Exhibit 10.37

***Text Omitted and Filed Separately
with the Securities and Exchange Commission.
Confidential Treatment Requested
Under 17 C.F.R. Sections 200.80(b)(4)
and 240.24b-2.

LICENSE AGREEMENT

 

BETWEEN

 

SENOMYX, INC.

 

AND

 

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

 

FOR

 

CASE NO. SD1998-D06
CASE NO. SD1999-A15
CASE NO. SD1999-A29
CASE NO. SD1999-B68
CASE NO. SD1999-C03
CASE NO. SD1999-C04
CASE NO. SD2000-A45

 

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TABLE OF CONTENTS

Recitals

 

 

 

 

 

 

 

Article 1:

Definitions

 

 

 

 

 

 

Article 2:

Grant

 

 

 

 

 

 

Article 3:

Consideration

 

 

 

 

 

 

Article 4:

Reports, Records and Payments

 

 

 

 

 

 

Article 5:

Patent Matters

 

 

 

 

 

 

Article 6:

Governmental Matters

 

 

 

 

 

 

Article 7:

Termination of Agreement

 

 

 

 

 

 

Article 8:

Limited Warranty and Indemnification

 

 

 

 

 

 

Article 9:

Use of Names and Trademarks

 

 

 

 

 

 

Article 10:

Miscellaneous Provisions

 

 

 

 

 

 

Exhibit A:

Common Interest Agreement

 

 

 

 

 

 

Exhibit B:

Patent Rights

 

 

 

 

 

 

Exhibit C:

Technology

 

 

 

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LICENSE AGREEMENT

This agreement (“Agreement”) is made by and between  Senomyx, Inc., a Delaware
corporation having an address at 11099 N. Torrey Pines Road, La Jolla,
California 92037 (“LICENSEE”), and The Regents of the University of California,
a California corporation having its statewide administrative offices at 1111
Franklin Street, Oakland, California 94607-5200 (“UNIVERSITY”), represented by
its San Diego campus having an address at University of California, San Diego,
Technology Transfer & Intellectual Property Services, Mail Code 0910, 9500
Gilman Drive, La Jolla, California 92093-0910 (“UCSD”).

This Agreement is effective on the date of the last signature (“Effective
Date”).

RECITALS

WHEREAS, the inventions disclosed in UCSD Disclosure Dockets  as listed below:
***The remainder of this page is intentionally left blank***

1

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UCSD Disclosure
Docket No.

 

OTT
Disclosure
Docket No.

 

Title

 

 

 

 

 

1998-D06

 

1998-306

 

[...***...]

 

 

 

 

 

1999-A15

 

1999-015

 

[...***...]

 

 

 

 

 

1999-A29

 

1999-029

 

[...***...]

 

 

 

 

 

1999-B68

 

1999-168

 

[...***...]

 

 

 

 

 

1999-C03

 

1999-203

 

[...***...]

 

 

 

 

 

1999-C04

 

1999-204

 

[...***...]

 

 

 

 

 

2000-A45

 

2000-045

 

[...***...]

 

collectively, (“Invention”), were made in the course of research at UCSD by Dr.
Charles Zuker   and his associates (hereinafter and collectively, the “UCSD
Inventors”) and/or in the course of research at the National Institutes of
Health (“NIH”) by Dr. Nicholas Ryba and associates (hereinafter and
collectively, the  “NIH Inventors”) and are covered by Patent Rights as defined
below;

WHEREAS, the UCSD Inventors are employees of UNIVERSITY, and they are obligated
to assign all of their right, title and interest in the Invention to UNIVERSITY;

***Confidential Treatment Requested

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WHEREAS, Dr. Zuker is also an employee of the Howard Hughes Medical Institute
(“HHMI”) with a laboratory at UCSD;

WHEREAS, HHMI assigned its right and title in the Invention to UNIVERSITY under
the terms of an interinstitutional agreement between HHMI and UNIVERSITY (UC
Control No. 1986-18-0017, “HHMI Interinstitutional Agreement”), and accordingly,
UNIVERSITY has the sole responsibility to manage Invention and any patent rights
associated therewith on behalf of both parties;

WHEREAS, under the terms of the HHMI Interinstitutional Agreement, HHMI has
reserved a nonexclusive, paid-up, royalty-free, irrevocable license, with no
right to sublicense others, to make and use the Invention, Technology and Patent
Rights for research purposes;

WHEREAS, the NIH Inventors, in accordance with their patent agreement with NIH,
have assigned to NIH their interest in any patent rights covering Inventions
made during the course of their employment with NIH;

WHEREAS, under the terms of an interinstitutional agreement between NIH and
UNIVERSITY (UC Control No. 2000-18-0542, “NIH Interinstitutional Agreement”,
UNIVERSITY is granted the exclusive right to manage the invention on behalf of
both parties;

WHEREAS, the research was sponsored in part by the Government of the United
States of America and as a consequence this license is subject to overriding
obligations to the Federal Government under 35 U.S.C. §§ 200-212 and applicable
regulations;

WHEREAS, UNIVERSITY and LICENSEE (through its predecessor in interest, Ambryx)
had previously entered into an exclusive license agreement dated March 10, 2000
(UC Control #2000-04-0441, “Previous Agreement”) for certain rights in
Invention;

WHEREAS, LICENSEE has, since the execution of the Previous Agreement, developed
certain inventions that are complementary and closely related to Invention
(“Related Inventions” as defined in 1.21 below);

WHEREAS, with this Agreement LICENSEE and UNIVERSITY mutually desire to replace
the Previous Agreement and to contemporaneously enter into a Common Interest
Agreement, attached as Exhibit A to (i) optimize the patent protection strategy
for both Invention and Related Invention, and (ii) better define the rights,
obligations, including royalty obligation, and intents of both parties;

WHEREAS, UNIVERSITY and LICENSEE mutually desire that Invention and Related
Invention be developed and utilized to the fullest possible extent so that
their  benefits can be enjoyed by the general public;

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WHEREAS, LICENSEE understands that UNIVERSITY may publish or otherwise
disseminate information concerning the Invention and Technology (as defined
below) at any time and that LICENSEE is paying consideration thereunder for its
early access to the Invention and Technology, not continued secrecy therein.

NOW, THEREFORE, the parties agree:

ARTICLE 1.  DEFINITIONS

The terms, as defined herein, shall have the same meanings in both their
singular and plural forms.

1.1  “Affiliate” means any business entity which is bound in writing by LICENSEE
to the terms set forth in this Agreement and in which LICENSEE owns or controls,
directly or indirectly, at least fifty percent (50%) of the outstanding stock or
other voting rights entitled to elect directors, or in which LICENSEE is owned
or controlled directly or indirectly by at least fifty percent (50%) of the
outstanding stock or other voting rights entitled to elect directors; but in any
country where the local law does not permit foreign equity participation of at
least fifty  percent (50%), then an “Affiliate” includes any company in which
LICENSEE owns or controls or is owned or controlled by, directly or indirectly,
the maximum percentage of outstanding stock or voting rights permitted by local
law.

1.2  “Sublicense” means an agreement into which LICENSEE enters with a third
party that is not an Affiliate for the purpose of (i) granting certain rights
under the licenses to Patent Rights and/or Property Rights granted to LICENSEE
pursuant to Sections 2.1 and 2.2 of this Agreement; (ii) granting an option to
certain rights under the licenses to Patent Rights and/or Property Rights
granted to LICENSEE pursuant to Sections 2.1 and 2.2 of this Agreement; or (iii)
forbearing the exercise of any rights under the licenses to Patent Rights and/or
Property Rights, granted to LICENSEE under Sections 2.1 and 2.2 of this
Agreement (by way of illustration, but not limitation, an example of (iii) would
be if LICENSEE enters into an agreement under which LICENSEE receives
consideration from a third party for not selling a Licensed Product).
“Sublicensee” means a third party with whom LICENSEE enters into a Sublicense. 
For the avoidance of doubt, “Sublicense” does not include agreements into which
LICENSEE enters with a third party covering its own technology other than
University’s interest in Related Inventions or Related Patent Rights.

1.3  “Field” means all fields of use.

1.4  “Territory” means worldwide.

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1.5  “Term” means the period of time beginning on the Effective Date and, unless
otherwise terminated in accordance with the terms of this Agreement, ending on
the date there no longer exists a Valid Claim in a Patent Right licensed under
this Agreement.

1.6  “Patent Rights” means UNIVERSITY’s rights in the patents and patent
applications listed in Exhibit B, disclosing and claiming the Invention, filed
by Inventors and assigned to or otherwise managed by UNIVERSITY under the HHMI
Interinstitutional Agreement and the NIH Interinstitutional Agreement; and
continuing applications thereof including divisions, substitutions, and
continuations-in-part (but only to extent the claims thereof are supported in
the specification of the parent application); any patents issuing on said
applications including reissues, reexaminations and extensions; and any
corresponding foreign applications or patents.

1.7  “Technology” means the biological materials relating to the Invention
provided by the Inventors to LICENSEE and are listed in Exhibit C.  Technology
shall include, in whole or in part, but not be limited to, any derivative,
compound with common nucleotide sequence, homolog, ortholog, or analog thereof
which the Inventors provided to LICENSEE prior to Effective Date or may provide
during the Term of this Agreement.

1.8  “Sponsor Rights” means all the applicable provisions of any license to the
United States Government and HHMI as set forth in the recitals above.

1.9  “Licensed Method” means any process or method that uses Related Patent
Rights (as later defined in 1.18) or is covered by Patent Rights, the use of
which would constitute in a particular country, but for the license granted to
LICENSEE under this Agreement, an infringement, an inducement to infringe or
contributory infringement, of any pending or issued claim within Patent Rights
pending in such country were they issued in a patent at the time of the
infringing activity in that country.

1.10 “Licensed Product” means any service, composition or product that uses or
is identified with the use of (i) Related Patent Rights;  (ii) Licensed Method;
or (iii) Patent Rights, the manufacture, use, sale, offer for sale, or
importation of which would constitute in a particular country, but for the
license granted to LICENSEE under this Agreement, an infringement, an inducement
to infringe or contributory infringement, of any pending or issued claim within
the Patent Rights in such country were they issued in a patent at the time of
the infringing activity in that country.   For the avoidance of doubt, Licensed
Product does not include Enabled Products.

1.11 “Net Sales” means:

(i) in the case of Section 3.1(c)(i)-3.1(c)(iv), the total of the gross invoice
prices of Licensed Products sold or leased by LICENSEE, Sublicensee, Affiliate,
or any combination thereof, less the sum of the following actual and customary
deductions where

5

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applicable and separately listed:  cash, trade, or quantity discounts; sales,
use, tariff, import/export duties or other excise taxes imposed on particular
sales (except for value-added and income taxes imposed on the sales of Licensed
Product in foreign countries); transportation charges; or credits to customers
because of rejections or returns; and

(ii) in the case of 3.1(c)(v) and 3.1(c)(vi), revenue received for lease or
license of Enabled Products by LICENSEE, Sublicensee, Affiliate, or any
combination thereof, not including any Excluded Revenue.

For purposes of calculating Net Sales, transfers to a  Sublicensee or an
Affiliate of Licensed Product or Enabled Product under this Agreement for (i)
end use (but not resale) by the  Sublicensee or Affiliate shall be treated as
sales by LICENSEE at list price of LICENSEE, or (ii) resale by a Sublicensee or
an Affiliate shall be treated as sales at the list price of the Sublicensee or
Affiliate.

1.12                           “Patent Costs” means all out-of-pocket expenses
for the preparation, filing, prosecution, and maintenance of all United States
and foreign patents included in Patent Rights.  Patent Costs shall also include
reasonable out-of-pocket expenses for patentability opinions, inventorship
determination, preparation and prosecution of patent application,
re-examination, re-issue, interference, and opposition activities related to
patents or applications in Patent Rights.

1.13                           “Combination Product” means any product which is
a Licensed Product or Enabled Product and contains other product(s) or product
component(s) that is not an excipient, diluent, adjuvant, buffer and the like
and (i) does not use Technology Patent Rights, or Related Patent Rights; (ii)
the sale, use or import by itself does not contribute to or induce the
infringement of Patent Rights and does not misappropriate Property Rights (as
defined by 1.19 below; (iii) is sold separately by LICENSEE, its Sublicensee or
an Affiliate; and (iv) enhances the market price of the final product(s) sold,
used or imported by LICENSEE, its Sublicensee, or an Affiliate.  Notwithstanding
(iii) above, if said product(s) or product component(s) is not sold separately,
the parties shall negotiate in good faith the fair market value of the
component(s).  Any dispute between the parties regarding such fair market value
shall be resolved in accordance with Section 3.4.

1.14                           “Patent Product” means any composition or product
that (i) uses or is covered by the claims of Patent Rights or Related Patent
Rights, (ii) that is produced by or practices  the Licensed Method, or (iii) the
manufacture, use, sale, offer for sale, or importation of which would constitute
in a particular country, but for the license granted to LICENSEE under this
Agreement, an infringement, an inducement to infringe or contributory
infringement, of any pending or issued Valid Claim within the Patent Rights or
University’s interest in Related Patent Rights in such country had such rights
not been owned by LICENSEE.   Patent Product is a Licensed Product.  For the
avoidance of doubt, Patent Product does not include Enabled Products.

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1.15                           “Patent-Enabled Identified Product” means any
composition or product that (i) the use, sale, manufacture or import of it does
not infringe Patent Rights or Related Patent Rights but  (ii) is identified
using Patent Rights, Related Patent Rights or Patent Product.

1.16                           “Technology Product” means any composition or
product that (i) does not infringe Patent Rights or Related Patent Rights but
(ii) uses Property Rights or comprises, in whole or in part, Technology or
derivatives thereof.  Technology Product is a Licensed Product.

1.17                           “Technology-Enabled Identified Product” means any
composition or product that (i) the manufacture, use, sale, or import of it does
not infringe Patent Rights or Related Patent Rights and does not misappropriate
Property Rights but (ii) is identified using Technology, in whole or in part,
Technology Product or any derivative thereof.

1.18                           “Related Patent Rights” means LICENSEE’s rights
in any patents and patent applications filed by LICENSEE or its agents during
the period commencing on the Effective Date of the Previous Agreement and ending
on the expiration of the Term, and claiming Related Inventions.

1.19                           “Property Rights” means all of UNIVERSITY’S
right, title and interest in the tangible personal property embodied in the
Technology. Tangible personal property rights are defined in the California
Civil Code Title 2, Article 1.  Tangible property is defined in Black’s Law
Dictionary as “All property which is touchable and has real existence (physical)
whether it is real or personal.” Black’s Law Dictionary, Fifth Edition, pg.
1096.

1.20                           “Excluded Revenue” means (i) the cost of raw
material, labor, direct and indirect cost (where such direct and indirect costs
do not exceed 125% of the cost for raw materials and labor), and (ii) any
consideration that LICENSEE receives for research funding (including license
fees and milestones specifically intended for the reimbursement of research or
regulatory costs as demonstrated by written record), reimbursement of patent
filing, patent prosecution, patent maintenance, royalties paid or payable under
Section 3.1(d) or (f), Sublicense fees paid or payable under Section 3.1(e) or
other expenses (as agreed upon in writing by the parties).  The parties agree
that license fees and milestones under LICENSEE’s collaboration agreements
entered into prior to the Effective Date were intended for reimbursement of
research costs and therefore constitute Excluded Revenue.

1.21                           “Related Inventions” means the inventions
disclosed in U.S. Patent No. […***…] and any corresponding foreign applications
or patents.

1.22                           “Valid Claim” means a claim of a patent or patent
application within the Patent Rights in any country that (i) has not expired;
(ii) has not been disclaimed; (iii) has not been

***Confidential Treatment Requested

7

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cancelled or superseded, or if cancelled or superseded, ahs been reinstated;
(iv) has not been admitted to be invalid or unenforceable through reissue,
disclaimer or otherwise and (v) has not been revoked, held invalid, or otherwise
declared unenforceable or not allowable by a tribunal or patent authority of
competent jurisdiction over such claim in such country from which no further
appeal may be taken.

1.23                           “Sublicense Fees” means payments paid by a
Sublicensee in consideration for a Sublicense, but excluding consideration that
LICENSEE receives for reimbursement of patent filing, patent prosecution, patent
maintenance, and earned royalties.

1.24                           “Enabled Products” means Patent-Enabled
Identified Products and Technology-Enabled Identified Products.

ARTICLE 2.  GRANTS

2.1  License.

(a)           Subject to the limitations set forth in this Agreement and subject
to Sponsor’s Rights, including the licenses granted to the United States
Government and those reserved by HHMI set forth in the Recitals, UNIVERSITY and
LICENSEE hereby terminate the Previous Agreement and UNIVERSITY grants to
LICENSEE, and LICENSEE hereby agrees and accepts, a license under Patent Rights
to make and have made, to use and have used, to sell and have sold, to offer for
sale, and to export and import Licensed Products and to practice Licensed
Methods and a license under Property Rights to make and have made, to use and to
sell Technology, in the Field within the Territory.  To the extent that LICENSEE
sells Technology, LICENSEE shall prohibit its customers from reselling,
redistributing, or propagating Technology.  For the avoidance of doubt, for so
long as UNIVERSITY has granted to LICENSEE the above rights and licenses set
forth in this Section 2.1, LICENSEE, Affiliates and Sublicensees have the right
to make and have made, to use and have used, to sell and have sold, to offer for
sale, and to export and import Enabled Products and their third party customers
shall have the right to sell Enabled Products independent of UNIVERSITY.

The license granted herein is exclusive for Patent Rights.  The license granted
herein is exclusive for Technology, subject to (i) the Reservation of Rights in
Section 2.3; and (ii) the […***…] and HHMI’s policy on research tools.

(b) For the avoidance of doubt, after expiration (but not termination) of this
Agreement, LICENSEE shall have a fully paid up license under Property Rights to
make, have made, use and to sell Technology in the Field within the Territory.

***Confidential Treatment Requested

8

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2.2  Sublicense.

(a)  The license granted in Paragraph 2.1 includes the right of LICENSEE to
grant Sublicense(s) to third parties during the Term but only for as long as the
license is exclusive for Patent Rights.

(b)  With respect to Sublicense(s) granted pursuant to Paragraph 2.2(a),
LICENSEE shall:

(i) to the extent non-cash Sublicense revenue is received by LICENSEE or its
Affiliate from a Sublicensee under a Sublicense granted pursuant to Paragraph
2.2(a), value such non-cash Sublicense revenue at its fair market value as of
the date of receipt. Any dispute between the parties regarding such fair market
value shall be resolved in accordance with Section 3.4;

(ii)  to the extent applicable, include all of the rights of and obligations due
to UNIVERSITY and HHMI (and, if applicable, the Sponsor’s Rights) and contained
in this Agreement;

(iii)  promptly provide UNIVERSITY with a copy of each Sublicense issued; and

(iv)  collect and guarantee payment of all payments due, directly or indirectly,
to UNIVERSITY from Sublicensees and summarize and deliver all reports due,
directly or indirectly, to UNIVERSITY from Sublicensees.

(c)  Upon termination of this Agreement for any reason, UNIVERSITY, at its sole
discretion, shall determine whether LICENSEE shall cancel or assign to
UNIVERSITY any and all Sublicenses.

2.3  Reservation of Rights.  UNIVERSITY reserves the right to:

(a)  use the Invention, Technology and Patent Rights for educational and
research purposes;

(b)  publish or otherwise disseminate any information about the Invention and
Technology at any time to the extent such information does not contain
LICENSEE’s Confidential Information; and

(c)  allow other nonprofit institutions to use Invention, Technology and Patent
Rights for educational and research purposes in their facilities.

ARTICLE 3.  CONSIDERATION

3.1  Fees and Royalties.  The parties hereto understand that the fees and
royalties payable by LICENSEE to UNIVERSITY under this Agreement are partial
consideration for the license

9

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granted herein to LICENSEE under Technology, and Patent Rights. LICENSEE shall
pay UNIVERSITY:

(a) in recognition of the consideration paid under the Previous Agreement, and
the mutual promises and consideration recited in the contemporaneously-executed
Common Interest Agreement, no license or issue fee is due under this Agreement;

(b)  license maintenance fees of […***…] per year, due and payable on or before
February 28, 2007, and annually thereafter on each anniversary through year
2013;  provided however, that LICENSEE’s obligation to pay this fee shall
[…***…].

(c)  an earned royalty of:

(i)            […***…] of Net Sales of Patent Products by LICENSEE, an
Affiliate, or a Sublicensee ;  [By way of illustration, but not limitation, an
example would be sale by LICENSEE  (or an Affiliate or Sublicensee) of receptor
kits where such kits infringe a claim under Patent Rights.  In such event,
UNIVERSITY is entitled to […***…] of LICENSEE’s Net Sales or, in the case of a
Sublicense, to […***…] of Sublicensee’s Net Sales of such kits.]

(ii)           […***…] of Net Sales of Technology Products by LICENSEE,an
Affiliate, or a Sublicensee; [By way of illustration, but not limitation, an
example would be sale by LICENSEE (or an Affiliate or Sublicensee) of receptor
kits where such kits do not infringe a claim under Patent Rights but use
Property Rights.  In such event, UNIVERSITY is entitled to […***…] of LICENSEE’s
Net Sales or, in the case of a Sublicense, to […***…] of Sublicensee’s Net Sales
of such kits.]

(iii)          […***…] of Net Sales of Patent-Enabled Identified Products by
LICENSEE, an Affiliate, or a Sublicensee;  [By way of illustration, but not
limitation, an example would be direct sale by LICENSEE (or an Affiliate or
Sublicensee of Patent Rights) of a compound identified by LICENSEE (or, in the
case of an Affiliate or Sublicensee, a compound identified by such Affiliate or
Sublicensee) using the Patent Rights.  In such event, UNIVERSITY is entitled to
[…***…] of LICENSEE’s Net Sales or, in the case of a Sublicense, to […***…] of
Sublicensee’s Net Sales.]

(iv)          […***…] of Net Sales of Technology-Enabled Identified Products by
LICENSEE, an  Affiliate, or a Sublicensee;  [By way of illustration, but not
limitation, an example would be direct sale by LICENSEE (or direct sale by an
Affiliate or Sublicensee of Property Rights) of a compound identified by
LICENSEE (or, in the case of an Affiliate or Sublicensee, a compound identified
by such Affiliate or Sublicensee) using the Technology Product.  In such event,
UNIVERSITY is entitled to […***…] of LICENSEE’s Net Sales or, in the case of a
Sublicense, to […***…] of Sublicensee’s Net Sales.]

***Confidential Treatment Requested

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(v)           […***…] of Net Sales received by LICENSEE, an Affiliate or a
Sublicensee from a third party for lease or license of Patent-Enabled Identified
Products; [By way of illustration, but not limitation, examples would be: (a)
sale by a LICENSEE collaborator, which collaborator is not a Sublicensee of the
Patent Rights or Property Rights, of a compound identified by LICENSEE using the
Patent Rights; and (b) in the event of a Sublicense of Patent Rights or Property
Rights, sale by a Sublicensee’s collaborator of a compound identified by
Sublicensee using the Patent Rights.  The parties acknowledge that the current
agreements between LICENSEE and its collaborators fall under this royalty scheme
and UNIVERSITY is entitled to […***…] of LICENSEE’s Net Sales (i.e. royalty
revenue) to its collaborators.  In the case of (a) above, UNIVERSITY is entitled
to […***…] of LICENSEE’s Net Sales to its collaborator (not […***…] of the
collaborator’s Net Sales).  In the case of (b) above, UNIVERSITY is entitled to
[…***…] of Sublicensee’s Net Sales (i.e. royalty revenue) to its collaborator
(not […***…] of the collaborator’s Net Sales).  For the avoidance of doubt, this
(v) does not apply to Sublicenses of Patent Rights or Property Rights.]

(vi)          […***…] of Net Sales received by LICENSEE , an Affiliate or a
Sublicensee from a third party for lease or license of Technology-Enabled
Identified Products; [By way of illustration, but not limitation, examples would
be: (a) sale by a LICENSEE collaborator, which collaborator is not a Sublicensee
of the Patent Rights or Property Rights, of a compound identified by LICENSEE
using the Property Rights; and (b) in the event of a Sublicense of Patent Rights
or Property Rights, sale by a Sublicensee’s collaborator of a compound
identified by Sublicensee using the Property Rights.  In the case of (a) above,
UNIVERSITY is entitled to […***…] of LICENSEE’s Net Sales (i.e. royalty revenue)
to its collaborator (not […***…] of the collaborator’s Net Sales).  In the case
of (b) above, UNIVERSITY is entitled to […***…] of Sublicensee’s Net Sales (i.e.
royalty revenue) to its collaborator (not […***…] of the collaborator’s Net
Sales).  For the avoidance of doubt, this (v) does not apply to Sublicenses of
Patent Rights or Property Rights.]

provided, however, that the earned royalty due on Net Sales of Combination
Product by LICENSEE and/or its Affiliate(s) shall be calculated as below:

Earned Royalties due UNIVERSITY = [A/(A+B)] x Royalty Rate on Net Sales of the
Licensed Products or Enabled Products x Net Sales of Combination Product, where:

A is the separately listed sale price of the Licensed Product/Enabled Product or
Licensed Product/Enabled Product components; and

B is the separately listed sale prices of the individual products or product
components, respectively, that satisfied the requirements outlined in Paragraph
1.13.

For (v) and (vi) above, Net Sales shall not include Excluded Revenue.

For the avoidance of doubt, if LICENSEE has solely licensed a compound(s)
identified through screening with the Patent Rights but has not Sublicensed the
Patent Rights, […***…] of LICENSEE’s Net Sales will be due.  In the event of an
overlap of 3.1(c)(i) — 3.1(c)(vi) above, there shall be no

***Confidential Treatment Requested

11

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double royalty, but only the higher royalty shall be paid, for any single
Licensed Product or Enabled Product.

(d)           in the case of Sublicenses to Patent Rights or Property Rights
(and not  licenses solely to Patent-Enabled Identified Products or
Technology-Enabled Identified Products) […***…] of all Sublicense Fees received
by LICENSEE  from its Sublicensees.  In the event of an overlap with 3.1(c)(i) —
3.1(c)(vi) above, there shall be no double payment obligation, and only the
higher royalty shall be paid.

(e)           beginning the calendar year of 2014, if the total earned royalties
paid by LICENSEE, under Paragraph 3.1(c), on behalf of LICENSEE, its Sublicensee
or Affiliate, in any such calendar year, cumulatively amounts to less than the
following:

US Dollars payable to UNIVERSITY:

 

Calendar year:

 

[...***...]

 

2014

 

 

 

2015

 

 

 

2016

 

 

 

2017

 

 

 

2018

 

 

(“minimum annual royalty”), LICENSEE shall pay to UNIVERSITY a minimum annual
royalty on or before February 28 following the last quarter of such calendar
year the difference between amount noted above and the total earned royalty paid
by LICENSEE for such calendar year under Paragraph 3.1(c); provided, however,
that for all calendar years succeeding 2018, and until the termination of this
Agreement, the minimum annual royalty shall be […***…] per year.

All fees and royalty payments specified in Paragraphs 3.1(a) through 3.1(e)
above shall be paid by LICENSEE pursuant to Paragraph 4.3 and shall be delivered
by LICENSEE to UNIVERSITY as noted in Paragraph 10.1.

3.2  Patent Costs.  LICENSEE shall reimburse UNIVERSITY all […***…] Patent Costs
incurred in the Territory within […***…] following the date an itemized invoice
is sent from UNIVERSITY to LICENSEE.

***Confidential Treatment Requested

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3.3  Due Diligence.

(a)           LICENSEE shall, either directly or through its Affiliate(s) or
Sublicensee(s):

(I)       […***…]

(b)           If LICENSEE fails to perform any of its obligations specified in
Paragraphs 3.3(a)(i)-(x), then UNIVERSITY shall have the right and option to
[…***…].  This right, if exercised by

***Confidential Treatment Requested

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UNIVERSITY, supersedes the rights granted in Article 2.  To exercise the […***…]
for lack of diligence required in this Section 3.3(b), UNIVERSITY will give the
LICENSEE written notice of the deficiency.  LICENSEE will have sixty (60) days
to cure the deficiency.  If Licensee does not cure the deficiency within sixty
(60) days after the written notice takes effect and does not demonstrate to
UNIVERSITY’s satisfaction, by written, tangible evidence, that such default has
been cured, then UNIVERSITY may, at its option, […***…] by giving Licensee a
second written notice.  Any notice given by either party will be subject to
Section 10.1 (Notices).  If the licenses granted to LICENSEE are […***…].

3.4   VALUATION DISPUTE RESOLUTION.  IN THE EVENT OF A DISPUTE BETWEEN THE
PARTIES REGARDING (I) THE FAIR MARKET VALUE AS OF THE DATE OF RECEIPT OF ANY
NON-CASH NET SALES RECEIVED BY LICENSEE OR ITS AFFILIATE, OR (II) THE FAIR
MARKET VALUE OF LICENSEE’S PRODUCT(S) OR PRODUCT COMPONENT(S) THAT IS A VALID
PART OF A COMBINATION PRODUCT, THE PARTIES SHALL THEN SUBMIT THEIR ASSESSMENT TO
ARBITRATION BY A SINGLE ARBITRATOR UNDER THE RULES OF THE AMERICAN ARBITRATION
ASSOCIATION.   […***…] SHALL BEAR ALL FEES AND COSTS OF THE ARBITRATORS.

ARTICLE 4.  REPORTS, RECORDS AND PAYMENTS

4.1  Reports.

(a)           Progress Reports.

(i)            Beginning six months after Effective Date and ending on the date
of first commercial sale of a Licensed Product or Enabled Product in the United
States, LICENSEE shall report to UNIVERSITY progress covering LICENSEE’s (and
Affiliate’s and Sublicensee’s) activities for the preceding six months to
develop and test all Licensed Products and Licensed Methods, and Enabled
Products and obtain governmental approvals necessary for marketing the same. 
Such semi-annual reports shall be due within sixty days of the reporting period
and include a summary of work completed, summary of work in progress, current
schedule of anticipated events or milestones, market plans for introduction of
Licensed Products and Enabled Products and summary of resources (dollar value)
spent in the reporting period.

***Confidential Treatment Requested

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(ii)           LICENSEE shall also report to UNIVERSITY, in its immediately
subsequent progress report, the date of first commercial sale of a Licensed
Product or Enabled Product in each country.

(b)           Royalty Reports.  After the first commercial sale of a Licensed
Product or Enabled Product anywhere in the world, LICENSEE shall submit to
UNIVERSITY quarterly royalty reports on or before each February 28, May 31,
August 31 and November 30 of each year.  Each royalty report shall cover
LICENSEE’s (and each Affiliate’s and Sublicensee’s) most recently completed
calendar quarter and shall show, to the extent such information is made
available to LICENSEE:

(i)            the gross sales, deductions as provided in Paragraph 1.11, and
Net Sales during the most recently completed calendar quarter and the royalties,
in US dollars, payable with respect thereto;

(ii)           the number of each type of Licensed Product and/or Enabled
Product sold;

(iii)          Sublicense fees and royalties received during the most recently
completed calendar quarter in US dollars, payable with respect thereto;

(iv)          the method used to calculate the royalties; and

(v)           the exchange rates used.

If no sales of Licensed Products or Enabled Products have been made and no
Sublicense revenue has been received by LICENSEE during any reporting period,
LICENSEE shall so report.

4.2  Records & Audits.

(a)           LICENSEE shall keep, and shall require its Affiliates and
Sublicensees to keep, accurate and correct records of all Licensed Products
manufactured, used, and sold, and Sublicense fees received under this
Agreement.  Such records shall be retained by LICENSEE for at least five (5)
years following a given reporting period.

(b)           All records shall be available during normal business hours for
inspection at the expense of UNIVERSITY by UNIVERSITY’s Internal Audit
Department or by a Certified Public Accountant selected by UNIVERSITY and in
compliance with the other terms of this Agreement for the sole purpose of
verifying reports and payments or other compliance issues.  Such inspector shall
not disclose to UNIVERSITY any information other than information relating to
the accuracy of reports and payments made under this Agreement or other
compliance issues.  In the event that any such inspection shows an under
reporting and underpayment in excess of five percent (5%) for any twelve-month
(12-month) period, then LICENSEE shall pay the cost of the audit as well as any
additional sum that would have  been payable to

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UNIVERSITY had the LICENSEE reported correctly, plus an interest charge at a
rate of ten percent (10%) per year.  Such interest shall be calculated from the
date the correct payment was due to UNIVERSITY up to the date when such payment
is actually made by LICENSEE.  For underpayment not in excess of five percent
(5%) for any twelve-month (12-month) period, LICENSEE shall pay the difference
within thirty (30) days without interest charge or inspection cost.  Any
overpayments shall be credited to LICENSEE’s royalty obligations for the next
royalty period.

4.3  Payments.

(a)           All fees reimbursements and royalties due UNIVERSITY shall be paid
in United States dollars and all checks shall be made payable to “The Regents of
the University of California”, referencing UNIVERSITY’s taxpayer identification
number, 95-6006144, and sent to UNIVERSITY according to Paragraph 10.1
(Correspondence).  When Licensed Products are sold in currencies other than
United States dollars, LICENSEE shall first determine the earned royalty in the
currency of the country in which Licensed Products were sold and then convert
the amount into equivalent United States funds, using the exchange rate quoted
in the Wall Street Journal on the last business day of the applicable reporting
period.

(b)           Royalty Payments.

(i)            Royalties will accrue in each country for the duration of one or
more Valid Claims in Patent Rights in that country and will be payable to
UNIVERSITY (a) under Sections 3.1(c)(i)-(iv) when Licensed Products or Enabled
Products are invoiced, or if not invoiced, when delivered to a third party or
Affiliate; and (b) under Sections 3.1(c)(v) and 3.1(c)(vi) when royalty revenues
are received by LICENSEE on Enabled Products.

(ii)           LICENSEE shall pay earned royalties quarterly on or before
February 28, May 31, August 31 and November 30 of each calendar year.  Each such
payment shall be for earned royalties accrued within LICENSEE’s most recently
completed calendar quarter.

(iii)          Royalties earned on sales occurring or under Sublicense granted
pursuant to this Agreement in any country outside the United States shall not be
reduced by LICENSEE for any withholding taxes, fees or other charges imposed by
the government of such country on the payment of royalty income, except that all
payments made by LICENSEE in fulfillment of UNIVERSITY’s tax liability in any
particular country may be credited against earned royalties or fees due
UNIVERSITY for that country.  […***…].

(iv)          If at any time legal restrictions prevent the prompt remittance of
part or all royalties by LICENSEE with respect to any country where a Licensed
Product is sold or a Sublicense is granted pursuant to this Agreement, LICENSEE
shall convert the amount owed to

***Confidential Treatment Requested

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UNIVERSITY into US currency and shall pay UNIVERSITY directly from its US
sources of fund for as long as the legal restrictions apply.

(v)           LICENSEE shall not collect royalties from, or be obligated to pay
royaties on Licensed Products or Enabled Products sold to the account of the US
Government or any agency thereof as provided for in the license to the US
Government.

(vi)          In the event that any patent or patent claim within Patent Rights
is held invalid in a final decision by a patent office from which no appeal or
additional patent prosecution has been or can be taken, or by a court of
competent jurisdiction and last resort and from which no appeal has or can be
taken, all obligation to pay royalties based solely on that patent or claim or
any claim patentably indistinct therefrom shall cease as of the date of such
final decision.  LICENSEE shall not, however, be relieved from paying any
royalties that accrued before the date of such final decision, that are based on
another patent or claim not involved in such final decision.

(c)           Late Payments.  In the event royalty, reimbursement and/or fee
payments are not received by UNIVERSITY when due, LICENSEE shall pay to
UNIVERSITY interest charges at a rate of ten percent (10%) per year.  Such
interest shall be calculated from the date payment was due until actually
received by UNIVERSITY.

ARTICLE 5.  PATENT MATTERS

5.1  Patent Prosecution and Maintenance.

(a)           Provided that LICENSEE has reimbursed UNIVERSITY for Patent Costs
pursuant to Paragraph 3.2, UNIVERSITY shall diligently prosecute and maintain
the United States and, if available,  foreign patents, and applications in
Patent Rights using counsel of its choice. UNIVERSITY shall provide LICENSEE
with copies of all relevant documentation relating to such prosecution and
LICENSEE shall keep this documentation confidential.  The counsel shall take
instructions only from UNIVERSITY, and all patents and patent applications in
Patent Rights shall be assigned solely to UNIVERSITY.

(b)           UNIVERSITY shall consider amending any patent application in
Patent Rights to include claims reasonably requested by LICENSEE to protect the
products contemplated to be sold by LICENSEE under this Agreement.

(c)           LICENSEE may elect to terminate its reimbursement obligations with
respect to any patent application or patent in Patent Rights upon three (3)
months’ written notice to UNIVERSITY.  UNIVERSITY shall use reasonable efforts
to curtail further Patent Costs for such application or patent when such notice
of termination is received from LICENSEE.  UNIVERSITY, in its sole discretion
and at its sole expense, may continue prosecution and

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maintenance of said application or patent, and LICENSEE shall have no further
license with respect thereto.  Non-payment of any portion of Patent Costs with
respect to any application or patent may be deemed by UNIVERSITY as an election
by LICENSEE to terminate its reimbursement obligations with respect to such
application or patent.  The University is not obligated to file, prosecute, or
maintain Patent Rights outside of the territory at any time or to file,
prosecute, or maintain Patent Rights to which Licensee has terminated its
License hereunder.

5.2  Patent Infringement.

(A)           IN THE EVENT LICENSEE  KNOWS THAT ONE OR MORE THIRD PARTIES ARE
SUBSTANTIALLY INFRINGING THE PATENT RIGHTS UNDER THIS AGREEMENT, LICENSEE  WILL
PROMPTLY NOTIFY UNIVERSITY  IN WRITING AND PROVIDE UNIVERSITY WITH REASONABLE
EVIDENCE OF SUCH INFRINGEMENT.

(B)           BOTH PARTIES TO THIS AGREEMENT ACKNOWLEDGE THAT DURING THE PERIOD
AND IN A JURISDICTION WHERE THE LICENSEE  HAS EXCLUSIVE RIGHTS UNDER THIS
AGREEMENT, NEITHER PARTY WILL NOTIFY A THIRD PARTY OTHER THAN NIH AND HHMI THAT
AN INFRINGEMENT OF PATENT RIGHTS OCCURRED WITHOUT FIRST OBTAINING CONSENT OF THE
OTHER PARTY.  BOTH PARTIES WILL USE THEIR BEST EFFORTS IN COOPERATION WITH EACH
OTHER TO TERMINATE THE INFRINGEMENT WITHOUT LITIGATION.

(C)           IF THE LICENSEE DESIRES THAT PATENT RIGHTS BE ENFORCED AGAINST
INFRINGERS, AND THE LICENSEE  HAS EXCLUSIVE RIGHTS UNDER PATENT RIGHTS, THE
LICENSEE  EITHER MAY REQUEST UNIVERSITY  TO TAKE LEGAL ACTION AGAINST THE PATENT
INFRINGER OR MAY REQUEST PERMISSION FROM UNIVERSITY  TO FILE SUIT AGAINST THE
PATENT INFRINGER.  LICENSEE’S  REQUEST MUST BE MADE IN WRITING AND MUST INCLUDE
REASONABLE EVIDENCE OF THE INFRINGEMENT AND RESULTING DAMAGES TO THE LICENSEE. 
IF THE INFRINGING ACTIVITY HAS NOT BEEN ABATED WITHIN NINETY (90) DAYS FOLLOWING
THE EFFECTIVE DATE OF LICENSEE’S REQUEST, THEN UNIVERSITY AND THE NIH WILL HAVE
THE RIGHT TO ELECT ONE OF THE FOLLOWING:

(I)            COMMENCE SUIT ON THEIR OWN ACCOUNT; OR

(II)           REFUSE TO PARTICIPATE IN A SUIT AGAINST THE PATENT INFRINGER.

UNIVERSITY  and NIH will give written notice of their election to the LICENSEE 
within one hundred (100) days following the effective date of LICENSEE’s written
request.  The LICENSEE, thereafter, may bring suit for patent infringement if
and only if UNIVERSITY and the NIH elects not to commence suit and if the
infringement occurred during the period and in a jurisdiction where the
LICENSEE  had exclusive rights under this Agreement.  In the event LICENSEE 
elects to bring suit in accordance with this Paragraph, UNIVERSITY  and NIH may
thereafter join such suit at their own expense.

(D)           THE PARTY WHO BROUGHT THE SUIT WILL PAY FOR ALL LEGAL COSTS AND
WILL RECOVER ANY AND ALL RECOVERIES; PROVIDED, HOWEVER, THAT IF UNIVERSITY 
AND/OR THE NIH BROUGHT SUIT ON THEIR OWN ACCOUNT, THEN THE PARTIES AND THE NIH
MAY SHARE IN THE EXPENSE AND THE RECOVERIES WILL BE

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ALLOCATED IN THE FOLLOWING ORDER: (A) EACH PARTY WILL BE REIMBURSED IN EQUAL
AMOUNTS FOR ATTORNEY’S COSTS, FEES, AND OTHER RELATED EXPENSES (TO THE EXTENT
THAT EACH PARTY PAID FOR SUCH COSTS, FEES, AND EXPENSES) UNTIL ALL SUCH COSTS,
FEES, AND EXPENSES ARE REIMBURSED; AND (B) EACH PARTY WILL SHARE EQUALLY IN ANY
REMAINING AMOUNT IN PROPORTION TO THE SHARE OF EXPENSES PAID BY EACH PARTY.

(E)           EACH PARTY WILL COOPERATE WITH THE OTHERS DURING LITIGATION
PROCEEDINGS INSTITUTED HEREUNDER BUT AT THE EXPENSE OF THE PARTY WHO BROUGHT THE
SUIT.  THE PARTY BRINGING SUIT WILL CONTROL SUCH LITIGATION, EXCEPT THAT
UNIVERSITY  MAY BE REPRESENTED BY COUNSEL OF ITS CHOICE IN ANY SUIT BROUGHT BY
THE LICENSEE.

5.3  Patent Marking.  LICENSEE shall mark all Licensed Products made, used or
sold under the terms of this Agreement, or their containers, in accordance with
the applicable patent marking laws.

ARTICLE 6.  GOVERNMENTAL MATTERS

6.1  Governmental Approval or Registration.  If this Agreement or any associated
transaction is required by the law of any nation to be either approved or
registered with any governmental agency, LICENSEE shall assume all legal
obligations to do so.  LICENSEE shall notify UNIVERSITY if it becomes aware that
this Agreement is subject to a United States or foreign government reporting or
approval requirement.  LICENSEE shall make all necessary filings and pay all
costs including fees, penalties, and all other out-of-pocket costs associated
with such reporting or approval process.

6.2  Export Control Laws.  LICENSEE shall observe all applicable United States
and foreign laws with respect to the transfer of Licensed Products and related
technical data to foreign countries, including, without limitation, the
International Traffic in Arms Regulations and the Export Administration
Regulations.

6.3  Preference for United States Industry.  If LICENSEE sells a Patent Product
or Combination Product that consists of a Patent Product in the US, LICENSEE
shall manufacture said product substantially in the US.

ARTICLE 7.  TERMINATION OF THE AGREEMENT

7.1  Termination by UNIVERSITY. If LICENSEE fails to perform or violates any
material term of this Agreement, then UNIVERSITY may give written notice of
default (“Notice of Default”) to LICENSEE.  If LICENSEE fails to cure the
default within sixty (60) days of the Notice of Default, UNIVERSITY may
terminate this Agreement and the license granted herein by a second written
notice (“Notice of Termination”) to LICENSEE.  If a Notice of Termination is
sent to LICENSEE, this Agreement shall automatically terminate on the effective
date of that notice.

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Termination shall not relieve LICENSEE of its obligation to pay any fees owed at
the time of termination and shall not impair any accrued right of UNIVERSITY.

7.2  Termination by LICENSEE.

(a)           LICENSEE shall have the right at any time and for any reason to
terminate this Agreement upon a ninety (90)-day written notice to UNIVERSITY. 
Said notice shall state LICENSEE’s reason for terminating this Agreement.

(b)           Any termination under Paragraph 7.2(a) shall not relieve LICENSEE
of any obligation or liability accrued under this Agreement prior to termination
or rescind any payment made to UNIVERSITY or action by LICENSEE prior to the
time termination becomes effective.  Termination shall not affect in any manner
any rights of UNIVERSITY arising under this Agreement prior to termination.

7.3  Survival on Termination.  The following Paragraphs and Articles shall
survive the termination of this Agreement:

(a)           Article 4 (REPORTS, RECORDS AND PAYMENTS);

(b)                                 Paragraph 7.4 (Disposition of Licensed
Products on Hand);

(c)           Paragraph 8.2 (Indemnification);

(d)           Article 9 (USE OF NAMES AND TRADEMARKS);

(e)           Paragraph 10.2 hereof (Secrecy);

(f)            Paragraph 10.5 (Failure to Perform); and

(g)                                 Paragraph 10.12 (HHMI Third Party
Beneficiary Status).

7.4  Disposition of Licensed Products on Hand.  Upon termination of this
Agreement, LICENSEE may dispose of all previously made or partially made
Licensed Product within a period of […***…] days of the effective date of such
termination provided that the sale of such Licensed Product by LICENSEE, its
Sublicensees, or Affiliates shall be subject to the terms of this Agreement,
including but not limited to the rendering of reports and payment of royalties
required under this Agreement.

***Confidential Treatment Requested

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ARTICLE 8.  LIMITED WARRANTY AND INDEMNIFICATION

8.1  Limited Warranty.

(a)           UNIVERSITY warrants that it has the lawful right to grant this
license.

(b)           The license granted herein and the associated Technology are
provided “AS IS” and without WARRANTY OF MERCHANTABILITY or WARRANTY OF FITNESS
FOR A PARTICULAR PURPOSE or any other warranty, express or implied.  UNIVERSITY
makes no representation or warranty that the Licensed Product, Licensed Method
or the use of Patent Rights, Technology or Related Patent Rights or Related
Inventions will not infringe any other patent or other proprietary rights.

(c)           In no event shall:

(i)            UNIVERSITY be liable for any incidental, special or consequential
damages resulting from exercise by LICENSEE of the  license granted herein or
the use of the Invention, Licensed Product, Licensed Method or Technology; or

(ii)           LICENSEE  be liable for any incidental, special or consequential
damages resulting from exercise by UNIVERSITY of the  license granted herein or
the use of the Invention, Licensed Product, Licensed Method or Technology.

(d)           Nothing in this Agreement shall be construed as:

(i)            a warranty or representation by UNIVERSITY or LICENSEE as to the
validity or scope of any Patent Rights or Related Patent Rights;

(ii)           a warranty or representation that anything made, used, sold or
otherwise disposed of under any license granted in this Agreement is or shall be
free from infringement of patents of third parties;

(iii)          an obligation to bring or prosecute actions or suits against
third parties for patent infringement except as provided in Paragraph 5.2
hereof;

(iv)          conferring by implication, estoppel or otherwise any license or
rights under any patents of UNIVERSITY other than Patent Rights as defined in
this Agreement, regardless of whether those patents are dominant or subordinate
to Patent Rights; or

(v)           an obligation to furnish any know-how not provided in Patent
Rights and Technology; or

(vi)          an obligation to update Technology.

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8.2  Indemnification.

(a)           LICENSEE shall indemnify, hold harmless and defend UNIVERSITY, its
officers, employees, and agents; the sponsors of the research that led to the
Invention; and the Inventors of the patents and patent applications in Patent
Rights and their employers against any and all claims, suits, losses, damage,
costs, fees, and expenses resulting from or arising out of exercise of this
license or any Sublicense.  This indemnification shall include, but not be
limited to, any product liability.

HHMI and its trustees, officers, employees and agents (collectively, “HHMI
Indemnitees”), will be indemnified, defended by counsel acceptable to HHMI, and
held harmless by LICENSEE from and against any claim, expense, damage,
deficiency, liability, cost, loss or obligation of any kind or nature
(including, without limitation, reasonable attorneys’ fees and other costs and
expenses of defense), (collectively, “Claims”), based upon, arising out of, or
otherwise relating to this Agreement, including without limitation any cause of
action relating to product liability.  The previous sentence will not apply to
any Claim that is determines with finality by a court of competent jurisdiction
to result solely from the gross negligence or willful misconduct of an HHMI
Indemnitee.

(b)           LICENSEE, at its sole cost and expense or through its
collaborators, shall insure its activities in connection with the work under
this Agreement and obtain, keep in force and maintain insurance or an equivalent
program of self insurance as follows:

(i)            comprehensive or commercial general liability insurance
(contractual liability included) with limits of at least:  (A) each occurrence,
one million dollars (US$1,000,000); (B) products/completed operations aggregate,
five million dollars (US$5,000,000); (C) personal and advertising injury,one
million dollars (US$1,000,000); and (D) general aggregate (commercial form
only), five million dollars (US$5,000,000); and

(ii)           the coverage and limits referred to above shall not in any way
limit the liability of LICENSEE.

(c)           LICENSEE shall furnish UNIVERSITY with certificates of insurance
showing compliance with all requirements.  Such certificates shall: (i) provide
for thirty (30) day advance written notice to UNIVERSITY of any modification;
(ii) indicate that UNIVERSITY and HHMI have been endorsed as an additional
insured under the coverage referred to above; and (iii) include a provision that
the coverage shall be primary and shall not participate with nor shall be excess
over any valid and collectable insurance or program of self-insurance carried or
maintained by UNIVERSITY or HHMI.

(d)           UNIVERSITY shall notify LICENSEE in writing of any claim or suit
brought against UNIVERSITY or HHMI in respect of which UNIVERSITY or HHMI
intends to invoke the provisions of this Article.  LICENSEE shall keep
UNIVERSITY informed on a current basis of its defense of any claims under this
Article.

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ARTICLE 9.  USE OF NAMES AND TRADEMARKS

9.1           Nothing contained in this Agreement confers any right to use in
advertising, publicity, or other promotional activities any name, trade name,
trademark, or other designation of either party hereto (including contraction,
abbreviation or simulation of any of the foregoing).  Unless required by law,
the use by LICENSEE of the name, “The University of California” or the name of
any campus of the University Of California is prohibited, without the express
written consent of UNIVERSITY.

9.2           LICENSEE may not use the name of HHMI or of any HHMI employee
(including Dr. Charles Zuker in a manner that reasonably could constitute an
endorsement of a commercial product or service; but that use for other purposes,
even if commercially motivated, is permitted provided that (1) the use is
limited to accurately reporting factual events or occurrences, and (2) any
reference to the name of HHMI or any HHMI employees in press releases or similar
materials intended for public release is approved by HHMI in advance.

9.3           UNIVERSITY may disclose to the Inventors and HHMI the terms and
conditions of this Agreement upon their request.  If such disclosure is made,
UNIVERSITY shall request the Inventors and HHMI not disclose such terms and
conditions to others.

9.4           UNIVERSITY may acknowledge the existence of this Agreement and the
extent of the grant in Article 2 to third parties, but UNIVERSITY shall not
disclose the financial terms of this Agreement to third parties, except where
UNIVERSITY is required by law to do so, such as under the California Public
Records Act.

ARTICLE 10.  MISCELLANEOUS PROVISIONS

10.1                         Correspondence.  Any notice or payment required to
be given to either party under this Agreement shall be deemed to have been
properly given and effective:

          (a)  on the date of delivery if delivered in person, or

          (b)  five (5) days after mailing if mailed by first-class or certified
mail, postage paid, to the respective addresses given below, or to such other
address as is designated by written notice given to the other party.

If sent to LICENSEE:

Senomyx, Inc.

11099 N. Torrey Pines Road

La Jolla, CA 92037

Attention: General Counsel with copy to President

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Phone:  (858) 646-8300

Fax:  (858) 404-0750

If sent to UNIVERSITY by mail:

University of California, San Diego

Technology Transfer & Intellectual Property Services

9500 Gilman Drive

Mail Code 0910

La Jolla, CA 92093-0910

Attention:  Assistant Vice Chancellor

If sent to UNIVERSITY by courier:

University of California, San Diego

Technology Transfer & Intellectual Property Services

10300 North Torrey Pines Road

Torrey Pines Center North, First Floor

La Jolla, CA 92037

Attention:  Assistant Vice Chancellor

For wire payments to UNIVERSITY:

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ALL PAYMENTS DUE UNIVERSITY AND MADE BY WIRE TRANSFERS SHALL INCLUDE AN
ADDITIONAL WIRE TRANSFER FEE OF TWENTY-FIVE DOLLAR (US$25) TO THE AMOUNT DUE.
WIRE TRANSFERS SHALL BE MADE USING THE FOLLOWING INFORMATION:

 

UCSD receiving bank name:

Bank of America

 

UCSD bank account no.:

1233-0-18188

 

UCSD bank routing (ABA) no.:

0260-0959-3

 

UCSD bank account name:

Regents of UC

 

UCSD bank ACH format code:

CTX

 

UCSD bank CHIPS address:

0959

 

UCSD bank SWIFT address:

BOFAUS3N

 

UCSD bank address:

Bank of America
PO Box 37025
San Francisco, CA 94137
U.S.A.

 

 

 

 

UCSD addendum information:

Reference UCSD-TechTIPS

CASE No. SD1998-D06
CASE No. SD1999-A15
CASE No. SD1999-A29
CASE No. SD1999-B68
CASE No. SD1999-C03
CASE No. SD 1999-C04
CASE No. SD2000-A45

Department contact:
Financial Manager

 

A fax copy of the transaction receipt should be sent to Financial Manager at: 
(858) 534-7345. […***…]

10.2                                                                          
Secrecy.

(a) LICENSEE and UNIVERSITY will treat and maintain the other party’s
proprietary business, patent prosecution, technical information and other
Confidential Information, including the negotiated terms of this Agreement and
any progress reports and royalty reports (“Confidential Information”) in
confidence using at least the same degree of care as the receiving party uses to
protect its own Confidential Information of a like nature from the date of
disclosure until […***…] after the termination or expiration of this Agreement. 
For the avoidance of doubt, this confidentiality obligation will apply to the
information disclosed under the Previous Agreement.

***Confidential Treatment Requested

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(b) LICENSEE and UNIVERSITY may disclose Confidential Information to their
employees, agents, consultants, contractors and, in the case of LICENSEE, its
Sublicensees, provided that such parties are bound by a like duty of
confidentiality as that found in this Section 10.2 (Secrecy).  LICENSEE and
UNIVERSITY will use Confidential Information only as expressly permitted under
this Agreement.

(c)  All written Confidential Information will be labeled or marked confidential
or proprietary.  If the Confidential Information is orally disclosed, it will be
reduced to writing or some other physically tangible form, marked and labeled as
confidential or proprietary by the disclosing party and delivered to the
receiving party within thirty (30) days after the oral disclosure.

(d) Nothing contained herein will in any way restrict or impair the right of
LICENSEE or UNIVERSITY to use or disclose any Confidential Information:

(i)                                                         that recipient can
demonstrate by written records was previously known to it prior to its
disclosure by the disclosing party;

(ii)                                                      that recipient can
demonstrate by written records is now, or becomes in the future, public
knowledge other than through acts or omissions of recipient;

(iii)                                                   that recipient can
demonstrate by written records was lawfully obtained without restrictions on the
recipient from sources independent of the disclosing party;

(iv)                                                  that UNIVERSITY is
required to disclosed pursuant to the California Public Records Act or other
applicable law; and

(v)                                                     is independently
developed by the employees, agents or contractors of receiving party, without
the aid, application, or use of Confidential Information disclosed hereunder as
shown by written record.

LICENSEE or UNIVERSITY also may use or disclose Confidential Information that is
required to be disclosed (i) to a governmental entity or agency in connection
with seeking any governmental or regulatory approval, governmental audit, or
other governmental contractual requirement (ii) by law or regulation, provided
that the recipient uses reasonable efforts to give the party owning the
Confidential Information sufficient notice of such required disclosure to allow
the party owning the Confidential Information reasonable opportunity to object
to, and to take legal action to prevent, such disclosure.   Notwithstanding
anything to the contrary in this Agreement, either party may disclose the
material terms of this Agreement in legal proceedings or as are required to be
disclosed in its financial statements or by law.  Either party will have the
further right to disclose the material terms of this Agreement to potential
sublicensees, or under an obligation of confidentiality to any potential
acquirer, merger partner, bank, venture capital firm, or other financial
institution to obtain financing.

(e) Upon termination of this Agreement, LICENSEE and UNIVERSITY will destroy or
return any of the disclosing party’s Confidential Information in its possession
within fifteen (15) days following the termination of this Agreement.  LICENSEE
and UNIVERSITY will provide each

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other, within thirty (30) days following termination, with written notice that
such Confidential Information has been returned or destroyed.  Each party may,
however, retain one copy of such Confidential Information for archival purposes
with respect to determining compliance with this Agreement.

(f) With regard to Technology, the Licensee agrees destroy all copies of the
Technology at the termination (but not expiration) of this Agreement within
[…***…] following the effective date of such termination.

10.3                         Assignability.  This Agreement is binding upon and
will inure to the benefit of UNIVERSITY, its successors and assigns, but will be
personal to the LICENSEE.  This Agreement will not be assigned by the LICENSEE
to any third party without the prior written consent of UNIVERSITY, except that
LICENSEE can assign this Agreement to its successor without prior written
consent of UNIVERSITY provided that LICENSEE has sold all or substantially all
of its business assets or in connection with the acquisition of LICENSEE.  Any
other attempt by LICENSEE to assign this Agreement is void unless LICENSEE
obtains the prior written consent of UNIVERSITY.

10.4                         No Waiver.  No waiver by either party of any breach
or default of any covenant or agreement set forth in this Agreement shall be
deemed a waiver as to any subsequent and/or similar breach or default.

10.5                         Failure to Perform.  In the event of a failure of
performance due under this Agreement and if it becomes necessary for either
party to undertake legal action against the other on account thereof, then the
prevailing party shall be entitled to reasonable attorney’s fees in addition to
costs and necessary disbursements.

10.6                         Governing Laws.  THIS AGREEMENT SHALL BE
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA, but the scope and validity of any patent or patent application shall
be governed by the applicable laws of the country of the patent or patent
application.

10.7                         Force Majeure.  A party to this Agreement may be
excused from any performance required herein if such performance is rendered
impossible or unfeasible due to any catastrophe or other major event beyond its
reasonable control, including, without limitation, war, riot, and insurrection;
laws, proclamations, edicts, ordinances, or regulations; strikes, lockouts, or
other serious labor disputes; and floods, fires, explosions, or other natural
disasters.  When such events have abated, the non-performing party’s obligations
herein shall resume.

10.8                         Headings.  The headings of the several sections are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.

***Confidential Treatment Requested

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10.9                         Entire Agreement.  This Agreement embodies the
entire understanding of the parties and supersedes all previous communications,
representations or understandings, either oral or written, between the parties
relating to the subject matter hereof.

10.10                       Amendments.  No amendment or modification of this
Agreement shall be valid or binding on the parties unless made in writing and
signed on behalf of each party.

10.11                       Severability.  In the event that any of the
provisions contained in this Agreement is held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if the invalid, illegal, or unenforceable provisions had
never been contained in it.

10.12                       HHMI Third Party Beneficiary Status.  HHMI is not a
party to this Agreement and has no liability to LICENSEE, Affiliates, any
sublicense, or user of anything covered in this Agreement, but HHMI is an
intended third-party beneficiary of this Agreement and certain of its provisions
are for the benefit of HHMI and are enforceable by HHMI in its own name.

IN WITNESS WHEREOF, both UNIVERSITY and LICENSEE have executed this Agreement,
in duplicate originals, by their respective and duly authorized officers on the
day and year written.

SENOMYX, INC.:

 

THE REGENTS OF THE
UNIVERSITY OF CALIFORNIA:

 

 

 

By:

/s/ Kent Snyder

 

By:

/s/ Alan Paau

(Signature)

 

(Signature)

 

 

 

Kent Snyder

 

Alan S. Paau, M.B.A, Ph.D.

 

 

 

President & CEO

 

Assistant Vice Chancellor,

 

 

Technology Transfer &

 

 

Intellectual Property Services

 

 

 

Date:

Oct 11, 2006

 

Date:

Oct 11, 2006

 

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Exhibit A

Common Interest Agreement

[…***…]

 

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Exhibit B

Patent Rights

30

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[…***…]

 

***Confidential Treatment Requested

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Exhibit C

Technology

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[…***…]

 

***Confidential Treatment Requested

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