Document:

exv10w4

 

Exhibit 10.4

FLUOR CORPORATION 2000 RESTRICTED STOCK PLAN

FOR NON-EMPLOYEE DIRECTORS

(as amended and restated on August 2, 2006)

ARTICLE I. DEFINITIONS

1.1. Definitions.

     As used herein, the following terms shall have the meanings hereinafter set forth unless the
context clearly indicates to the contrary:

	 	(a)	 	“Assumed Award” shall mean a restricted stock grant, restricted stock unit or
other equity-based arrangement that was granted by Old Fluor to one of its non-employee
directors for his or her service as such and which is assumed by the Company in
connection with the Distribution, as such award has been adjusted or amended pursuant
to the terms thereof.
	 
	 	(b)	 	“Award” shall mean an award granted pursuant to the provisions of Article V or
Article VI hereof.
	 
	 	(c)	 	“Awardee” shall mean an Eligible Director to whom an Award has been granted
hereunder.
	 
	 	(d)	 	“Board” shall mean the Board of Directors of the Company.
	 
	 	(e)	 	“Change of Control” of the Company shall be deemed to have occurred if (i) a
third person, including a “group” as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, acquires shares of the Company having twenty-five percent or more
of the total number of votes that may be cast for the election of directors of the
Company; or (ii) as the result of any cash tender or exchange offer, merger or other
business combination, or any combination of the foregoing transactions (a
“Transaction”), the persons who were directors of the Company before the Transaction
shall cease to constitute a majority of the Board of the Company or any successor to
the Company.
	 
	 	(f)	 	“Committee” shall mean the administrative body provided for in Section 4.1.
	 
	 	(g)	 	“Company” shall mean Fluor Corporation and, with respect to periods of time
prior to the date of the Distribution, Old Fluor.
	 
	 	(h)	 	“Distribution” shall have the meaning set forth in Section 2.2.
	 
	 	(i)	 	“Eligible Director” shall mean a director of the Company who is not and never
has been an employee of the Company or any of its Subsidiaries.
	 
	 	(j)	 	“Fluor Stock Price” shall mean, as of any date, the closing sale price for shares of Stock quoted for such date on The New York Stock Exchange.
	 
	 	(k)	 	“Old Fluor” shall have the meaning set forth in Section 2.2.

 

 

	 	(l)	 	“Participant” shall mean any Eligible Director to whom an Award has been made
and any person (including any estate) to whom an Award has been assigned or transferred
pursuant to Section 5.3(b).
	 
	 	(m)	 	“Plan” shall mean the Fluor Corporation 2000 Restricted Stock Plan for
Non-Employee Directors, the current terms of which are set forth herein.
	 
	 	(n)	 	“Plan Effective Date” shall mean the date upon which the Plan becomes effective
in accordance with the provisions of Section 2.3.
	 
	 	(o)	 	“Restricted Stock Agreement” and “Restricted Unit Agreement” shall mean the
agreement between the Company and the Awardee with respect to any Restricted Stock
Award and Restricted Unit Award, respectively, granted hereunder.
	 
	 	(p)	 	“Restricted Stock Award” shall mean Stock that is awarded to an Eligible
Director by the Committee pursuant to Article V hereof, which is nontransferable except
as set forth herein and subject to a substantial risk of forfeiture until specific
conditions are met.
	 
	 	(q)	 	“Restricted Unit Award” shall mean amounts awarded pursuant to Article VI
hereof.
	 
	 	(r)	 	“Stock” shall mean the Common Stock of the Company or, in the event that the
outstanding shares of Stock are hereafter changed into or exchanged for shares of a
different stock or securities of the Company or its successor, such other stock or
securities.
	 
	 	(s)	 	“Subsidiary” shall mean any corporation, the majority of the outstanding
capital stock of which is owned, directly or indirectly, by the Company or any
partnership or joint venture in which either the Company or such a corporation is at
least a twenty percent (20%) equity participant.

ARTICLE II. GENERAL

	2.1	 	Name.

     This Plan shall be known as the “Fluor Corporation 2000 Restricted Stock Plan for Non-Employee
Directors.”

	2.2	 	Purpose.

     The purpose of the Plan is to advance the interests of the Company and its stockholders by
affording to Eligible Directors an opportunity to acquire or increase their proprietary interest in
the Company by the grant to such directors of Awards under the terms set forth herein. By
encouraging non-employee directors to become owners of Company shares, the Company seeks to
increase their incentive for enhancing stockholder value and to motivate, retain and attract those
highly competent individuals upon whose judgment, initiative, leadership and continued efforts the
success of the Company in large measure depends. The Plan also permits shares of Stock to be
issuable upon vesting or satisfaction of restricted stock and restricted unit awards that

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were assumed by the Company in connection with the distribution of the Company’s common stock (the
“Distribution”) to the stockholders of Massey Energy Company, which prior to the distribution was
known as Fluor Corporation (“Old Fluor”).

	2.3	 	Effective Date.

     The Plan became effective upon its approval by Old Fluor, as sole stockholder of the Company.

	2.4	 	Limitations.

     Subject to adjustment pursuant to the provisions of Section 8.1 hereof, the aggregate number
of shares of Stock which may be issued under the Plan shall not exceed 220,000. Any such shares
may be either authorized and unissued shares or shares issued and thereafter acquired by the
Company.

	2.5	 	Awards Granted under Plan.

     For purposes of Section 2.4, the aggregate number of shares of Stock issued under this Plan at
any time shall equal only the number of shares actually issued pursuant to Restricted Stock Awards
and shall not count any shares of Stock returned to the Company upon cancellation, expiration or
forfeiture of an Award or underlying a Restricted Unit Award.

ARTICLE III. PARTICIPANTS

	3.1	 	Eligibility.

     Any Eligible Director shall be eligible to participate in the Plan.

ARTICLE IV. ADMINISTRATION

	4.1	 	Composition of Committee.

     The Plan shall be administered by the Organization and Compensation Committee of the Board,
and/or by the Board or another committee of the Board, as appointed from time to time by the Board
(any such administrative body, the “Committee”). The Board shall fill vacancies on, and from time
to time may remove or add members to, the Committee. The Committee shall act pursuant to a
majority vote or unanimous written consent.

	4.2	 	Duties and Powers of the Committee.

     Subject to the express provisions of this Plan, the Committee shall be authorized and
empowered to do all things necessary or desirable in connection with the administration of this
Plan with respect to the Awards over which such Committee has authority, including, without
limitation, the following:

	 	(a)	 	to prescribe, amend and rescind rules and regulations relating to this Plan and
to define terms not otherwise defined herein;
	 
	 	(b)	 	to determine the number of shares of Stock subject to Awards;

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	 	(c)	 	to prescribe and amend the terms of the agreements or other documents
evidencing Awards made under this Plan;
	 
	 	(d)	 	to determine whether, and the extent to which, adjustments are required
pursuant to Section 8.1 hereof;
	 
	 	(e)	 	to interpret and construe this Plan, any rules and regulations under the Plan
and the terms and conditions of any Award granted hereunder, and to make exceptions to
any such provisions in good faith and for the benefit of the Company; and
	 
	 	(f)	 	to make all other determinations deemed necessary or advisable for the
administration of the Plan.

	4.3	 	Determinations of the Committee.

     All decisions, determinations and interpretations by the Committee or the Board regarding the
Plan shall be final and binding on all current or former directors of the Company and their
beneficiaries, heirs, successors and assigns. The Committee or the Board, as applicable, shall
consider such factors as it deems relevant, in its sole and absolute discretion, to making such
decisions, determinations and interpretations including, without limitation, the recommendations or
advice of any officer of the Company or Eligible Director and such attorneys, consultants and
accountants as it may select.

	4.4	 	Company Assistance.

     The Committee may designate the Secretary of the Company or other Company employees to assist
the Committee in the administration of the Plan, and may grant authority to such persons to execute
agreements evidencing Awards made under this Plan or other documents entered into under this Plan
on behalf of the Committee or the Company. The Company shall supply full and timely information to
the Committee on all matters relating to Eligible Directors, their death, retirement, disability or
removal or resignation from the Board and such other pertinent facts as the Committee may require.
The Company shall furnish the Committee with such clerical and other assistance as is necessary in
the performance of its duties.

ARTICLE V. RESTRICTED STOCK AWARDS

	5.1	 	Awards under the Plan.

     The Committee may provide for a one-time Restricted Stock Award to any Eligible Director which
shall be granted on a date determined by the Committee, in its sole discretion, in connection with
such Eligible Director first being appointed or elected to the Board. The Committee shall grant to
each Eligible Director that is a member of the Board during all or any portion of each calendar
year a Restricted Stock Award, which shall be granted on a date determined by the Committee, in its
sole discretion. The number of shares of Stock subject to a one-time Restricted Stock Award shall
be set by the Committee but shall not exceed 2,500 and the number of shares of Stock subject to an
annual Restricted Stock Award shall be set by the Committee but shall not exceed 2,500.

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     An Assumed Award is a restricted stock grant, restricted stock unit or other equity-based
arrangement that was granted by Old Fluor to its non-employee directors for their service as such
and assumed by the Company in connection with the Distribution, as adjusted or amended pursuant to
the terms thereof. Assumed Awards may be settled with Stock authorized and issued under this Plan.
Notwithstanding any provision to the contrary in this Plan and except as provided in this
sentence, the terms of Assumed Awards shall be subject to the terms and conditions set forth in the
grant agreement and/or other document(s) evidencing such Award and, to the extent provided therein,
to terms equivalent to the terms of the plan under which such Award was originally granted;
provided, however, that all Assumed Awards shall be administered by the Committee, which shall have
the power and authority provided for in Section 4 of this Plan.

	5.2	 	Restricted Stock Agreement.

     The Awardee shall be entitled to receive the Stock subject to such Award only if the Company
and the Awardee, within the time period specified by the Committee, enter into a written Restricted
Stock Agreement dated as of the date of the Award, which Agreement shall set forth such terms and
conditions as may be determined by the Committee consistent with the Plan.

	5.3	 	Restrictions on Sale or Other Transfer.

     Each share of Stock granted under a Restricted Stock Award shall be subject to acquisition by
the Company, and may not be sold or otherwise transferred except pursuant to the following
provisions:

	 	(a)	 	The shares of Stock represented by the Restricted Stock Agreement shall be held
in book entry form with the Company’s transfer agent until the restrictions lapse in
accordance with the conditions established by the Committee pursuant to Section 5.4
hereof or until the shares of Stock are forfeited pursuant to paragraph (c) of this
Section 5.3.
	 
	 	(b)	 	No such shares of Stock may be sold, transferred or otherwise alienated or
hypothecated so long as such shares are subject to the restriction provided for in this
Section 5.3; provided, however, that the Committee may in its sole
discretion grant an Award or amend an outstanding Award to provide that the Award is
transferable or assignable to a member or members of the Eligible Director’s “immediate
family”, as such term is defined under Rule 16a-1(e) under the Securities Exchange Act
of 1934, as amended, or to a trust for the benefit solely of the Eligible Director or a
member or members of the Eligible Director’s immediate family, or to a partnership or
other entity whose only owners are the Eligible Director and/or a member or members of
the Eligible Director’s family, provided that following any such transfer or assignment
the Award will remain subject to substantially the same terms applicable to the Award
while held by the Eligible Director, and the Participant shall execute an agreement
agreeing to be bound by such terms.

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	 	(c)	 	All of the Awardee’s Restricted Stock Award remaining subject to any
restriction hereunder shall be forfeited to, and be acquired at no cost by, the Company
in the event that the Committee determines that any of the following circumstances has
occurred:

	 	(i)	 	the Awardee has engaged in knowing and willful misconduct in
connection with his or her service as a member of the Board;
	 
	 	(ii)	 	the Awardee, without the consent of the Committee, at any time
during his or her period of service as a member of the Board, becomes a
principal of, serves as a director of, or owns a material interest in, any
business that directly or through a controlled subsidiary competes with the
Company or any Subsidiary; or
	 
	 	(iii)	 	the Awardee does not stand for reelection to, or voluntarily
quits or resigns from, the Board for any reason, except under circumstances
that would cause such restrictions to lapse under Section 5.4.

	5.4	 	Lapse of Restrictions.

	 	(a)	 	The restrictions imposed under Section 5.3 above upon a one-time Restricted
Stock Award shall lapse to the extent of 20% of the number of shares subject to such
Award on such date as shall be designated by the Committee, and, thereafter, the
restrictions on the remaining shares subject to such Award will lapse in four equal
increments on the succeeding anniversary dates following the date of lapsing of
restrictions on the first 20% of the shares.
	 
	 	(b)	 	The restrictions imposed under Section 5.3 above upon an annual Restricted
Stock Award shall lapse in five equal increments on the succeeding anniversary dates of
the date of grant. Notwithstanding the foregoing, if the Restricted Stock Award has
been held for at least six months, the restrictions imposed under Section 5.3 above
upon an annual Restricted Stock Award will lapse immediately upon the Awardee’s
retirement, death or disability, or upon a Change of Control unless the Committee
provides otherwise in the Restricted Stock Agreement.
	 
	 	(c)	 	Notwithstanding Sections 5.4(a) and (b), the Committee may provide that the
restrictions imposed under Section 5.3 will lapse over or upon satisfaction of a
greater or fewer number of years of service on the Board, except that the Committee may
not provide for full lapsing of all such restrictions for less than three (3) years
service on the Board other than upon the Awardee’s retirement, death or disability, or
upon a Change of Control.

	5.5	 	Early Retirement.

     An Awardee, who leaves the Board prior to the age for mandatory retirement of members of the
Board as specified in the Bylaws of the Company (as applied to an Eligible Director on the date of
such Eligible Directors’ retirement from the Board), may, upon application to and in the

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sole discretion of the Committee, be granted early retirement status and, consequently, may receive
benefits associated with such status.

	5.6	 	Rights as Stockholder.

     Subject to the provisions of Section 5.3 hereof, upon the issuance to the Awardee of Stock
hereunder, the Awardee shall have all the rights of a stockholder with respect to such Stock,
including the right to vote the shares and receive all dividends and other distributions paid or
made with respect thereto.

	5.7	 	Stock Certificates.

     The Company shall not be required to issue or deliver any certificate for shares of Stock
pursuant to a Restricted Stock Agreement executed hereunder, prior to fulfillment of all of the
following conditions:

	 	(a)	 	the admission of such shares to listing on all stock exchanges on which the
Stock is then listed;
	 
	 	(b)	 	the completion of any registration or other qualification of such shares under
any federal or state law or under the rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body, which the Committee
shall in its sole discretion deem necessary or advisable;
	 
	 	(c)	 	the obtaining of any approval or other clearance from any federal or state
governmental agency which the Committee shall in its sole discretion determine to be
necessary or advisable; and
	 
	 	(d)	 	the lapse of such reasonable period of time following the execution of the
Restricted Stock Agreement as the Committee from time to time may establish for reasons
of administrative convenience.

ARTICLE VI. RESTRICTED UNIT AWARDS

	6.1	 	 Restricted Unit Award Grant and Agreement.

     The Committee may in its discretion provide that a Restricted Unit Award be granted in
conjunction with Restricted Stock Awards. Each Restricted Unit Award granted hereunder shall be
evidenced by minutes of a meeting or the written consent of the Committee and by a written
Restricted Unit Agreement dated as of the date of grant and executed by the Company and the
Awardee, which Agreement shall set forth such terms and conditions as may be determined by the
Committee consistent with the Plan.

	6.2	 	Award Terms and Conditions.

     The Committee shall determine the number of shares of Stock subject to each Restricted Unit
Award. Each Restricted Unit Award shall become earned, and the Company shall automatically pay the
Awardee in cash, on the dates upon which a portion of the restrictions

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lapse on any associated Restricted Stock Award or upon such other terms and conditions as may be
determined by the Committee.

	6.3	 	Effect of Forfeiture of Restricted Stock Award.

     Unless provided otherwise by the Committee, upon all or any part of a Restricted Stock Award
being forfeited pursuant to Section 5.3(c), any associated Restricted Unit Award shall be forfeited
and cancelled, without any payment to the Awardee, to the same extent as such Restricted Stock
Award.

ARTICLE VII. TERMINATION, AMENDMENT AND MODIFICATION OF PLAN

	7.1	 	Termination, Amendment and Modification of Plan.

     The Committee may at any time terminate, and may at any time and from time to time and in any
respect amend or modify, the Plan provided that, if under applicable laws or the rules of any
securities exchange upon which the Company’s common stock is listed, the consent of the Company’s
stockholders is required for such amendment or modification, such amendment or modification shall
not be effective until the Company obtains such consent, and provided, further, that no
termination, amendment or modification of the Plan shall in any manner affect any Award theretofore
granted pursuant to the Plan without the consent of the Awardee. Notwithstanding the foregoing, if
an amendment or modification would (i) materially increase the benefits accruing to participants
under the Plan, (ii) materially increase the aggregate number of securities that may be issued
under the Plan or (iii) materially modify the requirements as to eligibility for participation in
the Plan, then, such amendment or modification shall not be effective until the Company obtains the
approval of the Company’s stockholders.

	7.2	 	Term of Plan.

     Each Award granted hereunder must be granted within ten years from the effective date of the
Plan.

ARTICLE VIII. MISCELLANEOUS

	8.1	 	Adjustment Provisions.

	 	(a)	 	Subject to Section 8.1(b) below, if the outstanding shares of Stock of the
Company are increased, decreased, or exchanged for a different number or kind of shares
or other securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of Stock or other securities,
through merger, consolidation, sale of all or substantially all of the assets of the
Company, reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other distribution with respect to such shares of Stock
or other securities, an appropriate and proportionate adjustment may be made in (i) the
maximum number and kind of shares provided in Sections 2.4 and 5.1, and (ii) the number
and kind of shares or other securities subject to the outstanding Awards.

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	 	(b)	 	Adjustments under Section 8.1(a) will be made by the Committee, whose
determination as to what adjustments will be made and the extent thereof will be final,
binding, and conclusive. No fractional interests will be issued under the Plan
resulting from any such adjustments.

	8.2	 	Continuation of Board Service.

     Nothing in the Plan or in any instrument executed pursuant to the Plan will confer upon any
Eligible Director any right to continue to serve on the Board.

	8.3	 	Compliance with Government Regulations.

     No shares of Stock will be issued hereunder unless and until all applicable requirements
imposed by federal and state securities and other laws, rules, and regulations and by any
regulatory agencies having jurisdiction and by any stock exchanges upon which the Stock may be
listed have been fully met. As a condition precedent to the issuance of shares of Stock pursuant
hereto, the Company may require the Awardee to take any reasonable action to comply with such
requirements.

	8.4	 	Privileges of Stock Ownership.

     No director and no beneficiary or other person claiming under or through such person will have
any right, title, or interest in or to any shares of Stock allocated or reserved under the Plan or
subject to any Award except as to such shares of Stock, if any, that have been issued to such
director.

	8.5	 	Non-Transferability.

     Except as set forth in Section 5.3 hereof, (a) for so long as any Award is subject to any
restrictions pursuant to this Plan, the Award may be owned during the life of the director solely
by the director or the director’s duly appointed guardian or personal representative and (b) no
Award and no other right under the Plan, contingent or otherwise, will be assignable or subject to
any encumbrance, pledge, or charge of any nature.

	8.6	 	Other Compensation Plans.

     The adoption of the Plan shall not affect any other stock option or incentive or other
compensation plans in effect for the Company or any Subsidiary, nor shall the Plan preclude the
Company from establishing any other forms of incentive or other compensation for employees or
directors of the Company or any Subsidiary.

	8.7	 	Plan Binding on Successors.

     The Plan shall be binding upon the successors and assigns of the Company.

	8.8	 	Singular, Plural; Gender.

     Whenever used herein, nouns in the singular shall include the plural, and the masculine
pronoun shall include the feminine gender.

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	8.9	 	Headings, etc., Not Part of Plan.

     Headings of Articles and Sections hereof are inserted for convenience and reference; they
constitute no part of the Plan.

	8.10	 	Governing Law.

     This Plan and any Awards hereunder shall be governed by and interpreted and construed in
accordance with the laws of the State of Delaware and applicable federal law. Any reference in
this Plan or in the agreement evidencing any Award to a provision of law or to a rule or regulation
shall be deemed to include any successor law, rule or regulation of similar effect or
applicability.

10exv10w6

 

Exhibit 10.6

Certain information in this document, marked by brackets, has been omitted and filed separately with the
Securities 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, a
constitutional, 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 Patent
Rights, as that term is defined and used in this Agreement. The Company desires the University
grant it a license to use, develop and commercialize the Licensed Patent Rights. The University is
willing 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 Licensed
Patent Rights (then in effect) effective August 1, 2003, and as of the Amendment Date have agreed
to certain amendments and modifications to the License Agreement, and accordingly have agreed to
enter 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 shall
have the meanings ascribed to them below in this Section 1.1:

          “Affiliate” means any corporation or other business entity which during the term of this
Agreement controls, is controlled by, or is under common control with the Company, but only for so
long as such entity controls, is controlled by, or is under common control with the Company. For
this purpose, control shall mean the possession of the power to direct or cause the direction of
the management and the policies of an entity whether through ownership directly or indirectly of
fifty percent (50%) or more of the stock entitled to vote, and for non-stock organizations, the
right to receive fifty percent (50%) or more of the profits by contract or otherwise, or in
countries where control of fifty percent (50%) or more of such rights is not permitted in the
country where such entity exists, the maximum permitted in such country.

          “BLA” means a Biologics License Application, as defined in the United States Food, Drug and
Cosmetic 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 applicable
Licensed Patent Rights.

          “Company” means Maxygen, Inc. and its Affiliates.

 

			
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          “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 in
Section 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 foreign
application, 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 the
Post-termination Period less (i) all trade, quantity, and cash discounts actually allowed, (ii) all
credits and allowances actually granted due to rejections, returns, billing errors, and retroactive
price 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 compulsory
payments to governmental authorities, (v) the cost of shipping packages and packing, if billed
separately, (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 any
valid and subsisting patent issued during the term of this License by the United States Patent
Trademark 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/or
Section 1(c) of the attached Schedule A. The term “Patent Application” also means any
continuations, continuations-in-part, divisions, patents of addition, and substitutions of a Patent
Application, including any foreign counterparts thereof.

          “Post-termination Period” means the [****] day period commencing on the date of termination or
expiration of this License as described below in Section 8.3.

          “Product” means any product or good made by, made for, or sold, transferred or otherwise
disposed of by the Company (or its permitted assignees or sublicensees) that is within the scope of
a 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 otherwise
disposed of during the period while the pertinent Valid Claim was subsisting in the applicable
country.

          “Rate” means the applicable percentage rate on Net Sales specified below in attached Schedule
A.

 

			
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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 Section
5(a) of the attached Schedule A.

          “Valid Claim” means a claim of (i) a pending Patent Application, or (ii) an issued and
unexpired Patent which has not been held unpatentable, invalid or unenforceable by a court or other
government agency of competent jurisdiction and has not been admitted to be invalid or
unenforceable through reissue, re-examination, disclaimer or otherwise. Notwithstanding the
foregoing, if a claim of a pending Patent Application has not issued as a claim of an issued Patent
within [****] years after the date from which such claim takes priority, such pending claim shall
not be a Valid Claim for purposes of this Agreement unless and until the patent is issued including
such claim.

ARTICLE 2 — TERM

     2.1 Term. The term of this License shall commence on the Effective Date first above
written and, unless terminated earlier as provided below in Article 8, this License shall expire on
a 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 any
country, the date on which the Patent ceases to be valid and subsisting in that or any other
country (or in the event more than one Patent has been licensed hereunder, the date on which none
of 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 this
License, 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 the
Company, and the Company hereby accepts, the following licenses:

                    (i) an exclusive license under the Licensed Patent Rights subject to [****] of Schedule A, to
manufacture, have manufactured, import, have imported, use, sell, offer for sale, lease or
otherwise dispose of Products in the Territory in the Field of Use as described in Section 2(A) of
Schedule 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,

 

			
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sell, offer for sale, lease or otherwise dispose of Products in the Territory in the Field of
Use as described in Section 2(B) of Schedule A.

Nothing herein shall be construed to grant the Company any rights other than the rights expressly
granted it in these Licenses to the Patent(s) or Patent Application(s) or to any other
University-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 the
University, may assign this License to (i) an Affiliate of the Company; or (ii) an entity that
acquires all or substantially all of the business or assets of the Company to which this Agreement
pertains, 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 terms
and conditions of this Agreement shall be binding on and inure to the benefit of the permitted
successors and assigns of the Parties. Any assignment made in violation of this paragraph shall be
void and shall grant the University the right to terminate this Agreement as provided below in
Section 8.1.

               (c) The Company may sublicense the rights granted it in Section 3.1.1 as provided in Section 3
of Schedule A.

          3.1.3 The University’s Rights.

               (a) The University retains an irrevocable, nonexclusive and nontransferable right to use the
Licensed Patent Rights and the inventions claimed in each Patent Application and Patent for its own
educational, non-commercial research, and non-commercial medical purposes.

               (b) The University may publish or otherwise disclose (in writing or orally) descriptions of
the inventions described in the Licensed Patent Rights. The parties acknowledge the Company’s
interest 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 publication
or prior to the date of the intended disclosure that recounts material information relating to the
aspects of the inventions described in the Licensed Patent Rights that have not been protected
under applicable patent and other intellectual property laws, the University shall notify the
Company of the planned publication or disclosure and shall provide the Company a copy of any such
abstract, paper or article or a written description of the purposed oral presentation. Within such
thirty-day period, the Company may deliver to the University written objections to such
disclosures. The University shall, if the Company requests, prohibit the publication or disclosure
of any description if (i) the publication or disclosure would violate the terms of any
nondisclosure 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 patentability
of the inventions claimed in the Licensed Patent Rights.

 

			
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          3.1.4 [****].

               (a) If the Company wishes to expand the scope of the Field of Use of the Licensed Patent
Rights to include [****] (the “Subfield”), the Company shall notify University in writing, and in
such event the Company shall have the option to include the Subfield in the Field of Use, with
notice to the University. In any such event, the Company shall pay to the University for the
inclusion of the Subfield in the Field of Use an additional [****] payment equal to that set forth
in Section 5[****] of Appendix A and royalty and milestone payments for Products for use in the
Subfield 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 the
Subfield, then University shall notify Maxygen, and Maxygen shall have a first right to obtain from
University a license to expand the Field of Use to include the Subfield. If Maxygen notifies
University within [****] days of University’s notice that Company wishes to expand its license to
include 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’s
exclusive license hereunder.

          3.1.5 Covenant Not to Sue. To ensure that the Company has freedom to practice the
rights granted to it in this Agreement, the University agrees that University and its assignees
and/or licensees shall not enforce, or facilitate the enforcement of, against the Company and/or
its Affiliates, Sublicensees, distributors and/or end users of any Product (each, an “Authorized
Entity”), any issued patent owned by University or that University has the right to enforce, that
any 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, to
commercialize a Product [****] and to meet market demand therefor. Efforts by the
Company’s sublicensees shall be deemed to be efforts by the Company for the purpose of this Section
4.1.

     4.2 U.S. Manufacture of Products. To the extent required by 35 U.S.C. §204, the
Company hereby agrees that it shall, and it shall require and cause any assignees or sublicensees
to, substantially manufacture all Products in the United States of America if (A) the Products are
to be sold in the United States of America and (B) the Products embody or are produced through use
of an invention which is subject to the rights of the federal government of the United States of
America, as described above in subsection 3.1.2.

     4.3 Commercialization Reports. Throughout the term of this License and during the
Post-termination Period, the Company shall deliver to the University, in addition to any Reports
described below in Section 5.3, [****] written reports summarizing the Company’s efforts and plans
to commercialize and sell Products.

 

			
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     4.4 Use of the University’s Name and Trademarks or the Names of University Faculty, Staff
or Students. No provision of this License grants the Company any right or license to use the
name 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 or
identities without the University’s and, as the case may be, the member of the faculty, staff or
student 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 this
License, the Company shall deliver to the University, as a one-time Up-front Payment, its check in
the amount, if any, specified in attached Schedule A.

          5.1.2 Financial Milestones. Within [****] business days of the attainment of a
milestone described in Section 5(c) of the attached Schedule A, the Company shall deliver to the
University 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 quarter
during the term of this License and during the Post-termination Period, the Company shall deliver
to the University its check in the applicable amount for royalties on Net Sales of Products, as
specified in Section 5(b) of Schedule A.

          5.1.4 Annual License Payments. Commencing on the first Anniversary of the Effective
Date 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 License
shall be in United States dollars. For purposes of determining the dollar value of transactions
conducted in non-United States dollar currencies, the exchange rate for the currency into dollars
shall be the rate set by Citibank, N. A. (or its successor), in New York, New York on the last
business 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 payable
to the “Regents of the University of Minnesota” and shall be mailed to the address specified in
Section 12.10 of this License.

     5.2 Reimbursement of Patent Prosecution Expenses. Within sixty (60) days of its
receipt of the University’s invoice for reimbursable expenses as specified in Sections 6.1 and 6.2
hereof, the Company shall deliver to the University its check in the amount of such invoice. Each
such 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 the
expense), and the Patent or Patent Application to which the expense relates.

 

			
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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 the
Post-termination Period, the Company shall deliver to the University a written Report (a copy of
the form of which is attached as Exhibit B) recounting the number and Net Sales amount (expressed
in U. S. dollars) of all sales, leases or other dispositions of Products by the Company and its
sublicensees 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 of
all sales, leases, and other dispositions of Products which enable the calculation of royalties
payable hereunder to be verified. The Company shall retain the books and records for each
quarterly period for [****] years after the submission of the corresponding report under Section
5.3 hereof.

          5.4.2 The University, at its expense, except as set forth below in this subsection, shall have
the right to select an independent certified public accountant, reasonably acceptable to the
Company, to inspect and audit the Company’s records referred to in subsection 5.4.1 hereof no more
than once per calendar year, at the Company’s address as set forth in Section 12.10 hereof or such
other location as the parties shall mutually agree during the Company’s normal business hours, for
the sole purpose of verifying the accuracy of the Company’s payments and compliance with this
Agreement. Such independent accountants may have access to the relevant books and records of the
Company to conduct a review or audit. The accounting firm shall enter into a confidentiality
agreement with the Company and shall report to Licensor only whether there has been a royalty
underpayment and, if so, the amount thereof. The Company shall reimburse the University for all
its out-of-pocket expenses to inspect and audit such records if the results of such inspection and
audit 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 fees
and reimbursements owed to the University under this License, commencing on the date payment for
such 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 that
as of the date of this License, each Patent has been issued to the University and the University
has filed each Patent Application listed with a serial number in attached Schedule A. Pursuant to
Section 5.2, the Company shall reimburse the University the amount specified in Section 4(a) of the
attached 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 other
countries the University will file, or cause to be filed, additional Patent Applications. In the
event the University and the Company mutually agree that the University should file a Patent
Application in a particular country, the University shall retain counsel of its choice,

 

			
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reasonably acceptable to the Company, to file and prosecute such Patent Application; the
University shall take all commercially reasonable steps to cause a Patent Application to be timely
filed and a Patent to be issued in that country; the University shall inform the Company promptly
of the status of the prosecution of each Patent Application, including delivering to the Company
copies 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 in
Section 6.3; and the Company shall reimburse the University for the percentage set forth in Section
4(b) of attached Schedule A of the University’s out-of-pocket costs, including application and
attorneys’ fees, to prosecute such Patent Application(s) and if, any Patent(s) are issued during
the 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 a
Patent Application should be filed in a particular country, the University may, but shall have no
duty or obligation hereunder to, file and prosecute such patent application at the University’s own
expense. No provision of this License limits, conditions or otherwise affects the University’s
right to prosecute a Patent Application in any country. Subject to Section 6.4 below, the
University retains the sole and exclusive right to file or otherwise prosecute the Patent
Applications.

          6.2.3 In the event that the Company notifies the University in writing that the Company does
not wish to support the filing, prosecution and/or maintenance of any Patent Application or Patent
within the Licensed Patent Rights in one or more countries, the Company shall not be obligated to
pay any further expenses for such activities undertaken by the University with respect to such
patent application or patent. With respect to countries in which the Company notifies the
University that the Company does not wish to pay for filing, prosecution or maintenance of Patents
and Patent Applications within the Licensed Patent, the Company shall thereby relinquish its rights
under such Patent or Patent Application in that country, and the University shall have the sole
right to decide on applying for patent protection and maintaining any Patents, at the University’s
expense, in such countries.

          6.2.4 It is understood and agreed that the Company wishes to file divisionals of certain
Patent Applications to ensure patent coverage of the Field of Use, and the University agrees to
file and prosecute such divisional Patent Applications, subject to the terms of this License
Agreement.

     6.3 University’s Responsibilities. The University shall consult with the Company
regarding the conduct of all such activities, by providing the Company a reasonable opportunity to
review and comment on all proposed submissions to any patent office before submission. For the
purpose of this Agreement, “reasonable opportunity” shall mean that the Company shall receive from
the 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 Rights
as soon as reasonably practical after the University has received such documents and materials and
at least [****] days before any date imposed upon the University for action or response with
respect to such patent applications or patents. The University agrees to consider the Company’s
comments concerning such documents and materials, and shall use its best efforts to incorporate
into the final version of such documents and materials any modification(s) and/or claim(s)
requested by the Company.

 

			
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     6.4 University’s Failure to Prosecute. In the event the University declines to file
or having filed fails to further prosecute or maintain any Patent Applications or Patents, or
conduct any interferences, re-examinations, reissues, oppositions, within a reasonable time
therefor, then the Company shall have the right, upon thirty (30) days prior notice to the
University, to prepare, file, prosecute and maintain such Patent Applications and Patents in such
countries as it deems appropriate, and conduct any interferences, re-examinations, reissues or
oppositions, at its sole expense, using patent counsel of its choice.

     6.5 Maintenance of Patents. The University shall take all commercially reasonable
steps to cause the Patents to remain or be valid and subsisting.

     6.6 Ownership of the Patents and Patent Applications. No provision of this License
grants the Company any rights, titles or interests (except for the grant of license in subsection
3.1.1 hereof) in the Patents or Patent Applications, notwithstanding the Company’s payment of all
or 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, the
University will designate the Company or its designee as its agent for obtaining an extension of
such patent or governmental equivalent which extends the exclusivity of any of the Patent subject
matter 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 the
Company or its sublicensee(s), at the Company’s expense. Furthermore, the University shall provide
reasonable assistance to facilitate the Company’s or its sublicensees’ efforts to obtain any such
extension.

          6.7.2 With respect to any Patent in [****] of Schedule A, University and Company agree to
discuss the Company’s request for obtaining an extension of such Patent or governmental equivalent
which 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 and
in the Territory that infringes one or more of the Patents, such party shall deliver written notice
of the possible infringement to the other party and thereafter promptly meet to discuss the
evidence suggesting infringement of the Patent.

               (b) Declaratory Judgments, etc. If either party hereto becomes aware that any of the
Patents become subject to a declaratory judgment action, re-examination,

 

			
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opposition or similar proceeding, such party shall promptly notify the other party hereto
describing 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 first
right, but not the obligation, to take action in its own name to secure the cessation of any
infringement in the Field of Use, and/or to bring suit against such alleged infringement of the
Patents, as well as other rights granted to Company under Section 3.1, by promptly giving written
notice to the University. All recoveries in such suits shall belong solely to the Company, and
only the portion of a recovery representing the Company’s lost Net Sales, minus the Company’s
documented out-of-pocket legal expenses for the suit (if such expenses were not separately
reimbursed in the recovery), shall be subject to the applicable royalty under Section 5.1.3. The
University 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 be
represented by separate counsel in such suits at its own expense. If the University is joined as a
party in such a suit, then the entire recovery by the Company, after the Company and University are
proportionately reimbursed from such recovery for their documented out-of-pocket legal expenses for
the suit (including, without limitation, attorneys and expert fees), shall be considered Net Sales
of 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 appropriate
action against an alleged infringer, it shall promptly notify the University in writing, and the
University shall then have the right, or may assign the right to prosecute or take other
appropriate action against an alleged infringer to a third party, at no cost to Company, to bring
suit or take other appropriate action against the alleged infringer, in which case any recovery
shall belong to the University or its assignee. University may provide notice to other parties who
have taken licenses under the Patents that the Company and/or the University intend to assert the
Patents against potential third party infringers as set out in subsection (a) above. Any such
notice to such other parties shall be subject to a written confidentiality agreement that requires
such 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 being
prosecuted by a party or a third party assignee of University under this Section 7.1.2 may be
entered into without the consent of the other party to this Agreement if such settlement, consent
judgment or other voluntary final disposition would alter, derogate or diminish such other party’s
rights under the Agreement or otherwise materially adversely affect such other party to this
Agreement, which consent shall not be unreasonably withheld or delayed.

               (d) University shall promptly provide notice to third parties who take or have taken licenses
under the Patents, and have their written agreement, that the Company, at its sole discretion shall
have the first right to assert the Patents in the Field of Use and other rights granted to Company
under Section 3.1 against potential third party infringers as set out in subparagraph (b) above and
that no settlement, consent judgment or other voluntary final disposition of any suit being
prosecuted by a third party relating to the practice of the Patents in

10

 

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’s
rights under the Agreement or otherwise materially adversely affect Company, which consent shall
not be reasonably withheld or delayed.

               (e) University shall require any third parties who take or have taken licenses under the
Patents to provide advance written notice to University of any intent by such third party to bring
suit or other action concerning the practice of the Patents outside the Field of Use. University
shall promptly provide written notice to Company upon receipt of any such written notice from such
third parties. Company shall have the right to join such suit or other action and be represented
by separate counsel at Company’s own expense. University shall promptly provide notice to such
third parties and have their written agreement of such third parties that the Company has the
rights set forth in this Section 7.1.2.

               (f) In any suit, action or other proceeding in connection with enforcement and/or defense of
any 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 make
available to the University, at reasonable times, all relevant records, papers, information,
samples and other similar materials in the University’s possession relating to the applicable
Patent, at no additional charge other than reimbursement for out-of-pocket expenses incurred by the
University at the request of the Company.

     7.2 The Company’s Alleged Infringement. In the event a third party commences an
action alleging that the Company’s manufacture, sell, lease or other disposition of Products
infringes the patent rights of a third party, such party promptly thereafter shall deliver written
notice of the possible infringement to the other party, describing in detail the action. The
Company shall defend and hold harmless the University from liabilities arising out of such an
action 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 for
milestones achieved; or

               (iv) if the Company transfers its rights hereunder in violation of subsection 3.1.1(b) hereof.

11

 

          8.1.2 Upon the occurrence on an Event of Default by the Company, the University may deliver to
the Company a written Notice of Default. The University may terminate this License and the
Company’s license to use the Licensed Patent Rights by delivering to the Company a written Notice
of Termination if the default has not cured in full within [****] days of the delivery to the
Company of the Notice of Default; provided, however, if either party receives notification from the
other of a material breach and if the party alleged to be in breach notifies the nonbreaching party
in 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 are
unable to resolve such dispute within [****] days after notice of the dispute is received by the
nonbreaching party, the matter will be submitted to arbitration and no termination shall become
effective 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 with
respect to any Licensed Patent Rights and/or any country, at any time, by delivering to the
University a written notice of termination at least [****] days prior to the effective date of
termination.

     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 the
Territory, provided the Products were manufactured prior to the effective date of termination or
the expiration of this License.

          8.3.2 In the event of any termination of this License under Section 8.1 hereof, the Company
shall 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 the
appropriate remedy for a breach of this Agreement by the Company.

     8.4 Survival of Sublicensees. In the event of any termination of this Agreement, any
sublicenses granted by the Company shall remain in force and effect and shall be assigned by the
Company to the University, provided, that such sublicensee is currently in good standing with
regard to its obligations under the sublicense or has cured any default or breach within the period
provided in such sublicense, and further provided, that the financial obligations of each such
Sublicensee shall be limited to those due the University hereunder for the practice of such a
sublicense.

ARTICLE 9 — INDEMNIFICATION AND INSURANCE

     9.1 The Company’s Indemnification. Throughout the term of this License and
thereafter, the Company shall indemnify, defend and hold the University harmless from all third
party suits, actions, claims, liabilities, demands, damages, losses or expenses (including
reasonable 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.

 

			
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     9.2 The University’s Indemnification. Subject to the limitations on liability set
forth in article 11 hereof, throughout the term of this License and thereafter, the University
shall 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 in
Section 10.2 hereof.

     9.3 The Company’s Insurance.

          9.3.1 No later than [****], the Company shall maintain in full force and effect comprehensive
general liability (CGL) insurance, with single claim limits of $[****] or more. Such insurance
policy shall include coverage for claims that may be asserted by the University against the Company
under Section 9.1 hereof and for claims by a third party against the Company or the University
arising out purchase or use of a Product. Such insurance policy shall name the University as an
additional insured. Upon receipt of the University’s written request, the Company shall deliver to
the 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 in
writing 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 has
full corporate power and authority to execute, deliver and perform this License, and that no other
corporate proceedings by such party are necessary to authorize the party’s execution or delivery of
this License.

     10.2 Exclusive Rights. The University represents and warrants that (i) to the best of
its knowledge, the University is the sole and exclusive owner of all right, title and interest in
and 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, and
will not grant during the term of this Agreement, any right, license or interest in or to the
Licensed Patent Rights, or any portion thereof, inconsistent with the license granted to the
Company herein; (iv) there are no threatened or pending actions, suits, investigations, claims or
proceedings 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, THE
UNIVERSITY 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.

 

			
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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 not
infringe 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 NO
EVENT 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 OTHER
RELIANCE OR EXPECTANCY, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, OF ANY
KIND.

     11.2 Damage Cap. IN NO EVENT SHALL THE UNIVERSITY’S TOTAL LIABILITY FOR THE BREACH OR
NONPERFORMANCE OF THIS AGREEMENT EXCEED THE AMOUNT OF ROYALTIES PAID TO THE UNIVERSITY UNDER
SECTION 5.1 OF THIS LICENSE. THIS LIMITATION SHALL APPLY TO CONTRACT , TORT AND ANY OTHER CLAIM OF
WHATEVER NATURE.

ARTICLE 12 — MISCELLANEOUS PROVISIONS

     12.1 Amendment and Waiver. This License may be amended from time to time only by a
written instrument signed by the parties hereto. No term or provision of this License shall be
waived and no breach excused unless such waiver or consent shall be in writing and signed by the
party claimed to have waived or consented. No waiver of a breach shall be deemed to be a waiver of
a different or subsequent breach.

     12.2 Assignment. Except as provided in Section 3.1.1 of this License, the Company
shall not assign its interest under this Agreement, unless the University consents to the
assignment. Any Agreement or assignment attempted to be made in violation of this section shall be
void. This Agreement shall inure to the benefit of the Company and the University and their
respective permitted assignees and sublicensees.

     12.3 Applicable Law. The internal laws of the state of Minnesota shall govern the
validity, construction and enforceability of this License, without giving effect to the conflict of
laws principles thereof.

14

 

     12.4 Confidentiality. The parties acknowledge that the University is subject to the
terms and provisions of the Minnesota Government Data Practices Act, Minnesota Statutes, §13.01
et seq. (the “Act”). The parties further acknowledge that the Act requires, with
certain exceptions, the University to permit the public to inspect and copy any information which
the University shall have collected, created, received, maintained, or disseminated. The parties
further acknowledge that in connection with the performance of this License, the Company may
deliver to the University certain information (“Trade Secret Information”) which the Company deems
proprietary and confidential. In the event the University receives a request under the Act for the
inspection of any Trade Secret Information, the University shall promptly notify the Company of
such request and shall refuse to disclose the Trade Secret Information. In no event shall the
University be required to commence or defend any action to prohibit the inspection and copying of
any Trade Secret Information. The Company shall defend, indemnify, and hold harmless the
University 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) that
arose out of or related to the Company’s request the University refuse to divulge any Trade Secret
Information. The Company for itself and its employees and agents hereby waives any claim or cause
of 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 Secret
Information. 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, in
connection 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 to
University employees who need to know the Reports described in Section 5.3 hereof and the records
inspected pursuant to Section 5.4 hereof. No provision of this License shall prohibit, limit, or
condition the University’s right to use and disclose any information in connection with enforcing
this License, in court or elsewhere.

     12.5 Consent and Approvals. Except as otherwise expressly provided, all consents or
approvals required under the terms of this License shall be in writing and shall not be
unreasonably withheld or delayed.

     12.6 Construction. The headings preceding and labeling the sections of this License
are for the purpose of identification only and shall not in any event be employed or used for the
purpose of construction or interpretation of any portion of this License. As used herein and where
necessary, the singular shall include the plural and vice versa, and masculine, feminine and neuter
expressions shall be interchangeable.

     12.7 Enforceability. If a court of competent jurisdiction adjudges a provision of
this License unenforceable, invalid or void, such determination shall not impair the enforceability
of any of the remaining provisions hereof and such provisions shall remain in full force and
effect.

     12.8 Entire Agreement; No Third Party Beneficiaries. This License (including all
attachments, exhibits and amendments hereto) is intended by the parties as the final and binding
expression of their contract and agreement and as the complete and exclusive statement of the terms
thereof. This Agreement cancels, supersedes and revokes all prior negotiations,

15

 

representations and agreements among the parties, whether oral or written, relating to the
subject matter of this Agreement.

     No provision of this Agreement, express or implied, is intended to confer upon any person
other than the parties to this Agreement any rights, remedies, obligations, or liabilities
hereunder.

     12.9 Language and Currency. Unless otherwise expressly provided in this License, all
notices, reports and other documents and instruments that a party hereto elects or is required by
the terms of this License to deliver to the other party hereto shall be in English, and all
notices, reports and other documents and instruments detailing revenues and earned under this
License or expenses chargeable to a party hereto shall be United States dollar denominated.

     12.10 Notices/Administration. All notices, requests and other communications that a
party is required or elects to deliver shall be in writing and shall be delivered personally or by
facsimile (provided such delivery is confirmed) or by a recognized overnight courier service or by
United States mail, first-class, certified or registered, postage prepaid, return receipt
requested, to the other party at its address set forth below or to such other address as such party
may 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. No
provision of this License shall create or be construed as creating a partnership, joint venture, or
agency relationship between the parties. No party shall have the authority to act for or bind the
other 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 of
the Parties that have accrued prior to the effective date of termination or expiration of this
License (e.g., the Company’s obligation to report and make payments on Net Sales and to
reimburse the University for costs) and the obligations specified in Sections 5.4 of the License
shall survive.

16

 

     12.13 Collection Costs and Attorneys’ Fees. If a party shall fail to perform an
obligation or otherwise breaches one or more of the terms of this License, and such breach is not
due in whole or part to the acts or omissions of the non-breaching party, the other party may
recover from the non-performing breaching party all its costs (including actual attorneys’ and
investigative fees) to enforce the terms of this License.

     12.14 Arbitration. The University and the Company agree that any dispute or
controversy between the parties arising out of or relating to this Agreement (excepting any dispute
relating to the validity, enforceability or infringement of any patent) shall be finally settled by
binding arbitration in Denver, Colorado, under the then-current Commercial Agreement Arbitration
Rules 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 limiting
the cost and time which the parties must expend on discovery; provided, the arbitrator shall permit
such 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-appealable
and may be entered in any court of competent jurisdiction. The parties agree that, any provision
of applicable law notwithstanding, they will not request, and the arbitrator shall have no
authority 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 the
arbitrator shall be finalized within a one (1) year time period from the date of submission to
arbitration unless otherwise agreed upon by both parties. A disputed performance or suspended
performances pending the resolution of the arbitration must be completed within a reasonable time
period following the final decision of the arbitrator, and the arbitrator shall not order
termination of the agreement for breach unless such breach is not cured and disputed or suspended
performance is not completed within a reasonable time (as determined by the arbitrator) following
the final decision of the arbitrator.

     IN WITNESS WHEREOF, the parties have caused this License to be duly executed by their
respective 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	 	 	 	 

17

 

SCHEDULE A

1. Patent and Patent Applications.

     (a) The following Patents issued prior to the Effective Date of this License:

	 	 	 	 	 
	 	 	 	 	Maxygen Share
	Patent	 	Issued	 	of Patent Costs
	[****]

	 	[****]
	 	[****]
	[****]

	 	[****]
	 	[****]

     (b) The following Patent Applications:

	 	 	 	 	 
	 	 	 	 	Maxygen Share
	Patent Application No.	 	Filed	 	of Patent Costs
	[****]

	 	[****]
	 	[****]
	[****]

	 	[****]
	 	[****]
	 	 	 
	[****]

	 	[****]
	 	[****]
	[****]

	 	[****]
	 	[****]
	 	 	 
	[****]

	 	[****]
	 	[****]
	[****]

	 	[****]
	 	[****]
	[****]

	 	[****]
	 	[****]
	 	 	 
	[****]

	 	[****]
	 	[****]
	[****]

	 	[****]
	 	[****]
	 	 	 
	[****]

	 	[****]
	 	[****]
	[****]

	 	[****]
	 	[****]

     (c) The following Patent Applications:

	 	 	 	 	 
	 	 	 	 	Maxygen Share
	Patent Application No.	 	Filed	 	of Patent Costs
	[****]

	 	[****]
	 	[****]
	[****]

	 	[****]
	 	[****]
	[****]

	 	[****]
	 	[****]
	[****]

	 	[****]
	 	[****]

     and with respect to each of (a), (b) and (c) above, all divisions (including, without
limitation, any divisional of U.S. Patent Application Serial No.[****]), continuations,
continuations-in-part, patents of addition, and substitutions of, such Patent Applications, all

 

			
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been requested with respect to the omitted portions.

18

 

Patent Applications claiming priority from such patent applications and all Patents issuing on any
of 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 only
if 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 Licensed
Patent Rights, provided each such sublicensee shall agree in writing to be bound by terms and
conditions 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 $[****] in
reimbursement of certain patent prosecution costs incurred with regard to the Licensed Patent
Rights prior to the Effective Date of this License.

     (b) Incurred During the Term of the License. With regard to the Patent Applications
and Patents described in Section [****] of this Schedule A, the Company shall reimburse the
University 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 to
maintain the Patents and Patent Application(s) under Section [****] of Schedule A in accordance
with the percentage of related costs as set forth for each Patent or Patent Application in such
subsections. With regard to the Patent Applications and Patents listed in Section [****] of this
Schedule A, in each case, the applicable percentage of related costs set forth in Section [****] of
this Schedule A, the Company shall pay costs and expenses incurred from the date of filing and
during the term of this License Agreement to prosecute such Patent Application(s) and to maintain
such Patent(s).

In addition, Company agrees to reimburse the University for reasonable, documented costs incurred
by the University for reviewing and amending the License Agreement and entering into this Amended
and Restated Agreement, which amount shall in no event exceed $[****].

5. Payments to the University.

     (a) Up-front Payment: $[****]

     (b) Royalties:

 

			
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19

 

          (1) Rate. Royalties will be due on a Product-by-Product basis on annual Net Sales of
the 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 an
application 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 Agreement
shall continue on a Product by Product and country-by-country basis, for so long as there exists an
issued 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 University
with respect to a particular Product subject to royalties under this Section 5(b), without regard
to whether more than one Valid Claim within the Licensed Patents is applicable to such Product. It
is understood that royalties shall only be payable under this Agreement with respect to Products
the manufacture, sale or use is within the scope a Valid Claim within the Licensed Patents in the
country for which such Product is made or sold. In no event shall more than one royalty be due
hereunder with respect to any Product unit. It is understood that no royalty shall be due to the
University with respect to sales or other transfers of Products for use as samples, in research and
development, clinical trials, compassionate sales, or indigent programs.

          (5) Combination Products. In the event that a Product is sold in combination as a
single product with another product, active component or ingredient whose sale and use are not
covered 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) above
shall 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 price
of the other product, active component or ingredient sold separately. In the event that no such
separate sales are made by the Company or its sublicensee, Net Sales for royalty determination
shall be as reasonably allocated by the Company between such Product and such other product, active
component or ingredient, based upon their relative importance and proprietary protection.

          (5) Third Party Obligations. If the Company or its sublicensees pay a third party to
obtain a license to intellectual property rights or other technologies which the Company, or its
Sublicensee, in its reasonable judgment, determines are necessary or useful to make, use or

 

			
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been requested with respect to the omitted portions.

20

 

sell a Product, the Company may offset up to a maximum of [****] of such amounts against
royalties due to the University under this Agreement.

     (c) Milestone Payments. The Company will make milestone payments to the University as
follows for the first Product:

$[****] upon filing of the first IND

$[****] upon initiation of the first Phase III clinical trial

$[****] upon approval of the first BLA

     (d) Annual License Fee: $[****] due each anniversary of the Effective Date during the
Term of the Agreement.

     (e) Additional Payment: $[****] payable in two equal installments of $[****], with
the first such installment due following the Amendment Date, and the second installment due
following the first anniversary of the Amendment Date, in each case, within [****] days following
the receipt of an invoice for the applicable amount.

6. Territory. [****].

 

			
	*	 	Certain information on this page has been omitted and filed separately with the commision. Confidence treatment has
been requested with respect to the omitted portions.

21

 

EXHIBIT B

Form of Report

22

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