Document:

Third Amended and Restated Employment Agreement dated 01-01-04: Tom Ward

  
 Exhibit 10.2.2

  
 THIRD AMENDED AND RESTATED 
 EMPLOYMENT AGREEMENT 
  
 THIS AGREEMENT is made effective January 1, 2004, between CHESAPEAKE ENERGY CORPORATION, an Oklahoma corporation (the “Company”), and TOM L.
WARD, an individual (the “Executive”). 
  
 W I T N E S S
E T H: 
  
 WHEREAS, the Company and the Executive entered into
that certain Amended and Restated Employment Agreement dated effective July 1, 1998 as amended by the First Amendment to Amended and Restated Employment Agreement dated December 31, 1998 and as further amended by the Second Amended and Restated
Employment Agreement dated January 1, 2001 (together the “Prior Agreements”); 
  
 WHEREAS, the Company and the Executive desire to amend and restate the Prior Agreements in their entirety. 
  
 NOW, THEREFORE, in consideration of the mutual promises herein contained, the Company and the Executive agree as follows: 
  
 1. Employment. The Company hereby employs the Executive and the Executive hereby
accepts such employment subject to the terms and conditions contained in this Agreement. The Executive is engaged as an employee of the Company and the Executive and the Company do not intend to create a joint venture, partnership or other
relationship that might impose a fiduciary obligation on the Executive or the Company in the performance of this Agreement. 
  
 2. Executive’s Duties. The Executive is employed on a full-time basis. Throughout the term of this Agreement, the Executive will use the Executive’s best
efforts and due diligence to assist the Company in achieving the most profitable operation of the Company and the Company’s affiliated entities consistent with developing and maintaining a quality business operation. 
  

	 	2.1	Specific Duties. The Executive will serve as President and Chief Operating Officer for the Company. From time to time, the Executive may be appointed as an officer of one (1)
or more of the Company’s subsidiaries. During the term of this Agreement, the Executive will be nominated for election or appointed to serve as a director of the Company and one (1) or more of the Company’s subsidiaries. The Executive will
use the Executive’s best efforts to perform all of the services required to fully and faithfully execute the offices and positions to which the Executive is appointed and such other services as may be reasonably directed by the Board of
Directors of the Company in accordance with this Agreement. 

  

	 	2.2	Modifications. The precise duties to be performed by the Executive may be extended or curtailed in the discretion of the Board of Directors of the Company. However, except
for termination for Cause (as hereinafter defined) under paragraph 6.1.2 of this Agreement, the failure of the Executive to be elected, be reelected or serve as a director of the Company during the term of this Agreement, the removal of the
Executive as a member of the board of directors of the Company, the withdrawal of the designation of the Executive as President and Chief Operating Officer of the Company, or the assignment of the performance of duties incumbent on the foregoing
offices to other persons without the prior written consent of the Executive will constitute termination without Cause by the Company. 

  

	 	2.3	Rules and Regulations. From time to time, the Company may issue policies applicable to employees and the Executive including an Employment Policies Manual that addresses
frequently asked questions regarding the Company. The Executive agrees to comply with such policies, except to the extent such policies are inconsistent with this Agreement. The policies and the Employment Policies Manual are subject to change
without notice in the sole discretion of the Company at any time. In the event of a conflict between such policies and this Agreement, this Agreement will control over the terms of the Employment Policies Manual. 

  

	 	2.4	Stock Investment. During the term of this Agreement, the Executive agrees to hold shares of the Company’s common stock having an aggregate Investment Value (as hereafter
defined) greater than five hundred percent (500%) of the compensation paid to the Executive under paragraphs 4.1 and 4.2 of this Agreement during such calendar year. Any shares of common stock acquired by the Executive prior to the date of this
Agreement and still owned by the Executive during the term of this Agreement may be used to satisfy the requirement to own common stock. For purposes of this paragraph, the “Investment Value” of each share of stock will be as follows: (a)
for shares purchased in the open market the price paid by the Executive for such shares; (b) for shares acquired after the Company’s initial public offering (“IPO”) in February 1993 through the exercise of stock options or other than
through open market purchases, the fair market value of the common stock on the date the option was exercised or the stock was acquired; and (c) for shares acquired prior to the Company’s IPO, the price obtained for stock in the IPO adjusted
for subsequent stock splits. This paragraph will become null and void if the Company’s common stock ceases to be listed on the New York Stock Exchange, the National Association of Securities Dealers Automated Quotation System or other national
exchange. The Company has no obligation to sell or to purchase from the Executive any of the Company’s stock in connection with this paragraph 2.4 and has made no representations or warranties regarding the Company’s stock, operations or
financial condition. 

  

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 3. Other Activities. Except for the activities (the “Permitted Activities”) expressly permitted by
paragraphs 3.1 and 3.2 of this Agreement or approved by the board of directors of the Company, the Executive will not: (a) engage in business independent of the Executive’s employment by the Company which requires any substantial portion of the
Executive’s time; (b) serve as an officer or director of any public corporation, partnership, company, or firm; (c) except for passive investments that do not violate this Agreement and require only a minimal portion of the Executive’s
time, serve as a general partner or member of any corporation, partnership, company or firm; or (d) directly or indirectly invest in, participate in or acquire an interest in any oil and gas business, including, without limitation, (i) producing oil
and gas, (ii) drilling, owning or operating oil and gas leases or wells, (iii) providing services or materials to the oil and gas industry, (iv) marketing or refining oil or gas, or (v) owning any interest in any corporation, partnership, company or
entity which conducts any of the foregoing activities. The limitations in this paragraph 3 will not prohibit an investment by the Executive in publicly traded securities. Notwithstanding the foregoing, the Executive will be permitted to participate
in the following activities that will be deemed to be approved by the Company, if such activities are undertaken in strict compliance with this Agreement. The foregoing will not prohibit the ownership of royalty interests where the Executive owns or
previously owned the surface of the land covered by the royalty interest and the ownership of the royalty interest is incidental to the ownership of the surface estate or the ownership of royalty, overriding royalty or working interests that are
received by gift, inheritance or were acquired prior to the Executive’s date of first employment with the Company. 
  

	 	3.1	Existing Interests. The Executive has in the past conducted oil and gas activities individually and through TLW Investments, Inc., TLW Production Company and other entities
owned or controlled by the Executive (collectively, the “Executive Affiliates”). The Executive will be permitted to continue to conduct oil and gas activities (including participation in new wells) directly or through the Executive
Affiliates, but only to the extent such activities are conducted on oil and gas leases or interests which the Executive or Executive Affiliates owned or had the right to acquire as of July 1, 2001, or which the Executive or the Executive
Affiliates acquired from the Company under this Agreement or prior agreements with the Company (collectively, the “Prior Interests”). To the extent that the oil and gas interests or activities covered by this paragraph 3.1 are operated by
the Company, the ownership and participation will be subject to the payment provisions set forth in this paragraph 3. 

  

	 	3.2	 Company’s Activities. The Executive or the designated Executive Affiliate will be permitted to acquire on the terms and conditions set forth herein an
interest in the governmental, spacing or production unit for each of the wells (the “Program Wells”) spudded by any of the Company Entities (as hereafter defined) in any Calendar Quarter (as hereafter defined) during the Participation Term
(as hereafter defined). The Program Wells include any well spudded during such Calendar Quarter in which the Company Entities 

  

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participate as a non-operator. Program Wells will include grass-roots wells only and will exclude re-entries of existing wells. 

 

	 	3.2.1 	Election. On or before the date which is thirty (30) days before the first (1st) day of each Calendar Quarter, the Executive will provide notice to the Compensation Committee of the Company’s Board of Directors of the Executive’s intent to participate in Program Wells
during the succeeding Calendar Quarter and the minimum percentage working interest which the Executive proposes to participate with during such Calendar Quarter (the “Acquisition Percentage”). The Executive’s elected Acquisition
Percentage for any Calendar Quarter will not exceed two and one-half percent (2.5%) on an eight-eighths (8/8ths) basis. If prior to the date specified herein, the Executive fails to provide notice of the Executive’s intent to participate or of
the Acquisition Percentage for a Calendar Quarter, the amount of the Acquisition Percentage for the Calendar Quarter will be deemed to be equal to the Acquisition Percentage for the immediately preceding Calendar Quarter. 

 

	 	3.2.2 	Amount of Participation. On election to participate and the designation of the Acquisition Percentage for a Calendar Quarter, the Executive will be deemed to have elected to
participate in each Program Well spudded during such Calendar Quarter with a working interest equal to the greater of the following determined on a well-by-well basis (the “Minimum Participation”): (a) the Acquisition Percentage for such
Program Well (as adjusted for any well under paragraph 3.2.3); or (b) the Prior Interest of the Executive or the Executive Affiliates in the drilling unit for such Program Well. If the foregoing clause (a) is applicable to a Program Well, then the
Company will assign or allocate to the Executive or the designated Executive Affiliate a unit working interest in the Program Well sufficient to cause the Executive and the Executive Affiliates’ combined interest in such Program Well to equal
the Acquisition Percentage (including in such computation any Prior Interests). The interest to be assigned or allocated under this paragraph to cause the Executive’s participation to be equal to the Acquisition Percentage will be derived
proportionately from all the interests owned by the Company in the Program Wells (including non-consenting interests, back-in interests, leased royalty interests, overriding royalty interests or other similar interests) so that the interests
assigned or allocated to the Executive are substantially similar to the interests retained by the Company. If the Executive elects not to participate in Program Wells during a Calendar Quarter, then the Executive can elect to participate or not
participate with any Prior Interests under the existing agreements related to such Prior Interests. 

  

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	 	3.2.3 	Minimum Company Working Interest Ownership Level. If the combined interests in a specific Program Well to be assigned or allocated by the Company to the Executive and Mr.
Aubrey K. McClendon under their respective employment agreements causes the Company’s working interest (determined after consideration of any carried or reversionary interests) on the spud date for such Program Well to be less than twelve and
one-half percent (12.5%) on an eight-eighths (8/8ths) basis, then the Acquisition Percentage for that Program Well will be equal to zero for purposes of paragraph 3.2.2 of this Agreement. If this paragraph 3.2.3 prohibits the Executive’s
participation in a Program Well, then Mr. McClendon will also not be entitled to participate in such Program Well under his employment agreement. 

  

	 	3.3	Conditions of Participation. The Participation by the Executive in each Program Well will be on no better terms than the terms agreed to by unaffiliated third party
participants in connection with the participation in such Program Well or similar wells operated by the Company Entities. The Acquisition Percentage cannot be changed during any Calendar Quarter without the prior approval of the members of the
Compensation Committee of the Company’s board of directors. Any participation by the Executive under paragraph 3.2 is also conditioned on the Executive’s participation in each Program Well spudded during such Calendar Quarter in an amount
equal to the Minimum Participation. The Executive hereby agrees to execute and deliver any documents reasonably requested by the Company and hereby appoints the Company as the Executive’s agent and attorney-in-fact to execute and deliver such
documents if the Executive fails or refuses to execute such documents. The Executive further agrees to pay all joint interest billings promptly after receipt of the Company’s invoice in accordance with the applicable joint operating agreement
or, in the absence of an applicable joint operating agreement, the standard joint operating agreement used by the Company in the ordinary conduct of its business.  

  

	 	3.4	Definitions. For purposes of this Agreement, the term: (a) “Calendar Quarter” means the three (3) month periods commencing on the first (1st) day of January, April, July and October; (b) the term “Company Entities” means the Company, any affiliate or
successor to the Company, any entity which controls, subsequently owns or is under common control with the Company and any subsidiary corporation, partnership, limited liability company or other entity owned by, controlled by or under common control
with any of the foregoing (whether direct or indirect); and (c) “Participation Term” means the term of this Agreement plus five (5) years after a termination under paragraphs 6.1.1 or 6.3 of this Agreement. 

  

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 4. Executive’s Compensation. The Company agrees to compensate the Executive as follows: 
  

	 	4.1	Base Salary. A base salary (the “Base Salary”), in an annual rate of not less than Eight Hundred Thousand Dollars ($800,000.00), will be paid to the Executive in
equal semi-monthly installments, beginning January 15, 2004, during the term of this Agreement. 

  

	 	4.2	Bonus. In addition to the Base Salary described at paragraph 4.1 of this Agreement, the Company may periodically pay bonus compensation to the Executive. Any bonus
compensation will be at the absolute discretion of the Company in such amounts and at such times as the Compensation Committee of the Board of Directors of the Company may determine. 

  

	 	4.3	Equity Compensation. In addition to the compensation set forth in paragraphs 4.1 and 4.2 of this Agreement, the Executive may periodically receive grants of stock options,
restricted stock or other equity related awards from the Company’s various stock compensation plans, subject to the terms and conditions thereof. 

  

	 	4.4	Benefits. The Company will provide the Executive such retirement benefits, reimbursement of reasonable expenditures for dues, travel and entertainment and other benefits on
terms customarily provided by the Company from time to time. The Company will also provide the Executive the opportunity to apply for coverage under the Company’s medical, life and disability plans, if any. If the Executive is accepted for
coverage under such plans, the Company will provide such coverage on the same terms as is customarily provided by the Company to the plan participants as modified from time to time. The following specific benefits will also be provided to the
Executive at the expense of the Company: 

  

	 	4.4.1 	Vacation. The Executive will be entitled to take up to five (5) weeks of paid vacation each calendar year during the term of this Agreement. No additional compensation will
be paid for failure to take vacation and no vacation may be carried forward from one calendar year to another. 

  

	 	4.4.2 	 Membership Dues. The Company will reimburse the Executive for: (a) the monthly dues necessary to maintain a full membership in (1) golf and/or country club
in the Oklahoma City area selected by the Executive; and (b) the reasonable cost of any qualified business entertainment at such country club. All other costs, including, without implied limitation, any initiation costs, initial membership costs,
personal use and business entertainment unrelated to the Company 

  

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will be the sole obligation of the Executive and the Company will have no liability with respect to such amounts. 

  

	 	4.4.3 	Travel. The Executive will receive a monthly cash allowance in the amount of Two Thousand Dollars ($2,000.00) to defer a portion of the Executive’s cost of acquiring,
operating and maintaining an automobile for use in the Executive’s employment. Additionally, for safety and security reasons, the Executive will be required to utilize aircraft owned or leased by the Company for business and personal use in the
Western Hemisphere (including North America, South America and the surrounding oceans) and will not be required to reimburse the Company for any cost related to such use. In addition, the Executive’s immediate family members may use such
company aircraft for their personal use to the same extent. When a family member travels without the Executive, then the Executive agrees to reimburse the company for the variable costs of such use. For purposes of this Agreement, the variable cost
of using the Company’s aircraft means the variable costs directly identifiable with each use (including fuel, pilot charges, landing fees, hourly charges under co-ownership arrangements and other such costs), but specifically excluding any
fixed costs of the aircraft (including acquisition costs and depreciation). The Executive will pay all personal income taxes accruing as a result of the personal use of the Company’s aircraft by the Executive under this paragraph.

  

	 	4.4.4 	Accounting Support. The Executive will be permitted to utilize the Company’s office space, computer facilities and personnel to provide accounting services, records
maintenance and tax advice and tax return preparation for the Executive’s (and his family’s) personal business investments and activities. The Executive will not be required to pay any amount to the Company in connection with such
accounting support. 

  

	 	4.5	 Gross-Up Payment. In the event it is determined that any payment or distribution by the Company or the Company Entities to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this paragraph 4.5) (a “Payment”) is subject
to the excise tax imposed by Section 4999 of the Internal Revenue Code (the “Code”) or any interest or penalties related to such excise tax (collectively, the “Excise Tax”), the Executive will be entitled to receive an additional
payment (a “Gross-Up Payment”) from the Company. The Gross-Up Payment will be equal to the amount such that after payment by the Executive of all taxes (including the Excise Tax, income taxes, interest and penalties imposed with respect to
such taxes) on the Gross-Up 

  

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Payment, the Executive will retain an amount of the Gross-Up Payment equal to the Excise Tax imposed on the Payment. 

  

	 	4.5.1 	Determination. Subject to the provisions of paragraph 4.5.2 all determinations required to be made under this paragraph 4.5 (including whether and when a Gross-Up Payment is
required, the amount of such Gross-Up Payment and the assumptions to be utilized) will be made by a nationally recognized certified public accounting firm designated by the Executive (the “Accounting Firm”). The Accounting Firm will
provide detailed supporting calculations both to the Company and the Executive within fifteen (15) business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is reasonably requested by the
Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting a Change of Control (as hereinafter defined), the Executive will be entitled to appoint another nationally recognized
accounting firm to make the determinations required under this paragraph (which accounting firm will then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm will be paid by the Company. Any Gross-Up
Payment required to be paid under this paragraph 4.5 will be paid by the Company to the Executive within five (5) days of the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm will be binding on the
Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm, the Gross-Up Payment made by the Company may be less than actually required (an
“Underpayment”) consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to paragraph 4.5.2 below and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm will determine the amount of the Underpayment that has occurred and any such Underpayment will be promptly paid by the Company to or for the benefit of the Executive. 

  

	 	4.5.2 	 Contest of Claims. The Executive will notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of a Gross-Up Payment. Such notification will be given as soon as practicable but no later than ten (10) business days after the Executive is informed in writing of such claim and will apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive will not pay such claim prior to the expiration of the thirty (30) day period following the date on which the Executive notifies the Company 

  

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(or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing
prior to the expiration of such thirty (30) day period that the Company desires to contest such claim, the Executive will: (a) provide to the Company any information reasonably requested by the Company relating to such claim; (b) take such action in
connection with contesting such claim as the Company reasonably requests in writing including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company; (c) cooperate with the
Company in good faith as necessary to effectively contest such claim; and (d) permit the Company to participate in any proceedings relating to such claim. The Company will bear and pay directly all costs and expenses (including additional interest
and penalties) incurred in connection with the contest of the claim and agrees to indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a
result of such protest (including payment of costs and expenses as provided hereunder). Without limitation on the foregoing provisions, the Company will control all proceedings related to such contested claim, may at its sole option pursue or forgo
any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may at its sole option either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner. The Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company reasonably determines. If the
Company directs the Executive to pay a claim and sue for a refund, the Company will be required to advance the amount of such payment to the Executive on an interest-free basis and agrees to indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance, provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contested
claim will be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive will be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other
taxing authority. 

  

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	 	4.5.3 	Refunds. If, after the receipt by the Executive of an amount advanced by the Company pursuant to paragraph 4.5.2, the Executive becomes entitled to receive any refund with
respect to such claim the Executive will (subject to the Company’s complying with the requirements of paragraph 4.5.2) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to paragraph 4.5.2, a determination is made that the Executive will not be entitled to any refund with respect to such claim and the Company
does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of (30) days after such determination, then the advance will be forgiven and will not be required to be repaid and the amount of such
advance will offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 

  

	 	4.6	Compensation Review. The compensation of the Executive will be reviewed not less frequently than semi-annually by the Compensation Committee of the Board of Directors of the
Company. The compensation of the Executive prescribed in paragraph 4 of this Agreement (including benefits) may be increased at the discretion of the Compensation Committee of the Board of Directors of the Company, but may not be reduced without the
prior written consent of the Executive. 

  
 5. Term. In the
absence of termination as set forth in paragraph 6 below, this Agreement will extend for a term of five (5) years commencing on January 1, 2004, and ending on December 31, 2008 (the “Expiration Date”) as extended from time to time. Unless
the Company provides thirty (30) days prior written notice of non-extension to the Executive, on each January 31 during the term of this Agreement, the term and the Expiration Date will be automatically extended for one (1) additional year so that
the remaining term on this Agreement will be not less than four (4) and not more than five (5) years. 
  
 6. Termination. This Agreement will continue in effect until the expiration of the term set forth in paragraph 5 of this Agreement unless earlier terminated pursuant to this paragraph 6. 
  

	 	6.1	Termination by Company. The Company will have the following rights to terminate this Agreement: 

  

	 	6.1.1 	 Termination without Cause. The Company may terminate this Agreement without Cause at any time by the service of written notice of termination to the
Executive specifying an effective date of such termination not sooner than ninety (90) business days after the date of such notice (the “Termination Date”). In the event the Executive is terminated without Cause (other than a CC
Termination under 

  

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paragraph 6.3 of this Agreement), the Executive will receive as termination compensation: (a) Base Compensation (as hereafter defined) during the remaining
term of this Agreement, but in any event through the Expiration Date; (b) any benefits provided by operation of paragraph 4.4 of this Agreement during the remaining term of this Agreement, but in any event through the Expiration Date (including,
without implied limitation, suitable office space, secretarial and accounting support at the levels presently provided by the Company to the Executive); and (c) any vacation pay accrued through the Termination Date. For purposes of this Agreement
the term “Base Compensation” means the Executive’s current Base Salary under paragraph 4.1 on the Termination Date plus the bonus compensation received by the Executive during the twelve (12) month period preceding the Termination
Date. 

  

	 	6.1.2 	 Termination for Cause. The Company may terminate this Agreement for Cause. For purposes of this Agreement, “Cause” means: (a) the willful and
continued failure of the Executive to perform substantially the Executive’s duties with the Company or one of the Company Entities (other than a failure resulting from incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Board of Directors which specifically identifies the manner in which the Board of Directors believes that the Executive has not substantially performed the Executive’s duties; or (b)
the willful engaging by the Executive in illegal conduct, gross misconduct or a clearly established violation of the Company’s code of conduct, in each case which is materially and demonstrably injurious to the Company. For purposes of this
provision, an act or failure to act, on the part of the Executive, will not be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or
omission was in the best interests of the Company. Any act, or failure to act, based on authority given pursuant to a resolution duly adopted by the Board of Directors or based on the advice of counsel for the Company will be conclusively presumed
to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. In the event this Agreement is terminated for Cause, the Company will not have any obligation to provide any further payments or benefits to
the Executive after the effective date of such termination. This Agreement will not be deemed to have terminated for Cause unless a written determination specifying the reasons for such termination is made, approved by a majority of the independent
and disinterested members of the Board of Directors of the Company and delivered to the Executive. Thereafter, the Executive will have the right for a period of thirty (30) days to request a Board of Directors 

  

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meeting to be held at a mutually agreeable time and location within the following thirty (30) days, at which meeting the Executive will have an opportunity
to be heard. Failing such determination and opportunity for hearing, any termination of this Agreement will be deemed to have occurred without Cause. 

  

	 	6.2	Termination by Executive. The Executive may voluntarily terminate this Agreement with or without Cause by the service of written notice of such termination to the Company
specifying an effective date of such termination ninety (90) days after the date of such notice, during which time the Executive may use remaining accrued vacation days, or at the Company’s option, be paid for such days. In the event this
Agreement is terminated by the Executive, neither the Company nor the Executive will have any further obligations hereunder including, without limitation, any obligation of the Company to provide any further payments or benefits to the Executive
after the effective date of such termination. 

  

	 	6.3	Termination After Change in Control. If during the term of this Agreement there is a “Change of Control” and within three (3) years thereafter there is a CC
Termination (as hereafter defined), then the Executive will be entitled to a severance payment (in addition to any other rights and other amounts payable to the Executive under this Agreement or otherwise) in an amount equal to the sum of the
following: (a) five (5) times the Executive’s Base Compensation; plus (b) five (5) times the value of any benefits provided by operation of paragraph 4.4 of this Agreement during the preceding twelve (12) months; plus (c) any applicable
Gross-Up Payment. If the foregoing amount is not paid within ten (10) days after the CC Termination, the unpaid amount will bear interest at the per annum rate of 12%. In addition, for a period of twelve (12) months after a CC Termination, the
Company will provide at no cost to the Executive suitable office space and secretarial and accounting support at the levels presently provided by the Company. 

  

	 	6.3.1 	Change of Control. For the purpose of this Agreement, a “Change of Control” means the occurrence of any of the following: 

  
 (a) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”). For purposes of this paragraph (a) the following acquisitions by a Person will not constitute a Change of 

  

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Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company; (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of paragraph (c) of this paragraph
6.3.1. 
  
 (b) The individuals who, as of the date hereof,
constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors. Any individual becoming a director subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders, is approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board as of the date hereof, but any such individual whose
initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than
the Incumbent Board will not be deemed a member of the Incumbent Board as of the date hereof. 
  
 (c) The consummation of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company (a
“Business Combination”), unless following such Business Combination: (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company
or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from
such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then
outstanding voting securities of 

  

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such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination. 

 
 (d) The approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company. 
  

	 	6.3.2 	CC Termination. The term “CC Termination” means any of the following: (a) this Agreement expires in accordance with its terms; (b) this Agreement is not extended
under paragraph 5 of this Agreement and the Executive resigns within one (1) year after such non-extension; (c) the Executive is terminated by the Company other than under paragraphs 6.1.2, 6.4 or 6.5 based on adequate grounds; (d) the Executive
resigns as a result of a change in the Executive’s duties or title, a reduction in the Executive’s then current compensation, a required relocation more than 25 miles from the Executive’s then current place of employment or a default
by the Company under this Agreement; (e) the failure by the Company after a Change of Control to obtain the assumption of this Agreement, without limitation or reduction, by any successor to the Company or any parent corporation of the Company; or
(f) after a Change of Control has occurred, the Executive agrees to remain employed by the Company for a period of three (3) months to assist in the transition and thereafter resigns. 

  

	 	6.4	Incapacity of Executive. If the Executive suffers from a physical or mental condition, which in the reasonable judgment of the Company’s Board of Directors, prevents the
Executive in whole or in part from performing the duties specified herein for a period of four (4) consecutive months, the Executive may be terminated. Although the termination will be deemed as a termination with Cause, any compensation payable
under paragraph 4 of this Agreement will be continued through the remaining term of this Agreement, but in any event through the Expiration Date. Notwithstanding the foregoing, the Executive’s Base Salary specified in paragraph 4.1 of this
Agreement will be reduced by any benefits payable under any disability plans provided by the Company under paragraph 4.4 of this Agreement. 

  

	 	6.5	 Death of Executive. If the Executive dies during the term of this Agreement, the Company may thereafter terminate this Agreement without compensation to the
Executive’s estate except: (a) the obligation to continue the Base Salary payments under paragraph 4.1 of this Agreement for twelve (12) months after the effective date of such termination, and (b) the benefits 

  

 -14- 

	 	 
described in paragraph 4.4 of this Agreement accrued through the effective date of such termination. 

  

	 	6.6	Effect of Termination. The termination of this Agreement will terminate all obligations of the Executive to render services on behalf of the Company, provided that the
Executive will maintain the confidentiality of all information acquired by the Executive during the term of his employment in accordance with paragraph 7 of this Agreement. In the event of a termination under paragraphs 6.1.1 or 6.3 of this
Agreement, the Executive’s right to participate in Program Wells will continue in accordance with paragraph 3 of this Agreement through the Expiration Date as extended under this Agreement. Except as otherwise provided in this paragraph 6, no
accrued bonus, severance pay or other form of compensation will be payable by the Company to the Executive by reason of the termination of this Agreement. In the event that payments are required to be made by the Company under this paragraph 6, the
Executive will not be required to seek other employment as a means of mitigating the Company’s obligations hereunder resulting from termination of the Executive’s employment and the Company’s obligations hereunder (including payment
of severance benefits) will not be terminated, reduced or modified as a result of the Executive’s earnings from other employment or self-employment. All keys, entry cards, credit cards, files, records, financial information, furniture,
furnishings, equipment, supplies and other items relating to the Company will remain the property of the Company. The Executive will have the right to retain and remove all personal property and effects that are owned by the Executive and located in
the offices of the Company. All such personal items will be removed from such offices no later than ten (10) days after the effective date of termination, and the Company is hereby authorized to discard any items remaining and to reassign the
Executive’s office space after such date. Prior to the effective date of termination, the Executive will cooperate with the Company to provide for the orderly termination of the Executive’s employment. 

  
 7. Confidentiality. The Executive recognizes that the nature of the Executive’s
services are such that the Executive will have access to information which constitutes trade secrets, is of a confidential nature, is of great value to the Company or is the foundation on which the business of the Company is predicated. The
Executive agrees not to disclose to any person other than the Company’s employees or the Company’s legal counsel nor use for any purpose, other than the performance of this Agreement, any confidential information (“Confidential
Information”). Confidential Information includes data or material (regardless of form) which is: (a) a trade secret; (b) provided, disclosed or delivered to Executive by the Company, any officer, director, employee, agent, attorney, accountant,
consultant, or other person or entity employed by the Company in any capacity, any customer, borrower or business associate of the Company or any public authority having jurisdiction over the Company of any business activity conducted by the
Company; or (c) produced, developed, obtained or prepared by or on behalf of Executive or the Company (whether or not such 

  

 -15- 

 
information was developed in the performance of this Agreement) with respect to the Company or any assets oil and gas prospects, business activities,
officers, directors, employees, borrowers or customers of the foregoing. However, Confidential Information will not include any information, data or material which at the time of disclosure or use was generally available to the public other than by
a breach of this Agreement, was available to the party to whom disclosed on a non-confidential basis by disclosure or access provided by the Company or a third party, or was otherwise developed or obtained independently by the person to whom
disclosed without a breach of this Agreement. On request by the Company, the Company will be entitled to a copy of any Confidential Information in the possession of the Executive. The Executive also agrees that the provisions of this paragraph 7
will survive the termination, expiration or cancellation of this Agreement for a period of one (1) year. The Executive will deliver to the Company all originals and copies of the documents or materials containing Confidential Information. For
purposes of paragraphs 7, 8, and 9 of this Agreement, the Company expressly includes any of the Company Entities. 
  
 8. Non-competition. For a period ending six months after the later of the Executive’s termination or the termination of the Executive’s participation
rights as described in paragraph 3 of this Agreement, the Executive will not acquire, attempt to acquire or aid another in the acquisition or attempted acquisition of an interest in oil and gas assets, oil and gas production, oil and gas leases,
minerals interests, oil and gas wells or other such oil and gas exploration, development or production activities within any spacing unit in which the Company owns an oil an gas interest on the date of the resignation or termination of the
Executive. In addition, the Executive will not solicit, induce, entice or attempt to entice any employee, contractor, customer, vendor or subcontractor to terminate or breach any relationship with the Company or the Company’s affiliates for the
Executive’s own account or for the benefit of another party. The Executive further agrees that the Executive will not circumvent or attempt to circumvent the foregoing agreements by any future arrangement or through the actions of a third
party. The foregoing will not prohibit the activities which are expressly permitted by paragraph 3 of this Agreement. 
  
 9. Proprietary Matters. The Executive expressly understands and agrees that any and all improvements, inventions, discoveries, processes or know-how that are
generated or conceived by the Executive during the term of this Agreement, whether generated or conceived during the Executive’s regular working hours or otherwise, will be the sole and exclusive property of the Company. Whenever requested by
the Company (either during the term of this Agreement or thereafter), the Executive will assign or execute any and all applications, assignments and or other instruments and do all things which the Company deems necessary or appropriate in order to
permit the Company to: (a) assign and convey or otherwise make available to the Company the sole and exclusive right, title, and interest in and to said improvements, inventions, discoveries, processes, know-how, applications, patents, copyrights,
trade names or trademarks; or (b) apply for, obtain, maintain, enforce and defend patents, copyrights, trade names, or trademarks of the United States or of foreign countries for said improvements, inventions, discoveries, processes or know-how.
However, the improvements, inventions, discoveries, processes or know-how generated or 

  

 -16- 

 
conceived by the Executive and referred to above (except as they may be included in the patents, copyrights or registered trade names or trademarks of the
Company, or corporations, partnerships or other entities which may be affiliated with the Company) will not be exclusive property of the Company at any time after having been disclosed or revealed or have otherwise become available to the public or
to a third party on a non-confidential basis other than by a breach of this Agreement, or after they have been independently developed or discussed without a breach of this Agreement by a third party who has no obligation to the Company or the
Company Entities. 
  
 10. Arbitration. The parties will attempt to promptly
resolve any dispute or controversy arising out of or relating to this Agreement or termination of the Executive by the Company. Any negotiations pursuant to this paragraph 10 are confidential and will be treated as compromise and settlement
negotiations for all purposes. If the parties are unable to reach a settlement amicably, the dispute will be submitted to binding arbitration before a single arbitrator in accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association. The arbitrator will be instructed and empowered to take reasonable steps to expedite the arbitration and the arbitrator’s judgment will be final and binding upon the parties subject solely to challenge on the grounds of
fraud or gross misconduct. Except for damages arising out of a breach of paragraphs 6, 7, 8 or 9 of this Agreement, the arbitrator is not empowered to award total damages (including compensatory damages) that exceed 300% of compensatory damages and
each party hereby irrevocably waives any damages in excess of that amount. The arbitration will be held in Oklahoma County, Oklahoma. Judgment upon any verdict in arbitration may be entered in any court of competent jurisdiction and the parties
hereby consent to the jurisdiction of, and proper venue in, the federal and state courts located in Oklahoma County, Oklahoma. The Company will pay the costs and expenses of the arbitration including, without implied limitation, the fees for the
arbitrators. Unless otherwise expressly set forth in this Agreement, the procedures specified in this paragraph 10 will be the sole and exclusive procedures for the resolution of disputes and controversies between the parties arising out of or
relating to this Agreement. Notwithstanding the foregoing, a party may seek a preliminary injunction or other provisional judicial relief if in such party’s judgment such action is necessary to avoid irreparable damage or to preserve the status
quo. 
  
 11. Miscellaneous. The parties further agree as follows:

  

	 	11.1	Time. Time is of the essence of each provision of this Agreement. 

  

	 	11.2	 Notices. Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement will be in writing and will be
deemed to have been given when delivered personally or by telefacsimile to the party designated to receive such notice, or on the date following the day sent by overnight courier, or on the third (3rd) business day after the same is sent by
certified mail, postage and charges prepaid, 

  

 -17- 

	 	 
directed to the following address or to such other or additional addresses as any party might designate by written notice to the other party:

  

			
	 To the Company:
	  	 Chesapeake Energy Corporation
 Post Office Box
18496
 Oklahoma City, OK 73154-0496
 Attn: Marcus C.
Rowland

		
	 To the Executive:
	  	 Mr. Tom L. Ward
 19200 North Rockwell
Avenue
 Oklahoma City, Oklahoma 73003-9200

  

	 	11.3	Assignment. Neither this Agreement nor any of the parties’ rights or obligations hereunder can be transferred or assigned without the prior written consent of the other
parties to this Agreement. 

  

	 	11.4	Construction. If any provision of this Agreement or the application thereof to any person or circumstances is determined, to any extent, to be invalid or unenforceable, the
remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which the same is held invalid or unenforceable, will not be affected thereby, and each term and provision of this Agreement will be
valid and enforceable to the fullest extent permitted by law. This Agreement is intended to be interpreted, construed and enforced in accordance with the laws of the State of Oklahoma. 

  

	 	11.5	Entire Agreement. Except as provided in paragraph 2.3 of this Agreement, this Agreement constitutes the entire agreement between the parties hereto with respect to the
subject matter herein contained, and no modification hereof will be effective unless made by a supplemental written agreement executed by all of the parties hereto. 

  

	 	11.6	Binding Effect. This Agreement will be binding on the parties and their respective successors, legal representatives and permitted assigns. In the event of a merger,
consolidation, combination, dissolution or liquidation of the Company, the performance of this Agreement will be assumed by any entity which succeeds to or is transferred the business of the Company as a result thereof. 

  

	 	11.7	 Attorneys’ Fees. If any party institutes an action, proceeding or arbitration against any other party relating to the provisions of this Agreement or
any default hereunder, the Company will be responsible for paying the Company’s legal fees and expenses and the Company will be required to reimburse the Executive for reasonable expenses and legal fees incurred by 

  

 -18- 

	 	 
the Executive in connection with the resolution of such action or proceeding, including any costs of appeal. 

  

	 	11.8	Supercession. This Agreement is the final, complete and exclusive expression of the agreement between the Company and the Executive and supersedes and replaces in all
respects any prior employment agreements (including the Prior Agreement). On execution of this Agreement by the Company and the Executive, the relationship between the Company and the Executive after the effective date of this Agreement will be
governed by the terms of this Agreement and not by any other agreements, oral or otherwise. 

  
 IN WITNESS WHEREOF, the undersigned have executed this Agreement effective the date first above written. 
  

			
	 CHESAPEAKE ENERGY CORPORATION, an
 Oklahoma
corporation

		
	By:	 	 
	 	 	

	 	 	 Marcus C. Rowland, Executive Vice
 President and Chief Financial Officer

		
	 	 	 (the “Company”)

  

			
		
	By:	 	 
	 	 	

	 	 	Tom L. Ward, individually
		
	 	 	 (the “Executive”)

  

 -19-AutoCoded Document

EXHIBIT 10.51

EXCLUSIVE
LICENSE AGREEMENT

     This
Agreement is made and entered  into by and between THE REGENTS OF THE  UNIVERSITY  OF
COLORADO,  a body  corporate,  having  its  principal  office  at  201  Regent  Hall,
Regent  Drive,  Boulder,  CO  80309  (hereinafter  "University")  and AVIGEN,
INC.,  a Delaware  corporation  having its  principal  office at 1301 Harbor Bay
Parkway,  Alameda, CA 94502 (hereinafter "Licensee").

WITNESSETH

     WHEREAS,
University  is the owner of certain  Patent  Rights (as later  defined  herein)  relating
to [ * ],  identified as University Case # CU 1068B,  developed by Professor  Linda
Watkins,  and has the right to grant licenses  under said Patent Rights, and;

     WHEREAS,
Licensee is  interested  in  licensing  and further  developing  the Patent  Rights for
commercial  applications, and;

     WHEREAS,
University  desires to have the Patent Rights  developed and  commercialized  to benefit
the public  and is willing to grant a license hereunder.

     NOW,
THEREFORE,  in  consideration of the premises and the mutual covenants  contained
herein,  the parties  hereto agree as follows:

ARTICLE 1.
DEFINITIONS

For the
purposes of this  Agreement, the following words and phrases shall have the following
meanings: 

 

	1.01	 “Affiliate”
      of a party shall mean any entity that is directly or indirectly controlling,
      controlled by or under common control with that party. “Control”
      for these purposes means the direct or indirect ownership of more than fifty
      percent (50%) of the capital stock of the subject entity entitled to vote
      in the election of directors (or, in the case of an entity that is not a
      corporation, interests entitled to vote in the election of the corresponding
      managing authority); or actual, present capacity to elect a majority of
      the directors or other managing authority of such entity 

1 of 21

[*] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

	1.02	“Effective
Date” shall mean the date of the last signature on this Agreement. 

	1.03	 “Fields
of  Use” shall mean the fields of use identified in Appendix B.

	1.04	 “Licensed
Process(es)” shall mean any process, art, or method that is covered  in whole or in
part by an issued, unexpired claim or a pending claim that  has been pending for no more
than six (6) years contained in the Patent  Rights. 

	1.05	“Licensed
Product(s)” shall mean any: 

		(a)	product
or part thereof  that is covered in whole or in part by an issued, unexpired claim or a
pending  claim that has been pending for no more than six (6) years contained in  the
Patent Rights; or 

		(b)	product,
chemical composition,  apparatus, or part thereof that is manufactured using a Licensed
Process(es)  or is employed to practice a Licensed Process(es); or 

		(c)	product
produced or  manufactured through the use of any Licensed Product defined in §1.05(a)
or §1.05(b).

	1.06	“Net
Sales” shall mean the total gross receipts for sales of Licensed Products or
practice  of Licensed Processes by or on behalf of Licensee or its sublicensees to  a
third party in an arms-length transaction, and from leasing, renting,  or otherwise
making Licensed Products available to a third party in an arms-length  transaction,
whether invoiced or not, less returns and allowances, packing  costs, insurance costs,
freight out, taxes or excise duties imposed on the  transaction (if separately invoiced
and paid), and wholesaler and cash discounts  in amounts customary in the trade to the
extent actually granted. No deductions  shall be made for commissions, or for the costs
of collections. Net sales  shall also include the fair market value of any non-cash
consideration received  by Licensee or sublicensees for the sale, lease, or transfer of
Licensed  Products or Licensed Processes. In no case shall Licensed Products transferred
to third parties for use in clinical trials or provided free of charge small  quantities
for compassionate use or other charitable purposes be deemed  to be Net Sales. Transfers
of Licensed Products between Licensee and its  Affiliates and sublicensees shall not be
treated as sales for purposes of  calculating Net Sales, provided that such Affiliates
and/or sublicensees  are not the end-users of the Licensed Products.

	1.07	Patent
Rights” shall mean all of the following University intellectual property:

		(a)	the
United States and  foreign patents and/or patent applications and/or provisional patent
applications  listed in Appendix A; and

		(b)	United
States and foreign  patents issued from the applications listed in Appendix A and from
divisionals  and continuations of these applications; and

2 of 21

[*] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

		(c)	claims
of United States  and foreign continuation-in-part applications, and of the resulting
patents,  which are directed to subject matter specifically described in the United
States and foreign applications listed in Appendix A; and

		(d)	any reissues
or  reexaminations  of United States and foreign patents described in (a), (b) or (c)
above.

	1.08 	 “Royalty” shall
mean any consideration paid by Licensee to University  pursuant to this Agreement.

	1.09 	 “Territory” shall
mean the geographical area identified in Appendix  B. 

ARTICLE 2.
GRANT OF RIGHTS AND ACCEPTANCE

	2.01 	 University
hereby grants and Licensee accepts, during the term and subject to  the terms and
conditions of this Agreement, and further subject to any rights  of the United States
government, an exclusive license to all University’s  Patent Rights in the
Territory, including the right to make, have made, use,  sell, offer to sell, have sold,
import, or distribute any Licensed Products  in the Fields of Use and to practice any
Licensed Processes in the Fields of  Use. 

	2.02 	 This
Agreement confers no license or rights by implication, estoppel, or otherwise  under any
patent applications or patents of University other than licensed Patent  Rights
regardless of whether such patents are dominant or subordinate to licensed  Patent
Rights. 

	2.03 	 This
Agreement shall be subject to the mandatory public laws in any country  where this
Agreement will produce an effect. 

ARTICLE 3.
SUBLICENSING

	3.01 	 Upon
prior notice to University, Licensee may sublicense to one or more third  parties the
rights granted in Article 2 subject to the following limitations: 

		(a) 	 Licensee
agrees that any sublicenses granted by it shall impose restrictions  and conditions upon
sublicensees that are consistent with those imposed upon  Licensee; and 

		(b) 	 Licensee
agrees that, in the event this Agreement is terminated for any reason,  any sublicenses
granted, in University’s sole discretion, shall be directly  enforceable by
University; and 

		(c) 	 Licensee
agrees that any sublicenses granted shall contain terms to protect  University’s
security and property interest in University’s Patent  Rights to at least the extent
that such interest is protected in this Agreement. 

3 of 21

[*] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

	3.02 	 Any
payments made by Licensee to University based on revenues from sublicenses  granted by
Licensee shall be in the form of cash consideration unless University  has expressly
consented otherwise in writing in advance. 

	3.03 	 Licensee
agrees to forward to University a copy of each fully executed sublicense  agreement
postmarked within thirty (30) days of the execution of such agreement, provided however,
that Licensee may redact confidential information which  is not relevant to Licensee’s
obligations to University under this agreement. 

ARTICLE 4. GOVERNMENT
AND UNIVERSITY RIGHTS

	4.01 	 Notwithstanding
any use of descriptive terms within this Agreement such as “exclusive”,  this
Agreement is subject to all of the terms and conditions of Title 35 U.S.C.  §§ 200
et al (“Bayh-Dole Act”) and 37 C.F.R. 401, as such  may be amended. Further,
Licensee agrees to take all reasonable action necessary  to enable University to satisfy
its obligations hereunder upon receipt of written  request for such action by University. 

	4.02 	 University
shall have the transferable right to practice the Patent Rights for  nonprofit research
and education purposes, but excluding all human clinical  trials. 

	4.03 	 University
shall have the right to publish any information included in the Patent  Rights and the
know-how provided that University takes reasonable steps to avoid  the loss of any patent
rights as a result of University exercising its rights  under this § 4.03. Such
reasonable steps shall include notifying Licensee  thirty (30) days in advance of any
planned publication reasonably related to  Patent Rights, so that Licensee may take steps
to protect Patent Rights. 

ARTICLE 5.  ROYALTIES

As
consideration for the  disclosure of University’s know-how as well as the licenses
and rights  under University’s Patent Rights, 

	5.01 	Licensee
agrees to pay a non-creditable, nonrefundable license issue royalty as set forth  in
Appendix C within thirty (30) days from the Effective Date of this Agreement;  and 

	5.02 	Licensee
agrees to pay University earned royalties as set forth in Appendix C; and 

	5.03 	Licensee
agrees to pay University milestone royalties as set forth in Appendix C; and 

	5.04 	Licensee
agrees to pay University sublicensing royalties as set forth in Appendix C. 

	5.05 	 No
multiple royalties shall be payable in the event that any Licensed Products  or Licensed
Processes are covered by more than one of the Patent Rights. 

4 of 21

[*] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

	5.06 	 Unless
otherwise provided herein, all payments required under this Agreement  shall be due
within thirty (30) days of written notice from University. Payments  past due shall bear
interest at the rate of one and one-half percent (1 1/2%)  per month compounded, or the
maximum interest rate allowed by applicable law,  whichever is less. 

ARTICLE 6.  REPORTS,
RECORDS AND AUDITS

	6.01 	 On
or before the sixtieth (60th) day following the end of each calendar  quarter during the
term of this Agreement following the first commercial sale  of a Licensed Product,
Licensee shall provide to University written accounts  for each calendar quarter of the
Net Sales of Licensed Products and/or Licensed  Processes subject to royalty hereunder
made during the prior three (3) month  period and shall simultaneously pay to University
the royalties due on such  Net Sales, if any, in United States Dollars. Notwithstanding
the foregoing,  reports shall be due semi-annually until sales of Licensed Products or
Licensed  Processes commence. The written report shall discuss the progress and results,
as well as ongoing plans, with respect to the Licensed Products and/or Licensed
Processes. University shall have the right to request one meeting per year to  discuss
such information. Net Sales shall be reported in the format of Appendix  D. 

	6.02 	 Licensee
shall keep accurate records in sufficient detail to reflect its operations  under this
Agreement and to enable the royalties accrued and payable under this  Agreement to be
determined. Such records shall be retained for at least three  (3) years after the close
of the period to which they pertain, or for such longer  time as may be required to
finally resolve any question or discrepancy raised  by University provided that such
University has provided notice of such question  or discrepancy in writing prior to the
end of the three year retention period. 

	6.03 	 Upon
the request of University, with reasonable notice, but not more frequently  than once a
year, Licensee shall permit an independent public accountant selected  and paid by
University to have access during regular business hours to such  records as may be
necessary to verify the accuracy of royalty payments made  or payable hereunder. Said
accountant shall disclose information acquired to  University only to the extent that it
should properly have been contained in  the royalty reports required under this
Agreement. If an inspection shows an  underreporting or underpayment in excess of [ * ] percent
([ * ]%)  for any [ * ]  period, then Licensee shall reimburse University for the  cost
of the inspection and pay the amount of the underpayment including any  interest as
required by this Agreement. 

	6.04 	 Licensee
acknowledges that University is subject to the Colorado Public Records  Act (C.R.S. §§ 24-72-201
et seq.). All plans and reports marked “Confidential” shall be treated by
University as confidential to the extent permitted under  §§ 24-72-204. 

5 of 21

[*] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

	6.05 	 Each
Party shall vigilantly protect the confidential information of the other  party according
to any and all mutual nondisclosure agreement between Avigen  and the Reagents of the
University of Colorado. 

ARTICLE 7.  DUE
DILIGENCE AND PERFORMANCE

	7.01 	 Licensee
shall use commercially reasonable efforts to bring Licensed Products  and Licensed
Processes to market through a [ * ] program for exploitation  of the Patent Rights, to
develop manufacturing capabilities, to continue [  * ] marketing efforts, and to satisfy
the needs of such market with the  Licensed Products and Licensed Processes throughout
the life of this Agreement  through its internal efforts and/or through sublicensing or
other contractual  arrangement. Licensee acknowledges and agrees to the performance
milestones  defined in Appendix E provided however that specific dates for such
milestones  may be adjusted if required due to developments including scientific and
regulatory  developments beyond the reasonable control of Licensee. No changes to the
dates  of such milestones will be made without the consent, which will not be
unreasonably  denied, of University. 

	7.02 	 Licensee
agrees to use commercially reasonable efforts to develop a [ * ] sublicensing program to
effect commercialization of Licensed Products and Licensed  Processes in any Field of Use
or Territory that Licensee decides not to exploit  for itself. 

	7.03 	 University
may terminate this Agreement or convert this Agreement to a non-exclusive  Agreement if
Licensee fails to meet any of the due diligence or performance  requirements of this
Article 7, subject to the notification and time to cure  provisions of section 10.03(c). 

ARTICLE 8.  PATENTS,
COSTS, AND ENFORCEMENT

	8.01	(a)	
        Licensee shall retain primary responsibility for all patent activities,
        including all costs, associated with the perfection and maintenance of
        Patent Rights originally transferred from University according to the
        Exclusive Option Agreement between the parties and including ongoing disclosures
        of data and know-how during the period through filing of the utility application(s). 
        Licensee’s patent counsel shall keep University advised as to the
        status of the Patent Rights by providing University, in a timely manner
        prior to their due date, with copies of all official documents and correspondence
        relating to the prosecution, maintenance, and validity of the Patent Rights. 
        Licensee shall consult with University in such prosecution and maintenance,
        and University shall reasonably assist Licensee in every proper way to
        obtain United States and foreign patents, in any and all countries. To
        that end University shall execute, verify and deliver such documents and
        perform such other acts as Licensee may reasonably request for use in
        applying for, obtaining, and sustaining such patents. Licensee shall diligently
        seek University’s advice on all matters pertaining to the Patent
        Rights, shall diligently seek strong and broad claims under the Patent
        Rights, and shall not finally abandon prosecution of any patent application
        without first notifying University sixty (60) days prior to any bar date,
        of Licensee’s intention and reason therefore, and providing University
        with reasonable opportunity to assume responsibility for prosecution,
        maintenance and associated costs of such patents and patent applications. 
        If University pursues such patent protection, then from that time forward
        all such subject patent applications and any patents arising there from
        shall no longer be considered Patent Rights under this Agreement and Licensee
        shall forfeit all rights under this Agreement to such patent applications
        and any patents arising there from. 

6 of 21

[*] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

		(b) 	University
acknowledges that claims may need to be modified during patent prosecution in  order to
obtain the most favorable overall patent protection. Whenever possible,  Licensee shall
notify University in advance of its intention to modify, delete,  or abandon any claim of
the Patent Rights and shall seek University’s input  into such decision.  Licensee’s
obligations under this § 8.01  shall include, without limitation, an obligation to
inform University in a timely  manner that Licensee will not pursue patents in any
foreign countries where  patent protection may be available, in order that University may
prosecute patents  in such countries if University so desires.  If University
pursues such  foreign patent protection, then from that time forward all such subject
patent  applications and any patents arising there from in such countries shall no longer
be considered Patent Rights under this Agreement and Licensee shall forfeit  all rights
under this Agreement to such patent applications and any patents  arising there from in
such countries.   University shall be responsible  for all costs associated
with those patent applications and patents it decides  to pursue and maintain. 

	8.02 	 If
Licensee breaches any of its obligations in section 8.01 above, [ * ]. 

	8.03 	 University
and Licensee agree to inform the other party promptly in writing  of any suspected
infringement of the Patent Rights by a third party. Licensee  shall have, for a period of
one year from the date of any notice of infringement  of the Patent Rights, the first
right to institute suit against such third party.  During that period Licensee shall also
have the right to pursue alternate remedies  such as sublicensing. If Licensee institutes
such a suit, it shall bear all  costs of the litigation and shall be entitled to retain
the entire amount of  any recovery or settlement less earned royalties due to University,
provided  however  that Licensee may name University as a party plaintiff at Licensee’s
expense if required to maintain the suit. Thereafter, University and Licensee  shall each
have the right to institute an action for infringement of the Patent  Rights against such
third party in accordance with the following: 

		(a) 	 If
both University and Licensee agree to institute suit jointly, the suit shall  be brought
in both their names, and the out-of-pocket costs thereof shall be  borne equally. Any
recovery that is designated as lost profit shall be divided  between the parties [ * ].
Any additional recovery or settlement shall  be [ * ]. University and Licensee shall
agree to the manner in which  they shall exercise control over such suit. Each party, at
its option, may be  represented by separate counsel of its own selection, the fees for
which shall  be paid for by the respective parties. 

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OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

		(b) 	 In
the absence of an agreement to institute a suit jointly, University may,  but is not
obligated to, institute suit, and at its option, join Licensee as  a plaintiff. If
University decides to institute suit, it shall notify Licensee  in writing. Licensee’s
failure to notify University in writing within thirty  (30) days after the date of
receipt of University’s notice, that it will  join in enforcing the Patent Rights
pursuant to the terms hereof, shall be deemed  a waiver of such rights. [ * ]

		(c) 	 In
the absence of an agreement to institute a suit jointly, and if University  does not
notify Licensee of its intent to pursue legal action within ninety  (90) days, as
provided in (b) above, Licensee may institute suit and name University  as a party
plaintiff if required to maintain the suit. [ * ]

		(d) 	 If
Licensee undertakes to defend the Patent Rights by litigation, Licensee may  defer from
its royalty payments to University with respect to the Patent Rights  subject to suit an
amount not exceeding [ * ] percent ([ * ]%)  of Licensee’s expenses and costs of
such action, including reasonable attorney’s  fees, provided however, that such
deferral shall not exceed [ * ] percent  ([ * ]%) of the total royalty due to University
for each [  * ], and that such deferred payments shall be delivered to University upon
settlement of the litigation. 

	8.04 	 In
the event that a declaratory judgment action alleging invalidity or non-infringement  of
any of the Patent Rights shall be brought against Licensee or raised by way  of
counterclaim or affirmative defense in an infringement suit brought by Licensee  under
§ 8.03, pursuant to this Agreement and the provisions of Chapter  29 of Title 35,
U.S. Code or other statutes, Licensee may: 

		(a) 	 defend
the suit in its own name, at its own expense, and on its own behalf for  presumably valid
claims in the Patent Rights, in any such suit, ultimately to  enjoin infringement and to
collect for its use, damages, profits, and awards  of whatever nature recoverable for
such infringement consistent with § 8.03; and 

		(b) 	 settle
any claim or suit for declaratory judgment involving the Patent Rights,  except that
Licensee shall have no right to deny the validity of any patent,  patent claim, or patent
application included in the Patent Rights in any compromise  or settlement of any claim
or suit for declaratory judgment without the express  prior written consent of
University; provided however, that University shall  have a continuing right to intervene
in such actions described in (a) and (b).  Licensee shall take no action to compel
University either to initiate or to  join in any such declaratory judgment action. If
Licensee elects not to defend  against such declaratory judgment action, University, at
its option, may do  so at its own expense and shall be entitled to retain the entire
amount of any  recovery or settlement. 

	8.05 	 In
all cases, Licensee agrees to keep University reasonably apprised of the  status and
progress of any litigation. 

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OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

ARTICLE 9.  WARRANTIES,  INDEMNIFICATIONS AND INSURANCE

	9.01 	 UNIVERSITY
MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER  EXPRESS OR IMPLIED,
AND ASSUMES NO RESPONSIBILITIES WHATSOEVER WITH RESPECT  TO USE, SALE, OR OTHER
DISPOSITION BY LICENSEE, SUBLICENSEE(S), OR THEIR VENDEES  OR OTHER TRANSFEREES OF
LICENSED PRODUCTS OR LICENSED PROCESSES INCORPORATING  OR MADE BY USE OF THE PATENT
RIGHTS. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES  OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR THAT THE USE OR SALE  OF SUCH PRODUCTS OR PROCESSES WILL NOT
INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK,  SERVICE MARK, OR OTHER RIGHTS. 

	9.02 	 Notwithstanding
anything in this Agreement to the contrary, nothing in this  Agreement shall be construed
as: 

		(a) 	 A
warranty or representation by University as to rights in know-how or the validity  or
scope of any of the Patent Rights; 

		(b) 	 A
warranty or representation that the Patent Rights or anything made, used,  sold or
otherwise disposed of under the License will or will not infringe patents,  copyrights or
other rights of third parties; or 

		(c) 	 An
obligation to furnish any know-how or technology not agreed to in this Agreement,  to
bring or prosecute actions or suits against third parties for infringement  (except to
the extent described in §8.05) or to provide any services other  than those
specified in this Agreement. 

	9.03 	 Licensee
shall indemnify, defend, and hold harmless University, its regents,  employees, students,
officers, agents, affiliates, and representatives from  and against all liability,
demands, damages, losses, and expenses (including  attorney fees), for death, personal
injury, illness, property damage, noncompliance  with applicable laws and any other
claim, proceeding, demand, expense and liability  of any kind whatsoever in connection
with or arising out of: 

		(a) 	 the
use by or on behalf of Licensee, its sublicensees, affiliates, directors,  officers,
employees, or third parties of any Patent Rights; or 

		(b) 	 the
design, manufacture, production, distribution, advertisement, consumption,  sale, lease,
sublicense or use of any Licensed Product(s), Licensed Process(es)  or materials by
Licensee, or other products or processes developed in connection  with or arising out of
the Patent Rights; or 

		(c) 	 any
right or obligation of Licensee under this Agreement, provided however that no part of
this section 9.03 shall remain in effect in the case of negligence  or willful

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OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

			misconduct  on
the part of University, its regents, employees, students,  officers, agents,  affiliates,
or representatives. 

	9.04 	 Within
(30) thirty days of the Effective Date, Licensee shall provide to University
certificates of insurance for comprehensive general liability insurance, including
products liability insurance, from companies reasonably acceptable to University,  which
companies shall include St. Paul Fire & Marine Insurance Co. and General  Star
Indemnity Co. The certificates shall specify that “This coverage is  primary to
other coverage in the event of a covered loss,” and that University  and its
regents, trustees, directors, officers, employees, students, and agents  are additional
insureds. In addition, the certificates must evidence that the  policy carries a minimum
limit of one million dollars ($1,000,000) per specific  occurrence and a minimum limit of
five million dollars ($5,000,000) for aggregate  liability insurance; provided, however,
that not less than thirty (30) days  before the earlier date upon which Licensee or its
affiliates (i) initiates  testing of Licensed Products or Licensed Processes in a
clinical trial involving  human subjects for purposes of diagnosis or treatment, or (ii)
makes a First  Commercial Sale of any Licensed Product or Licensed Processes, such
coverage  shall be increased to a minimum limit of five million dollars ($5,000,000) per
specific occurrence and a minimum limit of ten million dollars ($10,000,000)  for
aggregate liability insurance. 

ARTICLE 10.  DURATION
AND TERMINATION

	10.01 	 The
term of the License shall extend to the date of expiration of the last to  expire of anypatents
embodying the Licensed Products or Licensed Processes,  including any renewals or
extensions thereof or until such time any patents  embodying the Licensed Products or
Licensed Processes are held invalid or unenforceable  by a court of competent
jurisdiction. The obligation to pay the royalty set  forth under Article 5 with respect
to each Licensed Product or Licensed Process  shall expire when the Licensed Product or
Licensed Process patent expires on  a country by country basis. 

	10.02 	 Licensee
may terminate this Agreement at any time on sixty (60) days written  notice to University
if Licensee: 

		(a) 	 pays
all amounts due, including pro-rata minimum annual royalties, as well as  all
non-cancelable costs to University through the termination date; 

		(b) 	 submits
a final report of the type described in Article 6; 

		(c) 	 returns
any confidential materials provided to Licensee by University in connection  with this
Agreement; and 

		(d) 	 suspends
its use and sales of the Licensed Product(s) and Licensed Process(es); provided  however,
that subject to making the payments required by Article  5 and the reports  required by
Article 6, Licensee may, for a period of ninety  (90) days after

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OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

			the effective
date of  such termination, sell all Licensed Products  which may be in  inventory. 

	10.03 	 University
may terminate this Agreement in the event that: 

		(a) 	 Licensee
fails to pay University any amounts when due to University hereunder  and Licensee fails
to make such payment within thirty (30) days of receipt of  written notice of such
failure; or 

		(b) 	 Licensee
becomes insolvent, files a petition in bankruptcy, has such a petition  filed against it,
determines to file a petition in bankruptcy, or receives notice  of a third party’s
intention to file an involuntary petition in bankruptcy;  or 

		(c) 	 Licensee
is in material breach or default of this Agreement other than those  occurrences listed
in § 10.03 (a) or (b) and Licensee fails to cure the  breach or default or to
provide a mutually acceptable plan to cure the breach  or default within sixty (60) days
of receipt of written notice of the breach  or default. Licensee’s ability to cure
such breach shall be limited to  the first two breaches properly noticed under the terms
of this Agreement, regardless  of the nature of those breaches. Any subsequent breach
shall entitle University  to terminate this Agreement immediately. 

ARTICLE 11.
MISCELLANEOUS

	11.01 	 This
Agreement shall be binding upon and inure to the benefit of the respective  successors
and assigns of the parties hereto. However, Licensee may not assign  its rights in this
Agreement without prior written approval by University, such  approval not to be
unreasonably withheld or delayed. 

	11.02 	 This
section intentionally omitted. 

	11.03 	 Notice
hereunder shall be deemed effective when given by registered mail or  overnight carrier
such as Federal Express, postage prepaid, and addressed to  the party to receive such
notice at the address given below, or such other address  as may hereafter be designated
by notice in writing. 

	University:
	Licensee:

	Technology Transfer Office	 	VP Business Development	 
	University of Colorado, 588 SYS	 	Avigen, Inc.	 
	Suite 390, 4001 Discovery Drive	 	1301 Harbor Bay Pkwy	 
	Boulder, CO 80309-0588	 	Alameda, CA 94502	 
	License Administrator, Case # CU1068B	 

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OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

		Electronic funds
transfer can be made to:

Bank name: [ * ]
ABA/Routing  #: [ * ] (Domestic wires only)

International bank code/SwiftID: [ * ] (Foreign  wires only)
Payee/beneficiary: CU
Technology Transfer
Account number: [ * ]
Attention:  License Administrator, [ * ]

Please
include sufficient information to identify  payment.
Licensee is responsible for
electronic transfer expenses. 

	11.04 	 Licensee
agrees not to identify University in any promotional advertising, press  releases, sales
literature or other promotional materials to be disseminated  to the public or any
portion thereof without University’s prior written  consent in each case, except
that Licensee may state that it has a license for  the Patent Rights from University.
Licensee further agrees not to use the name  of University or any University faculty
member, inventor, employee or student  or any trademark, service mark, trade name,
copyright or symbol of University,  without the prior written consent of the University,
entity or person whose  name is sought to be used. 

	11.05 	 Licensee
agrees to: 

		(a) 	 cause
Licensed Products or the product of Licensed Processes sold under this  license to be
marked with the notice of the patent numbers or patent pending,  as may be appropriate; 

		(b) 	 comply
with all laws and regulations of the United States and any other country  as appropriate
concerning or controlling the import or export of the Licensed  Products, data, software,
laboratory prototypes or other commodities under this  Agreement. University makes no
representation that a license or consent for  export will not be required by applicable
governmental agencies, or if required,  that it will be issued; and 

		(c) 	 comply
with all applicable statutes, regulations, and guidelines, including  applicable
governmental regulations, policies and guidelines in its use of any  University — supplied
materials (“Materials”). Licensee agrees  not to use the Materials for research
involving human subjects or clinical trials  in the United States without complying with
21 C.F.R. Part 50 and 45 C.F.R.  Part 46 (as those regulations may be amended from time
to time). Licensee agrees  not to use the Materials for research involving human subjects
or clinical trials  outside of the United States without notifying University in writing,
of such  research or trials and complying with the applicable regulations of the
appropriate  national control authorities. Written notification to University of research
involving human subjects or clinical

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			trials outside
of the United States shall  be given  no later than sixty (60) days prior to commencement
of such research  or trials. 

	11.06 	 In
the event of any dispute arising out of or relating to this Agreement, the  affected
party shall promptly notify the other party (“Notice Date”),  the parties shall
attempt in good faith to resolve the matter. Any disputes  not so resolved shall be
referred to senior executives of the parties, who shall  meet at a mutually acceptable
time and location within thirty (30) days of the  Notice Date and shall attempt to
negotiate a settlement. Any obligation or action  due under any section of this Agreement
will be suspended during this period  of good faith negotiations. 

	11.07 	 The
terms and provisions contained in this Agreement constitute the entire Agreement  between
the parties and shall supersede all previous communications, representations,  agreements
or understandings, either oral or written, between the parties hereto  with respect to
the subject matter hereof, provided, however, that the  mutual nondisclosure agreement
between the parties dated January 6, 2003 shall  remain in full force and effect. No
agreement or understanding varying or extending  this Agreement will be binding upon
either party hereto, unless in writing which  specifically refers to this Agreement,
signed by duly authorized officers or  representatives of the respective parties, and the
provisions of this Agreement  not specifically amended thereby shall remain in full force
and effect according  to their terms. 

	11.08 	 The
provisions and clauses of this Agreement are severable, and in the event  that any
provision or clause is determined to be invalid or unenforceable under  any controlling
body of the law, such invalidity or unenforceability will not  in any way affect the
validity or enforceability of the remaining provisions  and clauses hereof. 

	11.09 	 This
Agreement does not establish a joint venture, agency or partnership between  the parties,
nor create an employer — employee relationship. 

	11.10 	 The
parties agree that nothing in this Agreement is intended or shall be construed  as a
waiver, either express or implied, of any of the immunities, rights, benefits,  defenses
or protections provided to University under governmental or sovereign  immunity laws from
time to time applicable to University, including, without  limitation, the Colorado
Governmental Immunity Act (C.R.S. §§ 24-10-101,  et seq.) and the Eleventh
Amendment to the United States Constitution. 

	11.11 	 If
a party’s performance required under this Agreement is rendered impossible  or
unfeasible due to any catastrophes or other major events beyond its reasonable  control,
including, without limitation, the following, the parties are excused  from performance:
war, riot, and insurrection; laws, proclamations, edicts,  ordinances or regulations;
strikes, lockouts or other serious labor disputes;  and floods, fires, explosions,
earthquakes or other natural disasters. When  such events abate, the parties’ respective
obligations under this Agreement  shall resume. 

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OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

	11.12 	 The
provisions of Articles 1 and 8, and §§ 6.01, 6.02, 9.01-9.03,  11.02, 11.04,
11.06-11.08, and 11.10, and any other provision of this Agreement  that by its nature is
intended to survive, shall survive any termination or  expiration of this Agreement.
*****

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     IN
WITNESS WHEREOF the parties  hereto have caused this Agreement, which is  effective on
the date of the last to sign  below, to be executed in duplicate by  their respective
duly authorized officers. 

	University:

      	 	Licensee:
      

      
	

      	 	
      

      
	By:	 /s/ David
      Allen	 	By:	/s/ Kenneth
      G. Chahine 
	Name:	David
      Allen	 	Name:	Kenneth
      G. Chahine 
	Title:	Assoc
      VP	 	Title:	 Chief
      Operating Officer 
	Date:	21 Nov
      2003	 	Date:	21 Nov
      2003 
	

      Technology Transfer Office 

      University of Colorado, 588 SYS 

      Suite 390, 4001 Discovery Drive 

      Boulder, CO 80309-0588 	 	

      Avigen
      Inc.
1301 Harbor Bay
      Parkway
Alameda, CA 94502

      

      APPROVED

      Avigen, Inc. - Business Dvlp.

      Date: Nov 21, 2003 

      By: /s/ Amy Percy 

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APPENDIX A

PATENT RIGHTS

[ * ]

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APPENDIX B

FIELDS OF
USE and TERRITORY

Fields of Use:
ALL

Territory:
WORLDWIDE

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APPENDIX C

ROYALTIES

In
accordance with  Articles 5 and 6, Licensee shall pay the following royalties to
University:

License
issue fee: [ * ] U.S. dollars ($[ * ]), plus a warrant for fifteen
thousand  (15,000) shares of Licensee common stock, $0.01 par value, with an exercise
price of the closing price for such stock as of the close of market on the  Effective
Date of this Agreement. Such warrant shall be exercisable at any time  on or after the
first anniversary of the Effective Date and shall have an  expiration date on the tenth
anniversary of the Effective Date. 

Earned
royalty: Base  rate of [ * ] percent ([ * ]%) of Net Sales, with
adjustments  upward for increasing sales and downward for third-party royalties according
to  the following [ * ]

Milestone
royalties as follows:

     [
* ]

Non-royalty
sublicense payments:

In the event
Licensee  sublicenses Patent Rights to a third party under this agreement, Licensee shall
pay University [ * ] percent ([ * ]%) of any cash receipts from
sublicensee for any event for which a milestone royalty under this Appendix C is  not
already provided for in this Agreement. For the purposes of calculating  amounts due to
University under this Agreement, issuance of licensee’s  stock for cash shall not be
considered a cash receipt from sublicensee,  provided however, that any premiums
received on equity investments shall  be considered to be cash receipts. Any payment
reimbursing Licensee for work  performed prior to the sublicense shall not be considered
a milestone payment. 

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  APPENDIX D 

ROYALTY REPORT

	Licensee:
                                                                        

      Inventor:                                                                   
      

      Period Covered: From:            /                 /            
      

      Prepared By:                                                            
      

      Approved By:                                                         
      	          	Case
      No.:                                                                          

      Patent No:                                                                        
      

      Through:              /                              /                           

      Date:                                                                                 

      Date:                                                                                 
      

  
 If
  license covers several major product lines, please prepare a separate report

  for each line. Then combine all product lines into a summary report.

	Report
      Type: 	____
      Single Product Line Report:                                                                                          

      ____ Multiproduct Summary Report. Page 1 of _____Pages

      ____ Product Line Detail. Line: __________ Trademark: __________ Pages:
      _____

  

	Country	Gross
Sales	*
Less:

Allowances 	Net

Sales 	Royalty

Rate 	Period
Royalty Amount
	This
Year	Last
Year
	U.S.A.	 	 	 	 	 	 
	Canada	 	 	 	 	 	 
	Europe	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Japan

  	 	 	 	 	 	 
	Other:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	TOTAL:	 	 	 	 	 	 

Sublicense Fees this quarter: $________
  (attach page showing names, addresses, and telephone numbers; and amount of
  fees received; territory; field of use)

Total Royalty: $ _____________

The following royalty forecast is
  non binding and for University internal planning purposes only:

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Royalty
Forecast Under This Agreement: 

Next
Quarter:_________ Q2:__________ Q3: ________ Q4: _________ 

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APPENDIX E

PERFORMANCE  MILESTONES

		
	Phase I initiation	 	[ * ]	 
	Phase III initiation	 	[ * ]	 
	BLA submission	 	[ * ]	 
	Market launch	 	[ * ]	 

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