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EXHIBIT 10.13

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

LICENSE AGREEMENT

     THIS AGREEMENT made and entered into this 1st day of June, 2004 (“EFFECTIVE DATE”), by and
between LEE G. DANTE, an individual having his principal office at [***] (“DANTE”), and OREXIGEN
THERAPEUTICS, INC., a corporation organized under the laws of Delaware (“OREXIGEN”), with its
corporate headquarters and principal office at One Palmer Square, Suite 515, Princeton, NJ 08540.

     WHEREAS, DANTE owns certain PATENT RIGHTS (as hereinafter defined);

     WHEREAS, DANTE has the right to grant licenses under said PATENT RIGHTS; and

     WHEREAS, DANTE desires to have the PATENT RIGHTS developed and commercialized to benefit the
public and is willing to grant licenses to each hereunder; and

     WHEREAS, OREXIGEN desires to obtain licenses under PATENT RIGHTS and upon the terms and
conditions hereinafter set forth; and

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

ARTICLE 1 – DEFINITIONS

     For the purposes of this AGREEMENT, and solely for that purpose, the terms and phrases set
forth below and elsewhere in this AGREEMENT in capital letters shall be defined as follows:

	 	1.01	 	“AFFILIATE” shall mean any corporation or non-corporate entity which controls,
is controlled by or is under the common control with a party hereto. A corporation or
a non-corporate entity, as applicable, shall be regarded as in control of another
corporation if it owns or directly or indirectly controls at least fifty percent (50%)
of the voting stock of the other corporation, or in the absence of ownership of at
least fifty percent (50%) of the voting stock of a corporation, or in the case of a non
corporate entity, if it possesses directly or indirectly, the power to direct or cause
the direction of the management and policies of such corporation or non-cooperate
entity, as applicable.
	 
	 	1.02	 	“CONSULTING AGREEMENT” shall have the meaning given in Section 3.01(f).
	 
	 	1.03	 	“FIELD OF USE” shall mean any and all uses.
	 
	 	1.04	 	“FULLY DILUTED BASIS” means the total number of issued and outstanding shares
of the OREXIGEN’s common stock, $.001 par value (“OREXIGEN COMMON STOCK”),
calculated to include (i) conversion of all issued and

 

			
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	 	 	 	outstanding securities then convertible into OREXIGEN COMMON STOCK, (ii) the
exercise of all then outstanding options and warrants to purchase shares of OREXIGEN
COMMON STOCK, whether or not then exercisable (other than options covered under the
following clause (iii)), and (iii) the issuance or grant of all securities reserved
for issuance pursuant to any stock or stock option plan of OREXIGEN in effect on the
date of the calculation.
	 
	 	1.05	 	“LICENSED PROCESS” shall mean any process which is covered in whole or in part
by a VALID CLAIM contained in the PATENT RIGHTS.
	 
	 	1.06	 	“LICENSED PRODUCT” shall mean any product or part thereof which:

	 	(a)	 	is covered in whole or in part by any VALID CLAIM contained in
the PATENT RIGHTS in the country in which any such product or part thereof is
made, used or sold; and/or
	 
	 	(b)	 	is manufactured by using a process or is employed to practice a
process which is covered in whole or in part by a VALID CLAIM contained in the
PATENT RIGHTS in the country in which any LICENSED PROCESS is used or in which
such product or part thereof is used or sold; and/or
	 
	 	(c)	 	in its intended use, practices, incorporates, or otherwise
utilizes, in whole, or in part, a VALID CLAIM contained in the PATENT RIGHTS in
the country in which any such product or part thereof is made, used, or sold.

	 	1.07	 	“LICENSED SERVICE” shall mean any service provided by OREXIGEN (and/or
SUBLICENSEES, as the case may be) to a THIRD PARTY which utilizes LICENSED PRODUCTS
and/or LICENSED PROCESSES.
	 
	 	1.08	 	“NET SALES” shall mean:

	 	(a)	 	in the case of LICENSED PRODUCTS, OREXIGEN’S (and/or those of
SUBLICENSEES, as the case may be) revenues received from sale and/or lease of
the subject LICENSED PRODUCTS; and
	 
	 	(b)	 	in the case of LICENSED PROCESSES, OREXIGEN’S (and/or those of
SUBLICENSEES, as the case may be) revenues received from sale and/or lease of
the subject LICENSED PROCESSES; and
	 
	 	(c)	 	in the case of LICENSED SERVICES, revenue received by OREXIGEN
(and/or SUBLICENSEES, as the case may be) for provision of the subject LICENSED
SERVICE to a THIRD PARTY.

	 	 	 	and each of (a) (b), and (c), above shall be less the sum of the following:

	 	(w)	 	discounts allowed in amounts customary in the trade;

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	 	(x)	 	sales, tariff duties and/or use taxes directly imposed and with
reference to particular sales;
	 
	 	(y)	 	outbound transportation prepaid or allowed; and
	 
	 	(z)	 	amounts allowed or credited on returns.

	 	 	 	No deductions to NET SALES shall be made for commissions paid to individuals whether
they are associated with independent sales agencies or regularly employed by
OREXIGEN (and/or SUBLICENSEES, as the case may be) and on its payroll, or for cost
of collections. LICENSED PRODUCTS shall be considered “sold” when the consideration
for provision thereof is received by OREXIGEN (and/or SUBLICENSEES, as the case may
be). LICENSED PRODUCTS, LICENSED SERVICES, and LICENSED SERVICES used by OREXIGEN
(and/or SUBLICENSEES, as the case may be) for its own use in the FIELD (and not in
connection with the sale to THIRD PARTIES) shall be considered to be “NET SALES” for
purposes of computing royalty obligations, except to the extent that such LICENSED
PRODUCTS and/or LICENSED SERVICES are used for clinical field trials or for
OREXIGEN’s own internal non-commercial research (and/or SUBLICENSEES, as the case
may be).
	 
	 	 	 	Except as provided below, if a LICENSED PRODUCT, LICENSED PROCESS or LICENSED
SERVICE is sold in combination with another active component or components, the NET
SALES PRICE, for purposes of determining royalties on the combination, will be
calculated by multiplying the NET SALES PRICE of the combination by the fraction
A/(A+B), where A is the invoice price of the LICENSED PRODUCT, LICENSED PROCESS or
LICENSED SERVICE if sold separately and B is the total invoice price of any other
active component or components in the combination if sold separately. If the
LICENSED PRODUCT, LICENSED PROCESS or LICENSED SERVICE and the other active
component or components in the combination are not sold separately, the NET SALES
PRICE, for purposes of determining royalties on the combination, will be calculated
by multiplying the NET SALES PRICE of the combination by the fraction C/(C+D), where
C is the actual manufacturing cost of the LICENSED PRODUCT, LICENSED PROCESS or
LICENSED SERVICE and D is the total actual manufacturing cost any other active
component(s) included in the combination. Cost of manufacturing or provision of
services for the purposes of this paragraph will be determined in accordance with
generally accepted accounting principles.
	 
	 	1.09	 	“NON-OBESITY NET SALES” shall mean NET SALES from any NON-OBESITY PRODUCT.
	 
	 	1.10	 	“NON-OBESITY PRODUCTS” shall mean any LICENSED PRODUCT, LICENSED PROCESS or
LICENSED SERVICE used for the treatment of any indication other than obesity.

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	 	1.11	 	“OBESITY NET SALES” shall mean NET SALES from any LICENSED PRODUCT, LICENSED
PROCESS or LICENSED SERVICE for the treatment of obesity.
	 
	 	1.12	 	“OBESITY PRODUCTS” shall mean any LICENSED PRODUCT, LICENSED PROCESS or
LICENSED SERVICE used for the treatment of obesity.
	 
	 	1.13	 	“PATENT RIGHTS” shall mean the patents, patent applications listed in APPENDIX
A (such patents hereinafter collectively referred to as “PATENTS”), together with all
divisions, continuations, continuations-in-part (but only to the extent that the
subject matter of each such continuation-in-part application is described in and
enabled by the disclosure of said PATENTS), re-examinations, reissues, substitutions,
or extensions thereof and patents issuing therefrom in the United States and non-U.S.
jurisdictions. Notwithstanding the foregoing or anything else to the contrary in this
AGREEMENT, PATENT RIGHTS shall not include those patents and/or patent applications
which, during the term of this AGREEMENT, cease to be PATENT RIGHTS pursuant to Section
6.01 or Section 6.02. The term “PATENT RIGHTS” shall also include any “Improvements”,
as such term is defined in the CONSULTING AGREEMENT.
	 
	 	1.14	 	“PATENT RIGHTS EXPENSES” shall mean all patent-related expenses (including, but
not limited to, filing fees, maintenance fees, and reasonable fees and expenses of
patent counsel) incurred in connection with the PATENT RIGHTS.
	 
	 	1.15	 	“STOCK OPTION AGREEMENT” shall have the meaning given in Section 3.01(a).
	 
	 	1.16	 	“SUBLICENSE” and “SUBLICENSE AGREEMENT” shall mean, and include without
limitation, any relationship/agreement in which a THIRD PARTY gains any
rights—temporary or otherwise—to any of the rights granted by DANTE to OREXIGEN under
this AGREEMENT (including, but not limited to, OREXIGEN AFFILIATES, assignee(s),
licensee(s), sublicensee(s), marketing partner(s) and the like, hereinafter, such THIRD
PARTIES referred as “SUBLICENSEES”), including, but not limited to those granted via
options, rights of first refusal, material transfer agreements, sublicenses (implied or
expressed), and the like.
	 
	 	1.17	 	“SUBLICENSE REVENUES” shall mean any and all initial upfront fees, license
fees, option fees, milestone payments, and other amounts (other than running
royalties on NET SALES of LICENSED PRODUCTS) payable to OREXIGEN (and/or any of
SUBLICENSEES, as the case may be) under a SUBLICENSE to any of the licenses granted
by DANTE to OREXIGEN under this AGREEMENT, but excluding any payments that are (a)
reimbursements of documented research and development costs and expenses; (b)
reimbursement of cost of goods directly relating to LICENSED PRODUCTS supplied by
OREXIGEN to such SUBLICENSEE; (c) loans granted to OREXIGEN by such SUBLICENSEE; (d)

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	 	 	 	reimbursement of documented costs directly related to pursuit of patent protection
and/or maintenance of patents for PATENT RIGHTS and/or OREXIGEN PATENT RIGHTS; or
(e) an equity investment by a commercial THIRD PARTY (but solely to the extent that
such investment is at a price equal to or less than one hundred percent (100%) of
the fair market value of stock sold or otherwise transferred in such investment). It
is agreed that [***] shall not receive from [***] for any SUBLICENSE under this
AGREEMENT, without the express prior written permission of DANTE, such approval not
to be unreasonably withheld.

	 	1.18	 	“TERRITORY” shall mean the world.
	 
	 	1.19	 	“THIRD PARTY” means any individual or other entity other than DANTE and/or
OREXIGEN.
	 
	 	1.20	 	“VALID CLAIM” shall mean (i) an issued and unexpired claim within the PATENT
RIGHTS that has not been permanently revoked or held invalid or unenforceable by a
decision of a court or other governmental agency of competent jurisdiction and that has
not been dedicated to the public or admitted to be invalid or unenforceable through
reissue, disclaimer or otherwise, or (ii) a claim of a pending patent application that
was filed in good faith, has not been pending for more than [***] ([***]) years, and
which has not been abandoned or finally disallowed without the possibility of appeal or
refilling of such application contained in the PATENT RIGHTS in the country in which
any such product or part thereof is made, used or sold.
	 
	 	1.21	 	Where appropriate, words denoting a singular number only shall include the
plural and vice versa.
	 
	 	1.22	 	Certain other defined terms shall have the meanings given them elsewhere in
this AGREEMENT.

ARTICLE 2 – LICENSE

	 	2.01	 	DANTE hereby grants to OREXIGEN and OREXIGEN hereby accepts from DANTE, subject
to the terms and conditions of this AGREEMENT, the exclusive right and sublicenseable
license for the FIELD OF USE in the TERRITORY to practice under the PATENT RIGHTS to
develop, make, have made, import, use, lease, offer for sale, sell, and distribute
LICENSED PRODUCTS for the FIELD OF USE in the TERRITORY only, to develop, make, have
made, import, use, lease, offer for sale, sell, and distribute LICENSED PROCESSES
in/for the FIELD OF USE in the TERRITORY, and/or to develop, make, have made, perform,
provide, import, use, lease, offer for sale, sell, and distribute LICENSED SERVICES in
the FIELD OF USE in the TERRITORY only until the end of the term for which the PATENT
RIGHTS are granted unless this AGREEMENT shall be sooner terminated according to the
terms hereinafter provided.

 

			
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	 	2.02	 	All SUBLICENSES shall be subject to the terms and conditions of this AGREEMENT,
shall be no less favorable to or protective of DANTE than this AGREEMENT except as
expressly stated in this AGREEMENT, and shall not be further sublicenseable without
the express written approval of DANTE, such approval not to be unreasonably
withheld. All SUBLICENSES will be assigned to DANTE in the event the AGREEMENT is
terminated, subject to DANTE’s approval, such approval not to be unreasonable
withheld or delayed. OREXIGEN shall use commercially reasonable efforts to enforce
the terms of the SUBLICENSE agreements. OREXIGEN further agrees to provide DANTE
with a copy of all SUBLICENSES within thirty (30) days of execution of each subject
SUBLICENSE.

ARTICLE 3 – LICENSE FEE, ROYALTIES AND OTHER FEES

	 	3.01	 	In consideration of the rights granted to OREXIGEN pursuant to this AGREEMENT
and subject to the terms and conditions of this AGREEMENT, OREXIGEN agrees to pay or
otherwise compensate DANTE as follows:

	 	(a)	 	Equity Consideration. OREXIGEN shall grant to DANTE
stock options to purchase one hundred forty-six thousand eight hundred
ninety-seven (146,897) shares of OREXIGEN COMMON STOCK as represent, on a FULLY
DILUTED BASIS, an amount not less than [***] percent ([***]%) of OREXIGEN
COMMON STOCK outstanding at the time of execution of this AGREEMENT
(hereinafter referred to as the “DANTE OPTIONS”). OREXIGEN shall issue and
deliver the DANTE OPTIONS to DANTE within thirty (30) days of the EFFECTIVE
DATE, DANTE and OREXIGEN shall enter into the Stock Option Agreement, the form
of which is attached as Appendix B (the “STOCK OPTION AGREEMENT”).
	 
	 	(b)	 	Upfront Royalty. OREXIGEN shall pay DANTE a one-time,
noncreditable, non-refundable payment of one hundred thousand dollars
($100,000), payable as follows: (i) upon execution of this AGREEMENT, OREXIGEN
shall pay DANTE the sum of twenty-five thousand dollars ($25,000); and (ii)
upon execution of this AGREEMENT, OREXIGEN shall deliver the sum of
seventy-five thousand dollars ($75,000) into an OREXIGEN escrow account, which
sum shall be released to DANTE upon OREXIGEN’S receipt of confirmation that
John S. Nagle has filed an assignment of the PATENT RIGHTS with the Patent and
Trademark Office.
	 
	 	(c)	 	Royalty on NET SALES of LICENSED PRODUCTS, LICENSED PROCESSES, and
LICENSED SERVICES. At the times and in the manner set forth
hereinafter, OREXIGEN (and/or appertaining SUBLICENSEES, as the case may be)
shall pay to DANTE non-refundable running royalties (hereinafter such
running royalty referred to collectively as the “RUNNING ROYALTY”) of: (i)
[***] percent

 

			
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	 	 	 	([***]%) on OBESITY NET SALES, and (ii) [***] percent ([***]%) on
NON-OBESITY NET SALES. Notwithstanding the foregoing, if OREXIGEN (and/or
appertaining SUBLICENSEES, as the case may be) obtains from any THIRD PARTY
any licenses and/or sublicenses for patent rights in order to practice
PATENT RIGHTS in the FIELD OF USE or in order to develop, make, have made,
use, import, offer for sale, sell, import, export or provide NON-OBESITY
PRODUCTS, then OREXIGEN (and/or appertaining SUBLICENSEES, as the case may
be) shall be entitled to credit its/their payment of additional running
royalties to such THIRD PARTY(ies), if any, on NON-OBESITY NET SALES against
the RUNNING ROYALTY for the subject NON-OBESITY PRODUCTS in the appertaining
country(ies) during the appertaining time period, provided that in no event
shall the amount otherwise payable to DANTE as RUNNING ROYALTY on
NON-OBESITY NET SALES be reduced to less than [***] percent ([***]%) for the
subject NON-OBESITY PRODUCTS in the appertaining country(ies) during the
appertaining time period. The RUNNING ROYALTY on OBESITY NET SALES shall
[***] under this Section 3.01(c).

	 	(d)	 	Milestone Payments. OREXIGEN (and/or appertaining
SUBLICENSEES, as the case may be) shall pay DANTE a one-time, noncreditable,
non-refundable payment of one million dollars ($1,000,000) within [***].
	 
	 	(e)	 	Royalty on SUBLICENSE REVENUES. OREXIGEN (and/or
appertaining SUBLICENSEES, as the case may be) shall pay to DANTE a royalty of
[***] percent ([***]%) on SUBLICENSING REVENUES.
	 
	 	(f)	 	Consulting Agreement. Concurrently with the execution
of this AGREEMENT, OREXIGEN and DANTE shall enter into a Consulting Agreement,
the form of which is attached hereto as Appendix C (the “CONSULTING
AGREEMENT”).

	 	3.02	 	All payments due from OREXIGEN (and/or appertaining SUBLICENSEES, as the case
may be) pursuant to this AGREEMENT shall be due and payable in accordance with the
terms and conditions of this AGREEMENT. All past due payments shall bear interest at
the annual rate of [***] percent ([***]%) legal from the due date of such payment until
paid. The payment of such interest and late fees shall not foreclose DANTE from
exercising any other rights he may have as a consequence of the lateness of any
payment.
	 
	 	3.03	 	No multiple royalties on NET SALES shall be payable to DANTE on a single
LICENSED PRODUCT because its manufacture, use, lease, sale or practice are or shall be
covered by more than one of the PATENT RIGHTS.

 

			
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ARTICLE 4 – DUE DILIGENCE REQUIREMENTS

	 	4.01	 	No multiple royalties on NET SALES shall be payable to DANTE on a single
LICENSED PRODUCT because its manufacture, use, lease, sale or practice are or shall be
covered by more than one of the PATENT RIGHTS and/or OREXIGEN PATENT RIGHTS.
	 
	 	4.02	 	OREXIGEN shall use commercially reasonable efforts to bring LICENSED PRODUCTS
to market through a thorough, vigorous and diligent program for exploitation of the
PATENT RIGHTS and OREXIGEN PATENT RIGHTS, and to continue active, diligent marketing
efforts for LICENSED PRODUCTS throughout the life of this AGREEMENT.
	 
	 	4.03	 	During the term of this AGREEMENT, OREXIGEN will submit [***] progress reports
to DANTE as set forth in Section 5.02. DANTE shall have the right to request [***]
([***]) [***] to discuss such information with representatives of OREXIGEN at
OREXIGEN’S offices. As part of exercising such commercially reasonable efforts,
OREXIGEN will consider filing an NDA for LICENSED PRODUCTS, provided that such a filing
is appropriate, given the medical effectiveness of the particular LICENSED PRODUCT, the
market opportunity therefor, competitive conditions, time to approval, cost of
conducting reasonably anticipatory clinical trials and other commercially reasonable
factors.

ARTICLE 5 – REPORTS AND RECORDS

	 	5.01	 	OREXIGEN shall keep full, true and accurate books of accounts and other records
containing all particulars which may be necessary to properly ascertain and verify the
amounts payable to DANTE hereunder and shall require SUBLICENSEES, as the case may be,
to do the same. Said books of account shall be kept at OREXIGEN’s (and/or
SUBLICENSEES’) principal place of business or the principal place of business of the
appropriate division of OREXIGEN (and/or SUBLICENSEE) to which this AGREEMENT relates.
Said books and the supporting data shall be open at all reasonable times for [***]
([***]) years following the end of the calendar year to which they pertain, to the
inspection of DANTE or its agents for the purpose of verifying the OREXIGEN’s (and/or
SUBLICENSEE’s) royalty statement or compliance in other respects with this AGREEMENT.
Should such inspection lead to the discovery of a greater than [***] percent ([***]%)
discrepancy in reporting, OREXIGEN agrees to pay the full cost of such inspection in
addition to any amounts due to DANTE.
	 
	 	5.02	 	OREXIGEN shall report the status of development of each LICENSED PRODUCT [***]
to DANTE by [***]. Such report shall include descriptions of OREXIGEN’s (and/or
SUBLICENSEES’s plans and commercially reasonable estimated timeframes for testing,
development, governmental approvals and marketing/sale of each LICENSED PRODUCT.

 

			
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	 	5.03	 	After the first commercial sale of a LICENSED PRODUCT, and in addition to the
reports required under Section 5.02, OREXIGEN shall render to DANTE prior to [***] a
written account of the NET SALES of LICENSED PRODUCTS made during the prior [***]
period ending [***], respectively, and shall simultaneously pay to DANTE the
royalties due on such NET SALES in United States dollars. Reports tendered shall
include the calculation of royalties by product by country. Further, OREXIGEN shall
render to DANTE prior to [***] a written account of royalties on SUBLICENSE REVENUES
due to DANTE for the prior [***] period ending [***], respectively, and shall
simultaneously pay to DANTE the royalties due on such NET SALES in United States
dollars.

ARTICLE 6 – PATENTS

	 	6.01	 	Patent Prosecution

	 	(a)	 	DANTE shall use his reasonable best efforts to have the prosecution of
the PATENT RIGHTS transferred to OREXIGEN’S patent firm (Knobbe Martens
Olson & Bear LLP, attn: Ned A. Israelsen, 550 West C Street, Suite 1200, San
Diego, CA 92101, (619) 235-8550 (voice), (619) 235-0176 (fax), email
nisraelsen@kmob.com) within [***] ([***]) days of the EFFECTIVE DATE so that
OREXIGEN may assume primary responsibility for all activities associated
with the prosecution and maintenance of the PATENT RIGHTS. OREXIGEN will
use reasonable commercial efforts to file, prosecute and maintain the PATENT
RIGHTS during the term of this AGREEMENT. OREXIGEN will keep DANTE advised
as to all developments with respect to any applicable divisional,
continuation, continuation-in-part and reissue application(s) within the
scope of the PATENT RIGHTS. OREXIGEN shall keep DANTE advised as to the
status of the PATENT RIGHTS and OREXIGEN’s designated patent attorneys will
provide DANTE, in a timely manner, with copies of all official documents and
correspondence relating to the prosecution, maintenance, and validity of the
PATENT RIGHTS. OREXIGEN shall consult with DANTE in such prosecution and
maintenance, shall diligently seek advice of DANTE on all matters pertaining
to the PATENT RIGHTS, shall diligently seek strong and broad claims under
the PATENT RIGHTS, and shall not abandon prosecution of any PATENT RIGHTS or
any of the claims of the PATENT RIGHTS without first notifying DANTE in a
timely manner of OREXIGEN’s intention and reason therefore, and providing
DANTE with reasonable opportunity to assume responsibility for prosecution
and maintenance of the appertaining PATENT RIGHTS (which thereafter shall be
subject to the provisions of Section 6.02(b) as regards status as PATENT
RIGHTS and LICENSED PRODUCTS, LICENSED PROCESSES, and LICENSED SERVICES and
OREXIGEN’s rights therein). All decisions with respect to the prosecution
of the PATENT RIGHTS by OREXIGEN pursuant to

 

			
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	 	 	 	this Section 6.01(a) shall be made by OREXIGEN, subject to the approval of
DANTE which approval shall not be unreasonably withheld or delayed.
OREXIGEN’s obligations under this Section 6.01(a) shall include, without
limitation, an obligation to inform DANTE in a timely manner (no less than
[***] ([***]) days prior to the appertaining filing deadlines) that OREXIGEN
will not pursue patents in any non-US country so that DANTE may pursue such
patents if it so desires in which case from the date of such filing of such
patent applications by DANTE shall not be considered PATENT RIGHTS and
OREXIGEN shall be deemed to have forfeited all rights under this AGREEMENT
to such patent applications and resulting patents. (APPENDIX A shall be
deemed to be so amended.) For avoidance of doubt, it is understood that
OREXIGEN shall assume direct and full responsibility for payment of expenses
it incurs as a result of his assumption of responsibility for prosecution of
PATENT RIGHTS under this Section 6.01(a).

	 	6.02	 	Patent Costs.

	 	(a)	 	During the term of this AGREEMENT, payment of all PATENT RIGHTS
EXPENSES shall be the responsibility of OREXIGEN, whether such fees and costs
were incurred before or after the EFFECTIVE DATE of this AGREEMENT.
Notwithstanding anything to the contrary in this AGREEMENT, except as OREXIGEN
declines interest in non-US patent pursuit, OREXIGEN shall be responsible for
all PATENT RIGHTS EXPENSES associated with the preparation and filing of the
PCT application(s) contained within the PATENT RIGHTS as well as all PATENT
RIGHTS EXPENSES associated with pursuit and maintenance of the PATENT RIGHTS.
Within thirty (30) days of the EFFECTIVE DATE of this AGREEMENT, OREXIGEN
agrees to reimburse DANTE for PATENT RIGHTS EXPENSES (not to exceed forty
thousand dollars ($40,000)) which were incurred by DANTE, and for which
attorney invoices were received and processed by DANTE, before the EFFECTIVE
DATE.
	 
	 	(b)	 	If OREXIGEN decides to discontinue the financial support of the
prosecution or maintenance of a subject PATENT APPLICATION or patent falling
within the scope of PATENT RIGHTS, OREXIGEN will give DANTE timely written
notice at least two (2) months in advance of the effective date of
OREXIGEN’s decision and DANTE will be free to continue prosecution or
maintain any such application(s)/patents, and to maintain any protection
issuing thereon in the U.S. and in any foreign country at DANTE’s sole
expense. In such instances, from the date of DANTE’s receipt of such
written notice from OREXIGEN, such patent and/or DANTE PATENT APPLICATION
shall no longer be considered to fall within the definition of PATENT RIGHTS
(APPENDIX A shall be deemed to be so amended) and OREXIGEN shall forfeit all
rights under this AGREEMENT to the subject issued patent(s) and/or subject
DANTE

 

			
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	 	 	 	PATENT APPLICATION and patent(s) arising from such PATENT APPLICATION.
Accordingly, DANTE shall be free, at his sole discretion to license said
patent(s) and patent application(s) to any THIRD PARTY or otherwise dispose
of such patent(s) and patent applications(s) as it deems appropriate.

	 	6.03	 	OREXIGEN agrees to mark the LICENSED PRODUCTS (as the case may be), and/or
their containers, labels, and/or other packaging, in such a manner as to conform to the
patent laws and practices of the country of manufacture or sale, as appropriate.

ARTICLE 7 – INFRINGEMENT OF THIRD-PARTY RIGHTS

	 	7.01	 	In the event that DANTE or OREXIGEN is charged with infringement of a patent by
a THIRD PARTY or is made a party in a civil action as a result of the activity of
OREXIGEN and/or a SUBLICENSEE (and not from the activity of DANTE or his AFFILIATES
other than the granting of this license to OREXIGEN) as a result (directly or
indirectly) of the licenses granted hereunder to OREXIGEN, OREXIGEN:

	 	(a)	 	must defend and/or settle any such claim of infringement or
civil action;
	 
	 	(b)	 	must assume all costs, expenses, damages, and other
obligations, for payments incurred as a consequence of such charges of
infringement and/or civil action;
	 
	 	(c)	 	must indemnify and hold DANTE harmless from any and all
damages, losses, liability, and costs resulting from a charge of infringement
or civil action which shall be brought against DANTE and attributable to
technology added to, incorporated into or sold with a LICENSED PRODUCT by
OREXIGEN, and/or SUBLICENSEE (as the case may be) or to manufacturing processes
utilized by OREXIGEN or SUBLICENSEE (as the case may be); and
	 
	 	(d)	 	may, if such claim of infringement or civil action shall be
based on patent claims contained in any pending or issued patent included in
the PATENT RIGHTS, terminate this AGREEMENT effective immediately upon DANTE’s
receipt of written notice of termination.

	 	7.02	 	DANTE will give OREXIGEN reasonable assistance, at OREXIGEN’s expense, in the
defense of any such infringement charge or lawsuit, as may be reasonably required.
OREXIGEN shall reimburse DANTE for such expenses within [***] ([***]) days of receiving
an invoice for the same.

ARTICLE 8 – INFRINGEMENT OF PATENT RIGHTS BY THIRD PARTIES

	 	8.01	 	Each party to this AGREEMENT is obligated to inform the other promptly in
writing of any alleged infringement of which it becomes aware and of any

 

			
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	 	 	 	available evidence of infringement by a THIRD PARTY of any patents within the PATENT
RIGHTS.

	 	8.02	 	If during the term of this AGREEMENT, OREXIGEN becomes aware of any alleged
infringement by a THIRD PARTY, OREXIGEN shall have the right, but not the obligation,
to either:

	 	(a)	 	settle the infringement suit by sub-licensing the alleged
infringer or by other means; or
	 
	 	(b)	 	prosecute at its own expense any infringement of the PATENT
RIGHTS. In the event OREXIGEN prosecutes such infringement of PATENT RIGHTS,
OREXIGEN may, for such purposes, request to use the name of DANTE as party
plaintiff. DANTE, at his sole discretion, may agree to become a party
plaintiff, and all costs associated therewith shall be borne by OREXIGEN.

	 	8.03	 	In the event that OREXIGEN undertakes the enforcement and/or defense of the
PATENT RIGHTS by litigation, including any declaratory judgment action, the total cost
of any such action commenced or defended solely by OREXIGEN shall be borne by OREXIGEN.
Any recovery of damages by OREXIGEN as a result of such action shall be applied first
in satisfaction of any unreimbursed expenses and attorneys’ fees of OREXIGEN relating
to the action, and second in satisfaction of unreimbursed legal expenses and attorneys’
fees of DANTE, if any, relating to the action. If applicable, OREXIGEN shall receive
an amount equal to its lost profits, a reasonable royalty on sales of the infringer, or
other measure of damages the court shall have applied, less a reasonable approximation
of the royalties that OREXIGEN would have owed to DANTE on NET SALES that may have been
made by OREXIGEN but, instead, were lost to the infringer, which amount shall be
promptly paid by OREXIGEN to DANTE. Any balance remaining from such recovery shall be
distributed between OREXIGEN and DANTE, with OREXIGEN receiving seventy-five percent (75%)
and DANTE receiving twenty-five percent (25%).
	 
	 	8.04	 	In the event OREXIGEN does not undertake action to prevent the infringing
activity within [***] ([***]) months of having been made aware and notified thereof,
DANTE shall have the right, but not the obligation, to prosecute at his own expense
any such infringements of the PATENT RIGHTS and, in furtherance of such right, DANTE
may use the name of OREXIGEN as a party plaintiff in any such suit without expense
to OREXIGEN. The total cost of any such infringement action commenced or defended
solely by DANTE shall be borne by DANTE. Any recovery of damages by DANTE for any
infringement shall be applied first in satisfaction of any unreimbursed expenses and
attorneys’ fees of DANTE relating to the suit, and second toward reimbursement of
OREXIGEN’s reasonable expenses, including reasonable attorneys’ fees, relating to
the suit. Any balance remaining from such recovery shall be distributed between

 

			
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	 	 	 	OREXIGEN and DANTE, with DANTE receiving seventy-five percent (75%) and OREXIGEN
receiving twenty-five percent (25%).

	 	8.05	 	In any infringement suit instituted by either party to enforce the PATENT
RIGHTS, the other party hereto shall, at the request and expense of the party
initiating such suit, reasonably cooperate in all respects and, to the extent
reasonably possible, have its employees testify when requested and make available
relevant records, papers, information, samples, specimens, and the like.
	 
	 	8.06	 	OREXIGEN has the sole right in accordance with the terms and conditions herein
to sublicense any LICENSED PRODUCT to an alleged infringer under the PATENT RIGHTS in
the TERRITORY in order to avoid infringement in the future.
	 
	 	8.07	 	Any of the foregoing notwithstanding, if at any time during the term of this
AGREEMENT any of the PATENT RIGHTS are held invalid or unenforceable in a decision
which is not appealable or is not appealed within the time allowed, OREXIGEN shall have
no further obligations to DANTE with respect to its future use or sale of any LICENSED
PRODUCT, LICENSED PROCESS, and/or LICENSED SERVICE covered solely by such PATENT
RIGHTS, including the obligation of paying royalties. For avoidance of doubt it is
understood and agreed that in such event, OREXIGEN shall not have any damage claim or
any claim for refund or reimbursement against DANTE for any amounts previously paid to
DANTE under this AGREEMENT, including, but not limited to, the payment of DANTE STOCK.

ARTICLE 9 – GOVERNMENT CLEARANCE, PUBLICATION

	 	9.01	 	Insofar as such clearance is required, OREXIGEN agrees to use its best efforts
to have the LICENSED PRODUCTS cleared for marketing in those countries in which
OREXIGEN intends to sell LICENSED PRODUCTS by the responsible government agencies
requiring such clearance. To accomplish said clearances at the earliest possible
date, OREXIGEN agrees to file or have filed any necessary data with said government
agencies as quickly as commercially reasonable. Should this AGREEMENT terminate in
accordance with Section 10.02, 10.03, or 10.04, LICENSEE shall, within [***] ([***])
days following such termination and at its own expense, assign to DANTE its full
interest and title in and full documentation of (i) all market clearance
applications (including all data relating thereto) which relate to LICENSED
PRODUCTS, LICENSED PROCESSES, and/or LICENSED SERVICES and (ii) all data that could
relate to market clearance applications for LICENSED PRODUCTS, LICENSED PROCESSES,
and/or LICENSED SERVICES, including, but not limited to, all in vitro and in vivo
pre-clinical data, pharmacology data, toxicology data, human data and the like.
Notwithstanding anything to the contrary in this AGREEMENT, effective upon receipt
of such information, data, etc. by DANTE, such information shall not be
considered the confidential information of OREXIGEN under Article 11 but instead
shall henceforth be considered the confidential information of DANTE

 

			
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	 	 	 	and subject to the provisions of restricted use and non-disclosure set forth in
Article 11.

	 	9.02	 	It is understood and agreed that the right of publication/presentation of the
PATENT RIGHTS shall reside with DANTE, but OREXIGEN shall also have the right to
publish and/or co-author any publication/presentation on the PATENT RIGHTS in
accordance with academic custom. In the event that either DANTE or OREXIGEN desires to
so publish/present, the party desiring publication shall notify the other party of its
desire to publish/present at least thirty (30) days in advance of each subject
publication/presentation and shall furnish to the non-publishing party a written
description of the subject matter of the publication/presentation in order to permit
the non-publishing party to review and comment thereon, such obligation of notification
of the publishing/presenting party and associated right of the
non-publishing/presenting party to review and comment thereon to expire upon the [***]
([***]) anniversary of the Effective Date.

ARTICLE 10 – DURATION AND TERMINATION

	 	10.01	 	This AGREEMENT shall become effective upon the EFFECTIVE DATE, and unless
sooner terminated in accordance with any of the provisions herein, shall remain in full
force and effect for the life of the last-to-expire of the patents included in the
PATENT RIGHTS.
	 
	 	10.02	 	Either party may immediately terminate this AGREEMENT for fraud, willful
misconduct, or illegal conduct of the other party, in all such cases with respect to
the subject matter of this AGREEMENT, upon written notice of same to that other party.
	 
	 	10.03	 	OREXIGEN may terminate this AGREEMENT by giving DANTE written notice at least
three (3) months prior to the effective date of such termination. It is understood
that OREXIGEN shall remain responsible for the timely payment of all amounts due DANTE
under this AGREEMENT through the effective date of the termination.
	 
	 	10.04	 	If either party fails to fulfill any of its material obligations under this
AGREEMENT, the non-breaching party may terminate this AGREEMENT, upon written notice
to the breaching party, as provided below. Such notice must contain a full
description of the event or occurrence constituting a breach of the AGREEMENT. The
party receiving notice of the breach will have the opportunity to cure that breach
within thirty (30) days of receipt of notice. If the breach is not cured within
that time, the termination will be effective as of the thirty-first (31st) day after
receipt of notice. A party’s ability to cure a breach will apply only to the first
[***] ([***]) breaches properly noticed under the terms of this AGREEMENT,
regardless of the nature of those breaches. Any subsequent breach by that party
will entitle the other party to terminate this AGREEMENT upon receipt of notice by
the breaching party, where such notice must contain a

 

			
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	 	 	 	full description of the event or occurrence constituting a breach of this AGREEMENT.

	 	10.05	 	If during the term of this AGREEMENT, OREXIGEN shall become bankrupt or
insolvent or if the business of OREXIGEN shall be placed in the hands of a receiver or
trustee, whether by the voluntary act of OREXIGEN or otherwise, or if OREXIGEN shall
cease to exist as an active business, this AGREEMENT shall immediately terminate and
all PATENT RIGHTS and any rights granted hereunder by DANTE to OREXIGEN shall
immediately be returned and transferred to DANTE.
	 
	 	10.06	 	Notwithstanding anything to the contrary in this AGREEMENT, neither expiration
nor any termination of this AGREEMENT shall remove any financial obligations to DANTE
which OREXIGEN incurred under this AGREEMENT prior to and as of the effective date of
any expiration or termination.
	 
	 	10.07	 	On or before the effective date of any expiration or termination of this
AGREEMENT, OREXIGEN shall cease the manufacture, use, practice, lease, and sale,
offering, distribution, and other commercialization of LICENSED PRODUCTS, LICENSED
PROCESSES, and LICENSED SERVICES.
	 
	 	10.08	 	Within thirty (30) days of any expiration or termination of this AGREEMENT,
OREXIGEN shall (i) return to DANTE or destroy, as directed by DANTE, all information,
data, and any relevant materials provided to OREXIGEN during the term of this AGREEMENT
and (ii) destroy all LICENSED PRODUCTS in a safe and legal manner. Further, OREXIGEN
shall provide DANTE with a written statement signed by an authorized representative of
OREXIGEN certifying the destruction of all LICENSED PRODUCTS in a safe and legal
manner, as well as the destruction of said information data, and relevant materials if
such instructions for destruction are given by DANTE.

ARTICLE 11 – CONFIDENTIALITY

	 	11.01	 	DANTE and OREXIGEN each agree to treat any confidential information disclosed
to it by the other party under this AGREEMENT with reasonable care and to avoid
disclosure of such information to any other person, firm or corporation, except
AFFILIATES bound by the obligations of confidentiality and restricted use set forth in
this Article 11, and either party shall be liable for unauthorized disclosure or
failure to exercise such reasonable care. Further, the receiving party will not use
the disclosing party’s confidential information other than for the benefit of the
parties hereto and relating to this AGREEMENT. These obligations of non-disclosure and
restricted use shall remain effect for each subject disclosure of confidential
information for a period of time of [***] ([***]) years from such disclosure, however,
neither party shall have an obligation, with respect to confidential information
disclosed to it, or any part thereof, which:

	 	(a)	 	is already known to the party at the time of the disclosure;

 

			
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	 	(b)	 	becomes publicly known without the wrongful act or breach of this
AGREEMENT by the party;
	 
	 	(c)	 	is rightfully received by the party from a THIRD PARTY on a
non-confidential basis;
	 
	 	(d)	 	is subsequently and independently developed by employees of the
party who had no knowledge of the information, as verified by written records;
	 
	 	(e)	 	is approved for release by prior written authorization of the
party disclosing the information; or
	 
	 	(f)	 	is disclosed pursuant to any judicial or government request,
requirement or order, provided that the party so disclosing takes reasonable
steps to provide the other party sufficient prior notice in order to contest
such request, requirement or order and provided and provided that such
disclosed confidential information otherwise remains subject to the obligations
of confidentiality set forth in this Article 11.

	 	11.02	 	DANTE and OREXIGEN agree that any information to be treated as confidential
information under this Article 11 must be disclosed in writing or other tangible medium
and must be clearly marked “CONFIDENTIAL”. Confidential information disclosed orally
must be summarized and reduced to writing or other tangible medium and communicated to
the other party within thirty (30) days of such disclosure, and the other party agrees
that such disclosed information shall be deemed confidential.
	 
	 	11.03	 	Notwithstanding the foregoing, OREXIGEN shall have the right to use and
disclose any confidential information related to the PATENT RIGHTS to investors,
prospective investors, employees, consultants and agents with a need to know,
collaborators, prospective collaborators and other THIRD PARTIES in the chain of
manufacturing and distribution provided that OREXIGEN obtains from such parties written
confidentiality agreements, the provisions of which are at least as restrictive and
protective of DANTE’s confidential information as those provided in this Article 11.
	 
	 	11.04	 	Notwithstanding anything to the contrary in this AGREEMENT, all information
relating to filing, prosecution, maintenance, defense, infringement, and the like
regarding the PATENT RIGHTS (no matter how disclosed) shall be considered the
confidential information of DANTE and subject to the obligations of restricted use and
non-disclosure set forth in this Article 11.

ARTICLE 12 – NOTICES

	 	12.01	 	It shall be a sufficient giving of any notice, request, report, statement,
disclosure or other communication hereunder if the party giving the same shall

	 	(a)	 	hand deliver such communication; or

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	 	(b)	 	mail such a communication, postage prepaid, first class, certified mail; or
	 
	 	(c)	 	send such communication, shipping prepaid by
national/international courier service

	 	 	 	to the party to receive such communication at the address given below, or such other
address as may hereafter be designated by notice in writing by the appertaining
party.

	 	 	 
	DANTE

	 	OREXIGEN
	 
	 	 
	Lee G. Dante

	 	Orexigen Therapeutics, Inc.
	[***]

	 	Attn: Chief Executive Officer
	 

	 	One Palmer Square, Suite 515
	 

	 	Princeton, NJ 08540 USA
	 
	 	 
	cc: (if of a legal nature)

	 	Biotech Law Associates, P.C.
	Flamm, Boroff & Bacine, P.C.

	 	Attn: Douglas A. Branch
	Attn: Mark W. Mullineaux

	 	800 Research Parkway, Suite 310
	925 Harvest Drive, Suite 220

	 	Oklahoma City, OK 73104
	Blue Bell, PA 19422
	 	 

	 	12.02	 	The date of giving any such notice, request, report, statement, disclosure or
other communications, and the date of making any payment hereunder required (provided
such payment is received), shall be the actual date of receipt.

ARTICLE 13 – ASSIGNMENT

	 	13.01	 	This AGREEMENT shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties hereto. However, OREXIGEN may not
assign its rights in this AGREEMENT without approval by DANTE, such approval not to be
unreasonably withheld. Notwithstanding the foregoing, a change of control transaction,
merger, consolidation or sale of substantially all of the assets of OREXIGEN shall not
be deemed an assignment for purposes of this clause and no consent of DANTE shall be
required for such transactions.

ARTICLE 14 – INDEMNITY, INSURANCE, REPRESENTATIONS, STATUS

	 	14.01	 	DANTE will be indemnified, defended by counsel reasonably acceptable to DANTE,
and held harmless by OREXIGEN and appertaining SUBLICENSEES, as the case may be,
from and against any claim, liability, cost, expense, damage, deficiency, loss or
obligation, of any kind or nature (including, without limitation, reasonable
attorneys’ fees and other costs and expenses of defense) (collectively, “CLAIMS”)
based upon, arising out of, or otherwise relating to this AGREEMENT including, but
not limited to, (i) any action relating to product liability, and (ii) any CLAIM
that a LICENSED PRODUCT and/or practice of

 

			
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	 	 	 	any of the PATENT RIGHTS infringes the intellectual property of a THIRD PARTY.
However, the foregoing indemnity shall not apply to CLAIMS to the extent that they
(w) are related to CLAIMS made by John S. Nagle with respect to the PATENT RIGHTS,
(x) are caused by the gross negligence of DANTE, (y) are caused by a material breach
of this AGREEMENT by DANTE, and/or (z) pertain solely to claims that the activities
of DANTE infringe the intellectual property of a THIRD PARTY.

	 	14.02	 	OREXIGEN will purchase and maintain in effect, at its sole expense, with
reputable insurance companies, appropriate insurance policies, including, but not
limited to a policy of product liability insurance and a policy of general liability
insurance, in such amounts as is reasonably sufficient and commercially reasonable to
protect against its liability under Section 14.01 above. Further, OREXIGEN will
require that every SUBLICENSEE, purchase and maintain in effect, at its sole expense,
with reputable insurance companies, appropriate insurance policies, including, but not
limited to a policy of product liability insurance and a policy of general liability
insurance, in such amounts as is reasonably sufficient and commercially reasonable to
protect against their respective liability as regards Section 14.01 above. It is
understood and agreed that OREXIGEN and/or SUBLICENSEES (as the case may be) shall not
be required to possess product liability insurance under this Section 14.02 until the
first of the following to occur as regards OREXIGEN and/or appertaining SUBLICENSEES
(i) commencement of clinical trials of a LICENSED PRODUCT; or (ii) commencement of
sale, lease, or provision of LICENSED PRODUCTS (including, but not limited to provision
of LICENSED SERVICES in connection with a clinical trial). DANTE shall have the right
to ascertain from time to time that any required coverage under this Section 14.02
exists, such right to be exercised by DANTE in a reasonable manner.
	 
	 	14.03	 	DANTE MAKES NO REPRESENTATIONS NOR EXTENDS ANY WARRANTIES OF ANY KIND. IN
PARTICULAR, THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR THAT THE USE OF THE PATENT RIGHTS DOES NOT INFRINGE ANY
PATENT, COPYRIGHT, TRADEMARK OR OTHER RIGHTS. IN ADDITION, NOTHING IN THIS AGREEMENT
SHALL BE DEEMED TO BE A REPRESENTATION OR WARRANTY BY DANTE OF THE VALIDITY OF ANY OF
THE PATENT RIGHTS OR THE ACCURACY, SAFETY, EFFICACY, OR USEFULNESS, FOR ANY PURPOSE, OF
THE PATENT RIGHTS. FURTHER, DANTE SHALL HAVE NO LIABILITY WHATSOEVER TO OREXIGEN, ITS
AFFILIATES, SUBLICENSEES, OR ANY THIRD PARTIES FOR OR ON ACCOUNT OF ANY INJURY, LOSS,
OR DAMAGE, OF ANY KIND OR NATURE, SUSTAINED BY, OR ANY DAMAGE ASSESSED OR ASSERTED
AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR IMPOSED UPON OREXIGEN OR ANY OTHER
PERSON OR ENTITY, ARISING OUT OF OR IN CONNECTION WITH OR RESULTING FROM:

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	 	(a)	 	the production, use, practice, offering, lease, or sale of any LICENSED
PRODUCT;
	 
	 	(b)	 	the use of the PATENT RIGHTS; or
	 
	 	(c)	 	any advertising or other promotional activities with respect to
any of the foregoing.

	 	 	 	The provisions of this Section 14.03 shall in no way limit or offset the
indemnification provided for in Section 14.04 and shall be superseded in its
application by Section 14.04.
	 
	 	14.04	 	OREXIGEN has been informed of agreements between DANTE and John S. Nagle
(“NAGLE”) regarding ownership of the PATENT RIGHTS. DANTE has informed OREXIGEN that,
based on an agreement dated October 23, 2003 between DANTE and NAGLE, and a payment by
DANTE to NAGLE, DANTE is the sole owner of the PATENT RIGHTS. This Section 14.04
governs the rights and responsibilities of the parties relative to such matter.

	 	(a)	 	In the event of any actual or threatened litigation involving
OREXIGEN or DANTE in which NAGLE (or any third party claiming rights from
NAGLE) claims an ownership interest in, or a license or other right to, the
PATENT RIGHTS (the “NAGLE LITIGATION”), OREXIGEN hereby agrees to assist DANTE
in such matter, as provided in this Section 14.04.
	 
	 	(b)	 	[***] shall pay all costs incurred by [***] in pursuing or
defending any NAGLE LITIGATION, including, but not limited to, all attorney’s
fees, litigation costs incurred by any attorney representing [***], court
costs, expert fees, travel costs, copying costs, and other costs related to the
NAGLE LITIGATION (hereinafter referred to as “NAGLE EXPENSES”). [***] shall
pay the NAGLE EXPENSES if [***] defends an action brought by NAGLE (or any
third party claiming rights from NAGLE) that includes a claim of ownership of,
or license rights to, the PATENT RIGHTS. [***] shall also pay the NAGLE
EXPENSES if DANTE or OREXIGEN brings an action against NAGLE (or any third
party claiming rights from NAGLE) so long as in any such action, [***] does not
make a claim in addition to ownership of the PATENT RIGHTS. OREXIGEN and DANTE
shall consult on litigation strategy, including, but not limited to, the
selection of counsel, whether to institute an action and/or the selection of
court (including geographic location). The rights and obligations under this
Section 14.04 (b) are separate and apart from the rights and obligations stated
in Sections 14.04 (c) and 14.04 (d) covering indemnification and hold harmless
terms. Any rights or obligations or payments incurred or made under Sections
14.04 (c) and 14.04 (d) shall have no impact on any obligation of [***] to pay
NAGLE EXPENSES.

 

			
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	 	(c)	 	DANTE shall be indemnified and held harmless by OREXIGEN, from and
against any CLAIMS relating to or arising from NAGLE LITIGATION; provided,
however, the extent to which OREXIGEN shall be required to so indemnify
shall be reduced by any payments (the “DANTE ROYALTY PAYMENTS”) made to
DANTE under Section 3.01 (other than Sections 3.01(a) or 3.01(f)). The
payment of any NAGLE EXPENSES by OREXIGEN shall not be reduced by any DANTE ROYALTY PAYMENTS. OREXIGEN shall not be required to
so indemnify DANTE under this Section 3.01 to the extent the CLAIMS in
connection with the NAGLE LITIGATION arise out of, or are attributable to,
fraud or material and intentional misrepresentation on the part of DANTE.
	 
	 	(d)	 	OREXIGEN and its appertaining SUBLICENSEES shall be indemnified
and held harmless by DANTE from and against any CLAIMS (excluding NAGE
EXPENSES) relating to or arising from NAGLE LITIGATION; provided, however, that
such indemnification shall be limited to the total amount of DANTE ROYALTY
PAYMENTS made during the term of this AGREEMENT.

	 	14.05	 	Neither party hereto is an agent of the other party for any purpose whatsoever.

ARTICLE 15 – USE OF A PARTY’S NAME

	 	15.01	 	Neither party will, without the prior written consent of the other party:

	 	(a)	 	use in any publication, advertising, publicity, press release,
promotional activity or otherwise, any trade-name, personal name, trademark,
trade device, service mark, symbol, image, icon, or any abbreviation,
contraction or simulation thereof owned by the other party; or
	 
	 	(b)	 	represent, either directly or indirectly, that any product or
service of the other party is a product or service of the representing party or
that it is made in accordance with or utilizes the information or documents of
the other party.

ARTICLE 16 – SEVERANCE AND WAIVER

	 	16.01	 	Each clause of this AGREEMENT is a distinct and severable clause and if any
clause is deemed illegal, void or unenforceable, the validity, legality or
enforceability of any other clause or portion of this AGREEMENT will not be affected
thereby.
	 
	 	16.02	 	The failure of a party in any instance to insist upon the strict performance
of the terms of this AGREEMENT will not be construed to be a waiver or relinquishment
of any of the terms of this AGREEMENT, either at the time of the party’s failure to
insist upon strict performance or at any time in the future, and such terms will
continue in full force and effect.

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ARTICLE 17 – TITLES

	 	17.01	 	All titles and article headings contained in this AGREEMENT are inserted only
as a matter of convenience and reference. They do not define, limit, extend or
describe the scope of this AGREEMENT or the intent of any of its provisions.

ARTICLE 18 – SURVIVAL OF TERMS

	 	18.01	 	The provisions of Sections 3.01(a), 3.01(b)-(e) (as regards financial
obligations described therein incurred during the term of this AGREEMENT), 5.01, 5.03
(as regards obligations for reports and payments due to DANTE for activities occurring
during the term of this AGREEMENT), 6.02(a), 9.01 (as regards assignment to DANTE by
OREXIGEN of full title and interest in and full documentation of said market clearance
applications and all data that could relate to market clearance applications), 10.07,
10.08 and Articles 1, 7, 8 (to the extent, but only to the extent, that such
infringement occurs during the term of this AGREEMENT and excluding Section 8.06 which
shall only apply during the term of this AGREEMENT), 11, 12, 13, 14, 15, 16, 18 and 19
shall survive the expiration or termination of this AGREEMENT.

ARTICLE 19 – GOVERNING LAW

	 	19.01	 	This AGREEMENT shall be construed as having been entered into in the
Commonwealth of Pennsylvania and shall be interpreted in accordance with and its
performance governed by the laws of the Commonwealth of Pennsylvania, excluding choice
of law provisions. Notwithstanding the foregoing, questions affecting the construction
and effect of any patent in PATENT RIGHTS shall be determined by the law of the country
in which the patent was granted.

ARTICLE 20 – ARBITRATION

	 	20.01	 	Any controversy or claim arising out of or relating to this AGREEMENT or the
breach thereof will be settled by arbitration in Philadelphia, Pennsylvania, before and
in accordance with the Commercial Arbitration Rules (the “RULES”) of the American
Arbitration Association (“AAA”). While the Rules shall apply, the parties will proceed
as set forth below without hiring or paying AAA to manage the case. The parties shall
follow the Rules and any applicable law. The award rendered in that arbitration will
be binding on the parties hereto, and judgment upon the award can be entered by any
court having jurisdiction thereof. Without detracting from the generality of the
foregoing, the following specific provisions will also apply:

	 	(a)	 	The proceedings will be held by a panel of three arbitrators,
each party having the right to select one arbitrator, with the third to be
selected in accordance with the Rules of the American Arbitration Association;
	 
	 	(b)	 	The parties, by mutual agreement, can also provide that all or part of
the arbitration proceedings be held outside of Philadelphia, Pennsylvania;
in

 - 21 - 

 

	 	 	 	this event, the parties will equally bear any special expenses resulting
from that decision;

	 	(c)	 	Before rendering their final decision, the arbitrators will
first act as friendly, disinterested parties for the purpose of helping the
parties reach compromise settlements on the points in dispute; and
	 
	 	(d)	 	The costs of the arbitration will be in the discretion of the
arbitrators, provided, however, that no party is obliged to pay more than its
own costs, the costs of the arbitrator it has nominated, and the cost of the
third arbitrator.

ARTICLE 21 – ENTIRE UNDERSTANDING

	 	21.01	 	This AGREEMENT represents the entire understanding between the parties, and
supersedes all other agreements, express or implied, between the parties concerning the
subject matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.

     IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT on the dates set forth
below.

	 	 	 	 	 	 	 	 	 
	LEE G. DANTE	 	 	 	OREXIGEN THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Lee G. Dante M.D.
 

	 	 	 	By:
	 	/s/ John F. Crowley
 

	 	 
	 	 	 	 	John F. Crowley	 	 
	 	 	 	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	Date: 6/11/04	 	 	 	Date: 6/10/04	 	 

 - 22 - 

 

APPENDICES

APPENDIX A—PATENT RIGHTS

APPENDIX B—STOCK OPTION AGREEMENT

APPENDIX C—CONSULTING AGREEMENT

 - 23 - 

 

APPENDIX A

PATENT RIGHTS

	 	 	 
	Patent No.	 	 
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]

 
 

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

 

 

APPENDIX B

STOCK OPTION AGREEMENT

(attached)

 

 

OREXIGEN THERAPEUTICS, INC.

2004 STOCK PLAN

NOTICE OF STOCK OPTION GRANT

«Optionee»:

     You have been granted an option to purchase Common Stock of Orexigen Therapeutics, Inc. (the
“Company”) as follows:

	 	 	 
	Date of Grant:

	 	«GrantDate»
	 
	 	 
	Exercise Price per Share:

	 	«ExercisePrice»
	 
	 	 
	Total Number of Shares Granted:

	 	«NoofShares»
	 
	 	 
	Total Exercise Price:

	 	«TotalExercisePrice»
	 
	 	 
	Type of Option:

	 	«ISO»«NSO»
	 
	 	 
	Expiration Date:

	 	«ExpirDate10_years_from_grant»
	 
	 	 
	Vesting Commencement Date:

	 	«VestingCommencementDate»
	 
	 	 
	Vesting Schedule:

	 	So long as your Continuous Service Status with the Company continues, the
Shares underlying this Option shall vest and become exerciseable in accordance with the
following schedule: twenty-five percent (25%) of the total number of Shares subject to
the Option shall vest on the 1st anniversary of the Vesting Commencement Date and
1/36th of the total remaining number of Shares subject to the Option shall
vest on the same day of each month thereafter.
	 
	 	 
	Termination Period:

	 	This Option may be exercised for ninety (90) days after termination of
Optionee’s Continuous Service Status except as set out in Section 5 of the Stock Option
Agreement (but in no event later than the Expiration Date). Optionee is responsible
for keeping track of these exercise periods following termination for any reason of his
or her service relationship with the Company. The Company will not provide further
notice of such periods.
	 
	 	 
	Transferability:

	 	This Option may not be transferred.

 

 

     By your signature and the signature of the Company’s representative below, you and the Company
agree that this option is granted under and governed by the terms and conditions of the Orexigen
Therapeutics, Inc. 2004 Stock Plan and the Stock Option Agreement, both of which are attached and
made a part of this document.

     In addition, you agree and acknowledge that your rights to any Shares underlying the Option
will be earned only as you provide services to the Company over time, that the grant of the Option
is not as consideration for services you rendered to the Company prior to your Vesting Commencement
Date, and that nothing in this Notice or the attached documents confers upon you any right to
continue your employment or consulting relationship with the Company for any period of time, nor
does it interfere in any way with your right or the Company’s right to terminate that relationship
at any time, for any reason, with or without cause.

	 	 	 	 	 	 	 	 	 
	Dated: «GrantDate»	 	 	 	OREXIGEN THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

«Optionee»

	 	 	 	 	 	 

John F. Crowley,
	 	 
	 

	 	 	 	 	 	President and Chief Executive Officer	 	 

-2-

 

OREXIGEN THERAPEUTICS, INC.

2004 STOCK PLAN

STOCK OPTION AGREEMENT

     1. Grant of Option. Orexigen Therapeutics, Inc., a Delaware corporation (the
“Company”), hereby grants to «Optionee» (“Optionee”), an option (the
“Option”) to purchase the total number of shares of Common Stock (the “Shares”) set
forth in the Notice of Stock Option Grant (the “Notice”), at the exercise price per Share
set forth in the Notice (the “Exercise Price”) subject to the terms, definitions and
provisions of the Orexigen Therapeutics, Inc. 2004 Stock Plan (the “Plan”) adopted by the
Company, which is incorporated in this Agreement by reference. Unless otherwise defined in this
Agreement, the terms used in this Agreement shall have the meanings defined in the Plan.

     2. Designation of Option. This Option is intended to be an Incentive Stock Option as
defined in Section 422 of the Code only to the extent so designated in the Notice, and to the
extent it is not so designated or to the extent the Option does not qualify as an Incentive Stock
Option, it is intended to be a Nonstatutory Stock Option.

     Notwithstanding the above, if designated as an Incentive Stock Option, in the event that the
Shares subject to this Option (and all other Incentive Stock Options granted to Optionee by the
Company or any Parent or Subsidiary, including under other plans of the Company) that first become
exercisable in any calendar year have an aggregate fair market value (determined for each Share as
of the date of grant of the option covering such Share) in excess of $100,000, the Shares in excess
of $100,000 shall be treated as subject to a Nonstatutory Stock Option, in accordance with Section
5(c) of the Plan.

     3. Exercise of Option. This Option shall become exercisable during its term in
accordance with the Vesting Schedule set out in the Notice and with the provisions of Section 10 of
the Plan as follows:

          (a) Right to Exercise.

               (i) The Option may only be exercised to the extent it has become vested.

               (ii) This Option may not be exercised for a fraction of a share.

               (iii) In the event of Optionee’s death, disability or other termination of employment, the
exercisability of the Option is governed by Section 5 below, subject to the limitations contained
in this Section 3.

               (iv) In no event may this Option be exercised after the Expiration Date of the Option as set
forth in the Notice.

-1-

 

          (b) Method of Exercise.

               (i) This Option shall be exercisable by execution and delivery of the Exercise Notice and
Restricted Stock Purchase Agreement attached hereto as Exhibit A, or any other form of
written notice approved for such purpose by the Company which shall state Optionee’s election to
exercise the Option, the number of Shares in respect of which the Option is being exercised, and
such other representations and agreements as to the holder’s investment intent with respect to such
Shares as may be required by the Company pursuant to the provisions of the Plan. Such written
notice shall be signed by Optionee and shall be delivered to the Company by such means as are
determined by the Plan Administrator in its discretion to constitute adequate delivery. The
written notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed
to be exercised upon receipt by the Company of such written notice accompanied by the Exercise
Price.

               (ii) As a condition to the exercise of this Option and as further set forth in Section 12 of
the Plan, Optionee agrees to make adequate provision for federal, state or other tax withholding
obligations, if any, which arise upon the vesting or exercise of the Option, or disposition of
Shares, whether by withholding, direct payment to the Company, or otherwise.

               (iii) The Company is not obligated, and will have no liability for failure, to issue or
deliver any Shares upon exercise of the Option unless such issuance or delivery would comply with
the Applicable Laws, with such compliance determined by the Company in consultation with its legal
counsel. This Option may not be exercised until such time as the Plan has been approved by the
stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any applicable federal or
state securities or other law or regulation, including any rule under Part 221 of Title 12 of the
Code of Federal Regulations as promulgated by the Federal Reserve Board. As a condition to the
exercise of this Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by the Applicable Laws. Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to Optionee on the date on which the Option is
exercised with respect to such Shares.

     4. Method of Payment. Payment of the Exercise Price shall be by any of the following,
or a combination of the following, at the election of Optionee:

          (a) cash or check;

          (b) cancellation of indebtedness;

          (c) prior to the date, if any, upon which the Common Stock becomes a Listed Security, by
surrender of other shares of Common Stock of the Company that have an aggregate Fair Market Value
on the date of surrender equal to the Exercise Price of the Shares as to which the Option is being
exercised. In the case of shares acquired directly or indirectly from the Company, such shares
must have been owned by Optionee for more than six (6) months on the date of surrender (or such
other period of time as is necessary to avoid the Company’s incurring adverse accounting charges);
or

-2-

 

          (d) following the date, if any, upon which the Common Stock is a Listed Security, and if the
Company is at such time permitting “same day sale” cashless brokered exercises, delivery of a
properly executed exercise notice together with irrevocable instructions to a broker participating
in such cashless brokered exercise program to deliver promptly to the Company the amount required
to pay the exercise price (and applicable withholding taxes).

     5. Termination of Relationship. Following the date of termination of Optionee’s
Continuous Service Status for any reason (the “Termination Date”), Optionee may exercise
the Option only as set forth in the Notice and this Section 5. To the extent that Optionee is not
entitled to exercise this Option as of the Termination Date, or if Optionee does not exercise this
Option within the Termination Period set forth in the Notice or the termination periods set forth
below, the Option shall terminate in its entirety. In no event may any Option be exercised after
the Expiration Date of the Option as set forth in the Notice.

          (a) Termination. In the event of termination of Optionee’s Continuous Service Status
other than as a result of Optionee’s disability or death, Optionee may, to the extent Optionee is
vested in the Option Shares at the date of such termination (the “Termination Date”),
exercise this Option during the Termination Period set forth in the Notice.

          (b) Other Terminations. In connection with any termination other than a termination
covered by Section 5(a), Optionee may exercise the Option only as described below:

               (i) Termination upon Disability of Optionee. In the event of termination of
Optionee’s Continuous Service Status as a result of Optionee’s disability, Optionee may, but only
within six (6) months from the Termination Date, exercise this Option to the extent Optionee was
vested in the Option Shares as of such Termination Date.

               (ii) Death of Optionee. In the event of the death of Optionee (a) during the term of
this Option and while an Employee or Consultant of the Company and having been in Continuous
Service Status since the date of grant of the Option, or (b) within thirty (30) days after
Optionee’s Termination Date, the Option may be exercised at any time within twelve (12) months
following the date of death by Optionee’s estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent Optionee was vested in the Option as
of the Termination Date.

     6. Non-Transferability of Option. Except as otherwise set forth in the Notice, this
Option may not be transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by him or her. The terms of
this Option shall be binding upon the executors, administrators, heirs, successors and assigns of
Optionee.

     7. Tax Consequences. Below is a brief summary as of the date of this Option of
certain of the federal tax consequences of exercise of this Option and disposition of the Shares
under the laws in effect as of the Date of Grant. THIS SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES.

-3-

 

          (a) Incentive Stock Option.

               (i) Tax Treatment upon Exercise and Sale of Shares. If this Option qualifies as an
Incentive Stock Option, there will be no regular federal income tax liability upon the exercise of
the Option, although the excess, if any, of the fair market value of the Shares on the date of
exercise over the Exercise Price will be treated as an adjustment to the alternative minimum tax
for federal tax purposes and may subject Optionee to the alternative minimum tax in the year of
exercise. If Shares issued upon exercise of an Incentive Stock Option are held for at least one
(1) year after exercise and are disposed of at least two (2) years after the Option grant date, any
gain realized on disposition of the Shares will also be treated as long-term capital gain for
federal income tax purposes. If Shares issued upon exercise of an Incentive Stock Option are
disposed of within such one (1)-year period or within two (2) years after the Option grant date,
any gain realized on such disposition will be treated as compensation income (taxable at ordinary
income rates) to the extent of the difference between the Exercise Price and the lesser of (i) the
Fair Market Value of the Shares on the date of exercise, or (ii) the sale price of the Shares.

               (ii) Notice of Disqualifying Dispositions. With respect to any Shares issued upon
exercise of an Incentive Stock Option, if Optionee sells or otherwise disposes of such Shares on or
before the later of (i) the date two (2) years after the Option grant date, or (ii) the date one
(1) year after the date of exercise, Optionee shall immediately notify the Company in writing of
such disposition. Optionee acknowledges and agrees that he or she may be subject to income tax
withholding by the Company on the compensation income recognized by Optionee from the early
disposition by payment in cash or out of the current earnings paid to Optionee.

          (b) Nonstatutory Stock Option. If this Option does not qualify as an Incentive Stock
Option, there may be a regular federal (and state) income tax liability upon the exercise of the
Option. Optionee will be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price. If Optionee is an Employee, the Company will be required to
withhold from Optionee’s compensation or collect from Optionee and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at the time of exercise.
If Shares issued upon exercise of a Nonstatutory Stock Option are held for at least one (1) year,
any gain realized on disposition of the Shares will be treated as long-term capital gain for
federal income tax purposes.

     8. Lock-Up Agreement. In connection with the initial public offering of the Company’s
securities and upon request of the Company or the underwriters managing any underwritten offering
of the Company’s securities, Optionee hereby agrees not to sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of any securities of the Company however
and whenever acquired (other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such period of time (not to
exceed one hundred eighty (180) days) from the effective date of such registration as may be
requested by the Company or such managing underwriters and to execute an agreement reflecting the
foregoing as may be requested by the underwriters at the time of the public offering.

-4-

 

     9. Effect of Agreement. Optionee acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions thereof (and has had an
opportunity to consult counsel regarding the Option terms), and hereby accepts this Option and
agrees to be bound by its contractual terms as set forth herein and in the Plan. Optionee hereby
agrees to accept as binding, conclusive and final all decisions and interpretations of the Plan
Administrator regarding any questions relating to the Option. In the event of a conflict between
the terms and provisions of the Plan and the terms and provisions of the Notice and this Agreement,
the Plan terms and provisions shall prevail. The Option, including the Plan, constitutes the
entire agreement between Optionee and the Company on the subject matter hereof and supersedes all
proposals, written or oral, and all other communications between the parties relating to such
subject matter.

[Signature Page Follows]

-5-

 

     This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed
an original and all of which together shall constitute one document.

	 	 	 	 	 	 	 	 	 
	Dated: «GrantDate»	 	 	 	OREXIGEN THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	«Optionee»	 	 	 	John F. Crowley,	 	 
	 	 	 	 	President and Chief Executive Officer	 	 
	Address for Notice:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	«Address»
	 	 	 	 	 	 	 	 

-6-

 

EXHIBIT A

OREXIGEN THERAPEUTICS, INC.

2004 STOCK PLAN

EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

     This Agreement (“Agreement”) is made as of ___, by and between Orexigen
Therapeutics, Inc., a Delaware corporation (the “Company”), and «Optionee»
(“Purchaser”). To the extent any capitalized terms used in this Agreement are not defined,
they shall have the meaning ascribed to them in the Company’s 2004 Stock Plan (the “Plan”).

     1. Exercise of Option. Subject to the terms and conditions hereof, Purchaser hereby
elects to exercise his or her option to purchase «NoofShares» shares of the Common Stock (the
“Shares”) of the Company under and pursuant to the Plan and the Stock Option Agreement
granted «GrantDate», (the “Option Agreement”). Of these Shares, Purchaser has elected to
purchase                      of those Shares which have become vested as of the date hereof under the
Vesting Schedule set forth in the Notice of Stock Option Grant. The purchase price for the Shares
shall be «ExercisePrice» per Share for a total purchase price of $                    . The term
“Shares” refers to the purchased Shares and all securities received in replacement of the
Shares or as stock dividends or splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new, substituted or
additional securities or other properties to which Purchaser is entitled by reason of Purchaser’s
ownership of the Shares.

     2. Time and Place of Exercise. The purchase and sale of the Shares under this
Agreement shall occur at the principal office of the Company simultaneously with the execution and
delivery of this Agreement in accordance with the provisions of Section 3(b) of the Option
Agreement. On such date, the Company will deliver to Purchaser a certificate representing the
Shares to be purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of
the exercise price therefor by Purchaser by any method listed in Section 4 of the Option Agreement.

     3. Limitations on Transfer. In addition to any other limitation on transfer created
by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in
the Shares except in compliance with the provisions below and applicable securities laws.

          (a) Right of First Refusal. Before any Shares held by Purchaser or any transferee of
Purchaser (either being sometimes referred to herein as the “Holder”) may be sold or
otherwise transferred (including transfer by gift or operation of law), the Company or its
assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions
set forth in this Section 3(a) (the “Right of First Refusal”).

               (i) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the
Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide

-7-

 

intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser
or other transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred
to each Proposed Transferee; and (iv) the terms and conditions of each proposed sale or transfer.
The Holder shall offer the Shares at the same price (the “Offered Price”) and upon the same
terms (or terms as similar as reasonably possible) to the Company or its assignee(s).

               (ii) Exercise of Right of First Refusal. At any time within thirty (30) days after
receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the
Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to
any one or more of the Proposed Transferees, at the purchase price determined in accordance with
subsection (iii) below.

               (iii) Purchase Price. The purchase price (“Purchase Price”) for the Shares
purchased by the Company or its assignee(s) under this Section 3(a) shall be the Offered Price. If
the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in good faith.

               (iv) Payment. Payment of the Purchase Price shall be made, at the option of the
Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness, or by any combination thereof within thirty (30) days after receipt of
the Notice or in the manner and at the times set forth in the Notice.

               (v) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s)
as provided in this Section 3(a), then the Holder may sell or otherwise transfer such Shares to
that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or
other transfer is consummated within sixty (60) days after the date of the Notice and provided
further that any such sale or other transfer is effected in accordance with any applicable
securities laws and the Proposed Transferee agrees in writing that the provisions of this Section 3
shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares
described in the Notice are not transferred to the Proposed Transferee within such period, or if
the Holder proposes to change the price or other terms to make them more favorable to the Proposed
Transferee, a new Notice shall be given to the Company, and the Company and/or its assignees shall
again be offered the Right of First Refusal before any Shares held by the Holder may be sold or
otherwise transferred.

               (vi) Exception for Certain Family Transfers. Anything to the contrary contained in
this Section 3(a) notwithstanding, the transfer of any or all of the Shares during Purchaser’s
lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate Family or a trust
for the benefit of Purchaser’s Immediate Family shall be exempt from the provisions of this Section
3(a). “Immediate Family” as used herein shall mean any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive
relationships). In such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Section, and

-8-

 

there shall be no further transfer of such Shares except in accordance with the terms of this
Section 3.

          (b) Involuntary Transfer.

               (i) Company’s Right to Purchase upon Involuntary Transfer. In the event, at any time
after the date of this Agreement, of any transfer by operation of law or other involuntary transfer
(including death or divorce, but excluding a transfer to Immediate Family as set forth in Section
3(a)(vi) above) of all or a portion of the Shares by the record holder thereof, the Company shall
have an option to purchase all of the Shares transferred. Upon such a transfer, the person
acquiring the Shares shall promptly notify the Secretary of the Company of such transfer. The
right to purchase such Shares shall be provided to the Company for a period of thirty (30) days
following receipt by the Company of written notice by the person acquiring the Shares.

               (ii) Price for Involuntary Transfer. With respect to any stock to be transferred
pursuant to Section 3(b)(i), the price per Share shall be a price set by the Board of Directors of
the Company that will reflect the current value of the stock in terms of present earnings and
future prospects of the Company. The Company shall notify Purchaser or his or her executor of the
price so determined within thirty (30) days after receipt by it of written notice of the transfer
or proposed transfer of Shares. However, if the Purchaser or his or her executor does not agree
with the valuation as determined by the Board of Directors of the Company, the Purchaser or the
executor shall be entitled to have the valuation determined by an independent appraiser to be
mutually agreed upon by the Company and the Purchaser or the executor and whose fees shall be borne
equally by the Company and the Purchaser or the Purchaser’s estate.

          (c) Assignment. The right of the Company to purchase any part of the Shares may be
assigned in whole or in part to any stockholder or stockholders of the Company or other persons or
organizations.

          (e) Restrictions Binding on Transferees. All transferees of Shares or any interest
therein will receive and hold such Shares or interest subject to the provisions of this Agreement.
Any sale or transfer of the Company’s Shares shall be void unless the provisions of this Agreement
are satisfied.

          (f) Termination of Rights. The right of first refusal granted the Company by Section
3(a) above and the option to repurchase the Shares in the event of an involuntary transfer granted
the Company by Section 3(b) above shall terminate upon the first sale of Common Stock of the
Company to the general public pursuant to a registration statement filed with and declared
effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended
(the “Securities Act”). Upon termination of the right of first refusal described in
Section 3(a) above, a new certificate or certificates representing the Shares not repurchased shall
be issued, on request, without the legend referred to in Section 5(a)(ii) herein and delivered to
Purchaser.

-9-

 

     4. Investment and Taxation Representations. In connection with the purchase of the
Shares, Purchaser represents to the Company the following:

          (a) Purchaser is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and knowledgeable decision
to acquire the Shares. Purchaser is purchasing these securities for investment for his or her own
account only and not with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act or under any applicable provision of state law. Purchaser
does not have any present intention to transfer the Shares to any person or entity.

          (b) Purchaser understands that the Shares have not been registered under the Securities Act by
reason of a specific exemption therefrom, which exemption depends upon, among other things, the
bona fide nature of Purchaser’s investment intent as expressed herein.

          (c) Purchaser further acknowledges and understands that the securities must be held
indefinitely unless they are subsequently registered under the Securities Act or an exemption from
such registration is available. Purchaser further acknowledges and understands that the Company is
under no obligation to register the securities. Purchaser understands that the certificate(s)
evidencing the securities will be imprinted with a legend which prohibits the transfer of the
securities unless they are registered or such registration is not required in the opinion of
counsel for the Company.

          (d) Purchaser is familiar with the provisions of Rules 144 and 701, each promulgated under the
Securities Act, which, in substance, permit limited public resale of “restricted securities”
acquired, directly or indirectly, from the issuer of the securities (or from an affiliate of such
issuer), in a non-public offering subject to the satisfaction of certain conditions. Purchaser
understands that the Company provides no assurances as to whether he or she will be able to resell
any or all of the Shares pursuant to Rule 144 or Rule 701, which rules require, among other things,
that the Company be subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended, that resales of securities take place only after the holder of the Shares has held the
Shares for certain specified time periods, and under certain circumstances, that resales of
securities be limited in volume and take place only pursuant to brokered transactions.
Notwithstanding this paragraph (d), Purchaser acknowledges and agrees to the restrictions set forth
in paragraph (e) below.

          (e) Purchaser further understands that in the event all of the applicable requirements of Rule
144 or 701 are not satisfied, registration under the Securities Act, compliance with Regulation A,
or some other registration exemption will be required; and that, notwithstanding the fact that
Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has
expressed its opinion that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 or 701 will have a substantial burden
of proof in establishing that an exemption from registration is available for such offers or sales,
and that such persons and their respective brokers who participate in such transactions do so at
their own risk.

-10-

 

          (f) Purchaser understands that Purchaser may suffer adverse tax consequences as a result of
Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has
consulted any tax consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

5. Restrictive Legends and Stop-Transfer Orders.

          (a) Legends. The certificate or certificates representing the Shares shall bear the
following legends (as well as any legends required by applicable state and federal corporate and
securities laws):

	 	(i)	 	THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
	 
	 	(ii)	 	THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE
TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER,
A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

          (b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure compliance with
the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions
to its transfer agent, if any, and that, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.

          (c) Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

     6. No Employment Rights. Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a Parent or Subsidiary of the

-11-

 

Company, to terminate Purchaser’s employment or consulting relationship, for any reason, with
or without cause.

     7. Lock-Up Agreement. In connection with the initial public offering of the Company’s
securities and upon request of the Company or the underwriters managing any underwritten offering
of the Company’s securities, Purchaser agrees not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any securities of the Company however or
whenever acquired (other than those included in the registration) without the prior written consent
of the Company or such underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days) from the effective date of such registration as may be requested by the
Company or such managing underwriters and to execute an agreement reflecting the foregoing as may
be requested by the underwriters at the time of the public offering.

8. Miscellaneous.

          (a) Governing Law. This Agreement and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed and interpreted in
accordance with the laws of the State of California, without giving effect to principles of
conflicts of law.

          (b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and merges all
prior discussions between them. No modification of or amendment to this Agreement, nor any waiver
of any rights under this Agreement, shall be effective unless in writing signed by the parties to
this Agreement. The failure by either party to enforce any rights under this Agreement shall not
be construed as a waiver of any rights of such party.

          (c) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good
faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement
for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance
of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance
of the Agreement shall be enforceable in accordance with its terms.

          (d) Construction. This Agreement is the result of negotiations between and has been
reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this
Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be
construed in favor of or against any one of the parties hereto.

          (e) Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient when delivered personally or sent by telegram or fax or forty-eight
(48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed to the party to be notified at such party’s address as set forth below or as
subsequently modified by written notice.

-12-

 

          (f) Counterparts. This Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed an original and all of which together shall constitute one
instrument.

          (g) Successors and Assigns. The rights and benefits of this Agreement shall inure to
the benefit of, and be enforceable by the Company’s successors and assigns. The rights and
obligations of Purchaser under this Agreement may only be assigned with the prior written consent
of the Company.

          (h) California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE
OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS
EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE.
THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING
OBTAINED, UNLESS THE SALE IS SO EXEMPT.

[Signature Page Follows]

-13-

 

     The parties have executed this Exercise Notice and Restricted Stock Purchase Agreement as of
the date first set forth above.

	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	OREXIGEN THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 
	 	 	«Optionee»	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

I,                                         , spouse of «Optionee», have read and hereby approve the foregoing
Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares
as set forth in the Agreement, I hereby agree to be irrevocably bound by the Agreement and further
agree that any community property or other such interest shall hereby by similarly bound by the
Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.

	 	 	 	 	 
	 

	 	 

Spouse of «Optionee»
	 	 

-14-

 

RECEIPT

     The
undersigned hereby acknowledges receipt of Certificate No.
___ for                      shares of
Common Stock of Orexigen Therapeutics, Inc.

Dated:                     

	 	 	 	 	 
	 

	 	 

«Optionee»
	 	 

-15-

 

RECEIPT

     Orexigen Therapeutics, Inc. (the “Company”) hereby acknowledges receipt of a check in
the amount of
$                     given by «Optionee» as consideration for Certificate No. ___ for
                    
shares of Common Stock of the Company.

Dated:                     

	 	 	 	 	 	 	 
	 	 	OREXIGEN THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

(print)
	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

-16-

 

APPENDIX C

CONSULTING AGREEMENT

(attached)

 

 

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

Orexigen Therapeutics, Inc.

One Palmer Square, Suite 515

Princeton, NJ 08542

February ___, 2004

Lee G. Dante, M.D.

[***] Street

[***], [***] [***]

Dear Dr. Dante:

     The purpose of this letter agreement (the “Agreement”) is to set forth the principal terms of
the agreement that we have reached with respect to your rendering of consulting and advisory
services to Orexigen Therapeutics, Inc. (“Orexigen”) with respect to Orexigen’s efforts to develop
one or more products for appetite control, control of food intake and/or obesity treatment. That
agreement is as follows:

     1. Services.

          At times agreeable to you and as requested by Orexigen, you will make available your services
and consult with Orexigen with respect to Orexigen’s efforts to develop one or more products for
appetite control, control of food intake and/or obesity treatment and such other matters as may be
agreed upon between Orexigen and you. It is anticipated that you will spend approximately ___days
per month in rendering services pursuant to the terms hereof.

     2. Compensation and Related Matters.

          (a) As compensation for services rendered pursuant to the terms of this Agreement, Orexigen
shall pay you [***] Dollars ($[***]) per month.

          (b) You shall be reimbursed for out-of-pocket expenses incurred by you in connection with the
rendering of services pursuant to the terms hereof, including all reasonable expenses for air
travel necessary and requested by Orexigen, and all reasonable living expenses incurred by you when
rendering services for Orexigen at locations away from your home or business. We request that any
single expense in excess of [***] Dollars ($[***]) be approved by Orexigen in advance. To
facilitate reimbursement, you agree to provide, on a monthly basis, Orexigen with an invoice
itemizing your travel and other expenses,
together with receipts evidencing such expenses, and Orexigen shall make a reimbursement payable to
you within [***] ([***]) days of receipt of such invoice

 

			
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and receipts. Your invoices should be mailed to Orexigen Therapeutics, Inc., 28202 Cabot Road,
Suite 200, Laguna Niguel, CA 92677, Attention: Chief Financial Officer.

          (c) You shall be responsible for payment of all taxes on income earned by you under this
Agreement.

     3. Independent Contractor.

          (a) We agree that you are to have complete freedom of action as to the details, methods, and
means of performing requested services. It is further understood that you are retained and have
contracted with Orexigen only for the purposes and to the extent set forth in this Agreement, and
your relationship to Orexigen and any of its subsidiary companies shall, during the period of your
retainer and service, be that of an independent contractor, and you shall be free to dispose of
such portion of your entire time, energy, and skill as you are not obligated to devote to Orexigen
and its subsidiaries, in such manner as you see fit and to such persons, firms, or corporations as
you deem advisable so long as same does not create a conflict of interest between Orexigen and such
other persons, firms, or corporations.

          (b) Since you are performing the service under this Agreement as an independent contractor,
you shall not be considered under the provisions of this Agreement, or otherwise, as having status
as an employee of Orexigen, nor will you, except as provided herein, be entitled hereafter to
participate in any plans, arrangements, or distributions by Orexigen relating to any pension,
deferred compensation, bonds, stock bonus, stock option, hospitalization, insurance, or other
benefits extended to its employees since you are performing services as an independent contractor.

     4. Contract Period.

          This Agreement becomes effective as of the date hereof and will continue in effect for a
period of twelve (12) months. Notwithstanding the foregoing, either you or Orexigen may terminate
this Agreement upon [***] ([***]) days’ notice any time following the date hereof.

     5. Inventions and Creative Works.

          (a) During the term of this Agreement, you agree (i) not to transfer any of your rights in United
States Patent Numbers [***]; [***] and [***] (collectively, the “Patents”); (ii) otherwise take any
other action which would impair your ability to assign or license the Patents to Orexigen; and
(iii) not to directly or indirectly solicit or initiate any discussions or negotiations with, or

 

			
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participate in any negotiations with or provide any information to or otherwise cooperate in any
other way with any corporation, partnership, person or entity or group (other than Orexigen)
concerning any of the Patents. Orexigen believes that you are not precluded from assigning these
rights by any pre-existing agreement, and you agree that this is the case.

          (b) If, as a result of your service to Orexigen, you conceive, make, or develop any inventions
or creative works, including, without limitation, plans, drawings, prints, or specifications
relating to Orexigen’s business or that of its subsidiaries or affiliates, you will: (i) give
notice thereof to Orexigen; (ii) assign to Orexigen all of your rights therein; and (iii) execute
any necessary papers and otherwise reasonably cooperate with Orexigen in the securing of patents
on such inventions or copyrights on such inventions or creative works. However, if you make any
new invention (the “New Inventions”) that are direct improvements of or are dominated by any of the
Patents, you will own all right, title and interest in such New Inventions.

          (c) During the term of this Agreement, Orexigen shall have the right of first offer to (i)
[obtain an exclusive, worldwide, royalty-bearing license, including a right to sublicense to make,
have made, use and sell products incorporating the Patents or patent rights derived therefrom] [an
assignment] of the Patents and New Inventions.

     6. Security.

          (a) You agree, both during and subsequent to your services, keep confidential any technical or
other information of a confidential nature, including knowledge of Orexigen’s projects and general
activities and any information not publicly disclosed relating to Orexigen which you may acquire
through your consulting activities or otherwise. You will not use or disclose such information in
any manner without Orexigen’s express written permission; title to all property involved shall
remain exclusively in Orexigen. Upon termination of services, or upon Orexigen’s request at any
time, you shall account for and return to Orexigen all papers containing any such confidential
information. Orexigen does not wish to obtain any confidential information that belongs to other
parties. Therefore, you agree not to disclose or otherwise transfer to Orexigen any confidential
information, which you may have acquired as a result of any other employment or consulting
relationship.

          (b) You represent that your performance of all the terms of this Agreement and your retention as a
consultant by Orexigen does not and will not breach any agreement to keep in confidence
confidential information acquired by you in confidence or in trust prior to your retention as a
consultant by Orexigen.

 

 

You have not entered into, and will not enter into, any agreement, either written or oral, in
conflict herewith.

     7. Conflict of Interest.

          You agree that, during the term of this agreement, you will not (except as otherwise herein
provided), without Orexigen’ express written consent, engage in any business or activity (whether
as a consultant, advisor or otherwise) that may be deemed competitive with the business proposed to
be engaged in by Orexigen.

     8. Freedom of Action.

          It is agreed that your rendering of service under this Agreement shall in no way conflict or
interfere with your existing job responsibilities at ___.

     9. General Conditions.

          (a) You agree that for a period of [***] ([***]) year following termination of this Agreement,
you will not solicit or in any manner encourage employees of Orexigen to leave its employ.

          (b) If any provision of this Agreement shall be declared invalid, illegal or unenforceable,
such provision shall be severed and all remaining provisions shall continue in full force and
effect.

          (c) The term, Orexigen, as used herein, shall include any subsidiary or affiliate of Orexigen
Therapeutics, Inc.

          (d) This Agreement shall be binding upon you, your heirs, executors, administrators and
assigns, and shall inure to the benefit of Orexigen, its successors and assigns.

          (e) This Agreement shall be governed and construed in accordance with the laws of the State of
California.

     10. Notice.

          All notices and other communications under this Agreement shall be in writing. Unless and
until you are notified in writing to the contrary, all notices, communications and documents
directed to Orexigen and related to the Agreement, if not delivered by hand, shall be mailed,
addressed as follows:

OREXIGEN THERAPEUTICS, INC.

One Palmer Square, Suite 515

 

			
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with the Commission. Confidential treatment has been requested with respect to the omitted portions.

 

 

New Jersey, NJ 08542

Attention: President/Chief Executive Officer

     Unless and until Orexigen is notified in writing to the contrary, all notices, communications
and documents intended for you and related to this Agreement, if not delivered by hand, shall be
mailed to your last known address as shown on Orexigen’s books. Notices and communications shall
be mailed by registered or certified mail, return receipt requested, postage prepaid. All notices
related to this Agreement shall be deemed received upon delivery or, if mailed, within five (5)
days after mailing in accordance with this Section 10.

     11. Prior Agreements.

          This Agreement supersedes all prior agreements between you and Orexigen relative to your
services as a consultant to Orexigen. This Agreement contains the entire understanding of the
parties. Further, it shall be amended only in writing agreed to by both parties and shall not be
assignable by you or by operation of law.

     Please indicate your acceptance of the foregoing by signing in the space provided below and
returning one original letter to my attention.

	 	 	 	 	 	 	 
	 	 	Sincerely,	 	 
	 
	 	 	 	 	 	 
	 	 	OREXIGEN THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

John F. Crowley,
	 	 
	 

	 	 	 	President and Chief Executive Officer	 	 

	 	 	 
	ACCEPTED AND AGREED to this

___day of February, 2004
	 	 
	 
	 	 
	 

Lee G. Dante, M.D.

	 	 
	 
	 	 
	 

Social Security Numberexv10w14

 

EXHIBIT 10.14

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

LICENSE AGREEMENT

     THIS AGREEMENT made and entered into this 3rd day of January, 2005 (“EFFECTIVE DATE”),
by and between OREXIGEN THERAPEUTICS, INC., a Delaware corporation (“OREXIGEN”), and
CYPRESS BIOSCIENCE, INC., a Delaware corporation (“CYPRESS”).

     WHEREAS, OREXIGEN has certain intellectual property rights relating to technology which
enhances human weight loss; and

     WHEREAS, CYPRESS desires to acquire certain rights to such OREXIGEN technology to reduce
weight gain associated with the use of certain therapeutics; and

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

ARTICLE 1 – DEFINITIONS

     For the purposes of this AGREEMENT, and solely for that purpose, the terms and phrases set
forth below and elsewhere in this AGREEMENT in capital letters shall be defined as follows:

	 	1.01	 	“AFFILIATE” means any corporation or non-corporate entity which
controls, is controlled by or is under the common control with a party hereto. A
corporation or a non-corporate entity, as applicable, shall be regarded as in control
of another corporation if it owns or directly or indirectly controls at least fifty
percent (50%) of the voting stock of the other corporation, or in the absence of
ownership of at least fifty percent (50%) of the voting stock of a corporation, or in
the case of a non corporate entity, if it possesses directly or indirectly, the power
to direct or cause the direction of the management and policies of such corporation or
non-corporate entity, as applicable.
	 
	 	1.02	 	“AGENT” means any employee, consultant, agent or individual or entity
that has either assigned or licensed INTELLECTUAL PROPERTY to a party hereto.
	 
	 	1.03	 	“ARBITRATION ISSUES” shall have the meaning given in Section 20.04(a).
	 
	 	1.04	 	“ARBITRATION PANEL” shall have the meaning given in Section 20.03.
	 
	 	1.05	 	“CLAIMANT” shall have the meaning given in Section 20.04(a).
	 
	 	1.06	 	“CLAIMANT’S PROPOSAL” shall have the meaning given in Section
20.04(b).
	 
	 	1.07	 	“CLAIMS” shall have the meaning given in Section 14.01.
	 
	 	1.08	 	“CLINICAL STRATEGY ASSISTANCE” shall have the meaning given in
Section 4.03.

 

 

	 	1.09	 	“COLLABORATION CYPRESS INTELLECTUAL PROPERTY” means all INTELLECTUAL
PROPERTY during the term of this AGREEMENT:

	 	(a)	 	conceived solely by one or more AGENTS of CYPRESS in the course
of work performed pursuant to this AGREEMENT; and/or
	 
	 	(b)	 	that is an IMPROVEMENT to any PRE-COLLABORATION CYPRESS
INTELLECTUAL PROPERTY or COLLABORATION CYPRESS INTELLECTUAL PROPERTY:

	 	(i)	 	conceived solely by AGENTS of OREXIGEN in
the course of the COLLABORATIVE WORK; or
	 
	 	(ii)	 	conceived jointly by one or more AGENTS of
CYPRESS and one or more AGENTS of OREXIGEN in the course of the
COLLABORATIVE WORK.

	 	1.10	 	“COLLABORATION INTELLECTUAL PROPERTY” means the COLLABORATION CYPRESS
INTELLECTUAL PROPERTY”, COLLABORATION JOINT INTELLECTUAL PROPERTY and/or COLLABORATION
OREXIGEN INTELLECTUAL PROPERTY.
	 
	 	1.11	 	“COLLABORATION JOINT INTELLECTUAL PROPERTY” means all INTELLECTUAL
PROPERTY conceived jointly by one or more AGENTS of CYPRESS and one or more AGENTS of
OREXIGEN in the course of the COLLABORATIVE WORK, but excluding any such INTELLECTUAL
PROPERTY which is an IMPROVEMENT to any PRE-COLLABORATION CYPRESS INTELLECTUAL PROPERTY
or COLLABORATION CYPRESS INTELLECTUAL PROPERTY or to any PRE-COLLABORATION OREXIGEN
INTELLECTUAL PROPERTY or COLLABORATION OREXIGEN INTELLECTUAL PROPERTY.
	 
	 	1.12	 	“COLLABORATION OREXIGEN INTELLECTUAL PROPERTY” means all INTELLECTUAL
PROPERTY conceived during the term of this AGREEMENT:

	 	(a)	 	solely by one or more AGENTS of OREXIGEN in the course of work
performed pursuant to this AGREEMENT; and/or
	 
	 	(b)	 	that is an IMPROVEMENT to any PRE-COLLABORATION OREXIGEN
INTELLECTUAL PROPERTY or COLLABORATION OREXIGEN INTELLECTUAL PROPERTY:

	 	(i)	 	conceived solely by AGENTS of CYPRESS in
the course of the COLLABORATIVE WORK; or

- 2 -

 

	 	(ii)	 	conceived jointly by one or more AGENTS of CYPRESS and one or
more AGENTS of OREXIGEN in the course of the COLLABORATIVE WORK.

	 	1.13	 	“COLLABORATIVE WORK” shall have the meaning given in Section
4.01.
	 
	 	1.14	 	“COLLABORATIVE WORK PLAN” shall have the meaning given in Section
4.01.
	 
	 	1.15	 	“CYPRESS INDEMNITEES” shall have the meaning given in Section
14.02.
	 
	 	1.16	 	“CYPRESS MATERIALS” means any proprietary materials provided by CYPRESS
to OREXIGEN as part of the COLLABORATIVE WORK.
	 
	 	1.17	 	“DISPUTE” shall have the meaning given in Section 20.02.
	 
	 	1.18	 	“DUKE AGREEMENT” means that certain License Agreement dated March 31,
2004, by and between Duke University and OREXIGEN, as amended by Amendment No. 1
thereto, dated as of even date herewith.
	 
	 	1.19	 	“DUKE PATENT RIGHTS” means the patents and patent applications listed
on APPENDIX A, together with all divisions, continuations, continuations-in-part (but
only to the extent that the subject matter of each such continuation-in-part
application is described in and enabled by the disclosure of such patent applications
listed on APPENDIX A), re-examinations, reissues, substitutions, or extensions thereof
and patents issuing therefrom in the United States and non-U.S. jurisdictions, which
are licensed to OREXIGEN under the DUKE AGREEMENT.
	 
	 	1.20	 	“DUKE SUBLICENSE” means the sublicense under the DUKE AGREEMENT to
practice under the DUKE PATENT RIGHTS, which is included in the LICENSE.
	 
	 	1.21	 	“ELAN PARTIES” shall have the meaning given in Section 14.02.
	 
	 	1.22	 	“FIELD” means all human indications.
	 
	 	1.23	 	“FINAL DECISION” shall have the meaning given in Section 20.04(c).
	 
	 	1.24	 	“IMPROVEMENT” means any invention that is an improvement to, or
modification, of an existing invention claimed in any patent application or patent
within the INTELLECTUAL PROPERTY of a party.
	 
	 	1.25	 	“INTELLECTUAL PROPERTY” means all intellectual property rights worldwide
arising under statutory or common law, and whether or not perfected, including, without
limitation, all (A) patents and patent applications now existing or hereafter filed, issued
or acquired, together with all divisions, continuations, continuations-in-part (but only to
the extent that the subject matter of each such

- 3 -

 

	 	 	 	continuation-in-part application is described in and enabled by the disclosure of any such
patent application), re-examinations, reissues, substitutions, or extensions thereof and
patents issuing therefrom in the United States and non-U.S. jurisdictions; (B) rights
associated with works of authorship including copyrights, copyright applications and
copyright registrations; and (C) rights relating to the protection of trade secrets,
know-how and CONFIDENTIAL INFORMATION.
	 
	 	1.26	 	“LICENSE” means the exclusive, worldwide license rights granted
pursuant to Section 2.01, including, but not limited to, the DUKE SUBLICENSE.
	 
	 	1.27	 	“LICENSED PROCESS” means any process which is covered in whole or in
part by a VALID CLAIM contained in the OREXIGEN PATENT RIGHTS and is used, performed or
practiced with respect to any LICENSED PRODUCT.
	 
	 	1.28	 	“LICENSED PRODUCT” means any product or part thereof containing
mirtazapine or setiptiline in any form, (including, without limitation, any and all
enantiomers, analogs, derivatives and salts thereof) used in combination with one or
more active ingredients, which:

	 	(a)	 	is covered in whole or in part by any VALID CLAIM contained in
the OREXIGEN PATENT RIGHTS in the country in which any such product or part
thereof is made, used or sold; and/or
	 
	 	(b)	 	is manufactured by using a process or is employed to practice a
process which is covered in whole or in part by a VALID CLAIM contained in the
OREXIGEN PATENT RIGHTS in the country in which any LICENSED PROCESS is used or
in which such product or part thereof is used or sold; and/or
	 
	 	(c)	 	in its intended use, practices, incorporates, or otherwise
utilizes, in whole, or in part, a VALID CLAIM contained in the OREXIGEN PATENT
RIGHTS in the country in which any such product or part thereof is made, used,
or sold.

	 	 	 	“LICENSED PRODUCTS” shall also mean, unless the context otherwise clearly requires,
the following terms, collectively: LICENSED PRODUCTS, LICENSED PROCESSES, and
LICENSED SERVICES, and a LICENSED PROCESS and LICENSED SERVICE shall be included
within such term notwithstanding such process or service is not literally a physical
“product”.
	 
	 	1.29	 	“LICENSED SERVICE” means any service provided by CYPRESS (and/or
SUBLICENSEES, as the case may be) to a THIRD PARTY which utilizes LICENSED PRODUCTS
and/or LICENSED PROCESSES.

- 4 -

 

	 	1.30	 	“NET SALES” means:

	 	(a)	 	in the case of LICENSED PRODUCTS, CYPRESS’s (and/or those of
SUBLICENSEES, as the case may be) revenues received from sale and/or lease of
the subject LICENSED PRODUCTS; and
	 
	 	(b)	 	in the case of LICENSED PROCESSES, CYPRESS’s (and/or those of
SUBLICENSEES, as the case may be) revenues received from sale and/or lease of
the subject LICENSED PROCESSES; and
	 
	 	(c)	 	in the case of LICENSED SERVICES, revenue received by CYPRESS
(and/or SUBLICENSEES, as the case may be) for provision of the subject LICENSED
SERVICE to a THIRD PARTY

	 	 	 	and each of (a), (b) and (c), above shall be less the sum of the following:

	 	(w)	 	discounts allowed in amounts customary in the trade;
	 
	 	(x)	 	sales, tariff duties and/or use taxes directly imposed and with reference to
particular sales;
	 
	 	(y)	 	outbound transportation prepaid or allowed; and
	 
	 	(z)	 	amounts allowed or credited on returns.

	 	 	 	No deductions to NET SALES shall be made for commissions paid to individuals whether
they are associated with independent sales agencies or regularly employed by CYPRESS
(and/or SUBLICENSEES, as the case may be) and on its payroll, or for cost of
collections. LICENSED PRODUCTS shall be considered “sold” when the consideration
for provision thereof is received by CYPRESS (and/or SUBLICENSEES, as the case may
be). LICENSED PRODUCTS and LICENSED SERVICES used by CYPRESS (and/or SUBLICENSEES,
as the case may be) for clinical field trials, provided as free-of-charge samples
for distribution to customers or end users, or for CYPRESS’s own internal
non-commercial research (and/or SUBLICENSEES, as the case may be) shall not be
included in NET SALES.
	 
	 	 	 	Except as provided below, if a LICENSED PRODUCT is sold in combination with another
active component or components not otherwise claimed in the OREXIGEN PATENT RIGHTS
and CYPRESS does not pay a royalty for such component that will result in a reduced
RUNNING ROYALTY pursuant to Section 3.01(b), then the NET SALES, for
purposes of determining royalties on the combination, will be calculated by
multiplying the NET SALES of the combination by the fraction A/(A+B), where A is the
invoice price of the LICENSED PRODUCT, LICENSED PROCESS or LICENSED SERVICE if sold
separately and B is the total invoice price of any other active component or
components in the combination if sold separately. If the LICENSED PRODUCT, LICENSED
PROCESS or LICENSED SERVICE and the other active component

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	 	 	 	or components in the combination are not sold separately, the NET SALES, for
purposes of determining royalties on the combination, will be calculated by
multiplying the NET SALES of the combination by the fraction determined by mutual
agreement of the parties, that reflects the relative contribution in value that the
LICENSED PRODUCT contained in the combination makes to the total value of such
combination to the end user.
	 
	 	1.31	 	“NOTICE OF ARBITRATION” shall have the meaning given in Section
20.04(a).
	 
	 	1.32	 	“OPTION EXERCISE DEADLINE” means the [***] of the EFFECTIVE DATE, which
may be extended as provided in Section 4.02.
	 
	 	1.33	 	“OPTION TERM” means the period commencing with the EFFECTIVE DATE and
expiring on the OPTION EXERCISE DEADLINE. The OPTION TERM may be extended for not more
than [***]([***]) days as provided in Section 4.02.
	 
	 	1.34	 	“OREXIGEN INTELLECTUAL PROPERTY RIGHTS” means any and all OREXIGEN
PATENT RIGHTS, PRE-COLLABORATION OREXIGEN INTELLECTUAL PROPERTY, COLLABORATION OREXIGEN
INTELLECTUAL PROPERTY, and OREXIGEN rights in or to COLLABORATION JOINT INTELLECTUAL
PROPERTY.
	 
	 	1.35	 	“OREXIGEN MATERIALS” means any proprietary materials provided by
OREXIGEN to CYPRESS.
	 
	 	1.36	 	“OREXIGEN PATENT RIGHTS” means:

	 	(a)	 	the DUKE PATENT RIGHTS; and
	 
	 	(b)	 	any and all patents, patent applications and rights to file any
patent applications with respect to any COLLABORATION OREXIGEN INTELLECTUAL
PROPERTY, together with all divisions, continuations, continuations-in-part
(but only to the extent that the subject matter of each such
continuation-in-part application is described in and enabled by the disclosure
of any such patent applications), re-examinations, reissues, substitutions, or
extensions thereof and patents issuing from any such patent applications in the
United States and non-U.S. jurisdictions; and or
	 
	 	(c)	 	OREXIGEN rights in or to all patents, patent applications and
rights to file any patent applications with respect to any COLLABORATION JOINT
INTELLECTUAL PROPERTY, together with all divisions, continuations,
continuations-in-part (but only to the extent that the subject matter of each
such continuation-in-part application is described in and enabled by the
disclosure of any such patent applications), re-examinations, reissues,
substitutions, or extensions thereof and patents issuing from any such patent
applications in the United States and non-U.S. jurisdictions.

 

			
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	 	1.37	 	“PAYMENT TRANSFER FEES” shall have the meaning given in Section
3.05.
	 
	 	1.38	 	“PRE-CLINICAL STUDIES” shall have the meaning given in Section
4.02.
	 
	 	1.39	 	“PRE-COLLABORATION CYPRESS INTELLECTUAL PROPERTY” means all
INTELLECTUAL PROPERTY owned by, either partially or wholly, or licensed to, or
otherwise controlled by, CYPRESS, as of the EFFECTIVE DATE.
	 
	 	1.40	 	“PRE-COLLABORATION INTELLECTUAL PROPERTY” means the PRE-COLLABORATION
CYPRESS INTELLECTUAL PROPERTY and/or PRE-COLLABORATION OREXIGEN INTELLECTUAL PROPERTY.
	 
	 	1.41	 	“PRE-COLLABORATION OREXIGEN INTELLECTUAL PROPERTY” means all OREXIGEN
PATENT RIGHTS as of the EFFECTIVE DATE and all other INTELLECTUAL PROPERTY owned by,
either partially or wholly, or licensed to, or otherwise controlled by, OREXIGEN as of
the EFFECTIVE DATE necessary to practice the OREXIGEN PATENT RIGHTS and all
INTELLECTUAL PROPERTY, excluding those defined in subsection 1.25(A) of this AGREEMENT,
owned by, either partially or wholly, or licensed to, or otherwise controlled by,
OREXIGEN as of the EFFECTIVE DATE useful to practice the OREXIGEN PATENT RIGHTS.
	 
	 	1.42	 	“RESPONDENT” shall have the meaning given in Section 20.04(a).
	 
	 	1.43	 	“RESPONDENT’S PROPOSAL” shall have the meaning given in Section
20.04(b).
	 
	 	1.44	 	“REPONSE” shall have the meaning given in Section 20.04(a).
	 
	 	1.45	 	“RUNNING ROYALTY” shall have the meaning given in Section
3.01(b).
	 
	 	1.46	 	“SUBLICENSE” and “SUBLICENSE AGREEMENT” means any
relationship/agreement in which a THIRD PARTY gains any rights, temporary or otherwise,
to any of the rights granted by OREXIGEN to CYPRESS under this AGREEMENT (including,
but not limited to, CYPRESS AFFILIATES, assignee(s), licensee(s), sublicensee(s),
marketing partner(s) and the like, hereinafter, such THIRD PARTIES referred as
“SUBLICENSEES”), including, but not limited to those granted via options, rights of
first refusal, material transfer agreements, sublicenses (implied or expressed), and
the like, but excluding any THIRD PARTY that purchases LICENSED PRODUCTS as the end
user thereof.
	 
	 	1.47	 	“TERRITORY” means the world.
	 
	 	1.48	 	“THIRD PARTY” means any individual or other entity other than OREXIGEN
and/or CYPRESS.
	 
	 	1.49	 	“VALID CLAIM” means (i) an issued and unexpired claim within the OREXIGEN
PATENT RIGHTS that has not been permanently revoked or held

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	 	 	 	invalid or unenforceable by a decision of a court or other governmental agency of competent
jurisdiction and that has not been dedicated to the public or admitted to be invalid or
unenforceable through reissue, disclaimer or otherwise, or (ii) a claim of a pending patent
application within the OREXIGEN PATENT RIGHTS that was filed in good faith, has not been
pending for more than [***]([***]) years, and which has not been abandoned or finally
disallowed without the possibility of appeal or refiling of such application contained in
the OREXIGEN PATENT RIGHTS in the country in which any such product or part thereof is made,
used or sold.
	 
	 	1.50	 	Where appropriate, words denoting a singular number only shall include the
plural and vice versa.
	 
	 	1.51	 	Certain other defined terms shall have the meanings given them elsewhere in
this AGREEMENT.

ARTICLE 2 – OPTION/LICENSE/SUBLICENSES

	 	2.01	 	LICENSE. OREXIGEN hereby grants to CYPRESS and CYPRESS hereby accepts
from OREXIGEN, subject to the terms, conditions and restrictions of this AGREEMENT, the
exclusive, worldwide right and sublicenseable license (or, in the case of the DUKE
PATENT RIGHTS, sublicense) under the OREXIGEN INTELLECTUAL PROPERTY RIGHTS, until the
end of the term for which the OREXIGEN PATENT RIGHTS are granted, unless this AGREEMENT
shall be sooner terminated according to the terms hereinafter provided to:

	 	(a)	 	develop, make, have made, import, use, lease, offer for sale,
sell, and distribute LICENSED PRODUCTS;
	 
	 	(b)	 	develop, make, have made, import, use, lease, offer for sale,
sell, and distribute LICENSED PROCESSES;
	 
	 	(c)	 	develop, make, have made, perform, provide, import, use, lease,
offer for sale, sell, and distribute LICENSED SERVICES; and/or
	 
	 	(d)	 	practice and use the OREXIGEN INTELLECTUAL PROPERTY RIGHTS,
other than OREXIGEN PATENT RIGHTS, and to use the OREXIGEN MATERIALS, insofar
as such practice and use is required to carry out the activities under
subsections (a)-(c) above.

	 	2.02	 	LICENSE RESTRICTIONS.

	 	(a)	 	The LICENSE shall be limited to the FIELD and the TERRITORY.
	 
	 	(b)	 	CYPRESS agrees not to develop, market or sell, directly or
indirectly, a LICENSED PRODUCT under the OREXIGEN INTELLECTUAL PROPERTY RIGHTS
that is a combination of [***].

 

			
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	 	(c)	 	CYPRESS agrees not to develop, market or sell, directly or indirectly, a
LICENSED PRODUCT under the OREXIGEN INTELLECTUAL PROPERTY RIGHTS for an
indication for weight loss and/or the treatment of obesity but CYPRESS may
develop a LICENSED PRODUCT under the OREXIGEN INTELLECTUAL PROPERTY RIGHTS
for an indication for which the label discusses the prevention of weight
gain associated with mirtazapine or setiptiline.

	 	2.03	 	OPTION/EFFECTIVENESS OF LICENSE. The LICENSE granted by OREXIGEN to
CYPRESS under Section 2.01 shall not become effective unless and until CYPRESS
exercises its option (the “OPTION”), in accordance with the terms and
conditions of this Section 2.03, that the LICENSE shall become effective. The
OPTION shall be exercisable only during the OPTION TERM. Exercise of the OPTION must
be in writing and clearly establish the unconditional intention of CYPRESS to make the
LICENSE effective. If CYPRESS has not exercised the OPTION and timely delivered the
payments required by Section 3.01(b) during the OPTION TERM, then the OPTION
shall expire and irrevocably terminate.
	 
	 	2.04	 	SUBLICENSES. CYPRESS shall have the right to grant SUBLICENSES. All
SUBLICENSES shall be subject to the terms and conditions of this AGREEMENT, shall be no
less favorable to or protective of OREXIGEN than this AGREEMENT except as expressly
stated in this AGREEMENT and CYPRESS shall remain responsible for the performance of
its THIRD PARTY sublicensees. All SUBLICENSES will be assigned to OREXIGEN in the
event the AGREEMENT is terminated by OREXIGEN pursuant to Sections 10.04,
10.05, or 10.06, subject to OREXIGEN’s approval, such approval not to
be unreasonable withheld or delayed. CYPRESS shall use commercially reasonable efforts
to enforce the terms of the SUBLICENSE agreements. CYPRESS further agrees to provide
OREXIGEN with a copy of all SUBLICENSES within thirty (30) days of execution of each
subject SUBLICENSE. No SUBLICENSES (whether or not conditional or subject to
effectiveness of the LICENSE) may be granted by CYPRESS, however, prior to exercise of
the OPTION by CYPRESS.
	 
	 	2.05	 	NO OTHER RIGHTS GRANTED. The LICENSE granted under this AGREEMENT will
not be construed to confer any rights upon CYPRESS by implication, estoppel or
otherwise as to any intellectual property data, technology or other property rights
held by OREXIGEN (solely or jointly) not specifically set forth herein, regardless of
whether such property rights are dominant or subordinate to any of the OREXIGEN PATENT
RIGHTS.
	 
	 	2.06	 	DUKE AGREEMENT. OREXIGEN agrees that it will not enter into any
amendment of the DUKE AGREEMENT which diminishes the rights and/or interests of CYPRESS
under this AGREEMENT, without the prior written consent of CYPRESS, which shall not be
unreasonably withheld.

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ARTICLE 3 – LICENSE FEE, ROYALTIES AND OTHER FEES

	 	3.01	 	COMPENSATION TO OREXIGEN. In consideration of the right granted to
CYPRESS pursuant to this AGREEMENT by OREXIGEN, and the performance of the services by
OREXIGEN as specified in Section 4.02, and further subject to the terms and
conditions of this AGREEMENT, CYPRESS agrees to pay OREXIGEN as follows:

	 	(a)	 	Upfront Payments. CYPRESS shall make payments to
OREXIGEN as follows:

	 	(i)	 	the sum of One Million Dollars ($1,000,000)
at the time of execution of this AGREEMENT, which shall include
support for activities of OREXIGEN under the COLLABORATIVE WORK PLAN;
and
	 
	 	(ii)	 	the sum of Five Hundred Thousand Dollars
($500,000) on the earlier of February 1, 2005 or the OPTION EXERCISE
DATE.

	 	(b)	 	Royalty on NET SALES of LICENSED PRODUCTS. At the
times and in the manner set forth hereinafter, CYPRESS shall pay to OREXIGEN a
non-refundable running royalty on NET SALES of LICENSED PRODUCTS (hereinafter
such running royalty referred to as the “RUNNING ROYALTY”), based on
the level of NET SALES during any calendar year, as follows:

	 	 	 
	Royalty	 	 
	Rate	 	Annual NET SALES Levels
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]

	 	 	 	The applicable RUNNING ROYALTY rate for a particular NET SALES level shall apply
only to such NET SALES level. Therefore, as an example, if NET SALES for a
particular calendar year were $400 million, [***].

 

			
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	 	 	 	Notwithstanding the foregoing, if (a) CYPRESS (and/or appertaining SUBLICENSEES, as
the case may be) obtains from any THIRD PARTY any licenses and/or sublicenses for
patent rights in order to practice OREXIGEN PATENT RIGHTS in the FIELD or in order
to develop, make, have made, use, import, offer for sale, sell, import, export or
provide LICENSED PRODUCTS (including, without limitation, as a result of any claim
referred to in subsection (b)), or (b) any claim is made against CYPRESS (and/or
appertaining SUBLICENSEES, as the case may be) alleging that the practice of the
OREXIGEN PATENT RIGHTS in the FIELD infringes any THIRD PARTY patent, then CYPRESS
(and/or appertaining SUBLICENSEES, as the case may be) shall be entitled to credit,
in the case of subsection (a), any payment by CYPRESS (and/or appertaining
SUBLICENSEES, as the case may be) of additional running royalties to such THIRD
PARTY(ies), if any, on LICENSED PRODUCTS, and, in the case of subsection (b), fifty
percent (50%) of any reasonable costs and expenses (including, without limitation,
attorneys’ fees, but excluding any judgments or any settlements in connection with
such claims) incurred by CYPRESS (and/or appertaining SUBLICENSEES, as the case may
be) in connection with any such infringement claim against the RUNNING ROYALTY for
the subject LICENSED PRODUCTS, in the appertaining country(ies) during the
appertaining time period, provided that in no event shall the amount otherwise
payable to OREXIGEN as RUNNING ROYALTY be reduced to less than [***] percent
([***]%) of NET SALES for the subject LICENSED PRODUCTS in the appertaining
country(ies) during the appertaining time period; provided further that, in the case
of subsection (b), any amounts that would have been credited in any period, but are
not credited due to the [***] percent ([***]%) limitation, shall be carried forward
to the following periods until all such amounts have been credited against the
RUNNING ROYALTY for the subject LICENSED PRODUCTS.
	 
	 	 	 	Without limiting the credit available above, in the case of RUNNING ROYALTIES
payable by CYPRESS for NET SALES by any SUBLICENSEE, the RUNNING ROYALTY payable by
CYPRESS shall not exceed [***] percent ([***]%) of royalties received by CYPRESS
from such SUBLICENSEE (net of any payment on such royalties that CYPRESS is
obligated to pay to THIRD PARTIES with respect to LICENSED PRODUCTS) but in no event
will be lower than [***] percent ([***]%) of such NET SALES by such SUBLICENSEE.
	 
	 	 	 	The RUNNING ROYALTIES shall be payable on a LICENSED PRODUCT by LICENSED PRODUCT and
country by country basis from the date of first commercial sale of a given, LICENSED
PRODUCT in a given country until, the expiration of the last to expire of the
OREXIGEN PATENT RIGHTS containing a VALID CLAIM that, absent assignment or license,
would be infringed by the manufacture, use or sale of such LICENSED PRODUCT in such
country.

	 	(c)	 	Milestone Payments. CYPRESS (and/or appertaining SUBLICENSEES,
as the case may be) shall pay OREXIGEN the following one-time,
noncreditable, non-refundable payments within [***]([***]) days of the first

 

			
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	 	 	 	occurrence of each of the following milestones achieved by CYPRESS (and/or
any SUBLICENSEES, as the case may be) as relates to a LICENSED PRODUCT:

[***]

	 	3.02	 	TAXES. OREXIGEN shall pay any and all taxes levied on account of any
payments made to it under this AGREEMENT. If any such taxes are required to be
withheld by CYPRESS (and/or appertaining SUBLICENSEES, as the case may be), CYPRESS
(and/or appertaining SUBLICENSEES, as the case may be) will (a) deduct such taxes from
the payment made to OREXIGEN, (b) timely pay the taxes to the proper taxing authority,
and (c) send proof of payment to OREXIGEN and certify its receipt by the taxing
authority within forty-five (45) calendar days following such payment.
	 
	 	3.03	 	LATE PAYMENTS. All payments due from CYPRESS (and/or appertaining
SUBLICENSEES, as the case may be) pursuant to this AGREEMENT shall be due and payable in
accordance with the terms and conditions of this AGREEMENT, and if a payment due pursuant to
this AGREEMENT is not paid within [***] ([***]) days of the payment due date, then a late
payment fee equal to [***] percent ([***]%) of such payment shall, be added to the payment
due; provided, however, in addition to the late fee described above, all past due payments
shall bear interest at the [***]

 

			
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[***] from the due date of such payment until paid. The payment of such interest and late
fees shall not foreclose OREXIGEN from exercising any other rights it may have as a
consequence of the lateness of any payment.

	 	3.04	 	NO MULTIPLE ROYALTIES. No multiple royalties on NET SALES shall be
payable to OREXIGEN on a single LICENSED PRODUCT because its manufacture; use, lease,
sale or practice are or shall be covered by more than one of the OREXIGEN PATENT
RIGHTS. In addition, no royalty on NET SALES shall be payable to OREXIGEN with respect
to any LICENSED PROCESS or LICENSED SERVICE to the extent a royalty on NET SALES is
paid to OREXIGEN with respect to a LICENSED PRODUCT used in or resulting from such
LICENSED PRODESS or LICENSED SERVICE.
	 
	 	3.05	 	METHOD OF PAYMENT. All payments due to OREXIGEN under this AGREEMENT
shall be paid in United States Dollars in Princeton, New Jersey, or at such place as
OREXIGEN may reasonably designate consistent with the laws and regulations controlling
in any foreign country. If any currency conversion shall be required in connection
with such payments due hereunder, such conversion shall be made by using the exchange
rate prevailing at Bank of America (N.A.) (or its successor, as the case may be) on the
last business day of the reporting period to which such payments relate. If payments
are made by wire, electronic or other transfer form for which a fee is charged
(“PAYMENT TRANSFER FEES”), CYPRESS (and/or appertaining SUBLICENSEES, as the
case may be) shall be responsible for the full amount of such fees and shall promptly
reimburse OREXIGEN for OREXIGEN’s payment of such reasonable PAYMENT TRANSFER FEES
within thirty (30) days of invoice of the same from OREXIGEN. OREXIGEN shall be
responsible for making all payments required of OREXIGEN under the DUKE AGREEMENT.

ARTICLE 4 – COLLABORATIVE WORK/DUE DILIGENCE REQUIREMENTS

	 	4.01	 	COLLABORATIVE WORK. CYPRESS and OREXIGEN shall collaborate in the
development of LICENSED PRODUCTS through assistance to be provided by OREXIGEN as
outlined on APPENDIX B and referred to herein as the “COLLABORATIVE WORK PLAN”,
which shall include the PRE-CLINICAL STUDIES and CLINICAL STRATEGY ASSISTANCE (the
“COLLABORATIVE WORK”). The COLLABORATIVE WORK PLAN shall be updated by mutual
agreement of OREXIGEN and CYPRESS within thirty (30) days of the date of this
AGREEMENT. CYPRESS shall have final decision-making authority with regard to
development and commercialization of LICENSED PRODUCTS, including, without limitation,
whether to develop any LICENSED PRODUCTS for depression. OREXIGEN shall make all
PRE-COLLABORATION OREXIGEN INTELLECTUAL PROPERTY and COLLABORATION OREXIGEN
INTELLECTUAL PROPERTY available for review by CYPRESS.

 

			
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	 	4.02	 	PRE-CLINICAL STUDIES. Under the COLLABORATIVE WORK PLAN, OREXIGEN,
through [***] (a consultant of OREXIGEN), shall conduct pre-clinical studies (the
“PRE-CLINICAL STUDIES”) at [***]. The PRE-CLINICAL STUDIES shall include:

	 	(a)	 	[***]; and
	 
	 	(b)	 	[***].

	 	 	 	The parties recognize that, taking into account the uncertainties of drug
development, it may be necessary, from time to time, to amend the objectives of the
COLLABORATIVE WORK PLAN and/or extend the delivery date of the data from
PRE-CLINICAL STUDIES. CYPRESS hereby agrees to accept any reasonable proposals to
amend the scope of the COLLABORATIVE WORK PLAN in light of OREXIGEN’S experience in
conducting the PRE-CLINICAL STUDIES, provided that such amendments, in the
aggregate, shall not result in an extension of completion of the PRE-CLINICAL
STUDIES by more than [***]([***]) days. The PRE-CLINICAL STUDIES shall be deemed
completed when OREXIGEN delivers to CYPRESS data which satisfies all requirements
and objectives established in the COLLABORATIVE WORK PLAN. Any extension of the
completion of the PRE-CLINICAL STUDIES beyond [***]([***]) days shall extend the
OPTION EXERCISE DEADLINE by the extent to which such extension exceeds
[***]([***])[***].
	 
	 	4.03	 	CLINICAL STRATEGY ASSISTANCE. OREXIGEN shall assist CYPRESS in its
strategy with, respect to the planned proof of concept trials (the “CLINICAL
STRATEGY ASSISTANCE”), as described in the COLLABORATIVE WORK PLAN. CYPRESS will
have responsibility and sole decision making authority with respect to all clinical
trials for LICENSED PRODUCTS, including, without limitation, the planned proof of
concept trials, and all regulatory and other matters relating to the LICENSED PRODUCTS.
	 
	 	4.04	 	OWNERSHIP OF INTELLECTUAL PROPERTY.

	 	(a)	 	PRE-COLLABORATION CYPRESS INTELLECTUAL PROPERTY and
COLLABORATION CYPRESS INTELLECTUAL PROPERTY. All rights and title to
PRE-COLLABORATION CYPRESS INTELLECTUAL PROPERTY will belong to CYPRESS, and all
rights and title to COLLABORATION CYPRESS INTELLECTUAL PROPERTY, whether
patentable or copyrightable or not, will belong to CYPRESS.
	 
	 	(b)	 	PRE-COLLABORATION OREXIGEN INTELLECTUAL PROPERTY and COLLABORATION
OREXIGEN INTELLECTUAL PROPERTY.

 

			
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	 	 	 	All rights and title to PRE-COLLABORATION OREXIGEN INTELLECTUAL PROPERTY
will belong to OREXIGEN and all rights and title to COLLABORATION OREXIGEN
INTELLECTUAL PROPERTY, whether patentable or copyrightable or not, will
belong to OREXIGEN, subject to the LICENSE to be granted hereunder.
	 
	 	(c)	 	COLLABORATION JOINT INTELLECTUAL PROPERTY. All rights and title
to COLLABORATION JOINT INTELLECTUAL PROPERTY, whether patentable or
copyrightable or not, will belong jointly to CYPRESS and OREXIGEN and will
be subject to the terms and conditions of this AGREEMENT. Each party will
have the right to independently practice and to license such COLLABORATION
JOINT INTELLECTUAL PROPERTY, without accounting to the other party, subject
to the LICENSE during the term of this AGREEMENT, and only to the extent
that the practice of such COLLABORATION JOINT INTELLECTUAL PROPERTY by
CYPRESS or any sublicensee does not require rights under PRE-COLLABORATION
OREXIGEN INTELLECTUAL PROPERTY, COLLABORATION OREXIGEN INTELLECTUAL
PROPERTY, or any other INTELLECTUAL PROPERTY owned by, either partially or
wholly, or licensed to OREXIGEN, and that the practice of such COLLABORATION
JOINT INTELLECTUAL PROPERTY by OREXIGEN or any sublicensee does not require
rights under PRE-COLLABORATION CYPRESS INTELLECTUAL PROPERTY, COLLABORATION
CYPRESS INTELLECTUAL PROPERTY, or any other INTELLECTUAL PROPERTY owned by,
either partially or wholly, or licensed to CYPRESS. If such COLLABORATION
JOINT INTELLECTUAL PROPERTY contains any PRE-COLLABORATION INTELLECTUAL
PROPERTY, COLLABORATION INTELLECTUAL PROPERTY or other INTELLECTUAL PROPERTY
owned by, either partially or wholly, or licensed to, the other party, the
inventing party will only have the rights to practice and license the
COLLABORATION JOINT INTELLECTUAL PROPERTY as negotiated with such other
party pursuant to a license agreement or other agreed-upon arrangement.
Notwithstanding the foregoing, OREXIGEN shall not have the right to practice
or to license (other than to CYPRESS) any COLLABORATION JOINT INTELLECTUAL
PROPERTY, to the extent of the LICENSE granted to CYPRESS, so long as the
LICENSE is in effect. Additionally, subject to the provisions of
Section 8.02, so long as the LICENSE is in effect, each party will
have the right but not the obligation to bring, at its own expense, an
infringement action against any third party under its interest in
COLLABORATION JOINT INTELLECTUAL PROPERTY, subject to the same limitations
as set forth above with respect to the practice of such COLLABORATION JOINT
INTELLECTUAL PROPERTY by CYPRESS or OREXIGEN. The parties will assist one
another and cooperate in any such litigation, at the other’s reasonable
request, and, if a party is necessary in order to institute and maintain an
infringement suite

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	 	 	 	by the other party as defined by law, that party agrees to be joined in such
suit.
	 
	 	(d)	 	Reporting Inventions. The parties agree to use
reasonable efforts to report inventions conceived and/or reduced to practice
that are within the scope of the COLLABORATION JOINT INTELLECTUAL PROPERTY or
COLLABORATION OREXIGEN INTELLECTUAL PROPERTY described in this Article
4 within thirty (30) days of their identification thereof.

	 	4.05	 	CYPRESS DUE DILIGENCE. CYPRESS shall use commercially reasonable
efforts to bring LICENSED PRODUCTS to market and, if LICENSED PRODUCTS receive
marketing approval, to continue marketing efforts for LICENSED PRODUCTS during the term
of this AGREEMENT.
	 
	 	4.06	 	CYPRESS REPORTS. During the term of this AGREEMENT, CYPRESS will
submit [***] progress reports to OREXIGEN as set forth in Section 5.02.
OREXIGEN shall have the right to request [***]([***]) [***] to discuss such information
with representatives of CYPRESS at mutually acceptable times and places. Each party
will bear its own travel and living expenses incident thereto.

ARTICLE 5 – REPORTS AND RECORDS

	 	5.01	 	ACCOUNTING RECORDS. CYPRESS shall keep full, true and accurate books
of accounts and other records containing all particulars which may be necessary to
properly ascertain and verify the amounts payable to OREXIGEN hereunder and shall
require SUBLICENSEES, as the case may be, to do the same. Said books of account shall
be kept at CYPRESS’s (and/or SUBLICENSEES’) principal place of business or the
principal place of business of the appropriate division of CYPRESS (and/or SUBLICENSEE)
to which this AGREEMENT relates. Said books and the supporting data shall be open at
all reasonable times for [***]([***]) years following the end of the calendar year to
which they pertain, to the inspection of OREXIGEN or its agents for the purpose of
verifying the CYPRESS’s (and/or SUBLICENSEE’s) royalty statement or compliance in other
respects with this AGREEMENT. Should such inspection lead to the discovery of a
greater than [***] percent ([***]%) discrepancy in reporting, CYPRESS agrees to pay the
full cost of such inspection in addition to any amounts due to OREXIGEN, such amounts
to be subject to the provisions of Section 3.03.
	 
	 	5.02	 	STATUS REPORTS. CYPRESS shall report the status of development of each
LICENSED PRODUCT [***] to OREXIGEN by [***]. Such report shall include descriptions of
CYPRESS’s (and/or SUBLICENSEES’) plans and commercially reasonable estimated timeframes
for testing, development, governmental approvals and marketing/sale of each LICENSED
PRODUCT.

 

			
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	 	5.03	 	NET SALES REPORTS/PAYMENT OF RUNNING ROYALTIES. After the first
commercial sale of a LICENSED PRODUCT, and in addition to the reports required under
Section 5.02, CYPRESS shall render to OREXIGEN prior to [***] a written
account of the NET SALES of LICENSED PRODUCTS made during the prior [***] period
ending [***], respectively, and shall simultaneously pay to OREXIGEN the royalties
due on such NET SALES in United States dollars. Reports tendered shall include the
calculation of royalties by product by country.

ARTICLE 6 – PATENTS

	 	6.01	 	FILING OF PATENT APPLICATIONS. CYPRESS and OREXIGEN will each hold all
information it presently knows or acquires under this Article 6 as CONFIDENTIAL
INFORMATION in accordance with Article 11.

	 	(a)	 	CYPRESS INTELLECTUAL PROPERTY. CYPRESS will have the
sole right, using in-house or outside legal counsel selected by CYPRESS at its
sole discretion, to prepare, file, prosecute, maintain and extend, and defend
and enforce, patent applications and patents included in the PRE-COLLABORATION
CYPRESS INTELLECTUAL PROPERTY and COLLABORATION CYPRESS INTELLECTUAL PROPERTY
in countries of CYPRESS’s choosing. CYPRESS will bear all costs relating to
such activities.
	 
	 	(b)	 	OREXIGEN INTELLECTUAL PROPERTY. OREXIGEN will have the
first right, using in-house or outside legal counsel selected by OREXIGEN at
its sole discretion, to prepare, file, prosecute, maintain and extend patent
applications and patents included in the PRE-COLLABORATION OREXIGEN
INTELLECTUAL PROPERTY and COLLABORATION OREXIGEN INTELLECTUAL PROPERTY in
countries of OREXIGEN’s choosing. OREXIGEN will bear all costs relating to
such activities. OREXIGEN will solicit CYPRESS’s advice and review of such
patent applications and all substantive prosecution actions, and OREXIGEN will
take into consideration CYPRESS’s advice thereon. If OREXIGEN elects not to
prepare, file, prosecute or maintain certain of such patent applications or
patents or certain claims encompassed within such patent applications or
patents, in one or more countries, OREXIGEN will give CYPRESS notice thereof
within a reasonable period prior to allowing such patent applications, patents
or claims to lapse or become abandoned or unenforceable, and, subject to any
rights of Duke University with respect to the DUKE PATENT RIGHTS, CYPRESS will
thereafter have the right, at its sole expense and discretion, to prepare,
file, prosecute and maintain such patent applications and patents in such one
or more countries and furthermore, OREXIGEN shall take all actions to have such
rights assigned to CYPRESS.

 

			
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	 	(c)	 	COLLABORATION JOINT INTELLECTUAL PROPERTY. CYPRESS will have
the first right, using in-house or outside legal counsel selected by CYPRESS
at its sole discretion, to prepare, file, prosecute, maintain and extend
patent applications and patents included in the COLLABORATION JOINT
INTELLECTUAL PROPERTY in countries selected by mutual agreement of CYPRESS
and OREXIGEN. OREXIGEN and CYPRESS will equally bear all costs relating to
such activities. CYPRESS will solicit OREXIGEN’s advice and review of such
patent applications and all substantive prosecution actions, and CYPRESS
will take into consideration OREXIGEN’s advice thereon. If CYPRESS elects
not to prepare, file, prosecute or maintain certain of such patent
applications or patents or certain claims encompassed within such patent
applications or patents, in one or more countries, CYPRESS will give
OREXIGEN notice thereof within a reasonable period prior to allowing such
patent applications, patents or claims to lapse or become abandoned or
unenforceable, and OREXIGEN will thereafter have the right, at its sole
expense and discretion, to prepare, file, prosecute and maintain such patent
applications and patents in such one or more countries and furthermore,
CYPRESS shall take all actions to have such rights assigned to OREXIGEN.

	 	6.02	 	COOPERATION. Each party agrees to cooperate fully in the preparation,
fling, prosecution and maintenance of any patent applications and patents under this
AGREEMENT. Such cooperation includes, but is not limited to:

	 	(a)	 	executing all papers and instruments, or requiring its AGENTS
to execute such papers and instruments, so as to effectuate the ownership of
COLLABORATION INTELLECTUAL PROPERTY set forth in Section 6.01 and to
enable the other party to apply for and to prosecute patent applications in any
country; and
	 
	 	(b)	 	promptly informing the other party of any matters coming to
such party’s attention that may affect the preparation, filing, or prosecution
of any such patent applications.

	 	6.03	 	PATENT TERM RESTORATION. The parties hereto shall cooperate with each
other in obtaining patent term restoration or supplemental protection certificates or
their equivalents in any country where applicable to patents included within the
OREXIGEN PATENT RIGHTS under this AGREEMENT.
	 
	 	6.04	 	MARKING OF LICENSED PRODUCTS. CYPRESS agrees to mark the LICENSED
PRODUCTS (as the case may be), and/or their containers, labels, and/or other packaging,
in such a manner as to conform to the patent laws and practices of the country of
manufacture or sale, as appropriate.

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ARTICLE 7 – INFRINGEMENT OF THIRD-PARTY RIGHTS

	 	7.01	 	COUNSEL/DEFENSE/SETTLEMENT. In the event that OREXIGEN or CYPRESS is
charged with infringement of a patent by a THIRD PARTY as a result of activities
pursuant to this AGREEMENT, such party shall promptly notify the other in writing of
any such allegation by such THIRD PARTY. CYPRESS shall have the sole right to control
any defense of any such claim involving alleged infringement of THIRD PARTY patents by
CYPRESS’s activities at its own expense (subject to Section 3.01(b)) and by
counsel of its own choice, and OREXIGEN shall have the right, at its own expense, to be
represented in any such action by counsel of its own choice. OREXIGEN shall have the
sole right to control any defense of any such claim involving alleged infringement of
THIRD PARTY patents by OREXIGEN’s activities at its own expense and by counsel of its
own choice, and CYPRESS shall have the right, at its own expense, to be represented in
any such action by counsel of its own choice. Neither party shall have the right to
settle any patent infringement litigation under this Section 7.01 relating to
any OREXIGEN PATENT RIGHTS in a manner that diminishes the rights or interests of the
other party without the written consent of such other party (which shall not be
unreasonably withheld).
	 
	 	7.02	 	ASSISTANCE. Each party will give the other party reasonable
assistance, at such other party’s request and expense, in the defense of any such
infringement charge or lawsuit under Section 7.01, as may be reasonably
required.

ARTICLE 8 – INFRINGEMENT OF PATENT RIGHTS BY THIRD PARTIES

	 	8.01	 	NOTICE. Each party to this AGREEMENT is obligated to inform the other
promptly in writing of any alleged infringement of which it becomes aware and of any
available evidence of infringement by a THIRD PARTY of any patents within the OREXIGEN
PATENT RIGHTS.
	 
	 	8.02	 	CYPRESS RIGHTS. If during the term of this AGREEMENT, CYPRESS becomes
aware of any alleged infringement by a THIRD PARTY, CYPRESS shall have the right, but
not the obligation, to either:

	 	(a)	 	settle the infringement suit by sub-licensing the alleged
infringer or by other means; or
	 
	 	(b)	 	prosecute at its own expense any infringement of the OREXIGEN PATENT
RIGHTS. In the event CYPRESS prosecutes such infringement of OREXIGEN
PATENT RIGHTS, CYPRESS may use the name of OREXIGEN as a party plaintiff in
any such suit without expense to CYPRESS, and, if any such suit involves
OREXIGEN PATENT RIGHTS which are owned or co-owned by Duke University,
CYPRESS may, for such purposes, request to use the name of Duke University
as party plaintiff. In the event CYPRESS brings an infringement action,
OREXIGEN shall cooperate fully, including if required to bring such

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	 	 	 	action, the furnishing of a power of attorney. With respect to any suit
involving OREXIGEN PATENT RIGHTS which are owned or co-owned by Duke
University, Duke University, at its sole discretion, may agree to become a
party plaintiff, and all costs associated therewith shall be borne by
CYPRESS.

	 	8.03	 	ALLOCATION OF COSTS, RECOVERIES. In the event that CYPRESS undertakes
the enforcement and/or defense of the OREXIGEN PATENT RIGHTS by litigation, including
any declaratory judgment action, the total cost of any such action commenced or
defended solely by CYPRESS shall be borne by CYPRESS, subject to Section
3.01(b). Any recovery of damages by CYPRESS as a result of such action shall be
applied first in satisfaction of any unreimbursed expenses and attorneys’ fees of
CYPRESS relating to the action, and second in satisfaction of unreimbursed legal
expenses and attorneys’ fees of OREXIGEN, and, if applicable, Duke University, if any,
relating to the action. If applicable, CYPRESS shall receive an amount equal to its
lost profits, a reasonable royalty on sales of the infringer, or other measure of
damages the court shall have applied, less a reasonable approximation of the royalties
that CYPRESS would have owed to OREXIGEN on NET SALES that may have been made by
CYPRESS but, instead, were lost to the infringer, which amount shall be promptly paid
by CYPRESS to OREXIGEN. Any balance remaining from such recovery shall be distributed
between CYPRESS and OREXIGEN as follows: CYPRESS receiving seventy-five percent (75%) and
OREXIGEN receiving twenty-five percent (25%).
	 
	 	8.04	 	OREXIGEN RIGHTS. In the event CYPRESS does not undertake action to
prevent the infringing activity within [***] ([***]) [***] of having been made aware
and notified thereof, OREXIGEN (or, in the case of DUKE PATENT RIGHTS, Duke University)
shall have the right, but not the obligation, to prosecute at its own expense any such
infringements of the OREXIGEN PATENT RIGHTS and, in furtherance of such right, OREXIGEN
may use the name of CYPRESS as a party plaintiff in any such suit without expense to
CYPRESS. The total cost of any such infringement action commenced or defended solely
by OREXIGEN shall be borne by OREXIGEN. Any recovery of damages by OREXIGEN for any
infringement shall be applied first in satisfaction of any unreimbursed expenses and
attorneys’ fees of OREXIGEN relating to the suit, and second toward reimbursement of
CYPRESS’s and, if applicable, Duke University’s reasonable expenses, including
reasonable attorneys’ fees, relating to the suit. Any balance remaining from such
recovery shall be distributed between CYPRESS and OREXIGEN with OREXIGEN receiving
seventy-five percent (75%) and CYPRESS receiving twenty-five percent (25%).
	 
	 	8.05	 	COOPERATION. In any infringement suit instituted by either party to
enforce the OREXIGEN PATENT RIGHTS the other party hereto shall, at the request and
expense of the party initiating such suit, reasonably cooperate in all respects and,
to the extent reasonably possible, have its employees testify when requested

 

			
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	 	 	 	and make available relevant records, papers, information, samples, specimens, and
the like.
	 
	 	8.06	 	FUTURE INFRINGEMENT. CYPRESS has the sole right in accordance with the
terms and conditions herein, subject to the approval rights of Duke University with
respect to DUKE PATENT RIGHTS, to SUBLICENSE any LICENSED PRODUCT to an alleged
infringer under the OREXIGEN PATENT RIGHTS in the TERRITORY in order to avoid
infringement in the future.
	 
	 	8.07	 	SETTLEMENT. Neither party shall have the right to settle any patent
infringement litigation under this Article 8 relating to any OREXIGEN PATENT
RIGHTS exclusively licensed to CYPRESS hereunder without the prior written consent of
such other party.
	 
	 	8.08	 	PATENT INVALIDITY. Any of the foregoing notwithstanding, if at any
time during the term of this AGREEMENT any of the OREXIGEN PATENT RIGHTS are held
invalid or unenforceable in a decision which is not appealable or is not appealed
within the time allowed, CYPRESS shall have no further obligations to OREXIGEN with
respect to its future use or sale of any LICENSED PRODUCT covered solely by such
OREXIGEN PATENT RIGHTS, including the obligation of paying royalties.

ARTICLE 9 – GOVERNMENT CLEARANCE, PUBLICATION, EXPORT

	 	9.01	 	GOVERNMENT APPROVALS. Insofar as such clearance is required, CYPRESS
agrees to use commercially reasonable efforts to have the LICENSED PRODUCTS cleared for
marketing in those countries in which CYPRESS intends to sell LICENSED PRODUCTS by the
responsible government agencies requiring such clearance. To accomplish said
clearances at the earliest possible date, CYPRESS agrees to file or have filed any
necessary data with said government agencies as quickly as commercially reasonable.
	 
	 	9.02	 	EXPORT RESTRICTIONS. This AGREEMENT is subject to all of the United
States laws and regulations controlling the export of technical data, computer
software, laboratory prototypes and other commodities and technology. It is understood
that the parties are subject to United States laws and regulations controlling the
export of technical data, computer software, laboratory prototypes and other
commodities (including the Arms Export Control Act, as amended and the Export
Administration Act of 1979), and that its obligations hereunder are contingent on
compliance with applicable United States export laws and regulations. The transfer of
certain technical data and commodities by CYPRESS may require a license from the
cognizant agency of the United States Government and/or written assurances by CYPRESS
that CYPRESS shall not export data or commodities to certain foreign countries without
prior approval of such agency. OREXIGEN neither represents that a license shall not be
required nor that, if required, it shall be issued.

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ARTICLE 10 – DURATION AND TERMINATION

	 	10.01	 	EFFECTIVE DATE. This AGREEMENT shall become effective upon the
EFFECTIVE DATE, and unless sooner terminated in accordance with any of the provisions
herein, shall remain in full force and effect for the life of the last-to-expire of the
patents included in the OREXIGEN PATENT RIGHTS containing a VALID CLAIM that, absent
assignment or license, would be infringed by the manufacture, use or sale of such
LICENSED PRODUCT.
	 
	 	10.02	 	AUTOMATIC TERMINATION; NO OPTION EXERCISE. This AGREEMENT shall
terminate automatically if CYPRESS does not exercise the OPTION during the OPTION TERM.
	 
	 	10.03	 	CYPRESS VOLUNTARY TERMINATION.

	 	(a)	 	CYPRESS may terminate this AGREEMENT at any time and for any
reason by giving OREXIGEN written notice at least three (3) months prior to the
effective date of such termination. It is understood that CYPRESS shall remain
responsible for the timely payment of all amounts due OREXIGEN under this
AGREEMENT through the effective date of the termination.
	 
	 	(b)	 	CYPRESS may terminate this AGREEMENT at any time by giving
written notice to OREXIGEN in the event there is an unfavorable judgment
against OREXIGEN or other party relating to the DUKE PATENT RIGHTS at the trial
court or the patent office in an interference.

	 	10.04	 	TERMINATION DUE TO FRAUD, ETC. Either party may immediately terminate
this AGREEMENT for fraud, willful misconduct, or illegal conduct of the other party, in
all such cases with respect to the subject matter of this AGREEMENT, upon written
notice of same to that other party.
	 
	 	10.05	 	TERMINATION DUE TO BREACH. If either party fails to fulfill any of
its material obligations under this AGREEMENT (including, but not limited to, lack
of payment, but excluding termination under Section 10.02) (a “MATERIAL
BREACH”), the non-breaching party may terminate this AGREEMENT, following
written notice to the breaching party, as provided below. Such notice must contain
a full description of the event or occurrence constituting a MATERIAL BREACH of the
AGREEMENT. If (a) the party receiving notice of the MATERIAL BREACH does not cure
that MATERIAL BREACH within ninety (90) days (thirty (30) days with regard to
payment obligations) of receipt of .notice, the termination will be effective as of
the ninety first (91st) day (thirty-first (31st) day with regard to payment
obligations) after receipt of notice or (b) if such MATERIAL BREACH is not
susceptible of cure within such ninety (90) day period (thirty (30) day period with
respect to payment obligations), such party has not taken appropriate steps to
commence such cure during such ninety (90) day period (thirty (30) day period with
respect to payment obligations) and continued

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	 	 	 	to diligently pursue such cure in a manner reasonably assuring such cure within a
reasonable period of time thereafter, the termination will be effective as of a
further written notice to such effect by the non breaching party. Termination shall
not be permitted for a MATERIAL BREACH of payment obligations where the obligation
to make payment is being diligently contested in good faith by appropriate
proceedings and any required payment is promptly made following completion of
dispute resolution as contemplated hereby. A party’s ability to cure a MATERIAL
BREACH of its payment obligations will apply only to the first [***] ([***]) such
MATERIAL BREACHES properly noticed under the terms of this AGREEMENT. Any
subsequent MATERIAL BREACH of its payment obligations by that party will entitle the
other party to terminate this AGREEMENT upon receipt of notice by the breaching
party, where such notice must contain a full description of the event or occurrence
constituting a MATERIAL BREACH of payment obligations under this AGREEMENT.
	 
	 	10.06	 	INFRINGEMENT OF OREXIGEN INTELLECTUAL PROPERTY RIGHTS. In addition to
termination rights stated elsewhere in this AGREEMENT, OREXIGEN shall have the right to
terminate this AGREEMENT, by giving written notice to CYPRESS as provided in
Section 10.05, if CYPRESS makes any use of OREXIGEN INTELLECTUAL PROPERTY
RIGHTS not authorized under this AGREEMENT and CYPRESS does not cease such unauthorized
activities within [***] ([***]) days of receipt of notice, with such termination
becoming effective as of the [***] ([***]) day after receipt of notice. OREXIGEN’S
right to terminate under this Section 10.06 is in addition to, and not in lieu
of, other rights and remedies in law or equity which might be available to it for such
conduct by CYPRESS.
	 
	 	10.07	 	BANKRUPTCY. All rights and licenses granted under or pursuant to this
AGREEMENT by OREXIGEN are, and will otherwise be deemed to be, for purposes of Section
365(n) of the U.S. Bankruptcy Code, licenses of right to “intellectual property” as
defined under Section 101 of the U.S. Bankruptcy Code. The parties agree that CYPRESS,
as licensee of such rights under this AGREEMENT, will retain and may fully exercise all
of their rights and elections under the U.S. Bankruptcy Code. The parties further
agree that, in the event of the commencement of a bankruptcy proceeding-by or against
OREXIGEN under the U.S. Bankruptcy Code, CYPRESS will be entitled to a complete
duplicate of (or complete access to, as appropriate) any such intellectual property and
all embodiments of such intellectual property, and same, if not already in their
possession, will be promptly delivered to it (i) upon any such commencement of a
bankruptcy proceeding upon their written request therefor, unless OREXIGEN elects to
continue to perform all of its obligations under this AGREEMENT, or (ii) if not
delivered under (i) above, following the rejection of this AGREEMENT by or on behalf of
OREXIGEN upon written request therefor by CYPRESS.
	 
	 	10.08	 	EFFECT OF TERMINATION. Notwithstanding anything to the contrary in
this AGREEMENT, neither expiration nor any termination of this AGREEMENT shall
remove any rights or obligations of either party to the other party which

 

			
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	 	 	 	were incurred under this AGREEMENT prior to and as of the effective date of any
expiration or termination.
	 
	 	10.09	 	CEASE COMMERCIAL USE ON TERMINATION. On or before the effective date
of any expiration or termination of this AGREEMENT, CYPRESS shall cease the
manufacture, use, practice, lease, and sale, offering, distribution, and other
commercialization of LICENSED PRODUCTS provided, however, that nothing herein will in
any way limit or restrict CYPRESS and SUBLICENSEES from manufacturing, using,
practicing, leasing, and selling, offering for sale, distributing, and otherwise
commercializing LICENSED PRODUCTS after any expiration or termination of this AGREEMENT
if such activities would not infringe any issued patent within the OREXIGEN PATENT
RIGHTS containing a VALID CLAIM that, absent assignment or license, would be infringed
by the manufacture, use or sale of such LICENSED PRODUCT or would otherwise involve the
misappropriation of any trade secrets within the OREXIGEN INTELLECTUAL PROPERTY RIGHTS.
	 
	 	10.10	 	RETURN OF MATERIALS. Within thirty (30) days of any expiration or
termination of this AGREEMENT, CYPRESS shall (i) return to OREXIGEN or destroy, as
directed by OREXIGEN, all information, data, and any relevant materials provided to
CYPRESS during the term of this AGREEMENT and (ii) destroy all LICENSED PRODUCTS in a
safe and legal manner, except to the extent continued commercialization of LICENSED
PRODUCTS is permitted under Section 10.09. Further, if applicable, CYPRESS
shall provide OREXIGEN with a written statement signed by an authorized representative
of CYPRESS. certifying the destruction of all LICENSED PRODUCTS in a safe and legal
manner, as well as the destruction of said information data, and relevant materials if
such instructions for destruction are given by OREXIGEN.

ARTICLE 11 – CONFIDENTIALITY

	 	11.01	 	CONFIDENTIAL INFORMATION. OREXIGEN and CYPRESS each agree to treat
any proprietary information disclosed to it by the other party under this AGREEMENT
(“CONFIDENTIAL INFORMATION”) as confidential and to avoid disclosure of such
information to any other person, firm or corporation, except to AFFILIATES bound by the
obligations of confidentiality and restricted use set forth in this Article 11,
and either party shall be liable for unauthorized disclosure or failure to exercise
such reasonable care. Further, the receiving party will not use the disclosing party’s
CONFIDENTIAL INFORMATION’ other than for the benefit of the parties hereto and relating
to this AGREEMENT. These obligations of non-disclosure and restricted use shall remain
effect for the term of this AGREEMENT and a period of time of [***] ([***]) years
thereafter, CONFIDENTIAL INFORMATION shall not include any information that the
receiving party can prove by competent written evidence:

	 	(a)	 	is already known to the receiving party at the time of the
disclosure;

 

			
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	 	(b)	 	becomes publicly known without the wrongful act or breach of this
AGREEMENT by the receiving party;
	 
	 	(c)	 	is rightfully received by the receiving party from a THIRD
PARTY on a non-confidential basis; or
	 
	 	(d)	 	is subsequently and independently developed by employees of the
party who had no knowledge of the information, as verified by written records.

	 	11.02	 	EXCEPTION. Notwithstanding the foregoing, CYPRESS shall have the
right to use and disclose any CONFIDENTIAL INFORMATION related to the OREXIGEN
INTELLECTUAL PROPERTY RIGHTS to investors, prospective investors, employees,
consultants and agents with a need to know, collaborators, prospective collaborators,
SUBLICENSEES, prospective SUBLICENSEES, and other THIRD PARTIES in the chain of
manufacturing and distribution or engaged in due diligence with respect to CYPRESS
provided that such persons or entities are bound by similar terms of confidentiality
and restricted use which are at least as restrictive and protective of OREXIGEN’s
CONFIDENTIAL INFORMATION as those provided in this Article 11.
	 
	 	 	 	In addition, each party may disclose CONFIDENTIAL INFORMATION belonging to the other
party to the extent such other party provides written permission to disclose such
CONFIDENTIAL INFORMATION, or if such disclosure is reasonably necessary in the
following instances:

	 	(a)	 	prosecuting patents and patent applications;
	 
	 	(b)	 	regulatory filings;
	 
	 	(c)	 	prosecuting or defending litigation; or
	 
	 	(d)	 	complying with applicable court orders or governmental
regulations.

	 	 	 	In the event a party intends to make a disclosure of the other party’s CONFIDENTIAL
INFORMATION pursuant to Section 11.03(c) or (d) such party will use
efforts to secure confidential treatment of such information at least as diligent as
such party would use to protect its own CONFIDENTIAL INFORMATION, but in no event
less than reasonable efforts.
	 
	 	 	 	In any event, the parties agree to take all reasonable action to avoid disclosure of
CONFIDENTIAL INFORMATION hereunder.
	 
	 	11.03	 	SEC FILINGS. The parties will consult with each other on the
provisions of this AGREEMENT to be redacted in any filings made by the parties with the
Securities and Exchange Commission or as otherwise required by law.
	 
	 	11.04	 	PRESS RELEASE. It is understood that the parties may issue a press
release (joint or otherwise) announcing the execution of this AGREEMENT and agree

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	 	 	 	that each party may desire or be required to issue subsequent press releases
relating to this AGREEMENT or activities thereunder. The parties agree to consult
with each other reasonably and in good faith with respect to the text and timing of
such press releases prior to the issuance thereof, provided that a party may not
unreasonably withhold consent to such releases, and that either party may issue such
press releases as it determines, based on advice of counsel, are reasonably
necessary to comply with laws or regulations or for appropriate market disclosure.
Each party agrees to review each press release within forty-eight (48) hours after
receiving the press release from the other party. In addition, following the
initial press release announcing this AGREEMENT, either party shall be free to
disclose, without the other party’s prior written consent, the existence of this
AGREEMENT, the identity of the other party and those terms of this AGREEMENT that
have already been publicly disclosed in accordance herewith.
	 
	 	11.05	 	PUBLICATIONS. Each party to this AGREEMENT recognizes that the
publication of papers containing results of and other information regarding development
of LICENSED PRODUCTS (except as provided hereinafter), including oral presentations and
abstracts, may be beneficial to both parties provided such publications are subject to
reasonable controls to protect CONFIDENTIAL INFORMATION. In particular, it is the
intent of the parties to maintain the confidentiality of any CONFIDENTIAL INFORMATION
included in any United States or foreign application until such United States or
foreign patent application has been published. Accordingly, the other party shall have
the right and obligation to review and approve any paper proposed for publication by
the other party, including oral presentations and abstracts. Before either party may
submit any paper, oral presentation or abstract for publication, the party proposing
publication shall deliver a complete copy of such materials to the other party at least
forty five (45) days prior to submitting the paper to a publisher or the date set for
presentation. The other party shall review any such paper and give its comments to the
publishing party within thirty (30) days of the delivery of such paper to the other
party. With respect to oral presentation materials, the other party shall make
reasonable efforts to expedite review of such materials, and shall return such items as
soon as practicable to the publishing party with appropriate comments, if any, but in
no event later than thirty (30) days from the date of delivery to the other party.
With respect to abstracts, the other party shall make reasonable efforts to expedite
review of such abstracts, and shall return such items as soon as practicable to the
publishing party with appropriate comments, if any, but in no event later than ten (10)
days from the date of delivery to the other party. The publishing party shall comply
with the other party’s request to delete references to the non-publishing party’s
CONFIDENTIAL INFORMATION in any such paper or other materials. Notwithstanding
anything to the contrary in this AGREEMENT, neither party shall have the right to
publish in any form any CONFIDENTIAL INFORMATION of the other party without such other
party’s prior written consent.

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ARTICLE 12 – NOTICES

	 	12.01	 	It shall be a sufficient giving of any notice, request, report, statement,
disclosure or other communication hereunder if the party giving the same shall

	 	(a)	 	hand deliver such communication; or
	 
	 	(b)	 	mail such a communication, postage prepaid, first class,
certified mail; or
	 
	 	(c)	 	send such communication, shipping prepaid by
national/international courier service

	 	 	 	to the party to receive such communication at the address given below, or such other
address as may hereafter be designated by notice in writing by the appertaining
party.

	 	 	 
	OREXIGEN	 	CYPRESS
	 
	 	 
	For delivery via the U.S. Postal Service
	 
	 	 
	Orexigen Therapeutics, Inc.

	 	Cypress Bioscience, Inc.
	Attn: Chief Executive Officer

	 	Attn: Chief Executive Officer
	One
Palmer Square, Suite 515
Princeton, NJ 08540

	 	4350 Executive Drive, Suite 325

San Diego, CA 92121
	 
	 	 
	cc: (if of a legal nature)
	 	 
	Biotech Law Associates, P.C.

	 	Cooley Godward LLP
	Attn: Douglas A. Branch

800 Research Parkway, Suite 310

Oklahoma City, OK 73104

	 	Attn: Kay Chandler

4410 Eastgate Mall

San Diego, CA 92121

	 	12.02	 	DATE OF NOTICE. The date of giving any such notice, request, report,
statement, disclosure or other communications, and the date of making any payment
hereunder required (provided such payment is received), shall be the actual date of
receipt.

ARTICLE 13 – ASSIGNMENT

	 	13.01	 	This AGREEMENT shall be binding upon and inure to the benefit of the
respective permitted successors and assigns of the parties hereto. However, neither
this AGREEMENT nor any rights or obligations hereunder may be assigned or otherwise
transferred by either party without the prior written approval of the other party,
such approval not to be unreasonably withheld; provided that either party may assign
this AGREEMENT and its rights and obligations hereunder without the other party’s
consent in connection with the transfer or sale of all or substantially all of the
business of such party to which this AGREEMENT relates to a THIRD PARTY, whether by
merger, sale of stock, sale of assets or otherwise. In the event of such
transaction, however, intellectual

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	 	 	 	property rights of the acquiring party to such transaction (if other than one of the
parties to this AGREEMENT) shall not be included in the technology licensed
hereunder.

ARTICLE 14 – INDEMNITY, INSURANCE, REPRESENTATIONS, STATUS

	 	14.01	 	INDEMNIFICATION OF OREXIGEN. OREXIGEN, and its officers, directors,
employees and agents and the DUKE INDEMNITEES as such term is defined in the DUKE
AGREEMENT (such persons and DUKE INDEMNITEES referred to collectively, as the
“OREXIGEN INDEMNITEES”) will be indemnified, defended by counsel reasonably
acceptable to OREXIGEN, and held harmless by CYPRESS from and against any claim,
liability, cost, expense, damage, deficiency, loss or obligation, of any kind or nature
(including, without limitation, reasonable attorneys’ fees and other costs and expenses
of defense) (collectively, “CLAIMS”) incurred by any OREXIGEN INDEMNITEE as a
result of any THIRD PARTY claim or action based upon, arising out of, or otherwise
relating to (i) any MATERIAL BREACH of any representation or warranty made by CYPRESS
under this AGREEMENT, or (ii) the development, manufacture, use, handling, storage,
sale or other disposition of any LICENSED PRODUCT by CYPRESS or any SUBLICENSEE.
However, the foregoing indemnity shall not apply to CLAIMS to the extent that they are
(w) subject to OREXIGEN’s indemnification obligation under Section 14.02(b),
(x) caused by the negligence or willful misconduct of any OREXIGEN INDEMNITEE, (y)
caused by a MATERIAL BREACH of this AGREEMENT by OREXIGEN; and/or (z) pertain solely to
claims that the activities of OREXIGEN employees and/or agents in their performance of
their respective responsibilities at OREXIGEN infringe the INTELLECTUAL PROPERTY of a
THIRD PARTY.
	 
	 	14.02	 	INDEMNIFICATION OF CYPRESS. CYPRESS and its SUBLICENSEES, and their
respective officers, directors, employees and agents (such persons referred to
collectively, as the “CYPRESS INDEMNITEES”) will be indemnified, defended by
counsel reasonably acceptable to CYPRESS, and held harmless by OREXIGEN from and
against any CLAIMS incurred by any CYPRESS INDEMNITEE as a result of (a) any THIRD
PARTY claim or action based upon, arising out of, or otherwise relating to (i) any
MATERIAL BREACH of any representation or warranty made by OREXIGEN under this
AGREEMENT, (ii) any COLLABORATIVE WORK performed by OREXIGEN or any of its AGENTS,
or (iii) any practice by OREXIGEN or its AFFILIATES or licensees (other than CYPRESS
or any SUBLICENSEE) of the OREXIGEN INTELLECTUAL PROPERTY, and (b) any claim or
action brought by Elan Corp., plc, Elan Pharmaceuticals, Inc., Eisai, Inc., or Eisai
Co., Ltd. (the “ELAN PARTIES”) against CYPRESS or any SUBLICENSEE based
upon, arising out of, or otherwise relating to an alleged infringement by CYPRESS or
any SUBLICENSEE of a claim of any patent issued from, or that claims priority to,
the U.S. Patent Application No. 10/429,474, filed May 2, 2003, or U.S. Provisional
Application No. 60/378,446 because of the use of OREXIGEN MATERIALS or the practice
of any OREXIGEN INTELLECTUAL PROPERTY

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	 	 	 	RIGHTS under the LICENSE. However, the foregoing indemnity shall not apply to
CLAIMS to the extent that they (x) are caused by the gross negligence or willful
misconduct of any CYPRESS INDEMNITEES, (y) are caused by a MATERIAL BREACH of this
AGREEMENT by CYPRESS, and/or (z) with respect to the indemnity in clause (b),
pertain to any other causes of action, including charges of infringement of a patent
not related to the patent applications referenced in clause (b).
	 
	 	14.03	 	INSURANCE. CYPRESS will purchase and maintain in effect, at its sole
expense, with reputable insurance companies, appropriate insurance policies, including,
but not limited to a policy of product liability insurance and a policy of general
liability insurance, in such amounts as is reasonably sufficient and commercially
reasonable to protect against its liability under Section 14.01 above. Further,
CYPRESS will require that every SUBLICENSEE, purchase and maintain in effect, at its
sole expense, with reputable insurance companies, appropriate insurance policies,
including, but not limited to a policy of product liability insurance and a policy of
general liability insurance, in such amounts as is reasonably sufficient and
commercially reasonable to protect against their respective liability as regards
Section 14.01 above. It is understood and agreed that CYPRESS and/or
SUBLICENSEES (as the case may be) shall not be required to possess product liability
insurance under this Section 14.03 until the first of the following to occur as
regards CYPRESS and/or appertaining SUBLICENSEES (i) commencement of clinical trials of
LICENSED PRODUCTS; or (ii) commencement of sale, lease, or provision of LICENSED
PRODUCTS (including, but not limited to provision of LICENSED SERVICES in connection
with a clinical trial). OREXIGEN shall have the right to ascertain from time to time
that any required coverage under this Section 14.03 exists, such right to be
exercised by OREXIGEN in a reasonable manner. OREXIGEN will purchase and maintain in
effect, at its sole expense, with reputable insurance companies, appropriate insurance
policies in such amounts as is reasonably sufficient and commercially reasonable to
protect against its liability under Section 14.02 above. CYPRESS shall have
the right to ascertain from time to time that any required coverage under this
Section 14.03 exists, such right to be exercised by CYPRESS in a reasonable
manner.
	 
	 	14.04	 	NO WARRANTIES. EXCEPT AS PROVIDED IN SECTIONS 14.02 AND
14.05, OREXIGEN MAKES NO REPRESENTATIONS NOR EXTENDS ANY WARRANTIES OF ANY
KIND. IN PARTICULAR, THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR THAT THE USE OF THE OREXIGEN PATENT RIGHTS
DOES NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER RIGHTS. IN ADDITION,
NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO BE A REPRESENTATION OR WARRANTY BY
OREXIGEN OF THE VALIDITY OF ANY OF THE OREXIGEN PATENT RIGHTS OR THE ACCURACY,
SAFETY, EFFICACY, OR USEFULNESS, FOR ANY PURPOSE, OF THE OREXIGEN PATENT RIGHTS.
OREXIGEN SHALL HAVE NO

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	 	 	 	OBLIGATION, EXPRESS OR IMPLIED, TO SUPERVISE, MONITOR, REVIEW OR OTHERWISE ASSUME
RESPONSIBILITY FOR THE PRODUCTION, MANUFACTURE, TESTING, MARKETING OR SALE OF ANY
LICENSED PRODUCT. (FOR AVOIDANCE OF DOUBT, IT IS UNDERSTOOD AND AGREED THAT ANY
SUCH ACTIVITY DESCRIBED IN THE PRECEDING SENTENCE BY ONE OR MORE OF THE OFFICERS,
DIRECTORS AND/OR AGENTS OF OREXIGEN SHALL BE DEEMED TO BE OUTSIDE THEIR RESPECTIVE
CAPACITY AS AN OFFICER, DIRECTOR, EMPLOYEE AND/OR AGENT, AS THE CASE MAY BE.)
	 
	 	14.05	 	OREXIGEN REPRESENTATIONS. OREXIGEN makes the following
representations and warranties:

	 	(a)	 	OREXIGEN is the exclusive licensee under the DUKE AGREEMENT of
the INTELLECTUAL PROPERTY in APPENDIX A. OREXIGEN does not own or control any
INTELLECTUAL PROPERTY, other than the OREXIGEN INTELLECTUAL PROPERTY RIGHTS,
which is necessary or useful for the manufacture, use, sale, offer for sale or
import of LICENSED PRODUCTS in the FIELD or for the performance by the parties
of the COLLABORATIVE WORK PLAN. OREXIGEN has the full right and power to grant
the LICENSE to CYPRESS and to enter into and deliver this AGREEMENT and carry
out the provisions hereof and the person executing this AGREEMENT on its behalf
has been duly authorized to do so by all requisite action;
	 
	 	(b)	 	OREXIGEN’s rights in the OREXIGEN INTELLECTUAL PROPERTY is free
and clear of any and all liens, claims, licenses, security interests and
encumbrances (other than the DUKE AGREEMENT), and there are no actions or
proceedings before any court or tribunal (including, without limitation, the
U.S. Patent and Trademark Office or comparable authority in other
jurisdictions) involving the OREXIGEN PATENT RIGHTS, other than the action by
the ELAN PARTIES;
	 
	 	(c)	 	This AGREEMENT is legally binding upon OREXIGEN, enforceable in
accordance with its terms. The execution, delivery and performance of this
AGREEMENT by OREXIGEN does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound, nor violate any material law or regulation of any court, governmental
body or administrative or other agency having jurisdiction over it; and
	 
	 	(d)	 	OREXIGEN has not, and will not during the term of this
AGREEMENT, grant any right to any THIRD PARTY that would conflict with the
rights granted to CYPRESS. It has maintained and will maintain and keep in
full force and effect all agreements (including but not limited to the DUKE
AGREEMENT) and filings (including patent filings) necessary to perform its
obligations hereunder.

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	 	14.06	 	Neither party hereto is an agent of the other party for any purpose whatsoever.

ARTICLE 15 – USE OF A PARTY’S NAME

	 	15.01	 	Subject to Article 11, neither party will, without the prior written
consent of the other party:

	 	(a)	 	use in any publication, advertising, publicity, press release,
promotional activity or otherwise, any trade-name, personal name, trademark,
trade device, service mark, symbol, image, icon, or any abbreviation,
contraction or simulation thereof owned by the other party;
	 
	 	(b)	 	use the name or image of any employee, consultant, or agent of
the other party in any publication, publicity, advertising, press release,
promotional activity or otherwise; or
	 
	 	(c)	 	represent, either directly or indirectly, that any product or
service of the other party is a product or service of the representing party or
that it is made in accordance with or utilizes the information or documents of
the other party.

ARTICLE 16 – SEVERANCE AND WAIVER

	 	16.01	 	SEVERABILITY. Each clause of this AGREEMENT is a distinct and
severable clause and if any clause is deemed illegal, void or unenforceable, the
validity, legality or enforceability of any other clause or portion of this AGREEMENT
will not be affected thereby.
	 
	 	16.02	 	WAIVER. The failure of a party in any instance to insist upon the
strict performance of the terms of this AGREEMENT will not be construed to be a waiver
or relinquishment of any of the terms of this AGREEMENT, either at the time of the
party’s failure to insist upon strict performance or at any time in the future, and
such terms will continue in full force and effect.

ARTICLE 17 – TITLES

	 	17.01	 	All titles and article headings contained in this AGREEMENT are inserted only
as a matter of convenience and reference. They do not define, limit, extend or
describe the scope of this AGREEMENT or the intent of any of its provisions.

ARTICLE 18 – SURVIVAL OF TERMS

	 	18.01	 	Except as set forth below or elsewhere in this AGREEMENT, the obligations and
rights of the parties under Sections 4.04(a), (b), and (c),
5.01, 10.07, 10.08, 10.09, 10.10,
14.01, 14.02, and 14.04 and Articles 1, 11,
12, 13, 14, 15, 16, 17, 18,
19, 20, and 21 shall survive the expiration or termination of
this AGREEMENT.

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ARTICLE 19 – GOVERNING LAW

	 	19.01	 	This AGREEMENT shall be construed as having been entered into in the State of
California and shall be interpreted in accordance with and its performance governed by
the laws of the State of California. Notwithstanding the foregoing, questions
affecting the construction and effect of any patent in OREXIGEN PATENT RIGHTS shall be
determined by the law of the country in which the patent was granted.

ARTICLE 20 – ARBITRATION

	 	20.01	 	SEVERABILITY OF ARBITRATION TERMS. Each clause of this Article
20 is a distinct and severable clause and if any clause is deemed illegal, void or
unenforceable, the validity, legality or enforceability of any other clause or portion
of this Article 20 will not be affected thereby.
	 
	 	20.02	 	ARBITRATION. Any disputes arising between the parties relating to,
arising out of or in any way connected with this AGREEMENT or any term or condition
hereof, or the performance by either party of its obligations hereunder or thereunder,
whether before or after termination of this AGREEMENT (a “DISPUTE”), shall be
resolved in accordance with this Article 20. Any DISPUTE will be referred to
the Chief Executive Officer of CYPRESS and the Chief Executive Officer of OREXIGEN for
resolution. In the event the two Chief Executive Officers are unable to resolve such
DISPUTE within thirty (30) days of such DISPUTE being referred to the officers, the
DISPUTE (other than any DISPUTE regarding patent matters) shall be finally resolved by
binding arbitration as herein provided.
	 
	 	20.03	 	GENERAL. Except as otherwise provided in this Article 20, any
arbitration hereunder shall be conducted under the commercial rules of the American
Arbitration Association. Each such arbitration shall be conducted in the English
language by a single arbitrator appointed in accordance with such rules, provided that
if either party requests the arbitration shall be conducted by a panel of three (3)
arbitrators (the “ARBITRATION PANEL”). In the case of three (3) arbitrators,
each of CYPRESS and OREXIGEN shall appoint one (1) arbitrator to the Arbitration Panel
and the third arbitrator shall be appointed by mutual agreement of the two (2)
arbitrators appointed by CYPRESS and OREXIGEN. The ARBITRATION PANEL shall be convened
upon delivery of the NOTICE OF ARBITRATION (as herein defined). Any such arbitration
shall be held in San Diego, California. The ARBITRATION PANEL shall have the authority
to grant specific performance, injunctive relief and to allocate between the parties
the costs of arbitration in such equitable manner as it shall determine. Judgment upon
the award so rendered may be entered in any court having jurisdiction or application
may be made to such court for judicial acceptance of any award and an order of
enforcement, as the case may be.

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	 	20.04	 	PROCEDURE.

	 	(a)	 	Whenever a party (the “CLAIMANT”) shall decide to
institute arbitration proceedings, it shall give written notice to that effect
(the “NOTICE OF ARBITRATION”) to the other party (the
“RESPONDENT”). The NOTICE OF ARBITRATION shall set forth in detail the
nature of the DISPUTE, the facts upon which the CLAIMANT relies and the issues
to be arbitrated (collectively, the “ARBITRATION ISSUES”). Within
fifteen (15) days after its receipt of the NOTICE OF ARBITRATION, the
RESPONDENT shall send the CLAIMANT and the ARBITRATION PANEL a written response
(the “RESPONSE”). The RESPONSE shall set forth in detail the facts
upon which the RESPONDENT relies. In addition, the RESPONSE shall contain all
counterclaims that the RESPONDENT may have against the CLAIMANT which are
within the ARBITRATION ISSUES, whether or not such claims have previously been
identified. If the RESPONSE sets forth a counterclaim, the CLAIMANT may,
within fifteen (15) days after its receipt of the RESPONSE, deliver to the
RESPONDENT and the ARBITRATION PANEL a rejoinder answering such counterclaim.
	 
	 	(b)	 	Within fifteen (15) days after the later of (1) the expiration
of the period provided in Section 20.04(a) above for the CLAIMANT to
deliver a rejoinder or (2) the completion of any discovery proceedings
authorized by the ARBITRATION PANEL: (A) the CLAIMANT shall send to the
ARBITRATION PANEL a proposed resolution of the ARBITRATION ISSUES and a
proposed resolution of any counterclaims set forth in the RESPONSE, including
without limitation the amount of monetary damages, if any, or other relief
sought (the “CLAIMANT’S PROPOSAL”); and (B) the RESPONDENT shall send
to the ARBITRATION PANEL a proposed resolution of the ARBITRATION ISSUES, a
proposed resolution of any counterclaims set forth in the RESPONSE and a
proposed resolution of any rejoinder submitted by the CLAIMANT, including
without limitation the amount of monetary damages, if any, or other relief
sought (the “RESPONDENT’S PROPOSAL”). Once both the CLAIMANT’S
PROPOSAL and the RESPONDENT’S PROPOSAL have been submitted, the ARBITRATION
PANEL shall deliver to each party a copy of the other party’s proposal.
	 
	 	(c)	 	The ARBITRATION PANEL shall issue an opinion with respect to any
DISPUTE, which opinion shall constitute the ARBITRATION PANEL’S final
decision (the “FINAL DECISION”). The concurrence of two (2)
arbitrators shall be sufficient for the entry of a FINAL, DECISION. The
ARBITRATION PANEL shall issue a FINAL DECISION within one (1) month from the
later of (1) the last day for submission of proposals under Section
20.04(b) above or (2) the date of the final hearing on any DISPUTE held
by the ARBITRATION PANEL. The FINAL DECISION shall include a written award
and statement of decision

- 33 -

 

	 	 	 	describing the essential findings and conclusions on which the award is
based, including the calculation of any damages awarded. A FINAL DECISION
shall be binding on both parties.

ARTICLE 21 – ENTIRE UNDERSTANDING

	 	21.01	 	This AGREEMENT represents the entire understanding between the parties, and
supersedes all other agreements, express or implied, between the parties concerning the
subject matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.

[Signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT on the dates set forth
below.

	 	 	 	 	 	 	 	 	 	 	 
	OREXIGEN THERAPEUTICS, INC.	 	 	 	CYPRESS BIOSCIENCE, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ John F. Crowley
 

	 	 
	 	By:
	 	/s/ Jay D. Kranzler
 

	 	 
	John F. Crowley	 	 	 	Jay D. Kranzler, M.D., Ph.D.	 	 
	President and Chief Executive Officer	 	 	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: 12/27/04	 	 	 	Date: 1/3/05	 	 

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APPENDICES

APPENDIX A – OREXIGEN PATENT RIGHTS

APPENDIX B – OREXIGEN PRECLINICAL AND CLINICAL SUPPORT

- 36 -

 

APPENDIX A

OREXIGEN PATENT RIGHTS

DUKE PATENTS

	 	 	 	 	 	 	 
	Serial No.	 	Filing Date	 	Title	 	First Inventor
	[***]

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

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

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

 

			
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APPENDIX B

OREXIGEN PRECLINICAL AND CLINICAL SUPPORT

Pre-Clinical Support

Orexigen shall conduct pre-clinical studies to provide validation and provide guidance to Cypress’
[***] clinical trials. Such role shall include, but not be limited to, the following matters:

[***]

Such role shall include, but not be limited to, the services of the following Orexigen scientists:

[***]

Orexigen acknowledges that upon execution of the License Agreement, Cypress intends to schedule a
kick off meeting and that Orexigen agrees to provide the services of [***] at such meeting and any
other meetings that are convened to discuss the pre-clinical studies; providing, that, Cypress
schedules such meetings after consulting with [***] as to times and locations.

Clinical Support

Orexigen shall assist Cypress in an advisory role with respect to designing and implementing
Cypress’ [***] clinical trials. Such role shall include, but not be limited to, guidance on the
following matters:

[***]

 

			
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Such guidance shall include, but not be limited to, the services of the following consultants:

[***]

Orexigen acknowledges that upon execution of the License Agreement, Cypress intends to schedule a
kick off meeting and that Orexigen agrees to provide the services of [***] and its consultants at
such meeting and any other meetings that are convened to discuss the clinical proof of concept
studies; providing, that, Cypress schedules such meetings after consulting with [***] as to times
and locations.

 

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

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