Exhibit 10.39

SCIENTIFIC ADVISORY BOARD AGREEMENT

THIS SCIENTIFIC ADVISORY BOARD AGREEMENT (the “Agreement”) is made and entered
into as of July 19, 2006 (the “Effective Date”), by and between KOSAN
BIOSCIENCES INCORPORATED, a Delaware corporation with a place of business at
3832 Bay Center Place, Hayward, CA 94545 (the “Company”), and CHAITAN S. KHOSLA,
PH.D., an individual with an address at 740 La Para Avenue, Palo Alto, CA 94306
(the “Advisor”). The Company and the Advisor may be referred to herein
individually as “Party” or collectively, as “Parties.”

RECITAL

As part of its ongoing program of research and development, the Company desires
to retain distinguished scientists and other qualified individuals to advise the
Company with respect to its technology strategy and to assist it in the
research, development and analysis of the Company’s technology. In furtherance
of this desire, the Company wishes to retain Advisor as a consultant and member
of the Company’s Scientific Advisory Board.

AGREEMENT

In consideration of the mutual covenants set forth below, the Parties hereby
agree as follows:

1. Scientific Advisory Board and Consulting Services.

Commencing on the Effective Date, the Company hereby retains Advisor, and
Advisor hereby agrees to serve, as a member of the Company’s Scientific Advisory
Board (the “SAB”) and as a consultant to the Company. As consultant and member
of the SAB, Advisor agrees to devote Advisor’s best efforts to provide the
following services: (a) attending meetings of the Company’s SAB; (b) performing
the duties of an SAB member at such meetings, as established from time to time
by the mutual agreement of the Company and the SAB members, including without
limitation meeting with Company employees, consultants and other SAB members,
reviewing goals of the Company and assisting in developing strategies for
achieving such goals, and providing advice, support, theories, techniques and
improvements in the Company’s scientific research and product development
activities; and (c) providing consultation to the Company at its request,
including a reasonable amount of informal consultation over the telephone or
otherwise as requested by the Company. The services to be provided by Advisor
hereunder are referred to collectively herein as the “Services.”

 

1.

Khosla, C.

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2. Compensation.

As full and complete compensation for performing the Services, the Company shall
pay Advisor compensation in the amount of $2,500 per day for consultation at the
Company’s facility or at a location approved by the Company. Advisor will not
receive cash compensation for periodic telephone or other consultations, unless
those involve a significant amount of Advisor’s time and interfere with
Advisor’s other commitments, and the Company has agreed in advance in writing to
pay such compensation. The Company will also reimburse Advisor for reasonable
out-of-pocket travel expenses incurred by Advisor in providing Services at the
Company’s request from time to time.

3. Independent Contractor.

The Parties understand and agree that Advisor is an independent contractor and
not an employee of the Company. Advisor has no authority to obligate the Company
by contract or otherwise. Advisor will not be eligible for any employee
benefits, nor will the Company make deductions from Advisor’s fees for taxes
(except as otherwise required by applicable law or regulation). Any taxes
imposed on Advisor due to activities performed hereunder will be the sole
responsibility of Advisor.

4. Institutional Agreement.

(a) The Company acknowledges that Advisor is a professor of Stanford University
(the “University”) and is subject to the University’s policies, including
policies concerning consulting, conflicts of interest and intellectual property.
The Company acknowledges that, to the extent that such policies conflict with
the terms of this Agreement, Advisor’s obligations under the University’s
policies take priority over the obligations Advisor has by reason of this
Agreement. The Company further acknowledges and agrees that nothing in this
Agreement shall affect Advisor’s obligations to, or research on behalf of, the
University. Advisor agrees to use reasonable efforts to avoid or minimize any
such conflict. Advisor represents and warrants that he shall not use any
facilities or resources of the University in performing the Services hereunder.

(b) Advisor agrees to provide to the Company copies of University’s policies or
guidelines relating to Advisor’s obligations to the University and consulting
services, if any, promptly upon request by the Company. If Advisor is required
by the Institution, pursuant to applicable guidelines or policies, to make any
disclosure or take any action that conflicts with the Services being provided by
Advisor hereunder or that is contrary to the terms of this Agreement, Advisor
will promptly notify the Company of such obligation, specifying the nature of
such disclosure or action and identifying the applicable guideline or policy
under which disclosure or action is required, prior to making such disclosure or
taking such action.

 

2.

Khosla, C.

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5. Recognition of Company’s Rights; Nondisclosure.

Advisor recognizes that the Company is engaged in a continuous program of
research and development respecting its present and future business activities.
Advisor agrees as follows:

(a) At all times during the term of Advisor’s association with the Company and
thereafter, Advisor will hold in strictest confidence and will not disclose,
use, lecture upon or publish any of the Company’s Proprietary Information
(defined below), except to the extent such disclosure, use or publication may be
required in direct connection with Advisor’s performing requested Services for
the Company or is expressly authorized in writing by an officer of the Company.

(b) The term “Proprietary Information” shall mean any and all trade secrets,
confidential knowledge, know-how, data or other proprietary information or
materials of the Company, including without limitation by assignment under
Section 6. By way of illustration but not limitation, Proprietary Information
includes: (i) inventions, ideas, samples, media and/or cell lines and procedures
and formulations for producing any such samples, media and/or cell lines,
processes, formulas, data, know-how, improvements, discoveries, developments,
designs and techniques; and (ii) information regarding plans for research,
development, new products, marketing and selling, business plans, budgets and
unpublished financial statements, licenses, prices and costs, suppliers and
customers; and (iii) information regarding the skills and compensation of
employees or other consultants of the Company.

(c) In addition, Advisor understands that the Company has received and in the
future will receive from third parties confidential or proprietary information
(“Third Party Information”) subject to a duty on the Company’s part to maintain
the confidentiality of such information and to use it only for certain limited
purposes. During the term of Advisor’s association and thereafter, Advisor will
hold Third Party Information in the strictest confidence and will not disclose
or use Third Party Information, except in connection with Advisor’s performing
requested Services for the Company, or as expressly authorized in writing by an
officer of the Company.

6. Intellectual Property Rights.

(a) Advisor agrees that any and all ideas, inventions, discoveries,
improvements, know-how and techniques that the Advisor conceives, reduces to
practice or develops, alone or in conjunction with others, during or as a direct
result of performing the Services for the Company under this Agreement
(collectively, the “Inventions”) shall be the sole and exclusive property of the
Company.

 

3.

Khosla, C.

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(b) Advisor hereby assigns and agrees to assign to the Company Advisor’s entire
right, title and interest in and to all Inventions. Advisor hereby designates
the Company as Advisor’s agent for, and grants to the Company a power of
attorney with full power of substitution, which power of attorney shall be
deemed coupled with an interest, solely for the purpose of effecting the
foregoing assignments from the Advisor to the Company.

(c) Advisor further agrees to cooperate and provide reasonable assistance to the
Company to obtain and from time to time enforce United States and foreign
patents, copyrights, and other rights and protections claiming, covering or
relating to the Inventions in any and all countries.

(d) Advisor agrees to submit to the Company any proposed publication that
contains any discussion relating to the Company, Proprietary Information,
Inventions or work performed by Advisor for the Company hereunder. Advisor
further agrees that no such publication shall be made without the prior written
consent of the Company, which consent shall not be unreasonably withheld. Any
such consent shall be given within sixty (60) days.

7. No Conflicting Obligation.

(a) Advisor represents and warrants that Advisor’s performance of all of the
terms of this Agreement and the performing of the Services for the Company do
not and will not breach or conflict with any agreement with a third party,
including an agreement to keep in confidence any proprietary information of
another entity acquired by Advisor in confidence or in trust prior to the date
of this Agreement.

(b) Advisor hereby agrees not to enter into any agreement that conflicts with
this Agreement.

8. No Improper Use of Materials.

Advisor agrees not to bring to the Company or to use in the performance of
Services for the Company any materials or documents of a present or former
employer of Advisor, or any materials or documents obtained by Advisor from a
third party under a binder of confidentiality, unless such materials or
documents are generally available to the public or Advisor has authorization
from such present or former employer or third party for the possession and
unrestricted use of such materials. Advisor understands that Advisor is not to
breach any obligation of confidentiality that Advisor has to present or former
employers or clients, and agrees to fulfill all such obligations during the term
of this Agreement.

 

4.

Khosla, C.

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9. Term and Termination.

(a) This Agreement, and Advisor’s Services hereunder, shall commence on the
Effective Date and shall continue for an initial term of four (4) years after
the Effective Date, unless earlier terminated as provided below. At the end of
such initial term, the Agreement will automatically be extended for an
additional period or periods of one year each, unless the Advisor or the Company
shall have given to the other written notice to the contrary at least thirty
(30) days prior to the commencement of such additional period.

(b) Either Party may terminate the Agreement at any time by giving no less than
thirty (30) days prior written notice to the other Party. The obligations set
forth in Articles 5, 6, 7, 9 and 11 will survive any termination or expiration
of this Agreement. Upon termination of this Agreement, Advisor will promptly
deliver to the Company all documents and other materials of any nature
pertaining to the Services, together with all documents and other items
containing or pertaining to any Proprietary Information.

10. Assignment.

The rights and liabilities of the Parties hereto shall bind and inure to the
benefit of their respective successors, heirs, executors and administrators, as
the case may be; provided that, as the Company has specifically contracted for
Advisor’s Services, Advisor may not assign or delegate Advisor’s obligations
under this Agreement either in whole or in part without the prior written
consent of the Company. The Company may assign its rights and obligations
hereunder to any person or entity who succeeds to all or substantially all of
the Company’s business or assets to which this Agreement relates.

11. Legal and Equitable Remedies.

Because Advisor’s Services are personal and unique and because Advisor may have
access to and become acquainted with the Proprietary Information of the Company,
the Company shall have the right to enforce this Agreement and any of its
provisions by injunction, specific performance or other equitable relief without
prejudice to any other rights and remedies that the Company may have for a
breach of this Agreement.

12. Governing Law; Severability.

This Agreement shall be governed by and construed according to the laws of the
State of California, without regards to conflicts of laws rules. If any
provision of this Agreement is found by a court of competent jurisdiction to be
unenforceable, that provision shall be severed and the remainder of this
Agreement shall continue in full force and effect.

 

5.

Khosla, C.

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13. Complete Understanding; Modification.

This Agreement, and all other documents mentioned herein, constitute the final,
exclusive and complete understanding and agreement of the Parties hereto and
supersedes all prior understandings and agreements. Any waiver, modification or
amendment of any provision of this Agreement shall be effective only if in
writing and signed by the Parties hereto.

14. Notices.

Any notices required or permitted hereunder shall be given to the appropriate
Party at the address listed on the first page of the Agreement (if to the
Company, then to the attention of General Counsel), or such other address as the
Party shall specify in writing pursuant to this notice provision. Such notice
shall be deemed given upon personal delivery to the appropriate address or three
days after the date of mailing if sent by certified or registered mail.

15. Counterparts.

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

 

6.

Khosla, C.

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first written above.

 

KOSAN BIOSCIENCES INCORPORATED    CHAITAN S. KHOSLA, PH.D.

/s/ Pieter B. Timmermans

  

/s/ Chaitan Khosla

Name:    Pieter B. Timmermans, Ph.D.    Title:    SVP, Drug Discovery &
Preclinical Dev.   

 

7.

Khosla, C.