an active ingredient in Japan. Sections 4.8 et seq. hereof shall apply mutatis mutandis regarding the payments of Zentaris to Spectrum under this Section 4.6. 4.7 In the event that a Contract Product is sold in the form of a combination-preparation for which Spectrum is required to pay a royalty for an active ingredient to a Third Party (that is not an Affiliate of Zentaris), the Net Sales attributable to such combination preparation shall be calculated on a country by country basis by multiplying actual Net Sales of the combination preparation by the fraction A/(A+B)*C, where "A" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for D 63153 and "B" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for the Third Party ingredient(s) when sold in a mono-preparation in the relevant country during the period to which the Net Sales calculation applies or the fair market price if sold to an Affiliate and "C" is Spectrum's (or its Affiliates', sublicensees' or distributors', as applicable) actual Net Sales of the combination preparation during such period or the fair market price if sold to an Affiliate. 4.8 Royalty payments shall be made on a country-by-country and a Contract Product-by-Contract Product basis, however, in countries of the Territory where the Contract Products are no longer covered by a valid claim of a Zentaris Patent Right and Spectrum does not have exclusive commercialization rights in respect of Contract Product as a result of generic competition by a Third Party (other than an Affiliate or sublicensee of Spectrum), Spectrum shall not pay any royalties on Net Sales for such Contract Product in such country, provided that in case of such generic competition in India the Parties agree to discuss a payment of royalties for such Contract Product. 4.9 All payments by Spectrum to Zentaris under this Agreement shall be paid in EURO to the following account: [Intentionally Redacted] For purposes of calculating the amounts payable by Spectrum under Sections 4.3 and 4.5 hereof, such payments shall be converted into Euros at the prevailing open market currency conversion rate (commercial selling rate) as quoted by the Wall Street Journal fixing rate, issued by Reuters at 3 pm on the last day of the calendar quarter in which such payments were received by Spectrum. 4.10 Participation payments and royalties under Sections 4.3 and 4.5 shall be paid on a calendar quarterly basis. Each quarterly payment by Spectrum under Sections 4.3 and 4.5 shall be paid within ninety (90) days after the close of the calendar quarter to which it corresponds. 4.11 In the event that any fee payable by Spectrum under Sections 4.1 and 4.2 is not paid to Zentaris on or before the due date therefore, as specified herein, or any quarterly participation or royalty payment under Sections 4.3 and 4.5 is overdue, the unpaid overdue amount shall bear interest at a rate equal to three (3) percentage points over LIBOR. 4.12 All payments by Spectrum to Zentaris under this Section 4 shall be paid in full, without deduction for any sales, use, excise or other similar taxes which shall be Zentaris' obligation. All payments are exclusive of value added tax, which shall, if applicable, be invoiced separately. In the event that Spectrum is required to withhold any taxes on any amount payable to Zentaris hereunder, under the applicable laws of any country within the Territory, Spectrum shall at Zentaris' request and cost use its best efforts to obtain and furnish Zentaris with official tax receipts, or other evidence of payment of such withholding taxes, sufficient to permit Zentaris to demonstrate the payment of such withholding taxes, in order to establish Zentaris' right to a credit for such withholding taxes against Zentaris' German income tax liability. Spectrum shall provide Zentaris with all assistance reasonably requested by Zentaris in connection with any application to any competent tax authorities in any country within the Territory to qualify for the benefit of a reduced rate of withholding taxation under any applicable Double Tax Treaty. 4.13 For the term of this Agreement and for a term of three (3) years thereafter, Spectrum shall maintain complete and accurate books and records of account, in accordance with generally accepted accounting principles, of all transactions and other business activities under this Agreement, sufficient to confirm the accuracy of all reports furnished by Spectrum to Zentaris under Section 3.3 hereof, and all payments by Spectrum to Zentaris under this Section 4. Upon reasonable written notice to Spectrum, Zentaris may request Spectrum's certified public accountant to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit. If Zentaris disagrees with the report provided by Spectrum's accountant, with reasonable justification for such disagreement, then upon reasonable written notice to Spectrum, a certified public accountant designated by Zentaris and acceptable to Spectrum shall have the right to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit; provided, however, that if any such audit reveals an underpayment of [Intentionally Redacted] percent ([Intentionally Redacted]%) or more between the amount of payments actually due and the amount of payments made to Zentaris for the audit period, then, in addition to paying the full amount of such underpayment, plus accrued interest, Spectrum shall reimburse Zentaris all such audit costs and expenses incurred. If the audit reveals an overpayment, Zentaris shall pay the full amount of the such overpayment to Spectrum.

Payments and Royalties. 4.1 In 3.1 As consideration for the rights and licenses sublicenses granted to NOVARTIS by Zentaris to Spectrum TITAN under this Sublicense Agreement, Spectrum shall pay to Zentaris the lump sum amount of EURO One Million ((euro)1,000,000) in cash payable on the Effective Date and [Intentionally Redacted] in common stock of Spectrum (the "Initial Shares") as soon as reasonably practicable after the Effective Date, but no later than 5 business days thereafter. The number of shares of common stock of Spectrum that shall constitute the Initial Shares shall be determined by (i) converting [Intentionally Redacted] to U.S. dollars at the exchange rate [Intentionally Redacted] as published in the Wall Street Journal [Intentionally Redacted], and then (ii) dividing the resulting dollar amount by [Intentionally Redacted] of Spectrum's common stock, as traded on the NASDAQ, [Intentionally Redacted], as set forth in the Wall Street Journal [Intentionally Redacted]. The Initial Shares shall be issued to Zentaris on the Effective Date, but shall be held by Zentaris and may not be assigned, transferred, sold or otherwise disposed of by Zentaris (with the exception only of an assignment or transfer to an Affiliate of Zentaris, provided that such Affiliate agrees to be bound by the restrictions on transfer of such Initial Shares set forth or referred to in Sections 4.1 and 13 of this Agreement) until December 31, 2005. The Initial Shares shall be subject to the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement. To Spectrum's present knowledge, except for the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement, the Shares shall be free of restrictions on transfer after December 31, 2005. 4.2 In addition to the lump sum payment specified in Section 4.1 hereof and as further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum NOVARTIS shall make the following milestone payments to ZentarisTITAN: (a) An upfront license fee of Twenty Million Dollars (U.S. $20,000,000) shall be paid by NOVARTIS to TITAN in cash within ten (10) business days of both parties' execution of this Sublicense Agreement. TITAN acknowledges that, up as of the effective date of this Sublicense Agreement, NOVARTIS has already paid to TITAN Five Million Dollars (U.S. $5,000,000) of such Twenty Million Dollar (U.S. $20,000,0000) amount; therefore, as of the effective date of this Sublicense Agreement, NOVARTIS is obligated to pay to TITAN the THE INFORMATION BELOW, MARKED BY * AND [ ], HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE COMMISSION. remaining Fifteen Million Dollars (U.S. $15,000,000) of such Twenty Million Dollar (U.S. $20,000,000) upfront license fee. Up to Five Million Dollars (U.S. $5,000,000) of such Twenty Million Dollar amount may, at NOVARTIS' option, be paid in the form of an equity investment made by NOVARTIS in TITAN convertible preferred stock at a maximum price per share as provided for in the Convertible Preferred Stock Agreement between TITAN and NOVARTIS of [Intentionally Redactedeven date herewith and attached hereto as Appendix C and incorporated herein by reference. NOTE: the immediately preceding sentence will be deleted from this Sublicense Agreement if the parties do not enter into the Convertible Preferred Stock Agreement referred to above simultaneously with the execution of this Sublicense Agreement. The Twenty Million Dollar payment provided for herein shall, unless otherwise expressly provided for herein, be non-refundable. (b) A first development milestone payment of [ * ] shall be payable by NOVARTIS to TITAN upon submission by TITAN to NOVARTIS of an invoice therefor substantially in the form of the sample invoice attached hereto as Appendix D (the "Invoice"), one time only upon the first NDA Filing (based on a full and complete regulatory package and for these purposes not to include an ANDA or "Paper" NDA) for PRODUCT in the FIELD in the United States (New Drug Application) or the Initial Filing in Europe (Marketing Authorization Application via the Central Procedure, or the mutual recognition procedure) by NOVARTIS, its AFFILIATE or SUBLICENSEE. As used in this Section, "NDA Filing" or "Initial Filing in Europe" (as the case may be) shall mean the notification in writing to NOVARTIS, its AFFILIATE or SUBLICENSEE from the FDA or an equivalent EUROPEAN UNION regulatory authority (via the Centralized Procedure or the mutual recognition procedure) that the NDA or Initial THE INFORMATION BELOW, MARKED BY * AND [ ], HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE COMMISSION. Filing in Europe (as the case may be) is sufficiently complete to permit a substantive review. Such milestone payment shall be paid in cash by NOVARTIS directly to HMRI within seven (7) business days of the date of such first filing, and NOVARTIS shall notify TITAN of such payment concurrently with such payment to HMRI. The [ * ] payment provided for herein shall, unless otherwise expressly provided for herein, be non-refundable. (c) Following prior receipt by NOVARTIS of TITAN's Invoice therefor, a second development milestone payment of [ * ] which shall be payable one time only by NOVARTIS to HMRI as follows: (i) upon completion [ * ] shall be paid in cash by NOVARTIS directly to HMRI, within seven (7) business days of receipt by NOVARTIS, its AFFILIATE or SUBLICENSEE of the first Phase II study conducted FDA approval letter or the regulatory agency for the EUROPEAN UNION (Marketing Authorization via the Centralized Procedure or mutual recognition procedure), that PRODUCT is approved for marketing and commercialization by or on behalf of SpectrumNOVARTIS , its Affiliates AFFILIATE or Sublicensees [Intentionally RedactedSUBLICENSEE (or their designee) for a major indication having an approval comparable to the principal indication(s) of leading competing products in the FIELD, and NOVARTIS shall notify TITAN of such payment concurrently with such payment to HMRI; and (ii) [ * ] [Intentionally Redactedshall be paid in cash by NOVARTIS directly to HMRI within six (6) months after receipt of such notification, and NOVARTIS shall notify TITAN of such payment concurrently with such payment to HMRI. The [ * ] payment provided for herein shall, unless otherwise expressly provided for herein, be non-refundable. (d) NOVARTIS shall notify TITAN in writing thirty (30) business days prior to NOVARTIS' estimated achievement of each milestone event described in Sections 3.1(b) and 3.1(c)(i) above. Upon the receipt of such notification, TITAN shall send NOVARTIS an Invoice for the milestone payment due as a result of the achievement of such milestone event, and NOVARTIS shall make each such payment within seven (7) business days of the achievement of the milestone event for which such payment is due. (a) Unless TITAN instructs NOVARTIS in writing otherwise, all cash payments by NOVARTIS to TITAN (including, without limitation, upfront payments, milestone payments, and royalties) shall be made by bank wire transfer as follows: Bank of America-San Francisco ABA #000000000 Titan Pharmaceuticals, Inc. Account #0000-0-00000 (b) All cash payments by NOVARTIS to HMRI (including, without limitation, milestone payments and royalties) shall be made by bank wire transfer as follows: Citibank-New York ABA#000000000 Hoechst Xxxxxx Xxxxxxx, Inc. Account #-00000000 (c) At least two (2) business days prior to the planned wire transfer to either of the above accounts, NOVARTIS shall notify TITAN's Chief Financial Officer by facsimile (000) 000-0000, Attention: Mr. Xxxxxx Xxxxxxx) and HMRI's Treasurer (if applicable) by facsimile (000-000-0000, Attention: Cash Manager) of the amount and date the cash shall be transferred. THE INFORMATION BELOW, MARKED BY * AND [ ];, HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE COMMISSION. (d) In the event of a late payment hereunder by NOVARTIS to TITAN (or HMRI, as the case may be), NOVARTIS shall pay to TITAN (or HMRI, as the case may be) interest based on the prime rate as stated in The Wall Street Journal, New York edition, on the date such payment is due (or the immediately preceding business date if such payment date is not a business date) plus two percent (2%) on the outstanding balance until such balance, including interest, is paid in full to TITAN. The acceptance of such late payment shall act as a waiver of any rights TITAN may have hereunder due to a breach by NOVARTIS relating solely to such payment being made late. 3.3 As consideration for the sublicense granted to NOVARTIS in this Sublicense Agreement, NOVARTIS shall pay to TITAN, in those countries where, and for the period, PATENTS claiming a priority date of May 19, 1989 and December 29, 1989 in a particular country in the TERRITORY for which a patent had been granted validly claiming Iloperidone or the manufacture, formulation or the use thereof for use in the FIELD exist: (a) a [ * ] royalty on annual NET SALES of PRODUCT in the TERRITORY up to [ * ], and (b) a [ * ] royalty on annual NET SALES of PRODUCT in the TERRITORY in excess of [ * ]; in each case on NOVARTIS', its AFFILIATES' and SUBLICENSEES' annual NET SALES of PRODUCT in the TERRITORY. (a) In order to spread royalty payments hereunder over a sufficient period of time, in each of those countries in the TERRITORY where PATENTS claiming a priority date of May 19, 1989 and December 29, 1989 in a particular country for which a patent had been granted THE INFORMATION BELOW, MARKED BY * AND [ ], HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE COMMISSION. validly claiming Iloperidone or the manufacture, formulation or use thereof for use in the FIELD have expired, NOVARTIS' obligations to pay royalties for use of PATENTS in such country shall cease, and NOVARTIS and/or any of its SUBLICENSEES shall pay directly to HMRI a royalty for KNOW-HOW not relating to manufacturing (whether or not such KNOW-HOW continues as a valid intellectual property right or is in the public domain) of [ * ] on NOVARTIS', its AFFILIATES' and any SUBLICENSEES' annual NET SALES of PRODUCT in each such country for a period of ten (10) years after the expiration of the final remaining PATENT in each such country. After the end of such ten (10) year period, no further royalties arising from sales of PRODUCT in such country shall be due to HMRI and NOVARTIS shall be entitled to continue to use the KNOW-HOW on a fully-paid, irrevocable basis in accordance with Section 10.3. (b) In the event a THIRD PARTY's generic version of Iloperidone is actively marketed in a process patent country (that is, any country in which only protection in relation to processes for the manufacture of Iloperidone has been obtained and not protection for Iloperidone as a new chemical entity per se) in the TERRITORY where a PATENT(s) claiming a priority date of May 19, 1989 and December 29, 1989 has been granted validly claiming Iloperidone or the manufacture, formulation or use thereof for use in the FIELD exists, then subject to Sections 3.4(c) and (d) below, the royalty rate that NOVARTIS shall pay to TITAN on NOVARTIS' or its AFFILIATE's or SUBLICENSEE's annual NET SALES of PRODUCT in that process patent country shall be [ * ] until such PATENT(s) expires, provided: THE INFORMATION BELOW, MARKED BY * AND [ ], HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE COMMISSION. (i) NOVARTIS has obtained, or has made every effort to obtain, the maximum allowable period of exclusivity to which it is entitled based on PRODUCT's registration data in that process patent country to the extent such exclusivity is available; and (ii) upon initiation The PARTIES and HMRI, in accordance with Article 8 of this Sublicense Agreement, will implement an appropriate strategy for addressing the first Phase III study conducted commercialization of Iloperidone by said THIRD PARTY. Unless otherwise agreed to by the PARTIES, NOVARTIS shall at its sole cost be obligated to diligently enforce PATENT(s) until there is a binding, unappealable judicial determination as to whether the manufacture, formulation or on behalf use of Spectrum, its Affiliates such generic version of Iloperidone infringes PATENT(s) or sublicensees and after until it is demonstrated to the first patient satisfaction of both PARTIES that PATENT(s) are not being infringed in the Phase III trial has been dosed [Intentionally Redacted];such country (iiic) after [Intentionally RedactedIf it is demonstrated to the satisfaction of both PARTIES. or the binding, unappealable judicial determination under Section 3.4(b)(ii) holds that PATENT(s) are not being infringed in such process patent country, the royalty rate that NOVARTIS shall pay to TITAN on NOVARTIS' or its AFFILIATE's or SUBLICENSEE's annual NET SALES of PRODUCT in that process patent country shall continue to be [ * ] of the patients in the Phase III trial have been dosed [Intentionally Redacted];until such PATENT(s) expires. (ivd) upon acceptance If the binding, unappealable judicial determination under Section 3.4(b)(ii) holds that PATENT(s) are being infringed in such process patent country, NOVARTIS shall take reasonable steps to have enforced such determination. If as a result, the commercialization of Iloperidone by the FDA of submission for Regulatory Approval [Intentionally RedactedTHIRD PARTY in that country is discontinued: THE INFORMATION BELOW, MARKED BY * AND [ ];, HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE COMMISSION. (vi) upon the first grant royalty rate(s) that NOVARTIS shall pay to TITAN on NOVARTIS' or its AFFILIATE's or SUBLICENSEE's annual NET SALES of Regulatory Approval PRODUCT in that process patent country shall be, commencing on the later of: (A) the date such binding, unappealable judicial determination is rendered, and (B) the date (if any) specified in such determination that commercialization of such THIRD PARTY generic version of PRODUCT is to be discontinued, those royalty rates provided for marketing for a Contract Product in the Territory [Intentionally Redacted];Section 3.3 until such PATENT(s) expires; and (viii) upon the first grant of Regulatory Approval for marketing for a product with D-63153 as an active ingredient in Japan [Intentionally Redacted]. Spectrum NOVARTIS shall inform Zentaris on the occurrence of a milestone event as soon as possiblerepay to TITAN, however, not later than within fourteen (14) days following the occurrence of such milestone event. Milestone payments are payable within thirty (30) days after Spectrum's receipt the later of: (A) the date such binding, unappealable judicial determination was rendered, and (B) the date (if any) specified in such determination that commercialization of such THIRD PARTY generic version of PRODUCT is to be discontinued, an invoice issued by Zentaris for such milestone payment. 4.3 In case Spectrum grants sublicenses amount equal to the difference between the royalties that NOVARTIS would have paid to TITAN under Section 2.2 hereof3.3, Spectrum shall pay and the amount of royalties that NOVARTIS actually paid to Zentaris [Intentionally RedactedTITAN at the [ * ] percent ([Intentionally Redacted]%) of any lump sumrate, periodic or other consideration (other than royalties based on Net Sales) received by Spectrum from sublicensees including, but not limited to, equity, any upfront fees, sublicense fees, marketing rights, or other consideration paid for the authorization period commencing on the date the royalty rate for that process patent country was reduced to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made Contract Products. For the avoidance of doubt, the foregoing obligation shall not apply in respect of any sums received from sublicensees on which Spectrum has or is obliged to pay royalties [ * ] pursuant to Section 4.5 hereof3.4(b), and ending on the later of: (A) the date such binding, unappealable judicial determination was rendered, and (B) the date (if any) specified in such determination that commercialization of such THIRD PARTY generic version of PRODUCT is to be discontinued. 4.4 All fees payable by Spectrum to Zentaris under Sections 4.1(e) After PATENT(s) in any process patent country expires, 4.2 and 4.3 hereof are non-refundable upon expiration or termination of this Agreement for any reason whatsoever assuming such fees have become due during the term of this Agreement. None of the fees payable by Spectrum to Zentaris under Sections 4.1, 4.2 and 4.3 may be credited against any of Spectrum's royalty obligations under Section 4.5 hereof. 4.5 As further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum NOVARTIS and/or its SUBLICENSEE shall pay directly to HMRI royalties to Zentaris equal to [Intentionally Redacted] percent ([Intentionally Redacted]%) of Net Sales as provided for annual Net Sales up to [Intentionally Redacted] US dollars ($[Intentionally Redacted]), [Intentionally Redacted]% of Net Sales for annual Net Sales between [Intentionally Redacted] US dollars ($[Intentionally Redacted]) and [Intentionally Redacted] US dollars ------- Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. ($[Intentionally Redacted]) and [Intentionally Redacted]% of Net Sales for annual Net Sales exceeding [Intentionally Redacted] US dollars ($[Intentionally Redacted]in Section 3.4(a). 4.6 3.5 As consideration for the payment sublicense granted to NOVARTIS under this Sublicense Agreement in those countries in the TERRITORY for which (a) a PATENT application THE INFORMATION BELOW, MARKED BY * AND [ ], HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE COMMISSION. for COMPOUND or PRODUCT is pending or (b) no PATENT application has been filed or (c) PATENTS have been abandoned or been held invalid or unenforceable by Spectrum to Zentaris under Section 4.2 a decision of a court or tribunal of competent jurisdiction from which no appeal is or can be taken (vicollectively, "Non-Patent Countries"), Zentaris NOVARTIS shall pay to Spectrum for sales of products with D-63153 as an active ingredient in Japan either (i) fifty percent (50%) of profits on sales of products with D-63153 as an active ingredient in JapanTITAN, or (ii) fifty percent (50%) of any lump sum, periodic or other consideration received by Zentaris from sublicensees including, but not limited to, royalties, equity, sublicense fees, marketing rights, or other consideration paid for the authorization to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made products with D-63153 as an active ingredient in Japan. Sections 4.8 et seq. hereof shall apply mutatis mutandis regarding the payments of Zentaris to Spectrum under this Section 4.6. 4.7 In the event that a Contract Product is sold in the form of a combination-preparation for which Spectrum is required to pay a royalty for an active ingredient to a Third Party (that is not an Affiliate of Zentaris), the Net Sales attributable to such combination preparation shall be calculated on a country by country basis by multiplying actual Net Sales of the combination preparation by the fraction A/(A+B)*C, where "A" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for D 63153 and "B" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for the Third Party ingredient(s) when sold in a mono-preparation in the relevant country during the period to which the Net Sales calculation applies or the fair market price if sold to an Affiliate and "C" is Spectrum's (or its Affiliates', sublicensees' or distributors', as applicable) actual Net Sales of the combination preparation during such period or the fair market price if sold to an Affiliate. 4.8 Royalty payments shall be made on a country-by-country and a Contract Product-by-Contract Product basis, howevera [ * ] royalty for KNOW-HOW not relating to manufacturing (whether or not such KNOW-HOW continues as a valid intellectual property right or is in the public domain) on NOVARTIS', its AFFILIATES' and any SUBLICENSEES' annual NET SALES of PRODUCT in countries the Non-Patent Countries for a period of five (5) years from the date of the Territory where first commercial sale of PRODUCT in each such country by NOVARTIS, its AFFILIATES or SUBLICENSEES. After the Contract Products are end of such five (5) year period, no longer covered by a valid claim further royalties arising from sales of a Zentaris Patent Right and Spectrum does not have exclusive commercialization rights PRODUCT in such country shall be due. However, with respect of Contract Product as a result of generic competition by a Third Party to Section 3.5(a) or (other than an Affiliate or sublicensee of Spectrumb), Spectrum shall not pay if at any royalties on Net Sales time during or after such five (5) year period a PATENT for such Contract Product COMPOUND or PRODUCT is issued in such country, subject to Section 3.4, NOVARTIS shall pay to TITAN, from the date the PATENT was issued, the same royalties as provided that for in case Sections 3.3(a) and (b) above. Upon expiration of NOVARTIS' obligation to pay a royalty under such generic competition PATENT, notwithstanding Section 3.4, a [ * ] royalty for KNOW-HOW not relating to manufacturing (whether or not such KNOW-HOW continues as a valid intellectual property right or is in India the Parties agree to discuss a payment public domain), on NET SALES of royalties for PRODUCT in such Contract Product. 4.9 All payments by Spectrum to Zentaris under this Agreement country, shall be paid in EURO by NOVARTIS and/or any of its SUBLICENSEES directly to the following account: [Intentionally Redacted] For purposes HMRI for a period of calculating the amounts payable by Spectrum under Sections 4.3 and 4.5 hereof, such payments five (5) years after which NOVARTIS shall be converted into Euros at entitled to continue to use the prevailing open market currency conversion rate (commercial selling rate) as quoted by the Wall Street Journal fixing rate, issued by Reuters at 3 pm on the last day of the calendar quarter in which such payments were received by Spectrum. 4.10 Participation payments and royalties under Sections 4.3 and 4.5 shall be paid KNOW-HOW on a calendar quarterly basis. Each quarterly payment by Spectrum under Sections 4.3 and 4.5 shall be paid within ninety (90) days after the close of the calendar quarter to which it corresponds. 4.11 In the event that any fee payable by Spectrum under Sections 4.1 and 4.2 is not paid to Zentaris on or before the due date thereforefully-paid, as specified herein, or any quarterly participation or royalty payment under Sections 4.3 and 4.5 is overdue, the unpaid overdue amount shall bear interest at a rate equal to three (3) percentage points over LIBOR. 4.12 All payments by Spectrum to Zentaris under this Section 4 shall be paid in full, without deduction for any sales, use, excise or other similar taxes which shall be Zentaris' obligation. All payments are exclusive of value added tax, which shall, if applicable, be invoiced separately. In the event that Spectrum is required to withhold any taxes on any amount payable to Zentaris hereunder, under the applicable laws of any country within the Territory, Spectrum shall at Zentaris' request and cost use its best efforts to obtain and furnish Zentaris with official tax receipts, or other evidence of payment of such withholding taxes, sufficient to permit Zentaris to demonstrate the payment of such withholding taxes, in order to establish Zentaris' right to a credit for such withholding taxes against Zentaris' German income tax liability. Spectrum shall provide Zentaris with all assistance reasonably requested by Zentaris in connection with any application to any competent tax authorities in any country within the Territory to qualify for the benefit of a reduced rate of withholding taxation under any applicable Double Tax Treaty. 4.13 For the term of this Agreement and for a term of three (3) years thereafter, Spectrum shall maintain complete and accurate books and records of account, irrevocable basis in accordance with generally accepted accounting principles, of all transactions and other business activities under this Agreement, sufficient to confirm the accuracy of all reports furnished by Spectrum to Zentaris under Section 3.3 hereof, and all payments by Spectrum to Zentaris under this Section 4. Upon reasonable written notice to Spectrum, Zentaris may request Spectrum's certified public accountant to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit. If Zentaris disagrees with the report provided by Spectrum's accountant, with reasonable justification for such disagreement, then upon reasonable written notice to Spectrum, a certified public accountant designated by Zentaris and acceptable to Spectrum shall have the right to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit; provided, however, that if any such audit reveals an underpayment of [Intentionally Redacted] percent ([Intentionally Redacted]%) or more between the amount of payments actually due and the amount of payments made to Zentaris for the audit period, then, in addition to paying the full amount of such underpayment, plus accrued interest, Spectrum shall reimburse Zentaris all such audit costs and expenses incurred. If the audit reveals an overpayment, Zentaris shall pay the full amount of the such overpayment to Spectrum10.3.

Payments and Royalties. 4.1 In 3.1 As consideration for the rights and licenses sublicenses granted to Vanda by Zentaris to Spectrum Novartis under this Sublicense Agreement, Spectrum shall pay to Zentaris the lump sum amount of EURO One Million ((euro)1,000,000) in cash payable on the Effective Date and [Intentionally Redacted] in common stock of Spectrum (the "Initial Shares") as soon as reasonably practicable after the Effective Date, but no later than 5 business days thereafter. The number of shares of common stock of Spectrum that shall constitute the Initial Shares shall be determined by (i) converting [Intentionally Redacted] to U.S. dollars at the exchange rate [Intentionally Redacted] as published in the Wall Street Journal [Intentionally Redacted], and then (ii) dividing the resulting dollar amount by [Intentionally Redacted] of Spectrum's common stock, as traded on the NASDAQ, [Intentionally Redacted], as set forth in the Wall Street Journal [Intentionally Redacted]. The Initial Shares shall be issued to Zentaris on the Effective Date, but shall be held by Zentaris and may not be assigned, transferred, sold or otherwise disposed of by Zentaris (with the exception only of an assignment or transfer to an Affiliate of Zentaris, provided that such Affiliate agrees to be bound by the restrictions on transfer of such Initial Shares set forth or referred to in Sections 4.1 and 13 of this Agreement) until December 31, 2005. The Initial Shares shall be subject to the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement. To Spectrum's present knowledge, except for the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement, the Shares shall be free of restrictions on transfer after December 31, 2005. 4.2 In addition to the lump sum payment specified in Section 4.1 hereof and as further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum Vanda shall make the following milestone payments to Zentaris, up to a maximum of [Intentionally Redacted]Novartis: (ia) upon completion An up front license fee of the first Phase II study conducted Five Hundred Thousand United States Dollars (U.S.$500,000) shall be paid by or on behalf Vanda to Novartis in cash within ten (10) business days of Spectrum, its Affiliates or Sublicensees [Intentionally Redacted] [Intentionally Redacted];both parties' execution of this Sublicense Agreement. (iib) A first development milestone payment of [*] be payable by Vanda to Novartis one time only upon initiation of [*] for the first Phase III study conducted by or on behalf of Spectrum, its Affiliates or sublicensees and after the first patient in the Phase III trial has been dosed [Intentionally Redacted]; (iii) after [Intentionally Redacted] of the patients in the Phase III trial have been dosed [Intentionally Redacted]; (iv) upon acceptance by the FDA of submission for Regulatory Approval [Intentionally Redacted]; (v) upon the first grant of Regulatory Approval for marketing for a Contract Product in the Territory Field [Intentionally Redacted*];. As used in this Section, [*]. Such milestone payment shall be paid in cash by Vanda directly to Novartis within seven (7) business days of the date of [*]. The [*] payment provided for herein shall, unless otherwise expressly provided for herein, be non-refundable. (vic) upon the first grant A second development milestone payment of Regulatory Approval for marketing for a product with D-63153 as an active ingredient [*] which shall be payable one time only by Vanda to Novartis on [*]. (d) Vanda shall notify Novartis in Japan [Intentionally Redacted]. Spectrum shall inform Zentaris on the occurrence of a milestone event as soon as possible, however, not later than within fourteen (14) days following the occurrence of such milestone event. Milestone payments are payable within writing thirty (30) business days after Spectrumprior to Vanda's receipt estimated achievement of an invoice issued by Zentaris each milestone event described in Sections 3.1(b) and 3.1 (c) (i) above and Vanda shall make each such payment within seven (7) business days of the achievement of the milestone event for which such milestone paymentpayment is due. 4.3 (a) Unless Novartis instructs Vanda in writing otherwise, all cash payments by Vanda to Novartis (including, without limitation, up front payments, milestone payments, and royalties) shall be made by bank wire transfer as follows: Bank: [*] Swift: [*] Correspondent Bank for USD: [*] USD Account Xxxxxxxx XX, Xxxxx / Xxxxxxxxxxx: [*] USD Account Novartis Pharma AG, Basel / Switzerland: [*] (b) At least two (2) business days prior to the planned wire transfer to either of the above accounts, Vanda shall notify Novartis of the amount and date the cash shall be transferred. (c) In case Spectrum grants sublicenses under Section 2.2 hereofthe event of a late payment hereunder by Vanda to Novartis, Spectrum Vanda shall pay to Zentaris Novartis interest [Intentionally Redacted*] percent ([Intentionally Redacted]%*]%) on the outstanding balance until such balance, including interest, is paid in full to Novartis. The acceptance of such late ---------- CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. payment shall act as a waiver of any lump sum, periodic or other consideration (other than royalties based on Net Sales) received rights Novartis may have hereunder due to a breach by Spectrum from sublicensees including, but not limited to, equity, any upfront fees, sublicense fees, marketing rights, or other consideration paid for the authorization Vanda relating solely to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have such payment being made Contract Products. For the avoidance of doubt, the foregoing obligation shall not apply in respect of any sums received from sublicensees on which Spectrum has or is obliged to pay royalties pursuant to Section 4.5 hereoflate. 4.4 All fees payable by Spectrum to Zentaris under Sections 4.1, 4.2 and 4.3 hereof are non-refundable upon expiration or termination of this Agreement for any reason whatsoever assuming such fees have become due during the term of this Agreement. None of the fees payable by Spectrum to Zentaris under Sections 4.1, 4.2 and 4.3 may be credited against any of Spectrum's royalty obligations under Section 4.5 hereof. 4.5 As further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall pay royalties to Zentaris equal to [Intentionally Redacted] percent ([Intentionally Redacted]%) of Net Sales for annual Net Sales up to [Intentionally Redacted] US dollars ($[Intentionally Redacted]), [Intentionally Redacted]% of Net Sales for annual Net Sales between [Intentionally Redacted] US dollars ($[Intentionally Redacted]) and [Intentionally Redacted] US dollars ------- Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. ($[Intentionally Redacted]) and [Intentionally Redacted]% of Net Sales for annual Net Sales exceeding [Intentionally Redacted] US dollars ($[Intentionally Redacted]). 4.6 3.3 As consideration for the payment by Spectrum sublicense granted to Zentaris under Section 4.2 (vi)Vanda in this Sublicense Agreement, Zentaris Vanda shall pay to Spectrum Novartis, in those countries where, and for sales the period, Patents claiming a priority date of products with D-63153 as an active ingredient May 19, 1989 and December 29, 1989 or Patents owned by Novartis AG in Japan either a particular country in the Territory for which a patent had been granted validly claiming Iloperidone or the manufacture, formulation or the use thereof for use in the Field: (ia) fifty percent [*] per cent (50[*]%) of profits royalty on sales of products with D-63153 as an active ingredient in Japan, or (ii) fifty percent (50%) of any lump sum, periodic or other consideration received by Zentaris from sublicensees including, but not limited to, royalties, equity, sublicense fees, marketing rights, or other consideration paid for the authorization to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made products with D-63153 as an active ingredient in Japan. Sections 4.8 et seq. hereof shall apply mutatis mutandis regarding the payments of Zentaris to Spectrum under this Section 4.6. 4.7 In the event that a Contract Product is sold in the form of a combination-preparation for which Spectrum is required to pay a royalty for an active ingredient to a Third Party (that is not an Affiliate of Zentaris), the Net Sales attributable to such combination preparation shall be calculated on a country by country basis by multiplying actual annual Net Sales of the combination preparation by the fraction A/(A+B)*CProduct of Vanda, where "A" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for D 63153 ' and "B" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for the Third Party ingredient(s) when sold in a mono-preparation in the relevant country during the period to which the Net Sales calculation applies or the fair market price if sold to an Affiliate and "C" is Spectrum's (or its Affiliates', sublicenseesSublicensees' or distributors', as applicable) actual annual Net Sales of the combination preparation during such period or Product in the fair market price if sold to an AffiliateTerritory. 4.8 Royalty payments (b) Vanda shall be made on a country-by-country and a Contract Product-by-Contract Product basis, however, in countries of also pay to Novartis the Territory where the Contract Products are no longer covered by a valid claim of a Zentaris Patent Right and Spectrum does not have exclusive commercialization rights in respect of Contract Product as a result of generic competition by a Third Party (other than an Affiliate or sublicensee of Spectrum), Spectrum shall not pay any royalties on following milestone payments: Net Sales for such Contract Product in such country, provided that in case of such generic competition in India the Parties agree Milestone Milestone payment from Vanda to discuss a payment of royalties for such Contract Product. 4.9 All payments by Spectrum to Zentaris under this Agreement shall be paid in EURO to the following account: [Intentionally Redacted] For purposes of calculating the amounts payable by Spectrum under Sections 4.3 and 4.5 hereof, such payments shall be converted into Euros at the prevailing open market currency conversion rate Novartis ------------------- ---------------------------------------- (commercial selling rateA) as quoted by the Wall Street Journal fixing rate, issued by Reuters at 3 pm on the last day of the calendar quarter in which such payments were received by Spectrum. 4.10 Participation payments and royalties under Sections 4.3 and 4.5 shall be paid on a calendar quarterly basis. Each quarterly payment by Spectrum under Sections 4.3 and 4.5 shall be paid within ninety (90) days after the close of the calendar quarter to which it corresponds. 4.11 In the event that any fee payable by Spectrum under Sections 4.1 and 4.2 is not paid to Zentaris on or before the due date therefore, as specified herein, or any quarterly participation or royalty payment under Sections 4.3 and 4.5 is overdue, the unpaid overdue amount shall bear interest at a rate equal to three (3) percentage points over LIBOR. 4.12 All payments by Spectrum to Zentaris under this Section 4 shall be paid in full, without deduction for any sales, use, excise or other similar taxes which shall be Zentaris' obligation. All payments are exclusive of value added tax, which shall, if applicable, be invoiced separately. In the event that Spectrum is required to withhold any taxes on any amount payable to Zentaris hereunder, under the applicable laws of any country within the Territory, Spectrum shall at Zentaris' request and cost use its best efforts to obtain and furnish Zentaris with official tax receipts, or other evidence of payment of such withholding taxes, sufficient to permit Zentaris to demonstrate the payment of such withholding taxes, in order to establish Zentaris' right to a credit for such withholding taxes against Zentaris' German income tax liability. Spectrum shall provide Zentaris with all assistance reasonably requested by Zentaris in connection with any application to any competent tax authorities in any country within the Territory to qualify for the benefit of a reduced rate of withholding taxation under any applicable Double Tax Treaty. 4.13 For the term of this Agreement and for a term of three (3) years thereafter, Spectrum shall maintain complete and accurate books and records of account, in accordance with generally accepted accounting principles, of all transactions and other business activities under this Agreement, sufficient to confirm the accuracy of all reports furnished by Spectrum to Zentaris under Section 3.3 hereof, and all payments by Spectrum to Zentaris under this Section 4. Upon reasonable written notice to Spectrum, Zentaris may request Spectrum's certified public accountant to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit. If Zentaris disagrees with the report provided by Spectrum's accountant, with reasonable justification for such disagreement, then upon reasonable written notice to Spectrum, a certified public accountant designated by Zentaris and acceptable to Spectrum shall have the right to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit; provided, however, that if any such audit reveals an underpayment Achievement of [Intentionally Redacted*] percent ([Intentionally Redacted]%) or more between the amount of payments actually due and the amount of payments made to Zentaris for the audit period, then, in addition to paying the full amount of such underpayment, plus accrued interest, Spectrum shall reimburse Zentaris all such audit costs and expenses incurred. If the audit reveals an overpayment, Zentaris shall pay the full amount of the such overpayment to Spectrum.*]

Payments and Royalties. 4.1 In 3.1 As consideration for the rights and licenses sublicenses granted to Vanda by Zentaris to Spectrum Novartis under this Sublicense Agreement, Spectrum shall pay to Zentaris the lump sum amount of EURO One Million ((euro)1,000,000) in cash payable on the Effective Date and [Intentionally Redacted] in common stock of Spectrum (the "Initial Shares") as soon as reasonably practicable after the Effective Date, but no later than 5 business days thereafter. The number of shares of common stock of Spectrum that shall constitute the Initial Shares shall be determined by (i) converting [Intentionally Redacted] to U.S. dollars at the exchange rate [Intentionally Redacted] as published in the Wall Street Journal [Intentionally Redacted], and then (ii) dividing the resulting dollar amount by [Intentionally Redacted] of Spectrum's common stock, as traded on the NASDAQ, [Intentionally Redacted], as set forth in the Wall Street Journal [Intentionally Redacted]. The Initial Shares shall be issued to Zentaris on the Effective Date, but shall be held by Zentaris and may not be assigned, transferred, sold or otherwise disposed of by Zentaris (with the exception only of an assignment or transfer to an Affiliate of Zentaris, provided that such Affiliate agrees to be bound by the restrictions on transfer of such Initial Shares set forth or referred to in Sections 4.1 and 13 of this Agreement) until December 31, 2005. The Initial Shares shall be subject to the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement. To Spectrum's present knowledge, except for the restrictions on resale set forth or referred to in Sections 4.1 and 13 of this Agreement, the Shares shall be free of restrictions on transfer after December 31, 2005. 4.2 In addition to the lump sum payment specified in Section 4.1 hereof and as further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum Vanda shall make the following milestone payments to Zentaris, up to a maximum of [Intentionally Redacted]Novartis: (ia) upon completion An up front license fee of the first Phase II study conducted [*] shall be paid by or on behalf Vanda to Novartis in cash within [*] days of Spectrum, its Affiliates or Sublicensees [Intentionally Redacted] [Intentionally Redacted];both parties' execution of this Sublicense Agreement. (iib) A first development milestone payment of [*] be payable by Vanda to Novartis [*] upon initiation of [*] for the first Phase III study conducted by or on behalf of Spectrum, its Affiliates or sublicensees and after the first patient Product in the Phase III trial has been dosed Field [Intentionally Redacted*]; (iii) after . As used in this Section, [Intentionally Redacted*] ---------- [*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. Such milestone payment shall be paid in cash by Vanda directly to Novartis within [*] of the patients in the Phase III trial have been dosed date of [Intentionally Redacted*];. The [*] provided for herein shall, unless otherwise expressly provided for herein, be [*]. (ivc) upon acceptance A second development milestone payment of [*] which shall be payable [*] by the FDA of submission for Regulatory Approval Vanda to Novartis on [Intentionally Redacted*];. (vd) upon Vanda shall notify Novartis in writing [*] prior to Vanda's estimated achievement of each milestone event described in Sections 3.1(b) and 3.1 (c)(i) above and Vanda shall make each such payment within [*] of the first grant achievement of Regulatory Approval the milestone event for marketing for a Contract Product in the Territory [Intentionally Redacted];which such payment is due. (via) upon Unless Novartis instructs Vanda in writing otherwise, all cash payments by Vanda to Novartis (including, without limitation, up front payments, milestone payments, and royalties) shall be made by bank wire transfer as follows: Bank: [*] Swift: [*] Correspondent Bank for USD: [*] USD Account Novartis AG, Basel/Switzerland: [*] USD Account Novartis Pharma AG, Basel/Switzerland: [*] (b) At least [*] days prior to the first grant planned wire transfer to either of Regulatory Approval for marketing for a product with D-63153 as an active ingredient in Japan [Intentionally Redacted]. Spectrum the above accounts, Vanda shall inform Zentaris on notify Novartis of the occurrence amount and date the cash shall be transferred. (c) In the event of a milestone event as soon as possiblelate payment hereunder by Vanda to Novartis, however, not later than within fourteen (14) days following the occurrence of such milestone event. Milestone payments are payable within thirty (30) days after Spectrum's receipt of an invoice issued by Zentaris for such milestone payment. 4.3 In case Spectrum grants sublicenses under Section 2.2 hereof, Spectrum Vanda shall pay to Zentaris Novartis [Intentionally Redacted] percent *]([Intentionally Redacted]%*]%) on the outstanding balance until such balance, including interest, is paid in full to Novartis. The acceptance of such late ---------- [*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. payment shall act as a waiver of any lump sum, periodic or other consideration (other than royalties based on Net Sales) received rights Novartis may have hereunder due to a breach by Spectrum from sublicensees including, but not limited to, equity, any upfront fees, sublicense fees, marketing rights, or other consideration paid for the authorization Vanda relating solely to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have such payment being made Contract Products. For the avoidance of doubt, the foregoing obligation shall not apply in respect of any sums received from sublicensees on which Spectrum has or is obliged to pay royalties pursuant to Section 4.5 hereoflate. 4.4 All fees payable by Spectrum to Zentaris under Sections 4.1, 4.2 and 4.3 hereof are non-refundable upon expiration or termination of this Agreement for any reason whatsoever assuming such fees have become due during the term of this Agreement. None of the fees payable by Spectrum to Zentaris under Sections 4.1, 4.2 and 4.3 may be credited against any of Spectrum's royalty obligations under Section 4.5 hereof. 4.5 As further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall pay royalties to Zentaris equal to [Intentionally Redacted] percent ([Intentionally Redacted]%) of Net Sales for annual Net Sales up to [Intentionally Redacted] US dollars ($[Intentionally Redacted]), [Intentionally Redacted]% of Net Sales for annual Net Sales between [Intentionally Redacted] US dollars ($[Intentionally Redacted]) and [Intentionally Redacted] US dollars ------- Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. ($[Intentionally Redacted]) and [Intentionally Redacted]% of Net Sales for annual Net Sales exceeding [Intentionally Redacted] US dollars ($[Intentionally Redacted]). 4.6 3.3 As consideration for the payment by Spectrum sublicense granted to Zentaris under Section 4.2 (vi)Vanda in this Sublicense Agreement, Zentaris Vanda shall pay to Spectrum Novartis, in those countries where, and for sales the period, Patents claiming a priority date of products with D-63153 as an active ingredient May 19, 1989 and December 29, 1989 or Patents owned by Novartis AG in Japan either a particular country in the Territory for which a patent had been granted validly claiming Iloperidone or the manufacture, formulation or the use thereof for use in the Field: (ia) fifty percent [*] per cent (50[*]%) of profits royalty on sales of products with D-63153 as an active ingredient in Japan, or (ii) fifty percent (50%) of any lump sum, periodic or other consideration received by Zentaris from sublicensees including, but not limited to, royalties, equity, sublicense fees, marketing rights, or other consideration paid for the authorization to use the Zentaris' Patent Rights and/or Zentaris' Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made products with D-63153 as an active ingredient in Japan. Sections 4.8 et seq. hereof shall apply mutatis mutandis regarding the payments of Zentaris to Spectrum under this Section 4.6. 4.7 In the event that a Contract Product is sold in the form of a combination-preparation for which Spectrum is required to pay a royalty for an active ingredient to a Third Party (that is not an Affiliate of Zentaris), the Net Sales attributable to such combination preparation shall be calculated on a country by country basis by multiplying actual annual Net Sales of the combination preparation by the fraction A/(A+B)*CProduct of Vanda, where "A" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for D 63153 ' and "B" is Spectrum's (or its Affiliates, sublicensees or distributors) average selling price for the Third Party ingredient(s) when sold in a mono-preparation in the relevant country during the period to which the Net Sales calculation applies or the fair market price if sold to an Affiliate and "C" is Spectrum's (or its Affiliates', sublicenseesSublicensees' or distributors', as applicable) actual annual Net Sales of the combination preparation during such period or Product in the fair market price if sold to an AffiliateTerritory. 4.8 Royalty payments (b) Vanda shall be made on a country-by-country and a Contract Product-by-Contract Product basis, however, in countries of the Territory where the Contract Products are no longer covered by a valid claim of a Zentaris Patent Right and Spectrum does not have exclusive commercialization rights in respect of Contract Product as a result of generic competition by a Third Party (other than an Affiliate or sublicensee of Spectrum), Spectrum shall not also pay any royalties on Net Sales for such Contract Product in such country, provided that in case of such generic competition in India the Parties agree to discuss a payment of royalties for such Contract Product. 4.9 All payments by Spectrum to Zentaris under this Agreement shall be paid in EURO to Novartis the following account: [Intentionally Redacted] For purposes of calculating the amounts payable by Spectrum under Sections 4.3 and 4.5 hereof, such payments shall be converted into Euros at the prevailing open market currency conversion rate (commercial selling rate) as quoted by the Wall Street Journal fixing rate, issued by Reuters at 3 pm on the last day of the calendar quarter in which such payments were received by Spectrum. 4.10 Participation payments and royalties under Sections 4.3 and 4.5 shall be paid on a calendar quarterly basis. Each quarterly payment by Spectrum under Sections 4.3 and 4.5 shall be paid within ninety (90) days after the close of the calendar quarter to which it corresponds. 4.11 In the event that any fee payable by Spectrum under Sections 4.1 and 4.2 is not paid to Zentaris on or before the due date therefore, as specified herein, or any quarterly participation or royalty payment under Sections 4.3 and 4.5 is overdue, the unpaid overdue amount shall bear interest at a rate equal to three (3) percentage points over LIBOR. 4.12 All payments by Spectrum to Zentaris under this Section 4 shall be paid in full, without deduction for any sales, use, excise or other similar taxes which shall be Zentaris' obligation. All payments are exclusive of value added tax, which shall, if applicable, be invoiced separately. In the event that Spectrum is required to withhold any taxes on any amount payable to Zentaris hereunder, under the applicable laws of any country within the Territory, Spectrum shall at Zentaris' request and cost use its best efforts to obtain and furnish Zentaris with official tax receipts, or other evidence of payment of such withholding taxes, sufficient to permit Zentaris to demonstrate the payment of such withholding taxes, in order to establish Zentaris' right to a credit for such withholding taxes against Zentaris' German income tax liability. Spectrum shall provide Zentaris with all assistance reasonably requested by Zentaris in connection with any application to any competent tax authorities in any country within the Territory to qualify for the benefit of a reduced rate of withholding taxation under any applicable Double Tax Treaty. 4.13 For the term of this Agreement and for a term of three (3) years thereafter, Spectrum shall maintain complete and accurate books and records of account, in accordance with generally accepted accounting principles, of all transactions and other business activities under this Agreement, sufficient to confirm the accuracy of all reports furnished by Spectrum to Zentaris under Section 3.3 hereof, and all payments by Spectrum to Zentaris under this Section 4. Upon reasonable written notice to Spectrum, Zentaris may request Spectrum's certified public accountant to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such milestone payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit. If Zentaris disagrees with the report provided by Spectrum's accountant, with reasonable justification for such disagreement, then upon reasonable written notice to Spectrum, a certified public accountant designated by Zentaris and acceptable to Spectrum shall have the right to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit; provided, however, that if any such audit reveals an underpayment of [Intentionally Redacted] percent ([Intentionally Redacted]%) or more between the amount of payments actually due and the amount of payments made to Zentaris for the audit period, then, in addition to paying the full amount of such underpayment, plus accrued interest, Spectrum shall reimburse Zentaris all such audit costs and expenses incurred. If the audit reveals an overpayment, Zentaris shall pay the full amount of the such overpayment to Spectrum.: