**Exhibit10.37**

*****TextOmitted and Filed Separatelywith the Securities and Exchange Commission.Confidential Treatment RequestedUnder 17 C.F.R. Sections 200.80(b)(4)and 240.24b-2.**

**LICENSEAGREEMENT**

 

**BETWEEN**

 

**SENOMYX,INC.**

 

**AND**

 

**THEREGENTS OF THE UNIVERSITY OF CALIFORNIA**

 

**FOR**

 

**CASE NO.SD1998-D06CASE NO. SD1999-A15CASE NO. SD1999-A29CASE NO. SD1999-B68CASE NO. SD1999-C03CASE NO. SD1999-C04CASE NO. SD2000-A45**

** **

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**TABLE OFCONTENTS**
| 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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**LICENSEAGREEMENT**

This agreement (“Agreement”)is made by and between  Senomyx, Inc., aDelaware 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 1111Franklin Street, Oakland, California 94607-5200 (“UNIVERSITY”), represented byits San Diego campus having an address at University of California, San Diego,Technology Transfer & Intellectual Property Services, Mail Code 0910, 9500Gilman Drive, La Jolla, California 92093-0910 (“UCSD”).

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

**RECITALS**

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

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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 andcollectively, the “UCSD Inventors”) and/or in the course of research at theNational Institutes of Health (“NIH”) by Dr. Nicholas Ryba and associates(hereinafter and collectively, the  “NIHInventors”) and are covered by Patent Rights as defined below;

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

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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 theterms of an interinstitutional agreement between HHMI and UNIVERSITY (UCControl No. 1986-18-0017, “HHMI Interinstitutional Agreement”), andaccordingly, UNIVERSITY has the sole responsibility to manage Invention and anypatent rights associated therewith on behalf of both parties;

*WHEREAS,*under the terms of the HHMI Interinstitutional Agreement, HHMI has reserved anonexclusive, paid-up, royalty-free, irrevocable license, with no right tosublicense others, to make and use the Invention, Technology and Patent Rightsfor research purposes;

*WHEREAS*,the NIH Inventors, in accordance with their patent agreement with NIH, haveassigned to NIH their interest in any patent rights covering Inventions madeduring 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 isgranted 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 ofAmerica and as a consequence this license is subject to overriding obligationsto the Federal Government under 35 U.S.C. §§ 200-212 and applicableregulations;

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

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

*WHEREAS*,with this Agreement LICENSEE and UNIVERSITY mutually desire to replace thePrevious Agreement and to contemporaneously enter into a Common Interest Agreement,attached as Exhibit A to (i) optimize the patent protection strategy for bothInvention 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 bedeveloped and utilized to the fullest possible extent so that their  benefits can be enjoyed by the generalpublic;

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*WHEREAS*,LICENSEE understands that UNIVERSITY may publish or otherwise disseminateinformation concerning the Invention and Technology (as defined below) at anytime and that LICENSEE is paying consideration thereunder for its early accessto the Invention and Technology, not continued secrecy therein.

*NOW,THEREFORE*, the parties agree:

**ARTICLE 1. DEFINITIONS**

The terms, asdefined herein, shall have the same meanings in both their singular and pluralforms.

1.1  “Affiliate” means any business entity whichis bound in writing by LICENSEE to the terms set forth in this Agreement and inwhich LICENSEE owns or controls, directly or indirectly, at least fifty percent(50%) of the outstanding stock or other voting rights entitled to electdirectors, or in which LICENSEE is owned or controlled directly or indirectlyby at least fifty percent (50%) of the outstanding stock or other voting rightsentitled to elect directors; but in any country where the local law does notpermit foreign equity participation of at least fifty  percent (50%), then an “Affiliate” includesany company in which LICENSEE owns or controls or is owned or controlled by,directly or indirectly, the maximum percentage of outstanding stock or votingrights permitted by local law.

1.2  “Sublicense” means an agreement into whichLICENSEE 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 PropertyRights 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 Rightsand/or Property Rights granted to LICENSEE pursuant to Sections 2.1 and 2.2 ofthis Agreement; or (iii) forbearing the exercise of any rights under thelicenses to Patent Rights and/or Property Rights, granted to LICENSEE underSections 2.1 and 2.2 of this Agreement (by way of illustration, but notlimitation, an example of (iii) would be if LICENSEE enters into an agreementunder which LICENSEE receives consideration from a third party for not sellinga Licensed Product). “Sublicensee” means a third party with whom LICENSEEenters into a Sublicense.  For theavoidance of doubt, “Sublicense” does not include agreements into whichLICENSEE enters with a third party covering its own technology other thanUniversity’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 onthe Effective Date and, unless otherwise terminated in accordance with theterms of this Agreement, ending on the date there no longer exists a ValidClaim in a Patent Right licensed under this Agreement.

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

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

1.8  “Sponsor Rights” means all the applicableprovisions of any license to the United States Government and HHMI as set forthin the recitals above.

1.9  “Licensed Method” means any process or methodthat uses Related Patent Rights (as later defined in 1.18) or is covered byPatent Rights, the use of which would constitute in a particular country, butfor the license granted to LICENSEE under this Agreement, an infringement, aninducement to infringe or contributory infringement, of any pending or issuedclaim within Patent Rights pending in such country were they issued in a patentat the time of the infringing activity in that country.

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

1.11 “Net Sales” means:

(i) in the case of Section3.1(c)(i)-3.1(c)(iv), the total of the gross invoice prices of LicensedProducts sold or leased by LICENSEE, Sublicensee, Affiliate, or any combinationthereof, less the sum of the following actual and customary deductions where

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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 particularsales (except for value-added and income taxes imposed on the sales of LicensedProduct in foreign countries); transportation charges; or credits to customersbecause of rejections or returns; and

(ii) in the case of 3.1(c)(v) and 3.1(c)(vi), revenuereceived 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 toa  Sublicensee or an Affiliate ofLicensed Product or Enabled Product under this Agreement for (i) end use (butnot resale) by the  Sublicensee orAffiliate 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 thelist price of the Sublicensee or Affiliate.

1.12                           “PatentCosts” means all out-of-pocket expenses for the preparation, filing,prosecution, and maintenance of all United States and foreign patents includedin Patent Rights.  Patent Costs shallalso 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 topatents or applications in Patent Rights.

1.13                           “CombinationProduct” means any product which is a Licensed Product or Enabled Product andcontains other product(s) or product component(s) that is not an excipient,diluent, adjuvant, buffer and the like and (i) does not use Technology PatentRights, or Related Patent Rights; (ii) the sale, use or import by itself doesnot contribute to or induce the infringement of Patent Rights and does notmisappropriate Property Rights (as defined by 1.19 below; (iii) is soldseparately by LICENSEE, its Sublicensee or an Affiliate; and (iv) enhances themarket price of the final product(s) sold, used or imported by LICENSEE, itsSublicensee, 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 thecomponent(s).  Any dispute between theparties regarding such fair market value shall be resolved in accordance withSection 3.4.

1.14                           “PatentProduct” means any composition or product that (i) uses or is covered by theclaims of Patent Rights or Related Patent Rights, (ii) that is produced by orpractices  the Licensed Method, or (iii)the manufacture, use, sale, offer for sale, or importation of which wouldconstitute in a particular country, but for the license granted to LICENSEEunder this Agreement, an infringement, an inducement to infringe orcontributory infringement, of any pending or issued Valid Claim within thePatent Rights or University’s interest in Related Patent Rights in such countryhad such rights not been owned by LICENSEE.  Patent Product is a Licensed Product. For the avoidance of doubt, Patent Product does not include EnabledProducts.

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

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

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

1.18                           “RelatedPatent Rights” means LICENSEE’s rights in any patents and patent applicationsfiled by LICENSEE or its agents during the period commencing on the EffectiveDate of the Previous Agreement and ending on the expiration of the Term, andclaiming Related Inventions.

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

1.20                           “ExcludedRevenue” 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 rawmaterials and labor), and (ii) any consideration that LICENSEE receives forresearch funding (including license fees and milestones specifically intendedfor the reimbursement of research or regulatory costs as demonstrated bywritten record), reimbursement of patent filing, patent prosecution, patentmaintenance, royalties paid or payable under Section 3.1(d) or (f), Sublicensefees paid or payable under Section 3.1(e) or other expenses (as agreed upon inwriting by the parties).  The partiesagree that license fees and milestones under LICENSEE’s collaborationagreements entered into prior to the Effective Date were intended forreimbursement of research costs and therefore constitute Excluded Revenue.

1.21                           “RelatedInventions” means the inventions disclosed in U.S. Patent No. [...***...] and anycorresponding foreign applications or patents.

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

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

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

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

**ARTICLE 2. GRANTS**

2.1  **License.**

(a)           Subject to the limitations set forthin this Agreement and subject to Sponsor’s Rights, including the licensesgranted to the United States Government and those reserved by HHMI set forth inthe Recitals, UNIVERSITY and LICENSEE hereby terminate the Previous Agreementand UNIVERSITY grants to LICENSEE, and LICENSEE hereby agrees and accepts, alicense under Patent Rights to make and have made, to use and have used, tosell and have sold, to offer for sale, and to export and import LicensedProducts and to practice Licensed Methods and a license under Property Rightsto make and have made, to use and to sell Technology, in the Field within theTerritory.  To the extent that LICENSEEsells Technology, LICENSEE shall prohibit its customers from reselling,redistributing, or propagating Technology. For the avoidance of doubt, for so long as UNIVERSITY has granted toLICENSEE 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 andhave used, to sell and have sold, to offer for sale, and to export and importEnabled Products and their third party customers shall have the right to sellEnabled Products independent of UNIVERSITY.

The licensegranted 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’spolicy on research tools.

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

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2.2  **Sublicense.**

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

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

(i)to the extent non-cash Sublicense revenue is received by LICENSEE or itsAffiliate from a Sublicensee under a Sublicense granted pursuant to Paragraph2.2(a), value such non-cash Sublicense revenue at its fair market value as ofthe date of receipt. Any dispute between the parties regarding such fair marketvalue shall be resolved in accordance with Section 3.4;

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

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

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

(c)  Upon termination of this Agreement for anyreason, UNIVERSITY, at its sole discretion, shall determine whether LICENSEEshall 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 PatentRights for educational and research purposes;

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

(c)  allow other nonprofit institutions to useInvention, Technology and Patent Rights for educational and research purposesin their facilities.

**ARTICLE 3. CONSIDERATION**

3.1  **Feesand Royalties.**  The parties hereto understand that the feesand royalties payable by LICENSEE to UNIVERSITY under this Agreement arepartial consideration for the license

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

(a)in recognition of the consideration paid under the Previous Agreement, and themutual promises and consideration recited in the contemporaneously-executedCommon 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, andannually thereafter on each anniversary through year 2013;  provided however, that LICENSEE’s obligationto pay this fee shall [...***...].

(c)  an **earned royalty**of:

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

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

(iii)          [...***...] of Net Sales of Patent-EnabledIdentified 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 ofPatent Rights) of a compound identified by LICENSEE (or, in the case of anAffiliate or Sublicensee, a compound identified by such Affiliate orSublicensee) using the Patent Rights.  Insuch event, UNIVERSITY is entitled to [...***...] of LICENSEE’s Net Sales or, inthe 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 orSublicensee of Property Rights) of a compound identified by LICENSEE (or, inthe case of an Affiliate or Sublicensee, a compound identified by suchAffiliate 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 [...***...] ofSublicensee’s Net Sales.]

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(v)           [...***...] of Net Sales received byLICENSEE, an Affiliate or a Sublicensee from a third party for lease or licenseof Patent-Enabled Identified Products; [By way of illustration, but notlimitation, examples would be: (a) sale by a LICENSEE collaborator, whichcollaborator is not a Sublicensee of the Patent Rights or Property Rights, of acompound identified by LICENSEE using the Patent Rights; and (b) in the eventof a Sublicense of Patent Rights or Property Rights, sale by a Sublicensee’scollaborator of a compound identified by Sublicensee using the PatentRights.  The parties acknowledge that thecurrent agreements between LICENSEE and its collaborators fall under thisroyalty 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’sNet Sales to its collaborator (not [...***...] of the collaborator’s NetSales).  In the case of (b) above,UNIVERSITY is entitled to [...***...] of Sublicensee’s Net Sales (i.e. royaltyrevenue) to its collaborator (not [...***...] of the collaborator’s NetSales).  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 ofTechnology-Enabled Identified Products; [By way of illustration, but notlimitation, examples would be: (a) sale by a LICENSEE collaborator, whichcollaborator is not a Sublicensee of the Patent Rights or Property Rights, of acompound identified by LICENSEE using the Property Rights; and (b) in the eventof a Sublicense of Patent Rights or Property Rights, sale by a Sublicensee’scollaborator of a compound identified by Sublicensee using the PropertyRights.  In the case of (a) above,UNIVERSITY is entitled to [...***...] of LICENSEE’s Net Sales (i.e. royaltyrevenue) to its collaborator (not [...***...] of the collaborator’s NetSales).  In the case of (b) above,UNIVERSITY is entitled to [...***...] of Sublicensee’s Net Sales (i.e. royaltyrevenue) to its collaborator (not [...***...] of the collaborator’s NetSales).  For the avoidance of doubt, this(v) does not apply to Sublicenses of Patent Rights or Property Rights.]

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

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

A isthe separately listed sale price of the Licensed Product/Enabled Product orLicensed Product/Enabled Product components; and

B is the separatelylisted 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 thePatent Rights, [...***...] of LICENSEE’sNet Sales will be due.  In the event ofan overlap of 3.1(c)(i) — 3.1(c)(vi) above, there shall be no

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

(d)           in the case of Sublicenses to PatentRights or Property Rights (and not licenses solely to Patent-Enabled Identified Products orTechnology-Enabled Identified Products) [...***...] of all Sublicense Fees receivedby 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 thehigher royalty shall be paid.

(e)           beginning the calendar year of 2014,if the total earned royalties paid by LICENSEE, under Paragraph 3.1(c), onbehalf 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 aminimum annual royalty on or before February 28 following the last quarter ofsuch calendar year the difference between amount noted above and the totalearned royalty paid by LICENSEE for such calendar year under Paragraph 3.1(c);provided, however, that for all calendar years succeeding 2018, and until thetermination of this Agreement, the minimum annual royalty shall be [...***...] peryear.

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

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

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3.3  **Due Diligence.**

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

### (i)       [...***...]

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

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UNIVERSITY,supersedes the rights granted in Article 2. To exercise the [...***...] for lack of diligence required in this Section3.3(b), UNIVERSITY will give the LICENSEE written notice of the deficiency.  LICENSEE will have sixty (60) days to curethe deficiency.  If Licensee does notcure the deficiency within sixty (60) days after the written notice takeseffect and does not demonstrate to UNIVERSITY’s satisfaction, by written,tangible evidence, that such default has been cured, then UNIVERSITY may, atits option, [...***...] by giving Licensee a second written notice.  Any notice given by either party will besubject to Section 10.1 (Notices).  Ifthe licenses granted to LICENSEE are [...***...].

## 3.4   **ValuationDispute Resolution.**  In theevent of a dispute between the parties regarding (i) the fair market value asof the date of receipt of any non-cash Net Sales received by LICENSEE or itsAffiliate, or (ii) the fair market value of LICENSEE’s product(s) or productcomponent(s) that is a valid part of a Combination Product, the parties shallthen submit their assessment to arbitration by a single arbitrator under therules 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 EffectiveDate and ending on the date of first commercial sale of a Licensed Product orEnabled Product in the United States, LICENSEE shall report to UNIVERSITYprogress covering LICENSEE’s (and Affiliate’s and Sublicensee’s) activities forthe preceding six months to develop and test all Licensed Products and LicensedMethods, and Enabled Products and obtain governmental approvals necessary for marketingthe same.  Such semi-annual reports shallbe due within sixty days of the reporting period and include a summary of workcompleted, summary of work in progress, current schedule of anticipated eventsor milestones, market plans for introduction of Licensed Products and EnabledProducts and summary of resources (dollar value) spent in the reporting period.

*****Confidential Treatment Requested**

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

(b)           **Royalty Reports.**  After the first commercial sale of a LicensedProduct or Enabled Product anywhere in the world, LICENSEE shall submit toUNIVERSITY 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 andSublicensee’s) most recently completed calendar quarter and shall show, to theextent such information is made available to LICENSEE:

(i)            the gross sales, deductions asprovided in Paragraph 1.11, and Net Sales during the most recently completedcalendar quarter and the royalties, in US dollars, payable with respectthereto;

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

(iii)          Sublicense fees and royalties receivedduring the most recently completed calendar quarter in US dollars, payable withrespect thereto;

(iv)          the method used to calculate theroyalties; and

(v)           the exchange rates used.

If no sales ofLicensed Products or Enabled Products have been made and no Sublicense revenuehas been received by LICENSEE during any reporting period, LICENSEE shall soreport.

4.2**  Records & Audits.**

(a)           LICENSEE shall keep, and shallrequire its Affiliates and Sublicensees to keep, accurate and correct recordsof all Licensed Products manufactured, used, and sold, and Sublicense feesreceived under this Agreement.  Suchrecords shall be retained by LICENSEE for at least five (5) years following agiven reporting period.

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

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

4.3  **Payments**.

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

(b)           Royalty Payments.

(i)            Royalties will accrue in eachcountry for the duration of one or more Valid Claims in Patent Rights in thatcountry 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 EnabledProducts.

(ii)           LICENSEE shall pay earned royaltiesquarterly on or before February 28, May 31, August 31 and November 30 of eachcalendar year.  Each such payment shallbe for earned royalties accrued within LICENSEE’s most recently completedcalendar quarter.

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

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

*****Confidential TreatmentRequested**

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

(v)           LICENSEE shall not collect royaltiesfrom, or be obligated to pay royaties on Licensed Products or Enabled Productssold to the account of the US Government or any agency thereof as provided forin the license to the US Government.

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

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

**ARTICLE 5. PATENT MATTERS**

5.1  **Patent Prosecution andMaintenance**.

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

(b)           UNIVERSITY shall consider amendingany patent application in Patent Rights to include claims reasonably requestedby LICENSEE to protect the products contemplated to be sold by LICENSEE underthis Agreement.

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

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maintenanceof said application or patent, and LICENSEE shall have no further license withrespect thereto.  Non-payment of any portionof Patent Costs with respect to any application or patent may be deemed byUNIVERSITY as an election by LICENSEE to terminate its reimbursementobligations 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 tofile, prosecute, or maintain Patent Rights to which Licensee has terminated itsLicense hereunder.

5.2**  Patent Infringement**.

## (a)           In the eventLICENSEE  knows that one or more third partiesare substantially infringing the Patent Rights under this Agreement,LICENSEE  will promptly notifyUNIVERSITY  in writing and provideUNIVERSITY with reasonable evidence of such infringement.

## (b)           Both parties to thisAgreement acknowledge that during the period and in a jurisdiction where theLICENSEE  has exclusive rights under thisAgreement, neither party will notify a third party other than NIH and HHMI thatan infringement of Patent Rights occurred without first obtaining consent ofthe other party.  Both parties will usetheir best efforts in cooperation with each other to terminate the infringementwithout litigation.

## (c)           If the LICENSEEdesires that Patent Rights be enforced against infringers, and theLICENSEE  has exclusive rights under PatentRights, the LICENSEE  either may requestUNIVERSITY  to take legal action againstthe patent infringer or may request permission from UNIVERSITY  to file suit against the patentinfringer.  LICENSEE’s  request must be made in writing and mustinclude reasonable evidence of the infringement and resulting damages to theLICENSEE.  If the infringing activity hasnot been abated within ninety (90) days following the effective date ofLICENSEE’s request, then UNIVERSITY and the NIH will have the right to electone of the following:

### (i)            commence suit on their own account;or

### (ii)           refuse to participate in a suitagainst the patent infringer.

UNIVERSITY  and NIH will give written notice of theirelection to the LICENSEE  within onehundred (100) days following the effective date of LICENSEE’s writtenrequest.  The LICENSEE, thereafter, maybring suit for patent infringement if and only if UNIVERSITY and the NIH electsnot to commence suit and if the infringement occurred during the period and ina jurisdiction where the LICENSEE  hadexclusive rights under this Agreement. In the event LICENSEE  elects tobring suit in accordance with this Paragraph, UNIVERSITY  and NIH may thereafter join such suit attheir own expense.

## (d)           The party who brought the suit will pay for alllegal costs and will recover any and all recoveries; provided, however, that ifUNIVERSITY  and/or the NIH brought suiton their own account, then the parties and the NIH may share in the expense andthe recoveries will be

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## allocated inthe following order: (a) each party will be reimbursed in equal amounts forattorney’s costs, fees, and other related expenses (to the extent that eachparty paid for such costs, fees, and expenses) until all such costs, fees, andexpenses are reimbursed; and (b) each party will share equally in any remainingamount in proportion to the share of expenses paid by each party.

## (e)           Each party willcooperate with the others during litigation proceedings instituted hereunderbut at the expense of the party who brought the suit.  The party bringing suit will control suchlitigation, except that UNIVERSITY  maybe represented by counsel of its choice in any suit brought by the LICENSEE.

5.3  **Patent Marking.**  LICENSEE shall mark all Licensed Productsmade, used or sold under the terms of this Agreement, or their containers, inaccordance with the applicable patent marking laws.

**ARTICLE 6. GOVERNMENTAL MATTERS**

6.1  **Governmental Approval orRegistration.**  If thisAgreement or any associated transaction is required by the law of any nation tobe either approved or registered with any governmental agency, LICENSEE shallassume all legal obligations to do so. LICENSEE shall notify UNIVERSITY if it becomes aware that this Agreementis subject to a United States or foreign government reporting or approvalrequirement.  LICENSEE shall make allnecessary filings and pay all costs including fees, penalties, and all otherout-of-pocket costs associated with such reporting or approval process.

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

6.3  **Preference for UnitedStates Industry**.  If LICENSEEsells a Patent Product or Combination Product that consists of a Patent Productin 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”) toLICENSEE.  If LICENSEE fails to cure thedefault within sixty (60) days of the Notice of Default, UNIVERSITY mayterminate this Agreement and the license granted herein by a second writtennotice (“Notice of Termination”) to LICENSEE. If a Notice of Termination is sent to LICENSEE, this Agreement shallautomatically terminate on the effective date of that notice.

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

7.2  **Termination by LICENSEE.**

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

(b)           Any termination under Paragraph7.2(a) shall not relieve LICENSEE of any obligation or liability accrued underthis Agreement prior to termination or rescind any payment made to UNIVERSITYor action by LICENSEE prior to the time termination becomes effective.  Termination shall not affect in any mannerany rights of UNIVERSITY arising under this Agreement prior to termination.

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

(a)           Article4 (REPORTS, RECORDS AND PAYMENTS);

(b)                                 Paragraph7.4 (Disposition of Licensed Products on Hand);

(c)           Paragraph8.2 (Indemnification);

(d)           Article 9 (USE OF NAMES ANDTRADEMARKS);

(e)           Paragraph 10.2 hereof (Secrecy);

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

(g)                                 Paragraph10.12 (HHMI Third Party Beneficiary Status).

7.4  **Disposition of LicensedProducts on Hand.**  Upontermination of this Agreement, LICENSEE may dispose of all previously made orpartially made Licensed Product within a period of [...***...] days of theeffective date of such termination provided that the sale of such LicensedProduct by LICENSEE, its Sublicensees, or Affiliates shall be subject to theterms of this Agreement, including but not limited to the rendering of reportsand 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 thelawful right to grant this license.

(b)           Thelicense granted herein  and theassociated Technology are provided “AS IS” and without WARRANTY OFMERCHANTABILITY or WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE or any otherwarranty, express or implied.  UNIVERSITYmakes no representation or warranty that the Licensed Product, Licensed Methodor the use of Patent Rights, Technology or Related Patent Rights or RelatedInventions will not infringe any other patent or other proprietary rights.

(c)           In no event shall:

(i)            UNIVERSITY be liable for anyincidental, special or consequential damages resulting from exercise by LICENSEEof the  license granted herein or the useof the Invention, Licensed Product, Licensed Method or Technology; or

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

(d)           Nothing in this Agreement shall beconstrued as:

(i)            a warranty or representation byUNIVERSITY or LICENSEE as to the validity or scope of any Patent Rights orRelated Patent Rights;

(ii)           a warranty or representation thatanything made, used, sold or otherwise disposed of under any license granted inthis Agreement is or shall be free from infringement of patents of thirdparties;

(iii)          an obligation to bring or prosecuteactions or suits against third parties for patent infringement except asprovided in Paragraph 5.2 hereof;

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

(v)           an obligation to furnish any know-hownot provided in Patent Rights and Technology; or

(vi)          an obligation to update Technology.

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8.2  **Indemnification.**

(a)           LICENSEE shall indemnify, holdharmless and defend UNIVERSITY, its officers, employees, and agents; thesponsors of the research that led to the Invention; and the Inventors of thepatents and patent applications in Patent Rights and their employers againstany and all claims, suits, losses, damage, costs, fees, and expenses resultingfrom or arising out of exercise of this license or any Sublicense.  This indemnification shall include, but notbe limited to, any product liability.

HHMIand its trustees, officers, employees and agents (collectively, “HHMIIndemnitees”), will be indemnified, defended by counsel acceptable to HHMI, andheld 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 andexpenses of defense), (collectively, “Claims”), based upon, arising out of, orotherwise relating to this Agreement, including without limitation any cause ofaction relating to product liability. The previous sentence will not apply to any Claim that is determineswith finality by a court of competent jurisdiction to result solely from thegross negligence or willful misconduct of an HHMI Indemnitee.

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

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

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

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

(d)           UNIVERSITY shall notify LICENSEE inwriting of any claim or suit brought against UNIVERSITY or HHMI in respect ofwhich UNIVERSITY or HHMI intends to invoke the provisions of this Article.  LICENSEE shall keep UNIVERSITY informed on acurrent 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 Agreementconfers any right to use in advertising, publicity, or other promotionalactivities any name, trade name, trademark, or other designation of eitherparty hereto (including contraction, abbreviation or simulation of any of theforegoing).  Unless required by law, theuse by LICENSEE of the name, “The University of California” or the name of anycampus of the University Of California is prohibited, without the expresswritten consent of UNIVERSITY.

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

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

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

**ARTICLE 10. MISCELLANEOUS PROVISIONS**

10.1                         **Correspondence.**  Any notice or payment required to be given toeither party under this Agreement shall be deemed to have been properly givenand 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 addressas is designated by written notice given to the other party.

If sent to LICENSEE:

Senomyx,Inc.

11099N. Torrey Pines Road

LaJolla, CA 92037

Attention: GeneralCounsel with copy to President

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Phone:  (858) 646-8300

Fax:  (858) 404-0750

If sent to UNIVERSITY bymail:

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 bycourier:

University of California,San Diego

Technology Transfer &Intellectual Property Services

10300 North Torrey PinesRoad

Torrey Pines CenterNorth, First Floor

La Jolla, CA 92037

Attention:  Assistant Vice Chancellor

Forwire payments to UNIVERSITY:

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### All payments due UNIVERSITY and made by wiretransfers shall include an additional wire transfer fee of twenty-five dollar(US$25) to the amount due. Wire transfers shall be made using the followinginformation:

|   | 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-TechTIPSCASE 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 |

 

Afax copy of the transaction receipt should be sent to Financial Managerat:  (858) 534-7345. [...***...]

10.2                                                                           **Secrecy.**

(a) LICENSEE andUNIVERSITY 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 androyalty reports (“Confidential Information”) in confidence using at least thesame degree of care as the receiving party uses to protect its own ConfidentialInformation of a like nature from the date of disclosure until [...***...] afterthe termination or expiration of this Agreement.  For the avoidance of doubt, thisconfidentiality obligation will apply to the information disclosed under thePrevious Agreement.

*****Confidential Treatment Requested**

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(b) LICENSEE andUNIVERSITY 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 thatfound in this Section 10.2 (Secrecy). LICENSEE and UNIVERSITY will use Confidential Information only asexpressly permitted under this Agreement.

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

(d) Nothing containedherein will in any way restrict or impair the right of LICENSEE or UNIVERSITYto use or disclose any Confidential Information:

(i)                                                         thatrecipient can demonstrate by written records was previously known to it priorto its disclosure by the disclosing party;

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

(iii)                                                   thatrecipient can demonstrate by written records was lawfully obtained withoutrestrictions on the recipient from sources independent of the disclosing party;

(iv)                                                  thatUNIVERSITY is required to disclosed pursuant to the California Public Records Actor other applicable law; and

(v)                                                     isindependently developed by the employees, agents or contractors of receivingparty, without the aid, application, or use of Confidential Informationdisclosed hereunder as shown by written record.

LICENSEE or UNIVERSITYalso may use or disclose Confidential Information that is required to bedisclosed (i) to a governmental entity or agency in connection with seeking anygovernmental or regulatory approval, governmental audit, or other governmentalcontractual requirement (ii) by law or regulation, provided that the recipientuses reasonable efforts to give the party owning the Confidential Informationsufficient notice of such required disclosure to allow the party owning theConfidential Information reasonable opportunity to object to, and to take legalaction to prevent, such disclosure.  Notwithstanding anything to the contrary in this Agreement, either partymay disclose the material terms of this Agreement in legal proceedings or asare required to be disclosed in its financial statements or by law.  Either party will have the further right todisclose the material terms of this Agreement to potential sublicensees, orunder an obligation of confidentiality to any potential acquirer, mergerpartner, bank, venture capital firm, or other financial institution to obtainfinancing.

(e) Upontermination of this Agreement, LICENSEE and UNIVERSITY will destroy or returnany of the disclosing party’s Confidential Information in its possession withinfifteen (15) days following the termination of this Agreement.  LICENSEE and UNIVERSITY will provide each

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other, withinthirty (30) days following termination, with written notice that suchConfidential Information has been returned or destroyed.  Each party may, however, retain one copy ofsuch Confidential Information for archival purposes with respect to determiningcompliance with this Agreement.

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

10.3                         **Assignability.**  This Agreement is binding upon and will inureto the benefit of UNIVERSITY, its successors and assigns, but will be personalto the LICENSEE.  This Agreement will notbe assigned by the LICENSEE to any third party without the prior writtenconsent of UNIVERSITY, except that LICENSEE can assign this Agreement to itssuccessor without prior written consent of UNIVERSITY provided that LICENSEEhas sold all or substantially all of its business assets or in connection withthe acquisition of LICENSEE.  Any otherattempt by LICENSEE to assign this Agreement is void unless LICENSEE obtainsthe prior written consent of UNIVERSITY.

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

10.5                         **Failure toPerform.**  In the event of afailure of performance due under this Agreement and if it becomes necessary foreither party to undertake legal action against the other on account thereof,then the prevailing party shall be entitled to reasonable attorney’s fees inaddition to costs and necessary disbursements.

10.6                         **GoverningLaws.**  THIS AGREEMENT SHALL BEINTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OFCALIFORNIA, but the scope and validity of any patent or patent applicationshall be governed by the applicable laws of the country of the patent or patentapplication.

10.7                         **ForceMajeure.**  A party to thisAgreement may be excused from any performance required herein if suchperformance is rendered impossible or unfeasible due to any catastrophe orother major event beyond its reasonable control, including, without limitation,war, riot, and insurrection; laws, proclamations, edicts, ordinances, orregulations; 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 obligationsherein shall resume.

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

*****Confidential Treatment Requested**

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10.9                         **EntireAgreement. **This Agreementembodies the entire understanding of the parties and supersedes all previouscommunications, representations or understandings, either oral or written,between the parties relating to the subject matter hereof.

10.10                       **Amendments.**  No amendment or modification of thisAgreement shall be valid or binding on the parties unless made in writing andsigned on behalf of each party.

10.11                       **Severability.**  In the event that any of the provisions containedin this Agreement is held to be invalid, illegal, or unenforceable in anyrespect, such invalidity, illegality or unenforceability shall not affect anyother provisions of this Agreement, and this Agreement shall be construed as ifthe invalid, illegal, or unenforceable provisions had never been contained init.

10.12                       **HHMI ThirdParty Beneficiary Status. **HHMIis 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 anintended third-party beneficiary of this Agreement and certain of itsprovisions are for the benefit of HHMI and are enforceable by HHMI in its ownname.

*INWITNESS WHEREOF*, both UNIVERSITY and LICENSEE have executedthis Agreement, in duplicate originals, by their respective and duly authorizedofficers 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 InterestAgreement

[...***...]

 

*****Confidential Treatment Requested**

29

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Exhibit B

Patent Rights

30

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[...***...]

 

*****Confidential Treatment Requested**

31

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Exhibit C

Technology

32

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[...***...]

 

*****Confidential Treatment Requested**

33

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