Document:

Exhibit
10.37

***Text
Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4)

and 240.24b-2.

LICENSE
AGREEMENT

 

BETWEEN

 

SENOMYX,
INC.

 

AND

 

THE
REGENTS OF THE UNIVERSITY OF CALIFORNIA

 

FOR

 

CASE NO.
SD1998-D06

CASE NO. SD1999-A15

CASE NO. SD1999-A29

CASE NO. SD1999-B68

CASE NO. SD1999-C03

CASE NO. SD1999-C04

CASE NO. SD2000-A45

 

TABLE OF
CONTENTS

	
  Recitals

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article
  1:

  	
  Definitions

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article
  2:

  	
  Grant

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article
  3:

  	
  Consideration

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 4:

  	
  Reports, Records and Payments

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article
  5:

  	
  Patent
  Matters

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 6:

  	
  Governmental Matters

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 7:

  	
  Termination of Agreement

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 8:

  	
  Limited Warranty and Indemnification

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 9:

  	
  Use of Names and Trademarks

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 10:

  	
  Miscellaneous Provisions

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A:

  	
  Common Interest Agreement

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit B:

  	
  Patent Rights

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit C:

  	
  Technology

  	
   

  	
   

  

 

LICENSE
AGREEMENT

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

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

RECITALS

WHEREAS, the
inventions disclosed in UCSD Disclosure Dockets 
as listed below:

***The remainder of this page is intentionally left blank***

 1
 

 

	
  UCSD Disclosure

  Docket No.

  	
   

  	
  OTT

  Disclosure

  Docket No.

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1998-D06

  	
   

  	
  1998-306

  	
   

  	
  [...***...]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1999-A15

  	
   

  	
  1999-015

  	
   

  	
  [...***...]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1999-A29

  	
   

  	
  1999-029

  	
   

  	
  [...***...]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1999-B68

  	
   

  	
  1999-168

  	
   

  	
  [...***...]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1999-C03

  	
   

  	
  1999-203

  	
   

  	
  [...***...]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1999-C04

  	
   

  	
  1999-204

  	
   

  	
  [...***...]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2000-A45

  	
   

  	
  2000-045

  	
   

  	
  [...***...]

  

 

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

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

***Confidential Treatment Requested

 2
 

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

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

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

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

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

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

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

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

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

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

 3
 

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

NOW,
THEREFORE, the parties agree:

ARTICLE 1. 
DEFINITIONS

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

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

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

1.3  “Field” means all fields of use.

1.4  “Territory” means worldwide.

 4
 

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

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

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

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

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

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

1.11 “Net Sales” means:

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

 5
 

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

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

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

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

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

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

 6
 

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

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

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

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

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

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

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

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

***Confidential Treatment
Requested

 7
 

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

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

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

ARTICLE 2. 
GRANTS

2.1  License.

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

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

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

***Confidential Treatment Requested

 8
 

2.2  Sublicense.

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

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

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

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

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

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

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

2.3  Reservation of Rights.  UNIVERSITY reserves the right to:

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

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

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

ARTICLE 3. 
CONSIDERATION

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

 9
 

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

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

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

(c)  an earned royalty of:

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

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

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

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

***Confidential
Treatment Requested

 10

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

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

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

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

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

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

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

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

***Confidential Treatment Requested

 11
 

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

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

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

	
  US Dollars payable to UNIVERSITY:

  	
   

  	
  Calendar year:

  	
   

  
	
  [...***...]

  	
   

  	
  2014

  	
   

  
	
   

  	
   

  	
  2015

  	
   

  
	
   

  	
   

  	
  2016

  	
   

  
	
   

  	
   

  	
  2017

  	
   

  
	
   

  	
   

  	
  2018

  	
   

  

 

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

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

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

***Confidential Treatment Requested

 12
 

3.3  Due Diligence.

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

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

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

***Confidential Treatment Requested

 13
 

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

3.4   Valuation
Dispute Resolution.  In the
event of a dispute between the parties regarding (i) the fair market value as
of the date of receipt of any non-cash Net Sales received by LICENSEE or its
Affiliate, or (ii) the fair market value of LICENSEE’s product(s) or product
component(s) that is a valid part of a Combination Product, the parties shall
then submit their assessment to arbitration by a single arbitrator under the
rules of the American Arbitration Association.  
[...***...] shall bear all fees and costs of the arbitrators.

ARTICLE 4. 
REPORTS, RECORDS AND PAYMENTS

4.1  Reports.

(a)           Progress Reports.

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

***Confidential Treatment Requested

 14
 

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

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

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

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

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

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

(v)           the exchange rates used.

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

4.2  Records & Audits.

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

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

 15
 

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

4.3  Payments.

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

(b)           Royalty Payments.

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

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

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

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

***Confidential Treatment
Requested

 16
 

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

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

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

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

ARTICLE 5. 
PATENT MATTERS

5.1  Patent Prosecution and
Maintenance.

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

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

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

 17
 

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

5.2  Patent Infringement.

(a)           In the event
LICENSEE  knows that one or more third parties
are substantially infringing the Patent Rights under this Agreement,
LICENSEE  will promptly notify
UNIVERSITY  in writing and provide
UNIVERSITY with reasonable evidence of such infringement.

(b)           Both parties to this
Agreement acknowledge that during the period and in a jurisdiction where the
LICENSEE  has exclusive rights under this
Agreement, neither party will notify a third party other than NIH and HHMI that
an infringement of Patent Rights occurred without first obtaining consent of
the other party.  Both parties will use
their best efforts in cooperation with each other to terminate the infringement
without litigation.

(c)           If the LICENSEE
desires that Patent Rights be enforced against infringers, and the
LICENSEE  has exclusive rights under Patent
Rights, the LICENSEE  either may request
UNIVERSITY  to take legal action against
the patent infringer or may request permission from UNIVERSITY  to file suit against the patent
infringer.  LICENSEE’s  request must be made in writing and must
include reasonable evidence of the infringement and resulting damages to the
LICENSEE.  If the infringing activity has
not been abated within ninety (90) days following the effective date of
LICENSEE’s request, then UNIVERSITY and the NIH will have the right to elect
one of the following:

(i)            commence suit on their own account;
or

(ii)           refuse to participate in a suit
against the patent infringer.

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

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

 18
 

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

(e)           Each party will
cooperate with the others during litigation proceedings instituted hereunder
but at the expense of the party who brought the suit.  The party bringing suit will control such
litigation, except that UNIVERSITY  may
be represented by counsel of its choice in any suit brought by the LICENSEE.

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

ARTICLE 6. 
GOVERNMENTAL MATTERS

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

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

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

ARTICLE 7. 
TERMINATION OF THE AGREEMENT

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

 19
 

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

7.2  Termination by LICENSEE.

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

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

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

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

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

(c)           Paragraph
8.2 (Indemnification);

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

(e)           Paragraph 10.2 hereof (Secrecy);

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

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

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

***Confidential Treatment Requested

 20
 

ARTICLE 8. 
LIMITED WARRANTY AND INDEMNIFICATION

8.1  Limited Warranty.

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

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

(c)           In no event shall:

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

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

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

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

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

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

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

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

(vi)          an obligation to update Technology.

 21
 

8.2  Indemnification.

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

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

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

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

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

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

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

 22

ARTICLE 9. 
USE OF NAMES AND TRADEMARKS

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

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

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

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

ARTICLE 10. 
MISCELLANEOUS PROVISIONS

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

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

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

If sent to LICENSEE:

Senomyx,
Inc.

11099
N. Torrey Pines Road

La
Jolla, CA 92037

Attention: General
Counsel with copy to President

 23
 

Phone:  (858) 646-8300

Fax:  (858) 404-0750

If sent to UNIVERSITY by
mail:

University of California,
San Diego

Technology Transfer &
Intellectual Property Services

9500 Gilman Drive

Mail Code 0910

La Jolla, CA 92093-0910

Attention:  Assistant Vice Chancellor

If sent to UNIVERSITY by
courier:

University of California,
San Diego

Technology Transfer &
Intellectual Property Services

10300 North Torrey Pines
Road

Torrey Pines Center
North, First Floor

La Jolla, CA 92037

Attention:  Assistant Vice Chancellor

For
wire payments to UNIVERSITY:

 24
 

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

	
   

  	
  UCSD receiving bank name:

  	
  Bank of America

  
	
   

  	
  UCSD bank account no.:

  	
  1233-0-18188

  
	
   

  	
  UCSD bank routing (ABA) no.:

  	
  0260-0959-3

  
	
   

  	
  UCSD bank account name:

  	
  Regents of UC

  
	
   

  	
  UCSD bank ACH format code:

  	
  CTX

  
	
   

  	
  UCSD bank CHIPS address:

  	
  0959

  
	
   

  	
  UCSD bank SWIFT address:

  	
  BOFAUS3N

  
	
   

  	
  UCSD bank
  address:

  	
  Bank of America

  PO Box 37025

  San Francisco, CA 94137

  U.S.A.

  
	
   

  	
   

  	
   

  
	
   

  	
  UCSD addendum information:

  	
  Reference UCSD-TechTIPS

  

  CASE No. SD1998-D06

  CASE No. SD1999-A15

  CASE No. SD1999-A29

  CASE No. SD1999-B68

  CASE No. SD1999-C03

  CASE No. SD 1999-C04

  CASE No. SD2000-A45

  

  Department contact:

  Financial Manager

  

 

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

10.2                                                                           Secrecy.

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

***Confidential Treatment Requested

 25
 

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

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

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

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

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

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

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

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

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

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

 26
 

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

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

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

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

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

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

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

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

***Confidential Treatment Requested

 27
 

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

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

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

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

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

	
  SENOMYX, INC.:

  	
   

  	
  THE REGENTS OF THE

  UNIVERSITY OF CALIFORNIA:

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kent Snyder

  	
   

  	
  By:

  	
  /s/ Alan Paau

  
	
  (Signature)

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
  Kent Snyder

  	
   

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

  
	
   

  	
   

  	
   

  
	
  President &
  CEO

  	
   

  	
  Assistant Vice Chancellor,

  
	
   

  	
   

  	
  Technology
  Transfer &

  
	
   

  	
   

  	
  Intellectual
  Property Services

  
	
   

  	
   

  	
   

  
	
  Date: 

  	
  Oct 11, 2006

  	
   

  	
  Date: 

  	
  Oct 11, 2006

  

 

 28
 

Exhibit A

Common Interest
Agreement

[...***...]

 

***Confidential Treatment Requested

 29
 

Exhibit B

Patent Rights

 30
 

[...***...]

 

***Confidential Treatment Requested

 31
 

Exhibit C

Technology

 32
 

[...***...]

 

***Confidential Treatment Requested

 33Exhibit
10.38

***Text Omitted and Filed Separately with the Securities and

Exchange Commission. Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4) and 240.24b-2.

 

 

	
  ALAN S. PAAU, Ph.D., MBA

  	
   

  	
  TELEPHONE:

  	
  858.534.5815

  
	
   

  	
   

  	
  FAX: 

  	
  858.534.7345

  
	
   

  	
   

  	
  E-MAIL: 

  	
  apaau@ucsd.edu

  
	
  ASSISTANT VICE CHANCELLOR

  	
   

  	
   

  
	
  TECHNOLOGY TRANSFER & INTELLECTUAL PROPERTY
  SERVICES

  	
   

  	
   

  
	
  9500 GILMAN DRIVE, MC - 0910

  	
   

  	
   

  
	
  LA JOLLA, CA 92093-0910

  	
   

  	
   

  

 

October 11, 2006

Mr. Kent Snyder

President and Chief Executive Officer

Senomyx, Inc.

11099 North Torrey Pines Road

La Jolla, CA  92037

 

	
  Subject:

  	
  Letter Agreement

  
	
  Cases:

  	
  SD2001-F10 (OTT case no. 2001-510): [***]

  
	
   

  	
  SD2004-B00 (OTT
  case no. 2004-100): [***]

  
	
   

  	
   

  

Dear Mr. Snyder:

The
Regents of the University of California (“UNIVERSITY”), represented by its San
Diego campus Technology Transfer & Intellectual Property Services (9500
Gilman Drive, La Jolla, CA 92093-0910) offers to  Senomyx, Inc. (“COMPANY”)  an exclusive opportunity to secure an
exclusive license to the above-referenced inventions (“Inventions”) under the
terms and conditions of the attached license agreement “2006 License Agreement.”

This offer shall
be deemed accepted by COMPANY by signature below , and shall terminate the
sooner of (i) the date the Inventions are included in the 2006 License
Agreement, or (ii) [...***...] from the date of this Letter Agreement. This offer
shall be open for [...***...] from the date of this letter (“Term”) and may be
extended, in writing, by mutual consent of UNIVERSITY and COMPANY.  This offer is further contingent on
UNIVERSITY successfully obtaining from NIH and from HHMI the sole management
responsibility of the Inventions.

The
Letter Agreement has the following terms and conditions:

1.                                       UNIVERSITY
is a coassignee, along with the National Institutes of Health “NIH”, on UCSD
case 2001-F10.  Within a reasonable time
from the date of execution of the necessary interinstitutional agreement to
designate UNIVERSITY as sole manager of the patent rights, UNIVERSITY will
amend the 2006 License Agreement to include the patent rights directly arising
from this Invention.

2.                                       UNIVERSITY
is a coassignee, along with the Howard Hughes Medical Institute “HHMI”, on UCSD
case 2004-B00.  Within a reasonable time
from official, written notice from HHMI that case has been added to the
existing  interinstitutional agreement to
designate UNIVERSITY as sole manager of the patent rights, UNIVERSITY will
amend the 2006 License Agreement to include the patent rights directly arising
from this Invention.

***Confidential
Treatment Requested

3.                                       COMPANY
shall reimburse UNIVERSITY for [...***...]. COMPANY shall pay UNIVERSITY within [...***...]
of the date on any invoice sent by UNIVERSITY to COMPANY for such
reimbursement.  Nonpayment or partial
payment of any such invoice shall be deemed to be a material breach of the
Letter Agreement, subject to a cure period of [...***...].  UNIVERSITY will notify COMPANY of such breach
and, if such breach has not been cured within [...***...] of such written notice,
UNIVERSITY, at their option, may terminate the Letter Agreement by written
notification to COMPANY.

4.                                       Upon
addition of each Invention to the 2006 License Agreement, the Letter Agreement
shall terminate (for each Invention) on the date such license becomes
effective.

5.                                       COMPANY
agrees that any information that either party shares with the other under this
Letter Agreement shall remain confidential.

6.                                       If
the Letter Agreement becomes terminated by reason of expiration of the Term or
extension thereof, or, subject to the cure period in Section 3 above,
nonpayment by COMPANY of any invoice for [...***...], then UNIVERSITY shall have no
further obligation to COMPANY with respect to the Invention.

	
  

  	
  Sincerely,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Alan Paau

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Alan Paau, Ph.D., MBA

  	
   

  
	
   

  	
  Assistant Vice Chancellor

  	
   

  

 

	
  ACCEPTED:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kent Snyder

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Kent
  Snyder

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title: President
  and Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  October 11, 2006

  	
   

  	
   

  
						

 

Copy:     File

***Confidential
Treatment Requested

 

Exhibit A

2006 License Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00117-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00117-of-00352.parquet"}]]