**Exhibit 10.6****Certain information in this document, marked by brackets, has been omitted and filed separately with theSecurities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.****AMENDED AND RESTATED EXCLUSIVE LICENSE AGREEMENT**     **THIS AMENDED AND RESTATED LICENSE**(the “Agreement”) is made and entered into as of April 1,2006 (the “Amendment Date”), by and between Regents of the University of Minnesota, aconstitutional, educational corporation under the laws of the state of Minnesota (the “University”)and Maxygen, Inc., a corporation organized under the laws of Delaware (the “Company”).**Purpose**     A. The University owns the right to license to others certain rights to the Licensed PatentRights, as that term is defined and used in this Agreement. The Company desires the Universitygrant it a license to use, develop and commercialize the Licensed Patent Rights. The University iswilling to grant such a license on the terms set forth below.     B. The University and the Company entered into a License Agreement with regard to the LicensedPatent Rights (then in effect) effective August 1, 2003, and as of the Amendment Date have agreedto certain amendments and modifications to the License Agreement, and accordingly have agreed toenter this Amended and Restated License Agreement.     **NOW, THEREFORE**, the parties agree that:**ARTICLE 1 — DEFINITIONS**     1.1 Definitions. For purposes of interpreting this License, the following terms shallhave the meanings ascribed to them below in this Section 1.1:          “Affiliate” means any corporation or other business entity which during the term of thisAgreement controls, is controlled by, or is under common control with the Company, but only for solong as such entity controls, is controlled by, or is under common control with the Company. Forthis purpose, control shall mean the possession of the power to direct or cause the direction ofthe management and the policies of an entity whether through ownership directly or indirectly offifty percent (50%) or more of the stock entitled to vote, and for non-stock organizations, theright to receive fifty percent (50%) or more of the profits by contract or otherwise, or incountries where control of fifty percent (50%) or more of such rights is not permitted in thecountry where such entity exists, the maximum permitted in such country.          “BLA” means a Biologics License Application, as defined in the United States Food, Drug andCosmetic Act and the regulations promulgated thereunder, or any corresponding foreign application,registration or certification.          “Co-Exclusive” means that the University may grant [****], with regard to the applicableLicensed Patent Rights.          “Company” means Maxygen, Inc. and its Affiliates. * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
 

 
          “Field of Use” means the field of use specified in Section 2(a) of the attached Schedule A.          “Financial Milestone Payment” means the payments by the Company to the University specified inSection 5(c) of the attached Schedule A.          “IND” means an Investigational New Drug application, as defined in the United States Food,Drug and Cosmetic Act and the regulations promulgated thereunder, or any corresponding foreignapplication, registration or certification.          “Licensed Patent Rights” shall mean the Patents and Patent Applications.          “Net Sales” means the gross amount received by the Company and its Sublicensees for sales,leases and other dispositions of Products made during the term of this License and thePost-termination Period less (i) all trade, quantity, and cash discounts actually allowed, (ii) allcredits and allowances actually granted due to rejections, returns, billing errors, and retroactiveprice reductions, (iii) import and/or export duties and tariffs, actually paid, and (iv) excise,sale and use taxes, value added, and other consumption taxes and similar taxes and other compulsorypayments to governmental authorities, (v) the cost of shipping packages and packing, if billedseparately, (vi) insurance costs and outbound transportation charges prepaid or allowed, (vii)amounts paid to third parties for delivery devices sold with Products for delivery of Products, and(viii) amounts allowed or credited due to returns or uncollectable amounts.          “Patent” means the patents described in Section 1 of the attached Schedule A along with anyvalid and subsisting patent issued during the term of this License by the United States PatentTrademark Office or any like foreign body with respect to any Patent Application. The term“Patent” includes reissues, reexaminations or extensions of a Patent.          “Patent Application(s)” means the patent application(s) described in Section 1(b) and/orSection 1(c) of the attached Schedule A. The term “Patent Application” also means anycontinuations, continuations-in-part, divisions, patents of addition, and substitutions of a PatentApplication, including any foreign counterparts thereof.          “Post-termination Period” means the [****] day period commencing on the date of termination orexpiration of this License as described below in Section 8.3.          “Product” means any product or good made by, made for, or sold, transferred or otherwisedisposed of by the Company (or its permitted assignees or sublicensees) that is within the scope ofa Valid Claim or is made by a process that is within the scope of a Valid Claim. The term“Product” refers only to products and goods manufactured, made, sold, transferred or otherwisedisposed of during the period while the pertinent Valid Claim was subsisting in the applicablecountry.          “Rate” means the applicable percentage rate on Net Sales specified below in attached ScheduleA. * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
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          “Territory” means the geographical area specified in Section 6 of the attached Schedule A.          “Up-front Payment” means the payment by the Company to the University specified in Section5(a) of the attached Schedule A.          “Valid Claim” means a claim of (i) a pending Patent Application, or (ii) an issued andunexpired Patent which has not been held unpatentable, invalid or unenforceable by a court or othergovernment agency of competent jurisdiction and has not been admitted to be invalid orunenforceable through reissue, re-examination, disclaimer or otherwise. Notwithstanding theforegoing, if a claim of a pending Patent Application has not issued as a claim of an issued Patentwithin [****] years after the date from which such claim takes priority, such pending claim shallnot be a Valid Claim for purposes of this Agreement unless and until the patent is issued includingsuch claim.**ARTICLE 2 — TERM**     2.1 Term. The term of this License shall commence on the Effective Date first abovewritten and, unless terminated earlier as provided below in Article 8, this License shall expire ona country-by-country and Product-by-Product basis, upon the later of:          (i) if a relevant Patent has been or, during the term of this License, is issued by anycountry, the date on which the Patent ceases to be valid and subsisting in that or any othercountry (or in the event more than one Patent has been licensed hereunder, the date on which noneof the relevant Patents are valid and subsisting in the applicable country); or          (ii) if one or more Patent Applications have been filed prior to or during the term of thisLicense, the date on which no Valid Claims are pending in the applicable country.**ARTICLE 3 — GRANT OF LICENSE**     3.1 Grant of License.          3.1.1 The Company’s Rights.               (a) Subject to the terms and conditions of this License, the University hereby grants to theCompany, and the Company hereby accepts, the following licenses:                    (i) an exclusive license under the Licensed Patent Rights subject to [****] of Schedule A, tomanufacture, have manufactured, import, have imported, use, sell, offer for sale, lease orotherwise dispose of Products in the Territory in the Field of Use as described in Section 2(A) ofSchedule A; and                    (ii) a Co-Exclusive license under the Licensed Patent Rights subject to [****] of Schedule A,to manufacture, have manufactured, import, have imported, use, * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
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sell, offer for sale, lease or otherwise dispose of Products in the Territory in the Field ofUse as described in Section 2(B) of Schedule A.Nothing herein shall be construed to grant the Company any rights other than the rights expresslygranted it in these Licenses to the Patent(s) or Patent Application(s) or to any otherUniversity-owned technology, patent applications or patents.               (b) Except as provided in this paragraph, the Company shall not, and shall not attempt to,assign any of its rights under this License. The Company, without the prior approval of theUniversity, may assign this License to (i) an Affiliate of the Company; or (ii) an entity thatacquires all or substantially all of the business or assets of the Company to which this Agreementpertains, whether by merger, reorganization, acquisition, sale, operation of law, or otherwise.The Company may also assign this Agreement with the written consent of the University. The termsand conditions of this Agreement shall be binding on and inure to the benefit of the permittedsuccessors and assigns of the Parties. Any assignment made in violation of this paragraph shall bevoid and shall grant the University the right to terminate this Agreement as provided below inSection 8.1.               (c) The Company may sublicense the rights granted it in Section 3.1.1 as provided in Section 3of Schedule A.          3.1.3 The University’s Rights.               (a) The University retains an irrevocable, nonexclusive and nontransferable right to use theLicensed Patent Rights and the inventions claimed in each Patent Application and Patent for its owneducational, non-commercial research, and non-commercial medical purposes.               (b) The University may publish or otherwise disclose (in writing or orally) descriptions ofthe inventions described in the Licensed Patent Rights. The parties acknowledge the Company’sinterest in preserving the patentability of the inventions described in the Licensed Patent Rights.No less than [****] days prior to the submission of an abstract, paper or article for publicationor prior to the date of the intended disclosure that recounts material information relating to theaspects of the inventions described in the Licensed Patent Rights that have not been protectedunder applicable patent and other intellectual property laws, the University shall notify theCompany of the planned publication or disclosure and shall provide the Company a copy of any suchabstract, paper or article or a written description of the purposed oral presentation. Within suchthirty-day period, the Company may deliver to the University written objections to suchdisclosures. The University shall, if the Company requests, prohibit the publication or disclosureof any description if (i) the publication or disclosure would violate the terms of anynondisclosure agreement between the Company and the University, including without limitation,Section 12.4 below, or (ii) the publication or disclosure would prevent or hinder the patentabilityof the inventions claimed in the Licensed Patent Rights. * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
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          3.1.4 [****].               (a) If the Company wishes to expand the scope of the Field of Use of the Licensed PatentRights to include [****] (the “Subfield”), the Company shall notify University in writing, and insuch event the Company shall have the option to include the Subfield in the Field of Use, withnotice to the University. In any such event, the Company shall pay to the University for theinclusion of the Subfield in the Field of Use an additional [****] payment equal to that set forthin Section 5[****] of Appendix A and royalty and milestone payments for Products for use in theSubfield as set forth in Sections 5(b) and (c) of Appendix A.               (b) If a third party wishes to license any of the Licensed Patent Rights for use in theSubfield, then University shall notify Maxygen, and Maxygen shall have a first right to obtain fromUniversity a license to expand the Field of Use to include the Subfield. If Maxygen notifiesUniversity within [****] days of University’s notice that Company wishes to expand its license toinclude the Subfield and pays to the University the [****] payment described in Section 3.1.4(a)above, then the Subfield shall be included in the Field of Use and subject to the Company’sexclusive license hereunder.          3.1.5 Covenant Not to Sue. To ensure that the Company has freedom to practice therights granted to it in this Agreement, the University agrees that University and its assigneesand/or licensees shall not enforce, or facilitate the enforcement of, against the Company and/orits Affiliates, Sublicensees, distributors and/or end users of any Product (each, an “AuthorizedEntity”), any issued patent owned by University or that University has the right to enforce, thatany Authorized Entity may infringe in connection with the development, manufacture, use,importation, offer for sale or sale of any Product in the Field of Use, on the condition that[****].**ARTICLE 4 — COMMERCIALIZATION**     4.1 Commercialization and Performance Milestones. The Company shall use its[****] efforts, consistent with sound and reasonable business practices and judgment, tocommercialize a Product [****] and to meet market demand therefor. Efforts by theCompany’s sublicensees shall be deemed to be efforts by the Company for the purpose of this Section4.1.     4.2 U.S. Manufacture of Products. To the extent required by 35 U.S.C. §204, theCompany hereby agrees that it shall, and it shall require and cause any assignees or sublicenseesto, substantially manufacture all Products in the United States of America if (A) the Products areto be sold in the United States of America and (B) the Products embody or are produced through useof an invention which is subject to the rights of the federal government of the United States ofAmerica, as described above in subsection 3.1.2.     4.3 Commercialization Reports. Throughout the term of this License and during thePost-termination Period, the Company shall deliver to the University, in addition to any Reportsdescribed below in Section 5.3, [****] written reports summarizing the Company’s efforts and plansto commercialize and sell Products. * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
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     4.4 Use of the University’s Name and Trademarks or the Names of University Faculty, Staffor Students. No provision of this License grants the Company any right or license to use thename or trademarks of the University nor the names or identities of any member of the faculty,staff or student body of the University. The Company shall not use any such trademarks, names oridentities without the University’s and, as the case may be, the member of the faculty, staff orstudent body’s prior written approval.**ARTICLE 5 — PAYMENTS, REIMBURSEMENTS, REPORTS AND RECORDS**     5.1 Payments.          5.1.1 Up-front Payment. Within five (5) business days of the Effective Date of thisLicense, the Company shall deliver to the University, as a one-time Up-front Payment, its check inthe amount, if any, specified in attached Schedule A.          5.1.2 Financial Milestones. Within [****] business days of the attainment of amilestone described in Section 5(c) of the attached Schedule A, the Company shall deliver to theUniversity its check in the amount, if any, specified in such section of Schedule A.          5.1.3 Running Royalties. Within [****] days after the last day of a calendar quarterduring the term of this License and during the Post-termination Period, the Company shall deliverto the University its check in the applicable amount for royalties on Net Sales of Products, asspecified in Section 5(b) of Schedule A.          5.1.4 Annual License Payments. Commencing on the first Anniversary of the EffectiveDate of this License, the Company shall deliver to the University, as an Annual License Payment,its check in the amount specified in Section 5(d) of Schedule A.          5.1.5 Currency and Checks. All computations and payments made under this Licenseshall be in United States dollars. For purposes of determining the dollar value of transactionsconducted in non-United States dollar currencies, the exchange rate for the currency into dollarsshall be the rate set by Citibank, N. A. (or its successor), in New York, New York on the lastbusiness day of the month in which the transaction was entered into.          5.1.6 Payment Means and Address. All checks to the University shall be made payableto the “Regents of the University of Minnesota” and shall be mailed to the address specified inSection 12.10 of this License.     5.2 Reimbursement of Patent Prosecution Expenses. Within sixty (60) days of itsreceipt of the University’s invoice for reimbursable expenses as specified in Sections 6.1 and 6.2hereof, the Company shall deliver to the University its check in the amount of such invoice. Eachsuch invoice shall specify the date on which the expense was incurred, the purpose of the expense(including, as applicable, a detailed summary of patent attorney services giving rise to theexpense), and the Patent or Patent Application to which the expense relates. * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
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     5.3 The Company’s Reports. Commencing with the first commercial sale of a Product,within [****] days after the last day of a calendar quarter during the term of this License and thePost-termination Period, the Company shall deliver to the University a written Report (a copy ofthe form of which is attached as Exhibit B) recounting the number and Net Sales amount (expressedin U. S. dollars) of all sales, leases or other dispositions of Products by the Company and itssublicensees during such calendar quarter.     5.4 Records Retention and Audit Rights.          5.4.1 The Company, at its expense, shall keep and maintain complete and accurate records ofall sales, leases, and other dispositions of Products which enable the calculation of royaltiespayable hereunder to be verified. The Company shall retain the books and records for eachquarterly period for [****] years after the submission of the corresponding report under Section5.3 hereof.          5.4.2 The University, at its expense, except as set forth below in this subsection, shall havethe right to select an independent certified public accountant, reasonably acceptable to theCompany, to inspect and audit the Company’s records referred to in subsection 5.4.1 hereof no morethan once per calendar year, at the Company’s address as set forth in Section 12.10 hereof or suchother location as the parties shall mutually agree during the Company’s normal business hours, forthe sole purpose of verifying the accuracy of the Company’s payments and compliance with thisAgreement. Such independent accountants may have access to the relevant books and records of theCompany to conduct a review or audit. The accounting firm shall enter into a confidentialityagreement with the Company and shall report to Licensor only whether there has been a royaltyunderpayment and, if so, the amount thereof. The Company shall reimburse the University for allits out-of-pocket expenses to inspect and audit such records if the results of such inspection andaudit determines that the Company has underpaid amounts owed to the University by at least [****]in a year.     5.5 Interest. Interest computed at [****] per annum shall accrue on all unpaid feesand reimbursements owed to the University under this License, commencing on the date payment forsuch fee or reimbursement was due and owing.**ARTICLE 6 – PATENT APPLICATIONS AND PATENTS**     6.1 Pre-License Patent Filings and Cost Reimbursement. The parties acknowledge thatas of the date of this License, each Patent has been issued to the University and the Universityhas filed each Patent Application listed with a serial number in attached Schedule A. Pursuant toSection 5.2, the Company shall reimburse the University the amount specified in Section 4(a) of theattached Schedule A.     6.2 Patent Application Filings during the Term of this License.          6.2.1 The University, in consultation with the Company, shall determine in which othercountries the University will file, or cause to be filed, additional Patent Applications. In theevent the University and the Company mutually agree that the University should file a PatentApplication in a particular country, the University shall retain counsel of its choice, * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
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reasonably acceptable to the Company, to file and prosecute such Patent Application; theUniversity shall take all commercially reasonable steps to cause a Patent Application to be timelyfiled and a Patent to be issued in that country; the University shall inform the Company promptlyof the status of the prosecution of each Patent Application, including delivering to the Companycopies of all notices, written and oral communications with governmental officials, and documents,and shall consult with the Company on the prosecution of the patent application as described inSection 6.3; and the Company shall reimburse the University for the percentage set forth in Section4(b) of attached Schedule A of the University’s out-of-pocket costs, including application andattorneys’ fees, to prosecute such Patent Application(s) and if, any Patent(s) are issued duringthe term of this License, to maintain it.          6.2.2 In the event the University and the Company do not reach an agreement as to whether aPatent Application should be filed in a particular country, the University may, but shall have noduty or obligation hereunder to, file and prosecute such patent application at the University’s ownexpense. No provision of this License limits, conditions or otherwise affects the University’sright to prosecute a Patent Application in any country. Subject to Section 6.4 below, theUniversity retains the sole and exclusive right to file or otherwise prosecute the PatentApplications.          6.2.3 In the event that the Company notifies the University in writing that the Company doesnot wish to support the filing, prosecution and/or maintenance of any Patent Application or Patentwithin the Licensed Patent Rights in one or more countries, the Company shall not be obligated topay any further expenses for such activities undertaken by the University with respect to suchpatent application or patent. With respect to countries in which the Company notifies theUniversity that the Company does not wish to pay for filing, prosecution or maintenance of Patentsand Patent Applications within the Licensed Patent, the Company shall thereby relinquish its rightsunder such Patent or Patent Application in that country, and the University shall have the soleright to decide on applying for patent protection and maintaining any Patents, at the University’sexpense, in such countries.          6.2.4 It is understood and agreed that the Company wishes to file divisionals of certainPatent Applications to ensure patent coverage of the Field of Use, and the University agrees tofile and prosecute such divisional Patent Applications, subject to the terms of this LicenseAgreement.     6.3 University’s Responsibilities. The University shall consult with the Companyregarding the conduct of all such activities, by providing the Company a reasonable opportunity toreview and comment on all proposed submissions to any patent office before submission. For thepurpose of this Agreement, “reasonable opportunity” shall mean that the Company shall receive fromthe University or its patent counsel true copies of all documents relating to filing, registration,prosecution, and maintenance of patent applications and patents within the Licensed Patent Rightsas soon as reasonably practical after the University has received such documents and materials andat least [****] days before any date imposed upon the University for action or response withrespect to such patent applications or patents. The University agrees to consider the Company’scomments concerning such documents and materials, and shall use its best efforts to incorporateinto the final version of such documents and materials any modification(s) and/or claim(s)requested by the Company. * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
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     6.4 University’s Failure to Prosecute. In the event the University declines to fileor having filed fails to further prosecute or maintain any Patent Applications or Patents, orconduct any interferences, re-examinations, reissues, oppositions, within a reasonable timetherefor, then the Company shall have the right, upon thirty (30) days prior notice to theUniversity, to prepare, file, prosecute and maintain such Patent Applications and Patents in suchcountries as it deems appropriate, and conduct any interferences, re-examinations, reissues oroppositions, at its sole expense, using patent counsel of its choice.     6.5 Maintenance of Patents. The University shall take all commercially reasonablesteps to cause the Patents to remain or be valid and subsisting.     6.6 Ownership of the Patents and Patent Applications. No provision of this Licensegrants the Company any rights, titles or interests (except for the grant of license in subsection3.1.1 hereof) in the Patents or Patent Applications, notwithstanding the Company’s payment of allor any portion of the patent prosecution costs.     6.7 Patent Term Extensions.          6.7.1 With respect to any Patent in [****] of Schedule A, at the Company’s request, theUniversity will designate the Company or its designee as its agent for obtaining an extension ofsuch patent or governmental equivalent which extends the exclusivity of any of the Patent subjectmatter where available in any country in the world or if not feasible, at the Company’s option,permit the Company to file in the University’s name or diligently obtain such extension for theCompany or its sublicensee(s), at the Company’s expense. Furthermore, the University shall providereasonable assistance to facilitate the Company’s or its sublicensees’ efforts to obtain any suchextension.          6.7.2 With respect to any Patent in [****] of Schedule A, University and Company agree todiscuss the Company’s request for obtaining an extension of such Patent or governmental equivalentwhich extends the exclusivity of any of the Patent Subject Matter where available in any country.University will use reasonable efforts to accommodate Company’s request, [****].**ARTICLE 7 — INFRINGEMENT**     7.1 Third Party Infringement of the Patent.          7.1.1 Notice.               (a) Third Party Infringement. In the event a party hereto learns of substantial,credible evidence that a third party is making, using or selling a product in the Field of Use andin the Territory that infringes one or more of the Patents, such party shall deliver written noticeof the possible infringement to the other party and thereafter promptly meet to discuss theevidence suggesting infringement of the Patent.               (b) Declaratory Judgments, etc. If either party hereto becomes aware that any of thePatents become subject to a declaratory judgment action, re-examination, * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
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opposition or similar proceeding, such party shall promptly notify the other party heretodescribing the facts relating thereto in reasonable detail.          7.1.2 Infringement.               (a) The Company, as exclusive licensee of the Patents in the Field of Use, has the firstright, but not the obligation, to take action in its own name to secure the cessation of anyinfringement in the Field of Use, and/or to bring suit against such alleged infringement of thePatents, as well as other rights granted to Company under Section 3.1, by promptly giving writtennotice to the University. All recoveries in such suits shall belong solely to the Company, andonly the portion of a recovery representing the Company’s lost Net Sales, minus the Company’sdocumented out-of-pocket legal expenses for the suit (if such expenses were not separatelyreimbursed in the recovery), shall be subject to the applicable royalty under Section 5.1.3. TheUniversity agrees it will reasonably cooperate with the Company and, if made necessary under law,join as a party in such suits. Even if not required by law, the University may join and berepresented by separate counsel in such suits at its own expense. If the University is joined as aparty in such a suit, then the entire recovery by the Company, after the Company and University areproportionately reimbursed from such recovery for their documented out-of-pocket legal expenses forthe suit (including, without limitation, attorneys and expert fees), shall be considered Net Salesof Product and subject to the applicable royalty under Section 5.1.3.               (b) If the Company elects not to exercise its right to prosecute or take other appropriateaction against an alleged infringer, it shall promptly notify the University in writing, and theUniversity shall then have the right, or may assign the right to prosecute or take otherappropriate action against an alleged infringer to a third party, at no cost to Company, to bringsuit or take other appropriate action against the alleged infringer, in which case any recoveryshall belong to the University or its assignee. University may provide notice to other parties whohave taken licenses under the Patents that the Company and/or the University intend to assert thePatents against potential third party infringers as set out in subsection (a) above. Any suchnotice to such other parties shall be subject to a written confidentiality agreement that requiressuch other parties not to disclose such notice or the content thereof to any other party.               (c) No settlement, consent judgment or other voluntary final disposition of a suit beingprosecuted by a party or a third party assignee of University under this Section 7.1.2 may beentered into without the consent of the other party to this Agreement if such settlement, consentjudgment or other voluntary final disposition would alter, derogate or diminish such other party’srights under the Agreement or otherwise materially adversely affect such other party to thisAgreement, which consent shall not be unreasonably withheld or delayed.               (d) University shall promptly provide notice to third parties who take or have taken licensesunder the Patents, and have their written agreement, that the Company, at its sole discretion shallhave the first right to assert the Patents in the Field of Use and other rights granted to Companyunder Section 3.1 against potential third party infringers as set out in subparagraph (b) above andthat no settlement, consent judgment or other voluntary final disposition of any suit beingprosecuted by a third party relating to the practice of the Patents in
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the Field of Use may be entered into without the consent of Company if such settlement,consent judgment or other voluntary final disposition could alter, derogate or diminish Company’srights under the Agreement or otherwise materially adversely affect Company, which consent shallnot be reasonably withheld or delayed.               (e) University shall require any third parties who take or have taken licenses under thePatents to provide advance written notice to University of any intent by such third party to bringsuit or other action concerning the practice of the Patents outside the Field of Use. Universityshall promptly provide written notice to Company upon receipt of any such written notice from suchthird parties. Company shall have the right to join such suit or other action and be representedby separate counsel at Company’s own expense. University shall promptly provide notice to suchthird parties and have their written agreement of such third parties that the Company has therights set forth in this Section 7.1.2.               (f) In any suit, action or other proceeding in connection with enforcement and/or defense ofany of the Patents in the Field of Use, the University shall cooperate fully with the Company,including without limitation by executing such documents as the Company may reasonably makeavailable to the University, at reasonable times, all relevant records, papers, information,samples and other similar materials in the University’s possession relating to the applicablePatent, at no additional charge other than reimbursement for out-of-pocket expenses incurred by theUniversity at the request of the Company.     7.2 The Company’s Alleged Infringement. In the event a third party commences anaction alleging that the Company’s manufacture, sell, lease or other disposition of Productsinfringes the patent rights of a third party, such party promptly thereafter shall deliver writtennotice of the possible infringement to the other party, describing in detail the action. TheCompany shall defend and hold harmless the University from liabilities arising out of such anaction brought by such third party.**ARTICLE 8 — TERMINATION**     8.1 By the University.          8.1.1 The following events shall constitute an Event of Default by the Company:               (i) if royalties or reimbursements due the University are unpaid;               (ii) if the Company materially breaches any material term of this License;               (iii) if the Company fails to pay the milestone payments set forth in attached Schedule A formilestones achieved; or               (iv) if the Company transfers its rights hereunder in violation of subsection 3.1.1(b) hereof.
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          8.1.2 Upon the occurrence on an Event of Default by the Company, the University may deliver tothe Company a written Notice of Default. The University may terminate this License and theCompany’s license to use the Licensed Patent Rights by delivering to the Company a written Noticeof Termination if the default has not cured in full within [****] days of the delivery to theCompany of the Notice of Default; provided, however, if either party receives notification from theother of a material breach and if the party alleged to be in breach notifies the nonbreaching partyin writing within [****] days of receipt of default notice that it disputes the asserted default,the parties shall discuss in good faith and attempt to resolve such dispute. If the parties areunable to resolve such dispute within [****] days after notice of the dispute is received by thenonbreaching party, the matter will be submitted to arbitration and no termination shall becomeeffective prior to the completion of such arbitration, and unless approved by the arbitrators.     8.2 By the Company. The Company may terminate this License in its entirety or withrespect to any Licensed Patent Rights and/or any country, at any time, by delivering to theUniversity a written notice of termination at least [****] days prior to the effective date oftermination.     8.3 Post-termination Period.          8.3.1 Even after the termination under Section 8.2 hereof or the expiration of this License,the Company and its Sublicensees may sell, lease, or otherwise dispose of Products in theTerritory, provided the Products were manufactured prior to the effective date of termination orthe expiration of this License.          8.3.2 In the event of any termination of this License under Section 8.1 hereof, the Companyshall not have a license under the Licensed Patent Rights to manufacture, have manufactured, use,sell, lease or otherwise dispose of Products if the arbitrator determines that this is theappropriate remedy for a breach of this Agreement by the Company.     8.4 Survival of Sublicensees. In the event of any termination of this Agreement, anysublicenses granted by the Company shall remain in force and effect and shall be assigned by theCompany to the University, provided, that such sublicensee is currently in good standing withregard to its obligations under the sublicense or has cured any default or breach within the periodprovided in such sublicense, and further provided, that the financial obligations of each suchSublicensee shall be limited to those due the University hereunder for the practice of such asublicense.**ARTICLE 9 — INDEMNIFICATION AND INSURANCE**     9.1 The Company’s Indemnification. Throughout the term of this License andthereafter, the Company shall indemnify, defend and hold the University harmless from all thirdparty suits, actions, claims, liabilities, demands, damages, losses or expenses (includingreasonable attorneys’ and investigative expenses), relating to or arising out of the manufacture,use, lease, sale, or other disposition of a Product by the Company, including, without limitation,breach of contract and warranty and product liability claims relating to a Product. * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
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     9.2 The University’s Indemnification. Subject to the limitations on liability setforth in article 11 hereof, throughout the term of this License and thereafter, the Universityshall indemnify, defend and hold the Company harmless from all suits, actions, claims, liabilities,demands, damages, losses or expenses (including reasonable attorneys’ and investigative expenses),relating to or arising out of the University’s breach of the express warranties set forth inSection 10.2 hereof.     9.3 The Company’s Insurance.          9.3.1 No later than [****], the Company shall maintain in full force and effect comprehensivegeneral liability (CGL) insurance, with single claim limits of $[****] or more. Such insurancepolicy shall include coverage for claims that may be asserted by the University against the Companyunder Section 9.1 hereof and for claims by a third party against the Company or the Universityarising out purchase or use of a Product. Such insurance policy shall name the University as anadditional insured. Upon receipt of the University’s written request, the Company shall deliver tothe University a copy of the certificate of insurance for such policy.          9.3.2 The provisions of Section 9.3.1 hereof shall not apply if the University agrees inwriting to accept the Company’s self-insurance plan as adequate insurance.**ARTICLE 10 — WARRANTIES**     10.1 Authority. Each party represents and warrants to the other party that it hasfull corporate power and authority to execute, deliver and perform this License, and that no othercorporate proceedings by such party are necessary to authorize the party’s execution or delivery ofthis License.     10.2 Exclusive Rights. The University represents and warrants that (i) to the best ofits knowledge, the University is the sole and exclusive owner of all right, title and interest inand to the Licensed Patent Rights; (ii) the Licensed Patent Rights are free and clear of any lien,encumbrance, security interest or restriction on license; (iii) it has not previously granted, andwill not grant during the term of this Agreement, any right, license or interest in or to theLicensed Patent Rights, or any portion thereof, inconsistent with the license granted to theCompany herein; (iv) there are no threatened or pending actions, suits, investigations, claims orproceedings in any way relating to the Licensed Patent Rights.     10.3 Disclaimers.          10.3.1 **EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN SECTIONS 10.1 AND 10.2 HEREOF, THEUNIVERSITY DISCLAIMS AND EXCLUDES ALL WARRANTIES, EXPRESS AND IMPLIED, CONCERNING THE TECHNOLOGY,THE PATENT(S), THE PATENT APPLICATION(S) AND ANY PRODUCTS INCORPORATING THE TECHNOLOGY, INCLUDING,WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE.** * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
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          10.3.2 The University expressly disclaims any warranties and makes no representations:               (i) that the Patent Applications will be approved or that a Patent will issue;               (ii) concerning the validity or scope of any Patent; or               (iii) that the manufacture, use, sell, lease or other disposition of Products will notinfringe a third party’s patent or violate its intellectual property rights.**ARTICLE 11 — DAMAGES**     11.1 Remedy Limitation. **EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, IN NOEVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR (A) PERSONAL INJURY OR PROPERTY DAMAGES OR (B)LOST PROFITS, LOST BUSINESS OPPORTUNITY, INVENTORY LOSS, WORK STOPPAGE, LOST DATA OR ANY OTHERRELIANCE OR EXPECTANCY, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, OF ANYKIND.**     11.2 Damage Cap. **IN NO EVENT SHALL THE UNIVERSITY’S TOTAL LIABILITY FOR THE BREACH ORNONPERFORMANCE OF THIS AGREEMENT EXCEED THE AMOUNT OF ROYALTIES PAID TO THE UNIVERSITY UNDERSECTION 5.1 OF THIS LICENSE. THIS LIMITATION SHALL APPLY TO CONTRACT , TORT AND ANY OTHER CLAIM OFWHATEVER NATURE.****ARTICLE 12 — MISCELLANEOUS PROVISIONS**     12.1 Amendment and Waiver. This License may be amended from time to time only by awritten instrument signed by the parties hereto. No term or provision of this License shall bewaived and no breach excused unless such waiver or consent shall be in writing and signed by theparty claimed to have waived or consented. No waiver of a breach shall be deemed to be a waiver ofa different or subsequent breach.     12.2 Assignment. Except as provided in Section 3.1.1 of this License, the Companyshall not assign its interest under this Agreement, unless the University consents to theassignment. Any Agreement or assignment attempted to be made in violation of this section shall bevoid. This Agreement shall inure to the benefit of the Company and the University and theirrespective permitted assignees and sublicensees.     12.3 Applicable Law. The internal laws of the state of Minnesota shall govern thevalidity, construction and enforceability of this License, without giving effect to the conflict oflaws principles thereof.
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     12.4 Confidentiality. The parties acknowledge that the University is subject to theterms and provisions of the Minnesota Government Data Practices Act, Minnesota Statutes, §13.01etseq. (the “Act”). The parties further acknowledge that the Act requires, withcertain exceptions, the University to permit the public to inspect and copy any information whichthe University shall have collected, created, received, maintained, or disseminated. The partiesfurther acknowledge that in connection with the performance of this License, the Company maydeliver to the University certain information (“Trade Secret Information”) which the Company deemsproprietary and confidential. In the event the University receives a request under the Act for theinspection of any Trade Secret Information, the University shall promptly notify the Company ofsuch request and shall refuse to disclose the Trade Secret Information. In no event shall theUniversity be required to commence or defend any action to prohibit the inspection and copying ofany Trade Secret Information. The Company shall defend, indemnify, and hold harmless theUniversity and each of its regents, officers, employees and agents from and against any claim,suit, demand, or expense (including reasonable attorneys’ fees and investigation expenses) thatarose out of or related to the Company’s request the University refuse to divulge any Trade SecretInformation. The Company for itself and its employees and agents hereby waives any claim or causeof action of whatever nature against the University and each of its regents, officers, employees,and agents that arose out of or related to a request to inspect or copy any Trade SecretInformation. In no event shall the University be liable to any person for any expenses or damages,including, but not limited to, consequential, special, or incidental damages or lost profits, inconnection with the inspection or copying of any Trade Secret Information.     To the extent permitted by law, the University shall hold in confidence and disclose only toUniversity employees who need to know the Reports described in Section 5.3 hereof and the recordsinspected pursuant to Section 5.4 hereof. No provision of this License shall prohibit, limit, orcondition the University’s right to use and disclose any information in connection with enforcingthis License, in court or elsewhere.     12.5 Consent and Approvals. Except as otherwise expressly provided, all consents orapprovals required under the terms of this License shall be in writing and shall not beunreasonably withheld or delayed.     12.6 Construction. The headings preceding and labeling the sections of this Licenseare for the purpose of identification only and shall not in any event be employed or used for thepurpose of construction or interpretation of any portion of this License. As used herein and wherenecessary, the singular shall include the plural and vice versa, and masculine, feminine and neuterexpressions shall be interchangeable.     12.7 Enforceability. If a court of competent jurisdiction adjudges a provision ofthis License unenforceable, invalid or void, such determination shall not impair the enforceabilityof any of the remaining provisions hereof and such provisions shall remain in full force andeffect.     12.8 Entire Agreement; No Third Party Beneficiaries. This License (including allattachments, exhibits and amendments hereto) is intended by the parties as the final and bindingexpression of their contract and agreement and as the complete and exclusive statement of the termsthereof. This Agreement cancels, supersedes and revokes all prior negotiations,
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representations and agreements among the parties, whether oral or written, relating to thesubject matter of this Agreement.     No provision of this Agreement, express or implied, is intended to confer upon any personother than the parties to this Agreement any rights, remedies, obligations, or liabilitieshereunder.     12.9 Language and Currency. Unless otherwise expressly provided in this License, allnotices, reports and other documents and instruments that a party hereto elects or is required bythe terms of this License to deliver to the other party hereto shall be in English, and allnotices, reports and other documents and instruments detailing revenues and earned under thisLicense or expenses chargeable to a party hereto shall be United States dollar denominated.     12.10 Notices/Administration. All notices, requests and other communications that aparty is required or elects to deliver shall be in writing and shall be delivered personally or byfacsimile (provided such delivery is confirmed) or by a recognized overnight courier service or byUnited States mail, first-class, certified or registered, postage prepaid, return receiptrequested, to the other party at its address set forth below or to such other address as such partymay hereafter designate by notice given pursuant to this section:       If to the University: Patent and Technology Marketing    University of Minnesota    University Gateway Center, Suite 450    200 Oak Street S. E.    Minneapolis, MN 55455    Facsimile No.: (612) 624-6554       If to the Company: Maxygen, Inc.    515 Galveston Drive    Redwood City, CA 94063    Attention: General Counsel    Facsimile No.: (650) 298-5803     12.11 Relationship of Parties. In entering into, and performing their duties under,this License, the parties are acting as independent contractors and independent employers. Noprovision of this License shall create or be construed as creating a partnership, joint venture, oragency relationship between the parties. No party shall have the authority to act for or bind theother party in any respect.     12.12 Survival. Immediately upon the termination or expiration of this License,except for certain rights granted for the Post-termination Period described in Section 8.3 hereof,all the Company’s rights under this License shall terminate; provided, however, the obligations ofthe Parties that have accrued prior to the effective date of termination or expiration of thisLicense (e.g., the Company’s obligation to report and make payments on Net Sales and toreimburse the University for costs) and the obligations specified in Sections 5.4 of the Licenseshall survive.
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     12.13 Collection Costs and Attorneys’ Fees. If a party shall fail to perform anobligation or otherwise breaches one or more of the terms of this License, and such breach is notdue in whole or part to the acts or omissions of the non-breaching party, the other party mayrecover from the non-performing breaching party all its costs (including actual attorneys’ andinvestigative fees) to enforce the terms of this License.     12.14 Arbitration. The University and the Company agree that any dispute orcontroversy between the parties arising out of or relating to this Agreement (excepting any disputerelating to the validity, enforceability or infringement of any patent) shall be finally settled bybinding arbitration in Denver, Colorado, under the then-current Commercial Agreement ArbitrationRules of the American Arbitration Association. The arbitration shall be conducted by one (1)arbitrator who is a former federal or state court judge, appointed in accordance with such Rules.The arbitrator shall determine what discovery will be permitted, based on the principle of limitingthe cost and time which the parties must expend on discovery; provided, the arbitrator shall permitsuch discovery as the arbitrator deems necessary to achieve an equitable resolution of the dispute.The decision and/or award rendered by the arbitrator shall be written, final and non-appealableand may be entered in any court of competent jurisdiction. The parties agree that, any provisionof applicable law notwithstanding, they will not request, and the arbitrator shall have noauthority to award, punitive or exemplary damages against any party. The costs of any arbitration,including administrative fees and fees of the arbitrator, shall be shared equally by the parties.Each party shall bear the cost of its own attorneys and expert fees. The decision of thearbitrator shall be finalized within a one (1) year time period from the date of submission toarbitration unless otherwise agreed upon by both parties. A disputed performance or suspendedperformances pending the resolution of the arbitration must be completed within a reasonable timeperiod following the final decision of the arbitrator, and the arbitrator shall not ordertermination of the agreement for breach unless such breach is not cured and disputed or suspendedperformance is not completed within a reasonable time (as determined by the arbitrator) followingthe final decision of the arbitrator.     **IN WITNESS WHEREOF**, the parties have caused this License to be duly executed by theirrespective authorized representatives.**REGENTS OF THE UNIVERSITY OF MINNESOTA**         By: /s/ Michael F. Moore                 Michael F. Moore        Director of Health Technologies      **MAXYGEN, INC.**       By: /s/ Russel J. Howard             Russel J. Howard      Chief Executive Officer    
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**SCHEDULE A**1. Patent and Patent Applications.     (a) The following Patents issued prior to the Effective Date of this License:         Maxygen SharePatent Issued of Patent Costs[****] [****] [****][****] [****] [****]     (b) The following Patent Applications:         Maxygen SharePatent Application No. Filed of Patent Costs[****] [****] [****][****] [****] [****]   [****] [****] [****][****] [****] [****]   [****] [****] [****][****] [****] [****][****] [****] [****]   [****] [****] [****][****] [****] [****]   [****] [****] [****][****] [****] [****]     (c) The following Patent Applications:         Maxygen SharePatent Application No. Filed of Patent Costs[****] [****] [****][****] [****] [****][****] [****] [****][****] [****] [****]     and with respect to each of (a), (b) and (c) above, all divisions (including, withoutlimitation, any divisional of U.S. Patent Application Serial No.[****]), continuations,continuations-in-part, patents of addition, and substitutions of, such Patent Applications, all * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
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Patent Applications claiming priority from such patent applications and all Patents issuing on anyof such Patent Applications and all foreign-counterparts of any of the preceding.In each case, the Company shall be obligated to pay the specified proportion of patent costs onlyif the particular Patent Application or Patent contains claims directed to [****].2. Field of Use.     (A) [****]; and     (B) [****];in each case, with the further proviso [****].3. Sublicense Rights. The Company may grant and authorize sublicenses of the LicensedPatent Rights, provided each such sublicensee shall agree in writing to be bound by terms andconditions not inconsistent with the terms and conditions of this Agreement.4. Reimbursement of Patent Prosecution Costs.     (a) Incurred Pre-license. The Company shall pay to the University $[****] inreimbursement of certain patent prosecution costs incurred with regard to the Licensed PatentRights prior to the Effective Date of this License.     (b) Incurred During the Term of the License. With regard to the Patent Applicationsand Patents described in Section [****] of this Schedule A, the Company shall reimburse theUniversity for a share of the University’s total costs and expenses (including legal expenses)incurred after the Effective Date during the term of this License Agreement to prosecute and tomaintain the Patents and Patent Application(s) under Section [****] of Schedule A in accordancewith the percentage of related costs as set forth for each Patent or Patent Application in suchsubsections. With regard to the Patent Applications and Patents listed in Section [****] of thisSchedule A, in each case, the applicable percentage of related costs set forth in Section [****] ofthis Schedule A, the Company shall pay costs and expenses incurred from the date of filing andduring the term of this License Agreement to prosecute such Patent Application(s) and to maintainsuch Patent(s).In addition, Company agrees to reimburse the University for reasonable, documented costs incurredby the University for reviewing and amending the License Agreement and entering into this Amendedand Restated Agreement, which amount shall in no event exceed $[****].5. Payments to the University.     (a) Up-front Payment: $[****]     (b) Royalties: * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
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          (1) Rate. Royalties will be due on a Product-by-Product basis on annual Net Sales ofthe applicable Product, as follows:               (i) [****]% for annual Net Sales up to $[****]               (ii) [****]% for those annual Net Sales from $[****]-[****]               (iii) [****]% for those annual Net Sales from $[****]-[****]               (iv) [****]% for those annual Net Sales over $[****]          (2) Royalty on Pending or Valid Claims. The royalties set forth in Section 5(b)(1)above shall only be due with regard to Products within the scope of a pending Valid Claim in anapplication and/or issued Valid Claims of a patent in the country such Products are made or sold.          (3) Royalty Term. The obligation of the Company to pay royalties under this Agreementshall continue on a Product by Product and country-by-country basis, for so long as there exists anissued Valid Claim covering such Product in the country of manufacture or sale.          (4) One Royalty; Non-Royalty Sales. Only one royalty shall be paid to the Universitywith respect to a particular Product subject to royalties under this Section 5(b), without regardto whether more than one Valid Claim within the Licensed Patents is applicable to such Product. Itis understood that royalties shall only be payable under this Agreement with respect to Productsthe manufacture, sale or use is within the scope a Valid Claim within the Licensed Patents in thecountry for which such Product is made or sold. In no event shall more than one royalty be duehereunder with respect to any Product unit. It is understood that no royalty shall be due to theUniversity with respect to sales or other transfers of Products for use as samples, in research anddevelopment, clinical trials, compassionate sales, or indigent programs.          (5) Combination Products. In the event that a Product is sold in combination as asingle product with another product, active component or ingredient whose sale and use are notcovered by a Valid Claim of the Product in the country for which the combination product is sold,Net Sales from such sales for purposes of calculating the amounts due under Section 5(b)(1) aboveshall be calculated by multiplying the Net Sales of that combination by the fraction A/(A + B),where A is the gross selling price of the Product sold separately and B is the gross selling priceof the other product, active component or ingredient sold separately. In the event that no suchseparate sales are made by the Company or its sublicensee, Net Sales for royalty determinationshall be as reasonably allocated by the Company between such Product and such other product, activecomponent or ingredient, based upon their relative importance and proprietary protection.          (5) Third Party Obligations. If the Company or its sublicensees pay a third party toobtain a license to intellectual property rights or other technologies which the Company, or itsSublicensee, in its reasonable judgment, determines are necessary or useful to make, use or * Certain information on this page has been omitted and filed separately with the commision. Confidence treatment hasbeen requested with respect to the omitted portions.
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sell a Product, the Company may offset up to a maximum of [****] of such amounts againstroyalties due to the University under this Agreement.     (c) Milestone Payments. The Company will make milestone payments to the University asfollows for the first Product:$[****] upon filing of the first IND