Document:

advm-ex1046_908.htm

[*] = 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. 

Exhibit 10.46

 

		
	
UNIVERSITY OF CALIFORNIA, BERKELEY OFFICE OF TECHNOLOGY LICENSING
	

 

EXCLUSIVE LICENSE AND BAILMENT AGREEMENT

BETWEEN

AVALANCHE BIOTECHNOLOGIES, INC.

AND

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

FOR

[*]

UC Case Nos.: [*]

 

 

		
		
	
UNIVERSITY OF CALIFORNIA, BERKELEY OFFICE OF TECHNOLOGY LICENSING
	

 

EXCLUSIVE LICENSE and BAILMENT AGREEMENT
FOR
[*]

UC Case Nos.: [*]

 

This exclusive license agreement (“Agreement”) is effective June 17, 2013 (“Effective Date”), by and between THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a California corporation, whose legal address is 1111 Franklin Street, 12th Floor, Oakland, California 94607- 5200, acting through its Office of Technology Licensing, at the University of California, Berkeley, 2150 Shattuck Avenue, Suite 510, Berkeley, CA 94704-1347 (“REGENTS”) and AVALANCHE BIOTECHNOLOGIES, INC., a Delaware corporation having a principal place of business at 665 Third Street, Suite 250, San Francisco, CA 94107 (“LICENSEE”). The parties agree as follows:

	
1.
	
BACKGROUND

	
 
	
1.1
	
REGENTS has assignments to the following (collectively referred to as “INVENTIONS”): invention disclosures entitled, [*] invented by [*] employed by the University of California, Berkeley, as described in REGENTS’ case No.: [*]; and [*] invented by [*] employed by the University of California, Berkeley, as described in REGENTS’ case No.: [*] and to REGENTS’ PATENT RIGHTS, as hereinafter defined, which are directed to the INVENTIONS.

	
 
	
1.2
	
LICENSEE entered into an option agreement with REGENTS effective [*], terminating on [*], for the purpose of evaluating the INVENTIONS and granting LICENSEE an exclusive right to negotiate an exclusive license in REGENTS’ PATENT RIGHTS to the INVENTIONS, which Option Agreement covers LICENSEE’s commitment to reimburse REGENTS’ patent costs during the period.

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[*] = 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.

	
 
	
1.3
	
LICENSEE has provided REGENTS with a commercialization plan for the INVENTIONS and business strategy in order to evaluate its capabilities as a LICENSEE.

	
 
	
1.4
	
The development of the INVENTIONS was sponsored in part by various grants by U.S. Government agencies, and as a consequence, REGENTS elected to retain title to the INVENTIONS subject to the rights of the U.S. Government under 35 USC 200-212 and implementing regulations, including that REGENTS, in turn, has granted back to the U.S. Government a non-exclusive, non-transferrable irrevocable, paid-up license to practice or have practiced the INVENTIONS for or on behalf of the U.S. Government throughout the world. These U.S. Government grants are [*]

	
 
	
1.5
	
REGENTS and LICENSEE wish to have the INVENTIONS perfected and marketed as soon as reasonably practicable so that products resulting therefrom may be available for public use and benefit.

	
 
	
1.6
	
LICENSEE wishes to acquire, and REGENTS wishes to grant to LICENSEE, an exclusive license under REGENTS’ PATENT RIGHTS and an exclusive bailment of the BIOLOGICAL MATERIAL under the REGENTS’ PROPERTY RIGHTS for the purpose of undertaking development and to make, have made, use, sell, offer for sale, import, and export LICENSED PRODUCTS as defined below.

	
2.
	
DEFINITIONS

	
 
	
2.1
	
“REGENTS’ PATENT RIGHTS” means REGENTS’ rights in the following U.S. and foreign patent applications:

	
 
	
i.
	
[*] Patent Application Number [*], entitled “[*]” (UC Case No. [*]), filed on [*] and assigned to REGENTS;

	
 
	
ii.
	
[*] Patent Application Number [*], entitled “[*]” (UC Case No. [*]), filed on [*] and assigned to REGENTS;

	
 
	
iii.
	
[*] Patent Application Number [*] entitled [*] filed on [*] and assigned to REGENTS;

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[*] = 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.

	
 
	
iv.
	
[*] Patent Application Number [*] entitled [*] filed on [*] and assigned to REGENTS, and

	
 
	
v.
	
All other international patents and patent applications, and/or any divisions, continuations, reissues or continuations-in-part (only to the extent, however, that claims in the continuations-in-part are entitled to the priority filing date of the parent patent application) of any of the above-referenced U.S. or international patents or applications.

	
 
	
2.2
	
“LICENSED PRODUCTS” means all kits, compositions of matter, articles of manufacture, materials, and products, the manufacture, use, SALE, offer for SALE, or import of which: a) requires the performance of the LICENSED METHOD; or b) but for the license granted pursuant to this Agreement, would infringe, or contribute to or induce the infringement of, a VALID CLAIM under REGENTS’ PATENT RIGHTS.

	
 
	
2.3
	
“LICENSED METHOD” means any process or method the use or practice of which, but for the license pursuant to this Agreement, would infringe, or contribute to or induce the infringement of a VALID CLAIM under REGENTS’ PATENT RIGHTS in that country in which the LICENSED METHOD is used or practiced.

	
 
	
2.4
	
“LICENSED FIELD OF USE” means [*]

	
 
	
2.5
	
“NET SALES” means the gross invoice price charged, and the value of non-cash consideration owed to, LICENSEE or a sublicensee for SALES of LICENSED PRODUCTS, LICENSED SERVICES, and LICENSED METHODS in the LICENSED TERRITORY, the less the sum of the following actual and customary deductions where applicable: cash, trade or quantity discounts; sales, use, tariff, import/export duties or other excise taxes when included in gross sales, Deductable Value-Added Tax, but excluding value-added taxes other than Deductable Value Added Tax or taxes assessed on income derived from sales: “Deductable Value-Added Tax” means value-added tax only to the extent that such value-added tax is actually incurred and is not reimbursable, refundable, or creditable under the tax authority of any country; freight, insurance, packaging costs, and transportation 

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[*] = 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.

	
 
		
charges; allowances or credits to customers because of rejections or returns, because of retroactive price reductions, or due to recalls; provisions for actual uncollectible accounts determined in accordance with US GAAP; and discounts, rebates or similar payments granted or given to wholesalers or other distributors, buying groups, health care insurance carriers or other institutions or to the government, including Medicare/Medicaid and other government rebates/discounts. For purposes of calculating NET SALES, a SALE to a sublicensee for end use by the sublicensee will be treated as a SALE at wholesale price. NET SALES shall exclude any disposition of LICENSED PRODUCTS, LICENSED SERVICES and LICENSED METHODS in connection with clinical trials thereof and any disposition of LICENSED PRODUCTS distributed for promotional or charitable purposes, in reasonable quantities.

	
 
	
2.6
	
“AFFILIATE” of LICENSEE means any entity that, directly or indirectly, Controls LICENSEE, is Controlled by LICENSEE, or is under common Control with LICENSEE. “Control” means (i) having the actual, present capacity to elect a majority of the directors of such affiliate, or (ii) having the power to direct at least [*] of the voting rights entitled to elect directors, or (iii) in any country where the local law will not permit foreign equity participation of a majority, ownership or control, directly or indirectly, of the maximum percentage of such outstanding stock or voting rights permitted by local law.

	
 
	
2.7
	
“LICENSED TERRITORY” means [*]

	
 
	
2.8
	
“SALE” means, for LICENSED PRODUCTS and LICENSED SERVICES, the act of selling, leasing or otherwise transferring, providing, or furnishing such product or service, and for LICENSED METHOD the act of performing such method, for any use or for any consideration. Correspondingly, “SELL” means to make or cause to be made a SALE, and “SOLD” means to have made or caused to be made a SALE.

	
 
	
2.9
	
“LICENSED SERVICE” means a service provided using LICENSED PRODUCTS or LICENSED METHOD.

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[*] = 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.

	
 
	
2.10
	
“SUBLICENSEE REVENUE” means any cash consideration, and of the cash equivalent of all other consideration, due to LICENSEE under each sublicense for the grant of rights under the REGENTS’ PATENT RIGHTS, but excluding: (a) any royalty payments on sales of LICENSED PRODUCTS, LICENSED SERVICES and LICENSED METHODS by a sublicensee (which sales shall be included as NET SALES and shall give rise to royalty payments to REGENTS under section 6.1); (b) any amounts paid by a sublicensee as bona fide reimbursement for research and development costs at fair market value for materials and full time equivalents; (c) bona fide loans or any payments in consideration for a grant of equity of the LICENSEE at fair market value; (d) amounts paid for supplies of product or other tangible materials; (e) amounts paid as reimbursement for expenses directly related to the pursuit, maintenance, and/or defense of REGENTS’ PATENT RIGHTS; (f) milestone payments by a sublicensee (which shall be give rise to the milestone payments to REGENTS under section 6.4); and (g) withholding taxes and any other amounts by a sublicensee from amounts otherwise payable to LICENSEE under such sublicense agreement other than past due payments.

	
 
	
2.11
	
“PHASE IIB CLINICAL TRIAL” means a human clinical trial in any country that would satisfy the requirements of 21 CFR 312.21(b) and that is designed to support and immediately precede the initiation of a Phase III Clinical Trial without any further phase II trials by evaluating the dose-dependent effectiveness of a pharmaceutical product for a particular indication or indications in patients with the disease or condition under study and to determine the common side effects and risks associated with the pharmaceutical product.

	
 
	
2.12
	
“PHASE III CLINICAL TRIAL” means a human clinical trial in any country that would satisfy the requirements of 21 CFR 312.21(c).

	
 
	
2.13
	
“VALID CLAIM” shall mean a claim in an issued, unexpired patent or in a pending patent application (which claim is pending for no more than [*] within licensed REGENTS’ PATENT RIGHTS that (a) has not been cancelled, withdrawn, abandoned or rejected by any administrative agency or other body of competent jurisdiction from which no appeal has or can be taken, (b) has not been revoked, held invalid, or declared unpatentable or unenforceable in a decision of a court or other body of competent jurisdiction that is unappealable or unappealed within the time allowed for appeal, (c) has not been rendered unenforceable through disclaimer or otherwise, and (d) is not lost through an interference proceeding. If a 

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[*] = 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.

	
 
		
claim is pending for more than [*] and latter issues in a patent, then as of the patent issue date, the claim again becomes a VALID CLAIM.

	
 
	
2.14
	
“FIRST COMMERCIAL SALE” shall mean the first SALE of a LICENSED PRODUCT, LICENSED METHOD or LICENSED SERVICE by LICENSEE or its sublicensees following regulatory approval in the applicable country of sale.

	
 
	
2.15
	
“REGENTS’ PROPERTY RIGHTS” means all of REGENTS’ personal property rights in the tangible property in INVENTIONS licensed here under. REGENTS’ PROPERTY RIGHTS do not include REGENTS’ PATENT RIGHTS.

	
 
	
2.16
	
“BIOLOGICAL MATERIAL” means REGENTS’:

[*]

	
3.
	
GRANT

	
 
	
3.1
	
(a)Subject to the limitations set forth in this Agreement, including the license granted to the U.S. Government and the rights reserved in Paragraph 3.3, REGENTS hereby grants and LICENSEE hereby accepts an exclusive license under REGENTS’ PATENT RIGHTS to develop, make, have made, use, offer for SALE, import, export, and SELL LICENSED PRODUCTS and LICENSED SERVICES, and to practice the LICENSED METHOD, in the LICENSED FIELD OF USE in the LICENSED TERRITORY.

(b)Subject to the limitations set forth in this Agreement and subject to the license granted to the U.S. Government, REGENTS hereby grants and LICENSEE hereby accepts an exclusive license under REGENTS’ PROPERTY RIGHTS to possess, make and use, the BIOLOGICAL MATERIAL bailed to LICENSEE under this Agreement. LICENSEE acknowledges that the REGENTS is and will remain the sole owner of the BIOLOGICAL MATERIAL and the title of the material is not transferred to LICENSEE under this Agreement.

(c)REGENTS have provided the LICENSEE, one shipment of BIOLOGICAL MATERIAL in quantities that are deemed appropriate [*]. No additional obligation is required of REGENTS’ with respect to bailment of the BIOLOGICAL MATERIAL.

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[*] = 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.

	
 
	
3.2
	
The license under Paragraph 3.1 will be exclusive for a term commencing on the Effective Date and ending on the date of the last to expire patent under REGENTS’ PATENT RIGHTS.

	
 
	
3.3
	
Nothing in this Agreement will be deemed to limit the right of REGENTS to publish any and all technical data resulting from any research performed by REGENTS relating to the INVENTIONS and the BIOLOGICAL MATERIAL. REGENTS expressly reserves the right to use the INVENTIONS, the BIOLOGICAL MATERIAL and related technology for its educational and research purposes; to disseminate the BIOLOGICAL MATERIAL and other tangible materials associated with, or required to practice the INVENTIONS and/or the REGENTS’ PATENT RIGHTS to researchers at nonprofit institutions for their educational and research purposes and to permit other nonprofit institutions to use such BIOLOGICAL MATERIAL to practice the REGENTS’ PATENT RIGHTS for education and research purposes.

	
 
	
3.4
	
This Agreement will terminate immediately if LICENSEE files a claim that includes, in any way, the assertion that any portion of the REGENTS’ PATENT RIGHTS is invalid or unenforceable where the filing is by the LICENSEE, a third party on behalf of the LICENSEE (and with the actual knowledge of the LICENSEE), or a third party at the written urging of the LICENSEE.

	
 
	
3.5
	
LICENSEE will have a continuing responsibility to keep REGENTS informed of the large/small entity status, as defined in 15 U.S.C. 632, of itself and its sublicensees.

	
 
	
3.6
	
The INVENTIONS was funded in part by the U.S. Government. In accordance with PL 96-517 as amended by PL 98-620, to the extent required by law or regulation, any products covered by patent applications or patents claiming the INVENTIONS and sold in the United States will be substantially manufactured in the United States.

	
4.
	
SUBLICENSES

	
 
	
4.1
	
REGENTS also grants to LICENSEE the right to sublicense to AFFILIATES and third parties the right to develop, make, have made, use, offer for SALE, import, export, and SELL LICENSED PRODUCTS and LICENSED SERVICES, and to practice LICENSED METHOD, provided that LICENSEE has exclusive rights 

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[*] = 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.

	
 
		
under this Agreement at the time of sublicensing. Every such sublicense will include:

	
 
	
(a)
	
a statement setting forth the date upon which LICENSEE’s exclusive rights, privileges, and license hereunder will expire;

	
 
	
(b)
	
as applicable, all the rights of, and require the performance of all the obligations due to, REGENTS (and, if applicable, the United States Government) under this Agreement other than (i) any payment or reporting obligations (for which LICENSEE is directly responsible pursuant to Paragraph 4.6) and (ii) the indemnification obligation in Article 19 (which are addressed in Paragraph 4.1(d));

	
 
	
(c)
	
a sublicensee shall have the right to grant further sublicense to its AFFILIATE and/or third parties to the extent sublicensee deems such sublicense is commercially reasonable, useful or necessary for the development and/or commercialization of LICENSED PRODUCT(S) or LICENSED METHOD(S) in accordance with this AGREEMENT; provided that (i) such sublicense is subject to a written sublicense agreement and is bound by all of the applicable terms, conditions, obligations, restrictions and other covenants of this AGREEMENT that protect or benefit the REGENTS’(and, if applicable, the U.S. Government’s and other sponsors’) rights and interests and (ii) sublicensee shall, within thirty (30) days after issuing any further sublicense, furnish to LICENSEE for delivery to REGENTS, subject to any confidentiality provisions with third parties, all material terms of any such sublicenses, pertaining to the REGENTS interests, including the sublicensee name and address; and Indemnification of REGENTS as provided in this AGREEMENT; and

	
 
	
(d)
	
the same provision for indemnification of REGENTS as has been provided for in this Agreement.

	
 
	
4.2
	
LICENSEE will pay to REGENTS [*] of SUBLICENSE REVENUE.

In the event LICENSEE sublicenses the REGENTS’ PATENT RIGHTS along with its own patent rights or those of other third parties, LICENSEE may reasonably determine in good faith the percentage of compensation received thereunder that represents consideration due for the grant of the rights under the REGENTS’ PATENT RIGHTS, which percentage will be based upon the value of the 

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[*] = 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.

REGENTS’ PATENT RIGHTS licensed to the sublicensee relative to the value of the other third party patent rights licensed to the sublicensee. When making payment under this Paragraph 4.2, LICENSEE shall provide REGENTS with all supporting information and documentation used to determine any such percentage (or shall reference previously provided supporting information and documentation). However, in no case will LICENSEE reduce the compensation to The REGENTS below [*] of the sublicensed patent rights.

[*]

	
 
	
4.3
	
LICENSEE will notify REGENTS of each sublicense granted hereunder and furnish to REGENTS a copy of each such sublicense agreement. Such copy may be redacted by LICENSEE to protect sensitive information. However, such copy shall contain sufficient information to assure REGENTS that the sublicense is consistent with this Agreement, and under no circumstances shall any financial terms necessary to calculate payments due to REGENTS hereunder be redacted.

	
 
	
4.4
	
AFFILIATES will have no licenses under REGENTS’ PATENT RIGHTS except as granted by sublicense pursuant to this Agreement.

	
 
	
4.5
	
For the purposes of this Agreement, the operations of all sublicensees shall be deemed to be the operations of LICENSEE, for which LICENSEE shall be responsible.

	
 
	
4.6
	
LICENSEE will be responsible for payment of all monies and other consideration due REGENTS hereunder as a result of the activities of sublicensees, and all reports due REGENTS hereunder will reflect such activities.

	
 
	
4.7
	
Upon termination of this Agreement for any reason, all sublicenses that are granted by LICENSEE pursuant to this Agreement where the sublicensee is in compliance with its sublicense agreement as of the date of such termination will survive such termination (as a direct license(s) from REGENTS), provided that (a) each such direct license shall be subject to the same non-financial terms and conditions as those in this Agreement, except that REGENTS will not be bound to perform any duties or obligations set forth in any sublicenses that extend beyond the duties and obligations of REGENTS set forth in this Agreement; (b) such sublicensee (or if there is at such time more than one such sublicensee, such sublicensees severally and jointly) shall be required to make any annual maintenance payments due pursuant to Paragraph 5.2 or any minimum annual royalties due pursuant to 

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[*] = 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.

	
 
		
Paragraph 6.7; and (c) and such sublicensee shall be required to make any other monetary payment(s) that, had this Agreement not been terminated, LICENSEE would have been required to make under this Agreement as a result of the license to or activities of such sublicensee.

	
 
	
4.8
	
If REGENTS (to the extent of the actual knowledge of the licensing professional responsible for administration of this case) or a third party discovers and notifies that licensing professional that the INVENTIONS are useful for an application covered by the LICENSED FIELD OF USE, but for which LICENSED PRODUCTS have not been developed or are not currently under development by LICENSEE, and provided that such application does not compete, directly with LICENSED PRODUCTS that have been developed or are currently under development by LICENSEE (such application, the “NEW APPLICATION”), then REGENTS, as represented by the Office of Technology Licensing, shall give written notice to LICENSEE, except for: 1) information that is subject to restrictions of confidentiality with third parties, and 2) information which originates with REGENTS’ personnel who do not assent to its disclosure to LICENSEE.

LICENSEE shall have [*] to give REGENTS written notice stating whether LICENSEE elects to develop LICENSED PRODUCTS for the NEW APPLICATION.

If LICENSEE elects to develop and commercialize the proposed LICENSED PRODUCTS for the NEW APPLICATION, LICENSEE shall submit progress reports to REGENTS pursuant to Article 8.

If LICENSEE elects not to develop and commercialize the proposed LICENSED PRODUCTS for use in the NEW APPLICATION, REGENTS may seek (a) third party(ies) to develop and commercialize the proposed LICENSED PRODUCTS for the NEW APPLICATION. If REGENTS is successful in finding a third party, it shall refer such third party to LICENSEE. If the third party requests a sublicense under this Agreement, then LICENSEE shall report the request to REGENTS within [*] from the date of such written request. If the request results in a sublicense, then LICENSEE shall report it to REGENTS pursuant to Paragraph 4.3. LICENSEE shall have no obligation to grant a sublicense to any third party under this Paragraph 4.8 (and, for clarity, the subsequent paragraph shall not apply) if such third party fails to request such sublicense within [*] after the expiration of the [*] period described above.

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[*] = 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.

If LICENSEE refuses to grant a sublicense to the third party with respect to the NEW APPLICATION, then within [*] after such refusal LICENSEE shall submit to REGENTS a report specifying the license terms proposed by the third party and a written justification for LICENSEE’s refusal to grant the proposed sublicense. If [*], then REGENTS shall have the right to grant to the third party a license to make, have made, use, sell, offer for sale and import products for use in the NEW APPLICATION [*].

	
5.
	
LICENSE ISSUE FEE

	
 
	
5.1
	
LICENSEE will pay to REGENTS a non-creditable, non-refundable license issue fee of [*] due within thirty (30) days of the signing of the Agreement this fee is non-refundable and not an advance against royalties or other payments due under this Agreement.

	
 
	
5.2
	
LICENSEE will also pay to REGENTS an annual license maintenance fee of [*] beginning on the first anniversary of the Effective Date and on each anniversary of the Effective Date thereafter for the term of the AGREEMENT. Notwithstanding the foregoing, the license maintenance fee will not be due and payable on any anniversary of the Effective Date following the first SALE of a LICENSED PRODUCT, LICENSED METHOD OR LICENSED SERVICE.

	
6.
	
ROYALTIES

	
 
	
6.1
	
LICENSEE will pay to REGENTS earned royalties at the rate of [*] of NET SALES, subject to the following:

	
 
	
(a)
	
If LICENSEE is required to make any payment (including royalties or other license fees) to a third party to obtain a patent license or other patent rights in the absence of which LICENSEE could not practice REGENTS’ PATENT RIGHTS, such third party payments [*] creditable against royalties owed hereunder by LICENSEE to REGENTS, provided that in no one calendar year will the total of such credits reduce earned royalties owed by LICENSEE to REGENTS by [*] on NET SALES of LICENSED PRODUCTS, LICENSED SERVICES and LICENSED METHODS.

	
 
	
(b)
	
In the event a LICENSED PRODUCT, LICENSED SERVICE and LICENSED METHODS is, or LICENSED PRODUCTS, LICENSED 

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[*] = 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.

	
 
		
SERVICES and LICENSED METHODS are, combined with other licensed technologies for sales to end users by LICENSEE and the total combined royalty burden to LICENSEE on NET SALES exceeds [*], the earned royalty due to REGENTS will be adjusted, according to the following formula, where R is [*], C is [*] and B is the total combined royalty burden on LICENSEE:

Adjusted royalty = R x (C/B)

For example, if LICENSEE’s total combined royalty is [*], the adjusted royalty due from LICENSEE to REGENTS would be calculated as [*] Notwithstanding the foregoing, in no event will the royalty due to REGENTS under this adjustment be less than [*].

	
 
	
(c)
	
Only one royalty will be due on any given LICENSED PRODUCT, LICENSED METHOD and LICENSED SERVICE.

	
 
	
6.2
	
Royalties accruing to REGENTS will be paid to REGENTS quarterly within [*] after the end of each calendar quarter.

	
 
	
6.3
	
Royalties will be payable on SALES covered by a VALID CLAIM.

	
 
	
6.4
	
LICENSEE will pay to REGENTS milestone payments as follows:

	
 
	
i.
	
For the first LICENSED PRODUCT or LICENSED METHOD, LICENSEE shall pay to REGENTS a milestone payment of [*] within [*] of the [*] and;

	
 
	
ii.
	
For the first LICENSED PRODUCT or LICENSED METHOD, LICENSEE shall pay to REGENTS a milestone payment of [*] within [*] of the [*] and;

	
 
	
iii.
	
LICENSEE will pay to REGENTS a milestone payment of [*] within [*] days of the [*] and;

	
 
	
iv.
	
LICENSEE will pay to REGENTS a milestone payment of [*] within [*] of [*] and;

	
 
	
v.
	
LICENSEE will pay to REGENTS a milestone payment of [*] within [*] of the [*] and;

	
 
	
vi.
	
LICENSEE will pay to REGENTS a milestone payment of [*] within [*] of the [*] up to a maximum of two (2) additional indications.

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[*] = 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.

	
 
	
vii.
	
[*]

	
 
	
6.5
	
Beginning in the calendar year after the FIRST COMMERCIAL SALE and in each succeeding calendar year thereafter LICENSEE will pay to REGENTS a minimum annual royalty of [*] for the life of this Agreement. This minimum annual royalty will be paid to REGENTS by [*] of each year and will be credited against the earned royalty due and owing for the calendar year in which the minimum payment is made.

	
 
	
6.6
	
All payments due REGENTS will be payable in United States dollars. When LICENSED PRODUCTS, LICENSED SERVICES, or LICENSED METHOD are SOLD for monies other than United States dollars, earned royalties will first be determined in the foreign currency of the country in which the SALE was made and then converted into equivalent United States dollars. The exchange rate will be that rate quoted in [*] on the last business day of the reporting period.

	
 
	
6.7
	
Payments due for SALES occurring in any country outside the United States will not be reduced by any taxes, fees, or other charges imposed by the government of such country on the remittance of royalty income. LICENSEE will also be responsible for all bank transfer charges.

	
 
	
6.8
	
LICENSEE will make all payments under this Agreement by check payable to “The Regents of the University of California” and forward it to REGENTS at the address shown in Article 23 (Notices).

	
 
	
6.9
	
If any patent or patent application, or any claim thereof, included within REGENTS’ PATENT RIGHTS expires or is held invalid in a final decision by a court of competent jurisdiction and last resort and from which no appeal has been or can be taken, all obligation to pay royalties based on such patent, patent application or claim, or any claims patentably indistinct therefrom will cease as of the date of such expiration or final decision. LICENSEE will not, however, be relieved from paying any royalties that accrued before such expiration or decision or that are based on another valid patent or claim not expired or involved in such decision.

	
 
	
6.10
	
No earned royalties will be collected or paid hereunder on SALES to, or for use by, the United States Government. LICENSEE will reduce the amount charged for such SALES by an amount equal to the earned royalty otherwise due REGENTS as provided herein.

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[*] = 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.

	
7.
	
DUE DILIGENCE

	
 
	
7.1
	
LICENSEE, upon execution of this Agreement, will diligently proceed with the development, manufacture, and SALE of LICENSED PRODUCTS, LICENSED SERVICES, and LICENSED METHOD, and will diligently market them in quantities sufficient to meet the market demand.

	
 
	
7.2
	
In addition to its obligations under Paragraph 7.1, LICENSEE specifically commits to achieving the following objectives in its due diligence activities under this Agreement:

	
 
	
(a)
	
[*]

	
 
	
7.3
	
If LICENSEE is unable to meet any of its diligence obligations set forth in Paragraphs 7.1 and 7.2, then REGENTS will so notify LICENSEE of failure to perform. LICENSEE will have the right and option to extend the target date of any such due diligence obligation [*] upon the payment of [*] within thirty (30) days of the date to be extended for each such extension option exercised by LICENSEE. LICENSEE may further extend the target date of any diligence obligation for an additional [*] upon payment of an additional [*]. Additional extensions may be granted only by mutual written agreement of the parties to this Agreement. These payments are in addition to the minimum royalty payments specified in Paragraph 6.5. Should LICENSEE opt not to extend the obligation or fail to meet it by the extended target date, then REGENTS will have the right and option either to terminate this Agreement or to reduce LICENSEE’s exclusive license to a non-exclusive royalty-bearing license, with all payments hereunder reduced to [*] of the royalties due under an exclusive license. This right, if exercised by REGENTS, supersedes the rights granted in Article 3. The right to terminate this Agreement or reduce LICENSEE’s exclusive license granted hereunder to a non-exclusive license will be REGENTS’ sole remedy for breach of Paragraph 7.1 or 7.2.

	
 
	
7.4
	
At the request of either party, any controversy or claim arising out of or relating to the diligence provisions of Paragraphs 7.1 and 7.2 will be settled by arbitration conducted in [*] in accordance with the then current [*]. Judgment upon the award rendered by the arbitrator(s) will be binding on the parties and may be entered by either party in the court or forum having jurisdiction. In determination of due diligence, [*].

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[*] = 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.

	
 
	
7.5
	
To exercise either the right to terminate this Agreement or to reduce the license to a non-exclusive license for lack of diligence under Paragraph 7.1 or 7.2, REGENTS will give LICENSEE written notice of the deficiency. LICENSEE thereafter has [*] to cure the deficiency or to request arbitration. If REGENTS has not received a written request for arbitration or satisfactory tangible evidence that the deficiency has been cured by the end of the [*] period, then REGENTS may, at its option, either terminate the Agreement or reduce LICENSEE’s exclusive license to a non-exclusive license, with all payments hereunder reduced to [*] of the royalties due under an exclusive license, by giving written notice to LICENSEE. These notices will be subject to Article 23 (Notices).

	
8.
	
PROGRESS AND ROYALTY REPORTS

	
 
	
8.1
	
For the period beginning October 30, 2013, LICENSEE will submit to REGENTS a semi annual progress report covering LICENSEE’s activities related to the development and testing of all LICENSED PRODUCTS, LICENSED SERVICES and LICENSED METHOD and the obtaining of necessary governmental approvals, if any, for marketing in the United States. These progress reports will be made for all development activities until the FIRST COMMERCIAL SALE occurs in the United States.

	
 
	
8.2
	
Each progress report will be a sufficiently detailed summary of activities of LICENSEE and any sublicensees so that REGENTS may evaluate and determine LICENSEE’s progress in development of LICENSED PRODUCTS, LICENSED SERVICES, and LICENSED METHOD, and in meeting its diligence obligations under Article 7, and will include (but not be limited to) the following: summary of work completed and in progress; current schedule of anticipated events and milestones, including diligence milestones under Paragraph 7.2; anticipated market introduction dates for the licensed territories; and sublicensee’s activities during the reporting period.

	
 
	
8.3
	
LICENSEE also will report to REGENTS in its immediately subsequent progress and royalty reports, the date of FIRST COMMERCIAL SALE.

	
 
	
8.4
	
After the FIRST COMMERCIAL SALE anywhere in the world, LICENSEE will make quarterly royalty reports to REGENTS within [*] after the quarters ending March 31, June 30, September 30, and December 31, of each year. Each such royalty report will include at least the following:

Page 16 of 31 

[*] = 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.

	
 
	
(a)
	
The number of LICENSED PRODUCTS manufactured and the number SOLD;

	
 
	
(b)
	
Gross revenue from SALE of LICENSED PRODUCTS, LICENSED SERVICES and LICENSED METHOD;

	
 
	
(c)
	
NET SALES pursuant to Paragraph 2.5;

	
 
	
(d)
	
Total royalties due REGENTS; and

	
 
	
(e)
	
Names and addresses of any new sublicensees along with a summary of the material terms of each new sublicense agreement entered into during the reporting quarter.

	
 
	
8.5
	
If no SALES have occurred during the report period, a statement to this effect is required in the royalty report for that period.

	
9.
	
BOOKS AND RECORDS

	
 
	
9.1
	
LICENSEE will keep full, true, and accurate books and records containing all particulars that may be necessary for the purpose of showing the amount of royalties payable to REGENTS and LICENSEE’s compliance with other obligations under this Agreement. Said books and records will be kept at LICENSEE’s principal place of business or the principal place of business of the appropriate division of LICENSEE to which this Agreement relates. Said books and records and the supporting data will be open at all reasonable times during normal business hours upon reasonable notice, for [*] following the end of the calendar year to which they pertain, to the inspection and audit by representatives of REGENTS for the purpose of verifying LICENSEE’s royalty statement or compliance in other respects with this Agreement. Prior to any such inspection, such representatives will agree in a written agreement with LICENSEE to hold all information in confidence except as necessary to communicate LICENSEE’s non-compliance with this Agreement to REGENTS.

	
 
	
9.2
	
The fees and expenses of REGENTS’ representatives performing such an examination will be borne by REGENTS. However, if an error in underpaid royalties to REGENTS of [*] is discovered, then the fees and expenses of these representatives will be borne by LICENSEE.

Page 17 of 31 

[*] = 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.

	
10.
	
LIFE OF THE AGREEMENT

	
 
	
10.1
	
Unless otherwise terminated by the operation of law or by acts of the parties in accordance with the terms of this Agreement, this Agreement will be in force from the Effective Date and will remain in effect for the life of the last-to-expire patent or last-to-be-abandoned patent application licensed under this Agreement, whichever is later.

	
 
	
10.2
	
Any termination of this Agreement shall not affect the rights and obligations set forth in the following articles:

Article 2Definitions

Article 4Sublicenses

Article 9Books and Records

Article 10Life of the Agreement

Article 13Disposition of Licensed Products On Hand Upon
Termination

Article 16Use of Names and Trademarks

Article 17Limited Warranties

Article 19Indemnification

Article 23Notices

Article 24Late Payments

Article 26Confidentiality

Article 29Applicable Law; Venue; Attorneys’ Fees

	
 
	
10.3
	
Any termination of this Agreement will not relieve LICENSEE of its obligation to pay any monies due or owing at the time of such termination and will not relieve any obligations, of either party to the other party, established prior to termination.

	
11.
	
TERMINATION BY REGENTS

	
 
	
11.1
	
If LICENSEE should violate or fail to perform any term of this Agreement, then REGENTS may give written notice of such default (“Notice of Default”) to LICENSEE. If LICENSEE should fail to repair such default within sixty (60) days of the effective date of such notice, REGENTS will have the right to terminate this Agreement and the licenses herein by a second written notice (“Notice of Termination”) to LICENSEE. If a Notice of Termination is sent to LICENSEE, this Agreement will automatically terminate on the effective date of such notice. Such 

Page 18 of 31 

[*] = 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.

	
 
		
termination will not relieve LICENSEE of its obligation to pay any royalty or license fees owing at the time of such termination and will not impair any accrued rights of REGENTS. These notices will be subject to Article 23 (Notices).

	
12.
	
TERMINATION BY LICENSEE

	
 
	
12.1
	
LICENSEE will have the right at any time to terminate this Agreement in whole or as to any portion of REGENTS’ PATENT RIGHTS by giving notice in writing to REGENTS. Such notice of termination will be subject to Article 23 (Notices) and termination of this Agreement will be effective (30) days after the effective date of such notice.

	
 
	
12.2
	
Any termination pursuant to Paragraph 12.1 will not relieve LICENSEE of any obligation or liability accrued hereunder prior to such termination or rescind anything done by LICENSEE or any payments made to REGENTS hereunder prior to the time such termination becomes effective, and such termination will not affect in any manner any rights of REGENTS arising under this Agreement prior to such termination.

	
13.
	
DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION

	
 
	
13.1
	
Upon termination of this Agreement, for a period of [*] days after the date of termination LICENSEE may complete and SELL any partially made LICENSED PRODUCTS and continue to render any previously commenced LICENSED SERVICES, and continue the practice of LICENSED METHOD only to the extent necessary to do so; provided, however, that all such SALES will be subject to the terms of this Agreement including, but not limited to, the payment of royalties at the rate and at the time provided herein and the rendering of reports thereon. Upon termination of this Agreement by either party, LICENSEE shall return or destroy the BIOLOGICAL MATERIAL in its possession [*] following the effective date of termination, subject, however, to any continuing rights LICENSEE may have pursuant to any material transfer agreement between LICENSEE and REGENTS with respect to the BIOLOGICAL MATERIAL. Subject to such exception, LICENSEE shall provide REGENTS [*] following said termination date with written notice that the BIOLOGICAL MATERIAL has been returned or destroyed.

Page 19 of 31 

[*] = 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.

	
14.
	
PATENT PROSECUTION AND MAINTENANCE

	
 
	
14.1
	
REGENTS will diligently prosecute and maintain the United States and foreign patent applications and patents under REGENTS’ PATENT RIGHTS, subject to LICENSEE’S reimbursement REGENTS’ out of pocket costs under Article 14.3 below, and all patent applications and patents under REGENTS’ PATENT RIGHTS will be held in the name of REGENTS. REGENTS will have sole responsibility for retaining and instructing patent counsel, but continued use of such counsel at any point in the patent prosecution process subsequent to initial filing of a U.S. patent application covering the INVENTIONS shall be subject to the approval of LICENSEE. If LICENSEE rejects three of REGENTS’ choice of prosecution counsel, then REGENTS may select new prosecution counsel without LICENSEE’s consent. REGENTS shall promptly provide LICENSEE with copies of all relevant documentation so that LICENSEE may be currently informed and apprised of the continuing prosecution and LICENSEE agrees to keep this documentation confidential in accordance with Article 26. LICENSEE may comment upon such documentation, provided, however, that if LICENSEE has not commented upon such documentation in reasonable time for REGENTS to sufficiently consider LICENSEE’s comments prior to the deadline for filing a response with the relevant government patent office, REGENTS will be free to respond appropriately without consideration of LICENSEE’s comments. LICENSEE and LICENSEE’s patent counsel will have the right to consult with patent counsel chosen by REGENTS.

	
 
	
14.2
	
REGENTS will use reasonable efforts to prepare or amend any patent application to include claims reasonably requested by LICENSEE to protect the LICENSED PRODUCTS contemplated to be SOLD or to be practiced under this Agreement.

	
 
	
14.3
	
Subject to Paragraph 14.4, all past, present, and future costs for preparing, filing, prosecuting, and maintaining all United States and foreign patent applications, and patents under REGENTS’ PATENT RIGHTS will be borne by LICENSEE, so long as the licenses granted to LICENSEE herein are exclusive. To date the remaining past patent costs paid by REGENTS are about [*]. Payments are due within thirty (30) days after receipt of invoice from REGENTS. If, however, REGENTS reduces the exclusive licenses granted herein to non-exclusive licenses pursuant to Paragraphs 7.3, 7.4, or 7.5 and REGENTS grants additional license(s), the costs of preparing, filing, prosecuting and maintaining such patent applications and patents 

Page 20 of 31 

[*] = 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.

	
 
		
will be divided equally among the licensed parties from the effective date of each subsequently granted license agreement.

	
 
	
14.4
	
LICENSEE’s obligation to underwrite and to pay all domestic and foreign patent filing, prosecution, and maintenance costs will continue for so long as this Agreement remains in effect, provided, however, that LICENSEE may terminate its obligations with respect to any given patent application or patent in any or all designated countries upon [*] written notice to REGENTS. REGENTS will use its best efforts to curtail patent costs when such a notice is received from LICENSEE. REGENTS may continue prosecution and/or maintenance of such applications or patents at its sole discretion and expense; provided, however, that LICENSEE will have no further right or licenses thereunder.

	
15.
	
MARKING

	
 
	
15.1
	
Prior to the issuance of patents under REGENTS’ PATENT RIGHTS, LICENSEE agrees to mark LICENSED PRODUCT(S) (or their containers or labels) made, sold, licensed or otherwise disposed of by it in the United States under the license granted in this Agreement with the words “Patent Pending,” and following the issuance in the United States of one or more patents under REGENTS’ PATENT RIGHTS, with the numbers of the REGENTS’ PATENT RIGHTS. All LICENSED PRODUCTS shipped to, manufactured, or sold in other countries will be marked in such manner as to conform with the patent laws and practice of such countries.

	
16.
	
USE OF NAMES AND TRADEMARKS

	
 
	
16.1
	
Nothing contained in this Agreement will be construed as conferring any right to use in advertising, publicity or other promotional activities any name, trademark, trade name, or other designation of either party hereto by the other (including any contraction, abbreviation, or simulation of any of the foregoing). Unless required by law or consented to in writing by REGENTS, the use by LICENSEE of the name “The Regents of the University of California” or the name of any University of California campus in advertising, publicity or other promotional activities is expressly prohibited. Unless required by law or consented to in writing by LICENSEE, the use by REGENTS of the name “Avalanche Biotechnologies” in advertising, publicity or other promotional activities is expressly prohibited.

Page 21 of 31 

[*] = 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.

	
17.
	
LIMITED WARRANTIES

	
 
	
17.1
	
REGENTS warrants to LICENSEE that it has the lawful right to grant this license.

	
 
	
17.2
	
To the extent of the actual knowledge of the licensing professional responsible for administration of the Agreement as of the Effective Date, it is the owner of the REGENT’S PATENT RIGHTS, and it has not granted any right, license or interest in or to the REGENT’S PATENT RIGHTS to any third party.

	
 
	
17.3
	
Except as provided herein, this license, the BIOLOGICAL MATERIAL and the associated INVENTIONS are provided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESSED OR IMPLIED. REGENTS MAKES NO REPRESENTATION OR WARRANTY THAT THE INVENTIONS, THE BIOLOGICAL MATERIAL, REGENTS’ PATENT RIGHTS, LICENSED PRODUCTS, LICENSED SERVICES OR LICENSED METHOD WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT.

	
 
	
17.4
	
EXCEPT OF LICENSEE’S DUTIES FOR CLAIMS OF THIRD PARTIES UNDER ARTICLE 19, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE USE OF THE INVENTIONS, THE BIOLOGICAL MATERIAL, REGENTS’ PATENT RIGHTS, LICENSED METHOD, LICENSED SERVICES OR LICENSED PRODUCTS.

	
 
	
17.5
	
Except as expressly provided in this Article 17, nothing in this Agreement is or will be construed as:

	
 
	
(a)
	
A warranty or representation by REGENTS as to the validity, enforceability or scope of any REGENTS’ PATENT RIGHTS; or

	
 
	
(b)
	
A warranty or representation that anything made, used, or SOLD under any license granted in this Agreement is or will be free from infringement of patents of third parties; or

	
 
	
(c)
	
An obligation to bring or prosecute actions or suits against third parties for patent infringement, except as provided in Article 18; or

	
 
	
(d)
	
Conferring by implication, estoppel, or otherwise any license or rights under any patents of REGENTS other than REGENTS’ PATENT RIGHTS as defined herein, regardless of whether such patents are dominant or subordinate to REGENTS’ PATENT RIGHTS; or

Page 22 of 31 

[*] = 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.

	
 
	
(e)
	
An obligation to furnish any know-how not provided in the patents and patent applications under REGENTS’ PATENT RIGHTS, and REGENTS’ PROPERTY RIGHTS as defined herein.

	
18.
	
PATENT INFRINGEMENT

	
 
	
18.1
	
In the event that a party (in the case of the REGENTS to the extent of the actual knowledge of the licensing professional responsible for the administration of this Agreement) learns of the substantial infringement of any REGENTS’ PATENT RIGHTS under this Agreement, such party will promptly provide the other party with notice and reasonable evidence of such infringement (“Infringement Notice”). During the period and in a jurisdiction where LICENSEE has exclusive rights under this Agreement, neither party will notify a third party, including the infringer, of the infringement without first obtaining consent of the other party, which consent will not be unreasonably withheld. Both parties will use diligent efforts, in cooperation with each other, to terminate such infringement without litigation.

	
 
	
18.2
	
LICENSEE shall have the first right to institute suit for patent infringement against the infringer [*] after the Infringement Notice in 18.1. REGENTS may voluntarily join such suit at its own expense, but may not thereafter commence suit against the infringer for the acts of infringement that are the subject of LICENSEE’s suit or any judgment rendered in that suit. LICENSEE may not join REGENTS in a suit initiated by LICENSEE without REGENTS’ prior written consent. If, in a suit initiated by LICENSEE, REGENTS is involuntarily joined other than by LICENSEE, LICENSEE will pay any third party costs incurred by REGENTS arising out of such suit, including but not limited to, any legal fees of outside counsel that REGENTS selects and retains to represent it in the suit.

If, within [*] following the effective date of the Infringement Notice, the infringing activity of potential commercial significance has not been abated and if LICENSEE has not brought suit against the infringer, REGENTS may institute suit for patent infringement against the infringer. If REGENTS institutes such suit, LICENSEE may not join such suit without REGENTS’ consent and may not thereafter commence suit against the infringer for the acts of infringement that are the subject of REGENTS’ suit or any judgment rendered in that suit.

	
 
	
18.3
	
Such legal action as is decided upon will be at the expense of the party on account of whom suit is brought and all recoveries recovered thereby will belong to such 

Page 23 of 31 

[*] = 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.

	
 
		
party, provided that legal action brought jointly by REGENTS and LICENSEE and participated in by both, will be at the joint expense of the parties and all recoveries will be allocated in the following order: a) to each party reimbursement in equal amounts of the attorney’s costs, fees, and other related expenses to the extent each party paid for such costs, fees, and expenses until all such costs, fees, and expenses are consumed for each party; and b) any remaining amount shared jointly by them in proportion to the share of expenses paid by each party, but in no event will REGENTS’ share be [*] of such remaining amount if REGENTS is a party.

	
 
	
18.4
	
Each party will cooperate with the other in litigation instituted hereunder but at the expense of the party on account of whom suit is brought. Such litigation will be controlled by the party bringing the action, except that REGENTS may be represented by counsel of its choice in any suit brought by LICENSE.

	
 
	
18.5
	
Any agreement made by LICENSEE for the purposes of settling litigation or other dispute shall comply with the requirements of Article 4 (Sublicenses) of this Agreement.

	
19.
	
INDEMNIFICATION

	
 
	
19.1
	
LICENSEE will, and will require its sublicensees to, indemnify, hold harmless, and defend REGENTS and its officers, employees, and agents; sponsor(s) of the research that led to the INVENTIONS; and BIOLOGICAL MATERIAL covered by REGENTS’ PROPERTY RIGHTS; and the inventors of any patents and patent applications under REGENTS’ PATENT RIGHTS and their employers against any and all claims, suits, losses, damages, costs, fees, and expenses resulting from or arising out of exercise of this license or any sublicense or any use or possession of the BIOLOGICAL MATERIAL. This indemnification will include, but not be limited to, any product liability.

	
 
	
19.2
	
LICENSEE, at its sole cost and expense, will insure its activities in connection with any work performed hereunder and will obtain, keep in force, and maintain the following insurance:

	
 
	
(a)
	
Commercial Form General Liability Insurance (contractual liability included) with limits as follows:

Each Occurrence[*]

Products/Completed Operations Aggregate[*]

Page 24 of 31 

[*] = 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.

Personal and Advertising Injury[*]

General Aggregate[*]

If the above insurance is written on a claims-made form, it shall continue for [*] years following termination or expiration of this Agreement. The insurance shall have a retroactive date of placement prior to or coinciding with the Effective Date of this Agreement; and

	
 
	
(b)
	
Worker’s Compensation as legally required in the jurisdiction in which LICENSEE is doing business.

	
 
	
19.3
	
The coverage and limits referred to in Subparagraphs 19.2a and 19.2b above will not in any way limit the liability of LICENSEE under this Article. Upon the execution of this Agreement, LICENSEE will furnish REGENTS with certificates of insurance evidencing compliance with all requirements. Such certificates will:

	
 
	
(a)
	
provide for [*] advance written notice to REGENTS of any cancellation of insurance coverages; LICENSEE will promptly notify REGENTS of any material modification of the insurance coverages;

	
 
	
(b)
	
indicate that REGENTS has been endorsed as an additional insured under the coverage described above in Subparagraph l9.2; and

	
 
	
(c)
	
include a provision that the coverage will be primary and will not participate with, nor will be excess over, any valid and collectable insurance or program of self-insurance maintained by REGENTS.

	
 
	
19.4
	
REGENTS will promptly notify LICENSEE in writing of any claim or suit brought against REGENTS for which REGENTS intends to invoke the provisions of this Article 19. LICENSEE will keep REGENTS informed of its defense of any claims pursuant to this Article 19.

	
20.
	
COMPLIANCE WITH LAWS

	
 
	
20.1
	
LICENSEE will comply with all applicable international, national, state, regional, and local laws and regulations in performing its obligations hereunder and in its use, manufacture, SALE or import of the LICENSED PRODUCTS, LICENSED SERVICES, or practice of the LICENSED METHOD. LICENSEE understands that REGENTS is subject to United States laws and regulations (including the Arms 

Page 25 of 31 

[*] = 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.

	
 
		
Export Control Act, as amended, and the Export Administration Act of 1979), controlling the export of technical data, computer software, laboratory prototypes and other commodities, and REGENTS’ obligations under this Agreement are contingent on compliance with such laws and regulations. The transfer of certain technical data and commodities may require a license from the cognizant agency of the United States Government and/or written assurances by LICENSEE that LICENSEE will not export such technical data and/or commodities to certain foreign countries without prior approval of such agency. REGENTS neither represents that a license will not be required nor that, if required, it will be issued.

	
21.
	
GOVERNMENT APPROVAL OR REGISTRATION

	
 
	
21.1
	
If this Agreement or any associated transaction is required by the law of any nation to be either approved or registered with any governmental agency, LICENSEE will assume all legal obligations to do so. LICENSEE will notify REGENTS if it becomes aware that this Agreement is subject to a United States or foreign government reporting or approval requirement. LICENSEE will make all necessary filings and pay all costs including fees, penalties, and all other out-of-pocket costs associated with such reporting or approval process.

	
22.
	
ASSIGNMENT

	
 
	
22.1
	
This Agreement is binding upon and shall inure to the benefit of REGENTS, its successors and assigns. This Agreement will be personal to LICENSEE and assignable by LICENSEE only with the written consent of REGENTS, except that LICENSEE may freely assign this Agreement to an acquirer of all or substantially all of LICENSEE’s stock, assets or business.

	
23.
	
NOTICES

	
 
	
23.1
	
All notices under this Agreement will be deemed to have been fully given and effective when done in writing and delivered in person, or mailed by registered or certified U.S. mail, or deposited with a carrier service requiring signature by recipient, and addressed as follows:

	
 
	
To REGENTS:
	
Office of Technology Licensing
2150 Shattuck Avenue, Suite 510

Page 26 of 31 

[*] = 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.

	
 
		
Berkeley, CA 94704-1347
Attn.: Director [*]

	
 
	
To LICENSEE:
	
Avalanche Biotechnologies, Inc
665 Third Street, Suite 250
San Francisco, CA 94107
Attn.: Thomas W. Chalberg, Ph.D.

Either party may change its address upon written notice to the other party.

	
24.
	
LATE PAYMENTS

	
 
	
24.1
	
If monies owed to REGENTS under this Agreement are not received by REGENTS when due, LICENSEE will pay to REGENTS interest charges [*] on the date such payment is due, [*]. Such interest will be calculated from the date payment was due until actually received by REGENTS. Such accrual of interest will be in addition to, and not in lieu of, enforcement of any other rights of REGENTS related to such late payment. Acceptance of any late payment will not constitute a waiver under Article 25 (Waiver) of this Agreement.

	
25.
	
WAIVER

	
 
	
25.1
	
The failure of either party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement will not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other party. None of the terms and conditions of this Agreement can be waived except by the written consent of the party waiving compliance.

	
26.
	
CONFIDENTIALITY

	
 
	
26.1
	
Each party will hold the other party’s proprietary business and technical information, patent prosecution material and other proprietary information, including the negotiated terms of this Agreement, in confidence and against disclosure to third parties with at least the same degree of care as it exercises to protect its own data and license agreements of a similar nature. This obligation will expire [*] years after the termination or expiration of this Agreement.

Page 27 of 31 

[*] = 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.

	
 
	
26.2
	
Nothing contained herein will in any way restrict or impair the right of LICENSEE or REGENTS to use, disclose, or otherwise deal with any information or data which:

	
 
	
(a)
	
at the time of disclosure to a receiving party is generally available to the public or thereafter becomes generally available to the public by publication or otherwise through no act of the receiving party;

	
 
	
(b)
	
the receiving party can show by written record was in its possession prior to the time of disclosure to it hereunder and was not acquired directly or indirectly from the disclosing party; or

	
 
	
(c)
	
is independently made available to the receiving party without restrictions as a matter of right by a third party.

In addition, nothing contained herein will in any way restrict or impair the right of LICENSEE or REGENTS to make any disclosure required under the California Public Records Act or pursuant to other requirements of law.

	
 
	
26.3
	
REGENTS will be free to release to the inventors and senior administrators employed by REGENTS the terms and conditions of this Agreement upon their request. If such release is made, REGENTS will inform such employees of the confidentiality obligations set forth above and will request that they do not disclose such terms and conditions to others. Should a third party inquire whether a license to REGENTS’ PATENT RIGHTS is available, REGENTS may disclose the existence of this Agreement and the extent of the grant in Articles 3 and 4 to such third party, but will not disclose the name of LICENSEE unless LICENSEE has already made such disclosure publicly, except where REGENTS is required to release information under either the California Public Records Act or other applicable law, provided REGENTS gives prior written notice to LICENSEE of such disclosure.

	
 
	
26.4
	
LICENSEE and REGENTS agree to destroy or return to the disclosing party proprietary information received from the other in its possession within fifteen (15) days following the effective date of termination of this Agreement. However, each party may retain one copy of proprietary information of the other solely for archival purposes in non-working files for the sole purpose of verifying the ownership of the proprietary information, provided such proprietary information will be subject to the confidentiality provisions set forth in Article 26.1. LICENSEE and REGENTS agree to provide each other, within thirty (30) days following 

Page 28 of 31 

[*] = 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.

	
 
		
termination of this Agreement, with a written notice that proprietary information has been returned or destroyed.

	
27.
	
FORCE MAJEURE

	
 
	
27.1
	
Except for LICENSEE’s obligation to make any payments to REGENTS hereunder, the parties to this Agreement shall be excused from any performance required hereunder if such performance is rendered impossible or unfeasible due to any catastrophes or other major events beyond their reasonable control, including, without limitation, war, riot, and insurrection; laws, proclamations, edicts, ordinances, or regulations; strikes, lockouts, or other serious labor disputes; and floods, fires, explosions, or other natural disasters. When such events have abated, the parties’ respective obligations hereunder will resume.

	
28.
	
SEVERABILITY

	
 
	
28.1
	
The provisions of this Agreement are severable, and in the event that any provision of this Agreement will be determined to be invalid or unenforceable under any controlling body of law, such invalidity or enforceability will not in any way affect the validity or enforceability of the remaining provisions hereof.

	
29.
	
APPLICABLE LAW; VENUE; ATTORNEYS’ FEES

	
 
	
29.1
	
THIS AGREEMENT WILL BE CONSTRUED, INTERPRETED, AND APPLIED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, excluding any choice of law rules that would direct the application of the laws of another jurisdiction, but the scope and validity of any patent or patent application under REGENTS’ PATENT RIGHTS will be determined by the applicable law of the country of such patent or patent application. Any legal action brought by the parties relating to this Agreement will be conducted in [*]. The prevailing party in any legal action under this Agreement will be entitled to recover its reasonable attorneys’ fees in addition to its costs and necessary disbursements.

	
30.
	
ELECTRONIC COPY

	
 
	
30.1
	
The parties to this document agree that a copy of the original signature (including an electronic copy) may be used for any and all purposes for which the original 

Page 29 of 31 

[*] = 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.

	
 
		
signature may have been used. The parties further waive any right to challenge the admissibility or authenticity of this document in a court of law based solely on the absence of an original signature.

	
31.
	
SCOPE OF AGREEMENT

	
 
	
31.1
	
This Agreement (except for the Confidentiality Agreement [*] which will continue to the extent it is not inconsistent with this Agreement) incorporates the entire agreement between the parties with respect to the subject matter hereof, and this Agreement may be altered or modified only by written amendment duly executed by the parties hereto.

Page 30 of 31 

[*] = 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.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorized officers or representatives.

		
	
THE REGENTS OF THE 
UNIVERSITY OF CALIFORNIA

By   /s/ Carol Mimura

Carol Mimura, Ph.D.

Assistant Vice Chancellor

Office of Technology Licensing

Date
	
AVALANCHE BIOTECHNOLOGIES, INC.

By/s/ Thomas Chalberg

Thomas Chalberg, Ph.D.

Chief Executive Officer

 

DateJune 17, 2013

 

 

Page 31 of 31 

[*] = 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.advm-ex1047_912.htm

 

[*] = 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.

Exhibit 10.47

LICENSE AGREEMENT

This License Agreement (the “Agreement”) dated October 12, 2011 (the “Effective Date”), is between Virovek, Inc., a Delaware corporation (“Virovek”) with an address at 3521 Investment Boulevard, Suite 1, Hayward, California 94545, and Avalanche Biotechnologies, Inc., a Delaware corporation (“Avalanche”) with an address at 665 Third Street, Suite 250, San Francisco, California 94107.  Virovek and Avalanche shall each be a “Party” and together shall be the “Parties”.

Recitals

Whereas, Virovek has developed proprietary methods and materials for manufacturing adeno-associated virus (“AAV”) using baculovirus;

Whereas, Avalanche is a drug delivery company that specializes in the development of novel therapeutics for the treatment of ophthalmic diseases and conditions;

Whereas, Virovek and Avalanche desire to enter into a license agreement pursuant to which Avalanche would receive rights to use and further develop Virovek’s proprietary technology for the production of clinical and commercial scale quantities of Avalanche’s proprietary therapeutic products; and

Whereas, Virovek will also grant to Avalanche the right to develop, use and commercialize, itself or with or through third parties, Virovek’s proprietary technology for the production of other therapeutic products at clinical and commercial scale;

Now, Therefore, in consideration of the foregoing premises and the mutual covenants below, the Parties agree as follows:

Article 1

DEFINITIONS

The following terms, whenever used in this Agreement, shall have the following meanings:

1.1“Affiliate” means any entity that directly or indirectly controls, is controlled by or is under common control with the Party and for this purpose “control” means the possession directly or indirectly of the power to direct or cause the direction of the management and policies of the entity whether through voting shares, securities or otherwise.

1.2“Applicable Laws” shall mean all federal, state and local laws statutes, rules, regulations, and ordinances, applicable to the development, manufacture, distribution, use and 

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Commercialization of Licensed Products throughout the world including without limitation, the applicable regulations and guidelines of any governmental authority including the FDA and foreign counterparts and all applicable good manufacturing practices together with amendments thereto.

1.3“Audit Trigger” means the date upon which Avalanche becomes obligated to pay to Virovek pursuant to this Agreement an aggregate of [*]

1.4“Avalanche Product” means a Licensed Product, whether it is a Standard Product or an Improved Product, that (i) is developed in whole or in part by Avalanche or its Affiliates, alone or with their Sublicensees, and (ii) incorporates any composition of matter potentially useful for the prevention, treatment or amelioration of a disease or condition, and/or is based on a method of treatment or use, that is covered by intellectual property rights controlled by Avalanche or its Affiliates other than those licensed to Avalanche by Virovek pursuant to this Agreement.

1.5“Calendar Quarter” means each three month period commencing on the first day of January, April, July and October in any given calendar year.

1.6“Combination Product” means a product that includes an Avalanche Product and at least one (1) Other Component.

1.7“Commercialize” means to use commercially, sell, have sold, offer for sale, market, promote, import, export or otherwise exploit a Licensed Product.

1.8“Confidential Information” means all non-publicly available information provided by one Party to the other Party, including without limitation any information that relates to the Licensed Product, or any gene sequences, genetic mutations, variations or polymorphisms, vectors, organisms, cells, cell lines, tissues, biochemical or physiological consequences of any genetic variation, research, technology, discoveries, data, inventions, assays, production processes, know-how, products, services, clients, partners, markets, employees, business plans and financial information.

1.9“Control” or “Controlled” means, with respect to any designated item or intellectual property right with respect to which a right or license is granted by a Party to the other hereunder, the ability and right (whether by ownership or license, other than pursuant to this Agreement) of the Party to grant such right or license as provided for herein without violating the terms of any agreement or other arrangement with any Third Party existing at the time such Party grants the other Party such right or license.

1.10“FDA” means the U.S. Food and Drug Administration of the U.S. Department of Health and Human Services and any successor agencies.

1.11“Field” means all fields of use.

1.12“Improved Product” means any Licensed Product incorporating or otherwise produced utilizing (i) technology or intellectual property that is Controlled by Avalanche (other than a Virovek Improvement) in addition to [*] or (ii) any Improvements conceived and reduced to practice in whole or in part by Avalanche following the Effective Date.

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1.13“Improvements” means any modification, development, enhancement, derivative, variation or improvement to the Virovek Technology, including, without limitation, a composition of matter, a method of making or using, a formulation, a configuration or other attribute of the materials, organisms, methods, media, production process flow, downstream processing and/or scaleability, or other items used to practice the Virovek Technology as it exists as of the Effective Date or as it is improved in the course of the Parties’ activities under this Agreement that is made by either Party in performing activities under this Agreement.

1.14“Know-How” shall mean any and all Confidential Information, trade secrets, technology, media, materials, samples, know-how, show-how, discoveries, algorithms, unpatented inventions, developments, improvements, techniques, methods, test methods, processes, protocols, recipes, data (including development data), instructions, formulae, drawings and specifications, whether or not patentable or protectable.

1.15“Law” shall mean any federal, state or local law, statute or ordinance, or any rule, regulation, or published guidelines promulgated by any governmental or Regulatory Authority in any jurisdiction.

1.16“Licensed Product” means any product that is made using or that incorporates the Virovek Technology (including any Virovek know-how) and/or a Virovek Improvement. For the avoidance of doubt, Licensed Products include Standard Products or Improved Products that incorporate Virovek Technology and/or Virovek Improvements, but shall not include products that do not incorporate any Virovek Technology or Virovek Improvements.

1.17“Net Sales” means the gross amount invoiced by or on behalf of Avalanche, its Affiliates and their respective Sublicensees for sales of Avalanche Products in the Territory (other than sales among Avalanche, its Affiliates or Sublicensees for subsequent resale, in which case the first sale to a Third Party that is not a Sublicensee or an Affiliate of a Sublicensee shall be used for calculation of Net Sales), less the following deductions if and to the extent they are (i) included in the gross invoiced sales price of Avalanche Products or otherwise directly incurred by Avalanche, its Affiliates and their respective Sublicensees with respect to the sale of Avalanche Products, and (ii) not otherwise deducted in computing other amounts hereunder: (a) Voluntary rebates, quantity and cash discounts, and other discounts to customers, [*] (b) taxes (except income taxes) and tariffs or duties paid, absorbed or allowed which are directly related to the sale of Avalanche Products, (c) credits, allowances, discounts and rebates to, and chargebacks for, spoiled, damaged, out-dated, rejected or returned Avalanche Products (including in connection with Avalanche Product withdrawals, expired Avalanche Product and Avalanche Product recalls), (d) actual freight and insurance costs, including without limitation the costs of export licenses, shipping, postage and handling charges, incurred in transporting Avalanche Products to customers, (e) discounts, retroactive price reductions, rebates or other payments required by government entities, government regulations, or Applicable Law, including any governmental medical assistance programs, and (f) customs duties, surcharges and other governmental charges incurred in connection with the exportation or importation of Avalanche Products.

In the case of any sale or other disposal of Product for non-cash consideration, Net Sales shall be calculated as the fair market price of Avalanche Products in the country of sale or disposal. Notwithstanding the foregoing, provision of Avalanche Products for the purpose of conducting 

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pre-clinical or clinical research shall not be deemed to be a sale. For clarity, any Avalanche Products provided as free samples or as charitable donations shall not give rise to any Net Sales. Net Sales shall be determined in accordance with GAAP.

Notwithstanding the foregoing, in the event a Product is sold in a country in the Territory as a Combination Product, Net Sales of the Combination Product will be calculated as follows:

	
(i)
	
If the Avalanche Product contained in the Combination Product and Other Component(s) contained in the Combination Product each are sold separately in such country, Net Sales will be calculated by multiplying the total Net Sales (as described above) of the Combination Product by the fraction A/(A+B), where A is the [*] in such country of the Avalanche Product sold separately in the same formulation and dosage, and B is the sum of the [*] in such country of such Other Component(s) sold separately in the same formulation and dosage, during the applicable Calendar Year.

	
(ii)
	
If the Avalanche Product contained in the Combination Product is sold independently of the Other Component(s) contained in the Combination Product in such country, but the average gross selling price of such Other Component(s) in such country cannot be determined, Net Sales will be calculated by multiplying the total Net Sales (as described above) of the Combination Product by the fraction A/C where A is the [*] in such country of such Avalanche Product sold independently and C is the [*] in such country of the entire Combination Product, during the applicable Calendar Year.

	
(iii)
	
If the Other Component(s) contained in the Combination Product are sold independently of the Avalanche Product contained in the Combination Product in such country, but the average gross selling price of such Avalanche Product in such country cannot be determined, Net Sales will be calculated by multiplying the total Net Sales (as described above) of the Combination Product by the fraction (1-(B/C)), where B is the [*] in such country of such Other Component(s) and C is the [*] in such country of the entire Combination Product, during the applicable Calendar Year.

	
(iv)
	
If the Avalanche Product contained in the Combination Product and Other Component(s) contained in the Combination Product are not sold separately in such country, or if they are sold separately but the average gross selling price of neither such Avalanche Product nor such Other Component(s) can be determined in such country, Net Sales of the Combination Product in such country will be [*]

1.18“Other Component” means, for purposes of Section 1.16, any therapeutically active pharmaceutical ingredient or delivery device other than an Avalanche Product.

1.19“Other Products” means any Licensed Product, whether it is a Standard Product or an Improved Product, that is not an Avalanche Product.

1.20“Patents” means (a) unexpired letters patent (including without limitation inventor’s certificates), including without limitation any substitution, extension, registration, confirmation, reissue, re-examination, renewal, or any like filing thereof (“Issued Patents”), and (b) pending applications for letters patent, including without limitation any continuation, 

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divisional, or continuation-in-part thereof, and any provisional or non-provisional applications (“Patent Applications”).

1.21“Regulatory Authority” means the FDA in the United States, and the equivalent regulatory authority or governmental entity having the responsibility, jurisdiction, and authority to approve the manufacture, use, importation, packaging, labeling, marketing, and sale of diagnostic products in any country or jurisdiction in the Territory other than the United States.

1.22“Standard Product” means any Licensed Product incorporating or otherwise produced utilizing technology disclosed in the Initial Patent Application as it exists as of the Effective Date, or any Virovek Improvement, but not any (i) technology or intellectual property that is Controlled by Avalanche in addition to that disclosed in the Initial Patent Application (other than a Virovek Improvement), or (ii) any Improvements conceived and reduced to practice by Avalanche following the Effective Date.

1.23“Sublicensee” means an Affiliate of Avalanche or a Third Party to which a sublicense is granted under the license granted to Avalanche in Section 2.1, in accordance with Section 2.3 and/or 2.4, including any Affiliate of Avalanche or Third Party that receives a further sublicense from another such Affiliate or Third Party sublicense.

1.24“Technology Transfer” means the transfer from Virovek to Avalanche, its Affiliates or its Sublicensees of the Licensed Know-How as provided in Section 7.1.

1.25“Territory” means worldwide.

1.26“Third Party Revenue” means all consideration received by Avalanche in consideration for the grant of a sublicense under the rights granted to Avalanche pursuant to Section 2.1 with respect to Other Products, excluding (i) equity investments made by Sublicensees in Avalanche, to the extent such investments do not exceed the fair market value of such equity, (ii) payment by Sublicensees to Avalanche as reimbursement of patent expenses or expenses related to Technology Transfer or technical support, in each case related to Other Products, (iii) payments by Sublicensees to Avalanche for research, development, and pre-clinical and clinical studies undertaken by Avalanche on behalf of Sublicensees or financing of research and development at Avalanche’s expense related to Other Products, (iv) payments for the supply of Other Products, or components and materials used for the production of Other Products, and  (v) amounts received in consideration for intellectual property rights that are not Virovek Patents or Virovek Know-How, as reasonably determined by Avalanche.

1.27“Third Party” means any entity other than Avalanche or Virovek, or an Affiliate of either of them.

1.28“Valid Claim” means for any country, a claim of an Issued Patent that has not expired or been held unpatentable, invalid, or unenforceable by a court or other government agency of competent jurisdiction in an unappealed or unappealable decision or has not been admitted to be invalid or unenforceable through reissue, re-examination, disclaimer, or otherwise, or a claim of a Patent Application that has been filed in good faith and not abandoned or withdrawn, and which has not been pending before the applicable patent office for a period [*] from the original 

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date of filing, provided that if a pending Patent Application becomes an Issued Patent at any time after the expiration of such [*] period, the claims of such Issued Patent shall be Valid Claims from the date upon which they issue.

1.29“Virovek Improvement” means any Improvement created or reduced to practice (either actually or constructively in a Patent Application or Issued Patent) solely by Virovek.

1.30“Virovek Know-How” means all Know-How Controlled by Virovek that is necessary or useful for the development, manufacture, use or Commercialization of Licensed Product, or otherwise for the practice of the Virovek Technology in the Field, including without limitation any technical data and characterizing specifications for the Standard Product or any Improved Product that is not publically available.

1.31“Virovek Patents” means all Patents Controlled by Virovek claiming inventions that are necessary or useful for the development, manufacture, use or Commercialization of Licensed Products, or otherwise for the practice of the Virovek Technology in the Field, [*] (the “Initial Patent Application”) and foreign counterparts as further described at Exhibit A, any continuations, continuations-in-part or divisionals or other Patents claiming priority to the Initial Patent Application or foreign counterparts thereto, and all Patents issuing from such Patents.

1.32“Virovek Technology” means the invention disclosed in the Initial Patent Application.

Article 2

GRANT OF LICENSES

2.1License to Avalanche.  Subject to the terms and upon the conditions set forth in this Agreement, Virovek hereby grants, and Avalanche accepts, a royalty-bearing, non-exclusive, non-transferable, sublicensable license under the Virovek Patents and Virovek Know-How to develop, make, have made, use and Commercialize Licensed Products in the Field and in the Territory.

2.2Sublicensing.  Subject to the terms and upon the conditions of this Agreement, Avalanche shall have the right to grant Sublicenses to Third Parties, provided that such Sublicenses are consistent with the applicable terms of this Agreement. No Sublicense granted by Avalanche under this Section 2.2 shall relieve Avalanche of its obligations of performance under this Agreement.

2.3Right of Notice and First Negotiation.  In the event that Virovek enters into discussions or negotiations with respect to the terms under which Virovek may grant a license to any Third Party under the Virovek Patents and the Virovek Know-How (a “Third Party License”), Virovek will provide Avalanche with notice of such discussions or negotiations [*]  Following receipt of such notice from Virovek, Avalanche shall have the first right to negotiate with Virovek terms and conditions for converting this license to an exclusive license [*] (an “Exclusive License”). If Avalanche desires to exercise such right, it shall so notify Virovek within [*] after receiving notice from Virovek. The Parties shall negotiate in good faith for a period of up 

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to [*] (the “Negotiation Period”) after Avalanche receives notice of Virovek’s discussions or negotiations with a Third Party. During the Negotiation Period, Virovek will suspend further discussions or negotiations with any Third Party in relation to a Third Party License. The Parties may extend the Negotiation Period by mutual written agreement for a period of up to [*]. If the Parties fail to execute an Exclusive License at the end of the Negotiation Period, [*]

Article 3

CONSIDERATION

3.1License Issue Fee.  Avalanche shall pay to Virovek a license issue fee of [*], payable in two installments, in consideration for the rights granted to Avalanche under this Agreement:

(a)A one-time payment of [*] within [*]; and

(b)A one-time payment of [*] within [*]

The license issue fee is non-refundable and non-creditable against any milestone payments or royalties payable under this Agreement.

3.2Annual License Fee.  Avalanche shall pay to Virovek an annual fee of [*] (the “Annual Fee”) to maintain the rights granted to it herein. The Annual Fee shall be payable to Virovek’s nominated bank account within [*] days of Avalanche’s receipt of a valid invoice from Virovek for the amount of the Annual Fee, which invoice shall be issued by Virovek following each anniversary of the Effective Date, commencing with the first anniversary of the Effective Date.

3.3Royalty Payments.  In partial consideration for the license granted hereunder, and subject to the terms and conditions of this Agreement, subject to Section 3.9, Avalanche shall pay to Virovek during the Term a royalty (the “Royalty”) on incremental annual Net Sales of Avalanche Products by Avalanche, its Affiliates and Sublicensees, as follows:

		
	
Portion of Annual Net Sales of Avalanche
Products
	
Royalty Percentage

	
[*]
	
[*]

	
>[*] ≤ [*]
	
[*]

	
>[*] ≤ [*]
	
[*]

	
>[*]
	
[*]

By way of example, if Net Sales of Avalanche Products equals [*] in a calendar year, the royalty rate on the first [*] of Net Sales will be [*] and the royalty rate on the remaining [*] of Net Sales will be [*]

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3.4Royalty Term; Abatement.

(a)Avalanche’s obligation to pay royalties with respect to each Avalanche Product pursuant to Section 3.3 in each country in the Territory shall apply and continue for so long as one or more Valid Claims of the Virovek Patents cover the manufacture, use or sale of such Avalanche Product in such country at the time when the Avalanche Product is manufactured, used or sold in such country.

(b)In the event that the total annual royalties (including the Royalty) that Avalanche is required to pay to Virovek and all other royalties payable by Avalanche, its Affiliates and Sublicensees to any Third Parties (together the “Royalty Recipients”) in connection with the development, manufacture or Commercialization of a given Avalanche Product exceed [*] the royalties payable to each of the Royalty Recipients shall be reduced [*]

3.5Royalty calculation and reporting.   Royalty obligations under this Article 3 shall begin to accrue upon the first date upon which a Net Sale of an Avalanche Product occurs. All royalty payment obligations that have accrued on Net Sales made during a Calendar Quarter shall be due and payable to Virovek [*] after the end of the Calendar Quarter. Together with any payment of such royalties, Avalanche shall send to Virovek a written report setting forth the following in detail information necessary to confirm the calculation of Net Sales of Avalanche Products and the royalty payments payable during such Calendar Quarter. If no royalty shall be due, Avalanche shall so report.

3.6Revenue Allocation.  The Parties agree that any Third Party Revenue received by Avalanche from any Sublicensees will be shared between the Parties as follows:

(a)Third Party Revenue received with respect to Other Products that are Standard Products shall be apportioned [*] to Virovek, and [*]to Avalanche;

(b)Third Party Revenue received with respect to Other Products that are Improved Products shall be apportioned [*] Virovek, and [*] to Avalanche.

(c)Avalanche’s payment obligations under this Section 3.6 shall apply and continue for so long as one or more Valid Claims of the Virovek Patents cover the manufacture, use or sale of such Other Product in such country at the time when the Other Product is manufactured, used or sold in such country.

3.7Payment of Third Party Revenue.  Avalanche shall account to Virovek and pay payments due to Virovek with respect to Third Party Revenue owed to Virovek pursuant to Section 3.6 [*] Avalanche will provide a statement specifying the total amount Avalanche received, the deductions from such revenues taken to calculate Third Party Revenue payments due pursuant to Section 3.6, and the net Third Party Revenue payable to Virovek. Avalanche shall pay all such amounts to Virovek’s nominated bank account.

3.8Payment Mechanics.  All monies due to Virovek shall be paid in United States dollars. In the event that any Licensed Products shall be sold in a currency other than United States dollars, the Net Sales of Avalanche Products for the reporting period, or any other amounts upon 

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which payments are due to Virovek, shall be converted for the purpose of calculation of such royalty or amount into its equivalent dollar value [*] Any amounts not paid by Avalanche when due under this Agreement will be subject to interest from and including the date payment is due through and including the date upon which Virovek has collected the funds in accordance herewith [*] Virovek will pay any and all taxes levied on account of any payments made to it under this Agreement. If any taxes are paid or required to be withheld by Avalanche for the benefit of Virovek on account of any royalty or other payments to Virovek under this Agreement, Avalanche will (a) deduct such taxes from the amount of royalty or other payments otherwise due to Virovek, (b) timely pay the taxes to the proper taxing authority, and (c) send proof of payment to Virovek and certify its receipt by the taxing authority as promptly as practicable following such payment.

3.9Records.  Avalanche shall keep and maintain full, true and accurate books of account containing all particulars that may be necessary for the purpose of confirming the amounts payable to Virovek pursuant to this Agreement. The books of account shall be kept at Avalanche’s principal place of business. The books of account and the supporting data shall be made available to an independent auditor reasonably acceptable to Virovek [*] starting in the year in which the Audit Trigger occurs, at reasonable times during normal business hours upon at least ten (10) days advance written notice. Such audit may be conducted as to Net Sales and payment-related records until the expiration of the [*] period following the end of the calendar year to which they pertain and shall be made available under this Section 3.9 for the sole purpose of verifying Avalanche’s royalty statement or compliance in other respects with this Agreement. The costs and expenses relating to such inspection shall be borne by Virovek, except that if an audit reveals that Avalanche’s royalties calculated for any quarter period were underpaid by more than [*], Avalanche shall bear the costs of such audit in full.

Article 4

DEVELOPMENT AND COMMERCIALIZATION

4.1Development and Commercialization.  Avalanche shall use commercially reasonable efforts to further develop and Commercialize for use in connection with Licensed Products in the Field the Virovek Technology, itself or with or through Third Party Sublicensees. Virovek shall use commercially reasonable efforts to cooperate with Avalanche’s efforts to further develop and Commercialize for use in connection with Licensed Products in the Field the Virovek Technology.

Article 5

IP OWNERSHIP; PATENT PROSECUTION AND ENFORCEMENT

5.1Limitation.  Except as expressly set forth in this Agreement, neither Party is granted any license or other right with respect to intellectual property rights Controlled by the other Party.

5.2Ownership of Improvements. The Parties agree that ownership of all inventions and all intellectual property rights therein, arising out of any use of the Virovek Technology conducted under this Agreement, including without limitation Improvements and other inventions 

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that are made by employees, independent contractors, or agents of either Party shall be governed by US laws of inventorship. In relation to any jointly created Improvements, each Party shall own an equal undivided interest in such Improvements, with no duty of accounting to the other Party (subject to the remainder of this Section 5.2). The Parties agree that any Virovek Improvements, and Virovek’s ownership interest in any jointly created Improvements shall be included within the Virovek Patents or the Virovek Know-How and shall be subject to the terms of the licenses granted under this Agreement. For the avoidance of doubt, inventions developed solely by Avalanche shall belong to Avalanche, and inventions developed solely by Virovek shall belong to Virovek.

5.3Patent Prosecution. Virovek shall have the first right, at its sole cost and expense, to conduct and control prosecution, maintenance, challenges against validity and unenforceability or patentability with respect to the Virovek Patents. At Virovek’s reasonable request, Avalanche shall cooperate with and assist Virovek in connection with such activities. Virovek shall not abandon any of the Virovek Patents in the Territory without providing reasonable prior written notice to Avalanche of such intention to surrender and providing Avalanche an opportunity to assume responsibility for prosecution of such Licensed Patent, at its sole cost. If Avalanche elects to assume such responsibility, Virovek shall assign such Virovek Patent to Avalanche, and such Virovek Patent shall no longer be subject to this Agreement (and no claims of such Patent shall be eligible to be Valid Claims for purposes of Section 1.27).

5.4Enforcement of Virovek Technology. If either Party should become aware of any actual or threatened infringement or misappropriation by a Third Party of any rights included in the Virovek Patents or Virovek Know-How (a “Product Infringement”), it shall promptly notify the other Party in writing, and provide any available information relating to such alleged Product Infringement. Avalanche shall have the first right, but not the obligation, to bring or control, at its own expense, any enforcement action relating to such Product Infringement, but shall keep Virovek informed in relation to all significant decisions. Virovek shall reasonably cooperate in any such enforcement and as necessary, join or be joined as a party to such action, provided that Avalanche agrees to reimburse Virovek for all of its out-of-pocket costs, damages and expenses, including reasonable attorneys’ fees that Virovek may incur in relation to such assistance or joinder, including any award of costs against it in any judgment. If Avalanche elects not to bring a claim in relation to such Product Infringement, [*] Virovek shall then have the right, at its own expense, to enforce the Virovek Patents or Virovek Know-How. In the event that Virovek brings such an action, Avalanche shall reasonably cooperate in any such enforcement and as necessary, agree to join or be joined as a party to such action, provided that Virovek agrees to reimburse Avalanche for all of its out-of-pocket costs, damages and expenses, including reasonable attorneys’ fees that Avalanche may incur in relation to such assistance or joinder, including any award of costs against it in any judgment. In each case, any costs, expenses or damages hereunder to be reimbursed by the Party bringing the enforcement action shall be paid by the owing Party to the other Party [*] or receipt of evidence in writing that the costs, damages and expenses have been incurred. Any amount recovered in an action or suit to enforce the Virovek Patents or Virovek Know-How shall be returned to the Party bringing such action, after the reimbursement of each Party’s out-of-pocket costs, including reasonable attorneys’ fees, except that if Avalanche is the Party bringing such action, such amount shall be treated as Net Sales of Avalanche Products by Avalanche for the purposes of Section 3.3.

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5.5Infringement of Third Party Intellectual Property Rights.  If a Third Party brings a claim or allegation of infringement, by reason of the manufacture, use or sale of a Licensed Product in the Field and in the Territory, of such Third Party’s Patent rights, the Party first receiving notice of such claim or allegation shall notify the other Party in writing and shall share information relating thereto with such other Party (if necessary, pursuant to a common interest agreement).

Article 6

CONFIDENTIALITY

6.1Use, Nondisclosure.  With respect to the Confidential Information of the other Party, each Party agrees, during the term of this Agreement and for [*] after this Agreement is terminated, or, in the case of Confidential Information that is a trade secret, until such Confidential Information is no longer a trade secret, as follows:

(a)Each Party shall hold the other Party’s Confidential Information in confidence and take reasonable precautions to protect the same (including, without limitation, all precautions such Party employs with respect to its own confidential information).

(b)Each Party agrees not to divulge the other Party’s Confidential Information to any Third Party unless approved in writing by the other Party, provided that in each case, such Third Party agrees to be bound by confidentiality provisions at least as restrictive as those contained in this Section 6;

(c)Each Party agrees not to make any use whatsoever at any time of the other Party’s Confidential Information, except for the purpose of performing the Party’s obligations under this Agreement;

(d)Each Party agrees not to use the other Party’s Confidential Information as the basis for beginning any new research and development programs; and

(e)Each Party agrees not to copy or reverse engineer the other Party’s Confidential Information.

6.2At the conclusion of this Agreement, each Party shall [*] either return the other’s Confidential Information in its possession (including all copies) or shall, at the disclosing Party’s direction, destroy such Confidential Information (including all copies) and certify its destruction to the disclosing Party.

6.3Exclusions.  The term “Confidential Information” shall not include any information which: (a) is in the public domain at the time of disclosure or enters the public domain following disclosure through no fault of the receiving Party, (b) is already in the receiving Party’s possession prior to disclosure hereunder (as reflected by such Party’s written records) or is subsequently disclosed to the receiving Party with no obligation of confidentiality by a third Party having the right to disclose it, (c) is independently developed by the receiving Party without reference to the disclosing Party’s Confidential Information, or (d) is required to be disclosed 

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pursuant to an order of any competent court or government agency or rules of a securities exchange with prior notice to disclosing Party, or as required by any Regulatory Authority, but shall notify the other Party prior to disclosing such information, and shall cooperate with the other Party using its commercially reasonable efforts either to enable the disclosing Party to seek protective measures for the Confidential Information, or to seek confidential treatment of such Confidential Information, and will use commercially reasonable efforts to limit any disclosure required to be made to any such agency to the minimum required for to meet the requirements of such order.

6.4Necessary disclosures:  Each Party may disclose the Confidential Information it receives under this Agreement to (i) its employees, contractors and permitted Sublicensees, (ii) to a potential or actual acquirer of such Party or the assets of such Party to which this Agreement relates, (iii) for the purposes of Patent filing, prosecution and enforcement and (iv) to its advisors, provided that in each of (i), (ii) and (iv), the disclosure is limited to the extent required for the performance of either Party’s obligations under this Agreement, and provided that in each such case the individuals are subject to obligations of confidentiality in relation to such information no less stringent than those contained in this Agreement.

6.5Publicity.  The Parties agree that no publicity release or announcement concerning the transactions contemplated hereby will be issued without the advance written consent of the other Parties, such consent not to be unreasonably withheld, except as such release or announcement may be required (a) by applicable Laws, (b) for filings with governmental agencies, (c) for prosecuting or defending litigation, and (d) for complying with applicable governmental regulations, court orders, and legal requirements, including filings with the U.S. Securities Exchange Commission and with Regulatory Authorities, in each of which cases the Party required to make such release or announcement will, to the extent reasonably practicable before making any such release or announcement, afford the other Parties with a reasonable opportunity to review and comment upon such release or announcement and use reasonable efforts to seek confidential treatment of such information.

Article 7

ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES

7.1Technology Transfer.  As promptly as practicable but in any event no more than [*] after the Effective Date, Virovek shall make available to Avalanche any tangible copies of the Virovek Know-How in its Control (or copies thereof) that are necessary for Avalanche to exercise its rights under this Agreement.

7.2Compliance with Law. Each Party will comply in all material respects with all applicable Laws in performing its obligations and exercising its rights under this Agreement.

Article 8

REPRESENTATIONS AND WARRANTIES

8.1By Both Parties.  Each Party represents and warrants the following:

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(a)it is duly organized, validly existing, and in good standing under the laws of the state and/or nation of its organization;

(b)it has all requisite corporate power and authority to enter into this Agreement and perform its obligations hereunder and grant the rights it purports to grant hereunder, and it has taken all necessary corporate action on its part required to authorize the execution and delivery of the Agreement and the performance of its obligations hereunder;

(c)the Agreement has been duly executed and delivered on behalf of it, and constitutes a legal, valid, and binding obligation of such Party and is enforceable against it in accordance with its terms;

(d)the execution, delivery, and performance of this Agreement by it does not, and the consummation of the transactions contemplated hereby will not, violate or conflict with any provisions of its organizational documents, bylaws, any law or regulation applicable to it, or any agreement, instrument, order, judgment, or decree to which it is a Party or by which it is bound that would materially affect its ability to consummate the transaction contemplated hereby or impair the rights being granted to the other Party; and

(e)all necessary consents, approvals, and authorizations of all governmental authorities and other Third Parties required to be obtained by such Party in connection with the entry into this Agreement have been obtained.

8.2IMPLIED WARRANTIES.  EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 8, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES AS TO THE VIROVEK PATENTS OR VIROVEK KNOW-HOW OR ANY OTHER MATTER, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES, INCLUDING, WITHOUT LIMITATION, ALL IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A WARRANTY OR REPRESENTATION BY VIROVEK AS TO THE VALIDITY OR SCOPE OF ANY OF THE VIROVEK PATENTS.

Article 9

INDEMNIFICATION

9.1Indemnity by Avalanche.  Avalanche shall indemnify Virovek and its directors, officers, employees and agents from any costs, damages, liabilities or expenses (including reasonable legal fees and expenses) in connection with claims or actions brought by Third Parties (collectively, “Losses”) to the extent arising from the breach by or on behalf of Avalanche of its representations, warranties or obligations hereunder, or the negligence or willful misconduct of Avalanche, its Affiliates, independent contractors or Sublicensees.

9.2Indemnity by Virovek.  Virovek shall indemnify Avalanche and its directors, officers, employees and agents from any Losses to the extent arising from the breach by or on 

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behalf of Virovek of its representations, warranties or obligations hereunder, or the negligence or willful misconduct of Virovek, its Affiliates or independent contractors.

9.3Conditions of Indemnification.  The Indemnifying Party’s indemnity obligations as provided for in this Article 9 shall be conditioned upon the following:

(a)the Indemnified Party providing prompt written notice of the applicable Claim to the Indemnifying Party;

(b)the Indemnified Party permitting the Indemnifying Party to have sole control over the investigation, defense, or settlement of the applicable Claim;

(c)the Indemnified Party reasonably cooperating with the Indemnifying Party in the investigation and defense of such Claim; and

(d)the Indemnified Party’s agreement not to compromise or otherwise settle any such Claim without the Indemnifying Party’s prior written consent, which consent shall not be unreasonably withheld or delayed.

9.4Insurance.  Each Party shall maintain insurance in the amounts of [*].

9.5Limitation of Liability.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 9.4 IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER ARTICLE 9, OR DAMAGES AVAILABLE FOR A BREACH OF CONFIDENTIALITY OBLIGATIONS IN ARTICLE 6.

Article 10

TERM AND TERMINATION

10.1Term.  This Agreement shall be effective as of the Effective Date and, unless earlier terminated by mutual agreement or in accordance with other provisions herein, shall remain in effect until the expiration or abandonment of the last of the Virovek Patents included in the Virovek Technology.

10.2Termination.  Anything herein to the contrary notwithstanding, this Agreement may be terminated as follows:

(a)Avalanche Voluntary Termination.  Avalanche may terminate this Agreement at any time by giving [*] written notice to Virovek.

(b)Termination For Default.  Each Party shall have the right to terminate this Agreement for default due to the other Party’s uncured failure to comply in any material respect with the terms and conditions of this Agreement. At least [*] (or, in the case of Avalanche’s 

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failure to make any payment hereunder when due, [*]) prior to any such termination for default, the Party seeking to so terminate shall give the other Party written notice of its intention to terminate this Agreement in accordance with the provisions of this Section 10.2(b), which notice shall set forth the default(s) which form the basis for such termination. If the defaulting Party fails to correct such default(s) by the end of the applicable notice period, the other Party immediately may terminate this Agreement.

10.3Consequences of Expiration or Termination.

(a)In the event of expiration or any termination of this Agreement, all rights and obligations of the Parties under this Agreement shall terminate, except as set forth in this Section 10.3.

(b)In the event of any termination (but not expiration) of this Agreement:

(i)All rights to the Virovek Technology and any Virovek Improvements shall revert to Virovek;

(ii)Avalanche shall immediately cease any use and/or exploitation of the Virovek Patents and Virovek Know-How and cease developing, using, manufacturing, selling, distributing and/or licensing any Licensed Product, either directly or indirectly, and shall cause its Affiliates, and require its Sublicensees, to do the same; and

(iii)Each Party shall, at its election, either deliver to the other Party or destroy, and shall cause its agents, consultants and Sublicensees to deliver to the other Party or destroy, all embodiments of the other Party’s Confidential Information or any part thereof in their possession, power or control; provided, however, that such Party may retain, and permit its Sublicensees to retain, one archival copy of such Confidential Information solely for purposes of monitoring its compliance with Article 6 hereof.

(c)Neither expiration of this Agreement, nor termination of this Agreement for any reason, shall relieve the Parties of any obligation accruing prior thereto and shall be without prejudice to the rights and remedies of either Party with respect to any antecedent breach of the provisions of this Agreement. Without limiting the generality of the foregoing, no expiration or termination of this Agreement, whether by lapse of time or otherwise, shall serve to terminate the obligations of the Parties hereto under Sections 8.3, 10.1 and 10.3, and Articles 1, 6, 9 (but as to Sections 9.1 through 9.4 solely as to claims arising from activities during the term of this Agreement) and 11 and such other Sections as by their nature should survive, and such obligations shall survive any such expiration or termination.

Article 11

MISCELLANEOUS

11.1Assignment.  Neither Party may assign this Agreement without prior written consent from the other Party, except that no such consent shall be required for either Party to assign its rights or transfer its obligations to its Affiliates or in connection with the sale or transfer of the 

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majority of its stock or all or substantially all of its assets to which this Agreement relates, whether as part of a merger, acquisition, or asset sale. Any assignment in violation of this Agreement will be null and void. This Agreement benefits and binds the parties and their respective successors and permitted assigns.

11.2Severability.  If any provision or provisions of this Agreement shall, to any extent, be held to be invalid or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. However, in case such invalidation or unenforceability injures the rights and interests of a Party, the Parties hereto shall renegotiate this Agreement in good faith to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

11.3Entirety of Agreement; Modification.  This Agreement, together with all exhibits hereto, constitute the entire, final, and complete agreement and understanding between the Parties, and replace and supersede all prior discussions and agreements between them with respect to the subject matter hereof, [*]  No modification or amendment to this Agreement shall be valid or binding upon the Parties hereto unless made in writing and duly executed on behalf of each of the Parties hereto.

11.4Governing Law.  This Agreement shall be governed by and interpreted in accordance with the laws of the State of California without giving effect to any choice of law principles that would require the application of the laws of a different state or country.

11.5Force Majeure.  If a Party is prevented from complying, either totally or in part, with any of the terms or provisions set forth herein by reason of force majeure, including, by way of example and not of limitation, fire, flood, explosion, storm, earthquake, strike, lockout or other labor dispute, riot, war, rebellion, terrorist act, accidents, acts of God, failure of suppliers or any other similar cause, in each case to the extent beyond its reasonable control, said Party will promptly provide written notice of same to the other Parties. Such notice will identify the requirements of this Agreement or such of its obligations as may be affected, and such obligations will be suspended during the period of such disability, provided that the Party prevented from performing hereunder will use reasonable efforts to remove such disability and will continue performance whenever such causes are removed. The Party so affected will give to the other Party a good faith estimate of the continuing effect of the force majeure condition and the duration of the affected Party’s nonperformance.

11.6Notice.  Any notice required to be given by a Party in connection with this Agreement shall be given in the English language by prepaid airmail, express delivery service, or facsimile, and shall be deemed to have been given for all purposes (a) when received, if sent by express delivery service, (b) three (3) business days after mailing, if mailed by airmail, or (c) when received by recipient, if sent by facsimile transmission with electronic confirmation of transmission if transmission is confirmed during the recipient’s normal business hours, or otherwise on the recipient’s next business day. Unless otherwise specified in writing, the Parties’ addresses for notice purposes are as follows:

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Avalanche Confidential

		
		
	
To Virovek:
	
3521 Investment Boulevard, Suite 1

Hayward, CA 94545

Attn:  [*]

	
With a copy to (which shall not constitute notice):
	
[*]

	
To Avalanche:
	
665 Third Street, Suite 250

San Francisco, CA 94107

Attn: [*]

	
With a copy to (which shall not constitute notice):
	
[*]

 

11.7Dispute Resolution.  If any dispute arises relating to this Agreement, prior to instituting any termination under Sections 10.2(b) or any lawsuit or other dispute resolution process on account of such dispute, the Parties will attempt in good faith to settle such dispute first by negotiation and consultation between themselves, including referral of such dispute to the CEOs of the Parties. If the CEOs are unable to resolve such dispute or agree upon a mechanism to resolve such dispute [*] after such matter is first submitted to them for resolution, then either Party may then submit such issue for resolution by a court of competent jurisdiction in California.

11.8Construction.  The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event that an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Except where the context otherwise requires, where used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word “or” is used in the inclusive sense (and/or). The captions of this Agreement are for convenience of reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. The term “includes” and “including” as used herein means including, but not limited to.

11.9Use of Names.  Neither Party will use the name or trademark of the other Party in relation to this Agreement in any advertising, press release or other form of publicity without the prior written consent of the other Party, such consent not to be unreasonably withheld. This restriction shall not apply to materials used by either Party solely for financing purposes or to documents available to the public that identify the existence of the Agreement.

11.10Counterparts; Facsimiles.  This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which shall constitute together the same document. For purposes of this Agreement and any other document required to be delivered pursuant to this Agreement, facsimiles or electronic copies of signatures shall be deemed to be original signatures. In addition, if any of the Parties sign facsimile copies of this Agreement, such copies shall be deemed originals.

11.11Waiver.  Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights 

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to the future enforcement of its rights under this Agreement unless such Party provides an express written and signed waiver as to a particular matter for a particular period of time.

[Remainder of page intentionally left blank]

 

 

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In Witness Whereof, the Parties have caused this Agreement to be executed by their duly authorized officers as of the Effective Date.

Virovek, Inc.

 

By:

Name:

Title:

Date:

 

Avalanche Biotechnologies, Inc.

 

By:

Name:

Title:

Date:

 

 

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[*] = 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.

 

EXHIBIT A

Virovek Patents

 

 

				
	
Patent Filing
	
Type
	
Territory
	
Filing Date

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

 

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[*] = 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.

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