Document:

Manufacturing Agreement

 Exhibit 10.37 
  
 THIS AGREEMENT is made this 27th day of December, 2004 between: 
  

	(1)	CORGENTECH INC., a Delaware corporation having its principal place of business at 650 Gateway Boulevard, South San Francisco, CA 94080, USA (“Corgentech”);
and 

  

	(2)	AVECIA LIMITED, a company incorporated in England and Wales under registered number 3730853 and whose registered office is at Hexagon House, Blackley, Manchester, M9 8ZS,
England (“Avecia”). 

  
 WHEREAS 
  

	A.	Corgentech is in the business of developing and manufacturing the Products (as defined below). 

  

	B.	Avecia has experience and knowledge with regard to process development and manufacture of oligonucleotides, and has performed development and manufacturing services relating to the
Products for Corgentech. 

  

	C.	In consideration of the advance payment by Corgentech of the purchase price for the Products, Avecia undertakes to manufacture the Products at its Grangemouth, Scotland facility
during the three-month production schedule set forth in the Programme (as defined below), and to comply with the other terms and conditions set forth in this Agreement. 

  
 NOW IT IS HEREBY AGREED AS FOLLOWS: 
  

	1.	Definitions: 

  

	 	1.1	In this Agreement and the Schedules attached hereto, the following expressions shall have the following meanings: 

  

			
	Affiliate	  	any corporation, association or other business entity which directly or indirectly controls, is controlled by or is under common control with Avecia or Corgentech.
		
	Background Intellectual Property	  	any Intellectual Property owned by or in the possession of a party (and to which that party has the necessary rights) at the date of this Agreement or Intellectual Property developed
independently of the Programme by any employee of that party without reference to any of the Confidential Information disclosed by the other party, provided that, Confidential Information and Intellectual Property disclosed to Avecia or
licensed by Corgentech to Avecia prior to the date hereof shall not be treated as Avecia Background Intellectual Property for purposes of this Agreement and Confidential Information and Intellectual Property disclosed to Corgentech or licensed by
Avecia to Corgentech prior to the date hereof shall not be treated as Corgentech Background Intellectual Property for purposes of this Agreement.
		
	Commencement Date	  	27 December 2004
		
	Completion	  	completion of the Programme as defined in Section 2.2(d).
		
	Confidential Information	  	any technical and commercial information relating to the Products or the Programme and any other information of a confidential nature disclosed (whether disclosed in writing, verbally, by way of
sample or by any other means and whether directly or indirectly) by either party (“the Disclosing Party”) to the other (“the Receiving Party”) and

  

 1. 

			
	 	  	whether before, on or after the Commencement Date, including and without limitation, any information relating to the Disclosing Party’s business affairs.
		
	Force Majeure	  	any cause beyond the reasonable control of the party in question which for the avoidance of doubt and without prejudice to the generality of the foregoing shall include governmental actions,
war, riots, terrorism, fire, flood, but shall not include failure of the Product in clinical trials or failure of the Product to gain regulatory approval.
		
	GMP	  	current good manufacturing practice and standards as provided for (and as amended from time to time) in European Community Directive 91/356/EEC (Principles and guidelines of good manufacturing
practice for medicinal products) and in the Current Good Manufacturing Practice Regulations to the US Code of Federal Regulations Title 21 (21 CFR 210 and 21 CFR 211) in relation to the production of pharmaceutical
intermediates and active pharmaceutical ingredients, as interpreted by ICH Harmonised Tripartite Guideline, Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients, Q7A.
		
	Intellectual Property	  	all know-how, inventions, discoveries, devices, data, patents, designs, copyrights, or other industrial or intellectual property and all applications therefor.
		
	Joint Inventions	  	New Intellectual Property invented jointly by the parties.
		
	New Intellectual Property	  	Intellectual Property arising during and as a direct result of the parties carrying out the Programme.
		
	Product	  	the single strand intermediates and/or hybridized duplex products set forth in Part A of Schedule 1, and “the Products” shall mean any or all of them together.
		
	Programme	  	the programme of work to be carried out under this Agreement described in Part B of Schedule 1 (including the Specifications), or as may be amended from time to time in writing signed by
each of the parties.
		
	Programme Amendment Order	  	means a document detailing changes to the Programme agreed and signed by both parties.
		
	Specification	  	the specification for each of the Products more particularly described in Part B of Schedule 1.
		
	Technology Transfer	  	the documentation by Avecia of the manufacture of the Products, and the transfer of production from Avecia’s Grangemouth facility pursuant to Section 2.4.
		
	Third Party	  	any person or entity other than Avecia or Corgentech or their respective Affiliates.

  

 2. 

	 	1.2	Any reference to “day” or “days” means any day other than a Saturday, Sunday or Bank Holiday in the United Kingdom. 

  

	2.	Performance of the Programme 

  

	 	2.1	Quality Assurance. Avecia will carry out the work as detailed in the Programme in accordance with GMP and consistent with the provisions of a Quality Agreement to be mutually
agreed upon by the parties within thirty (30) days. 

  

	 	2.2	Programme Details. In consideration of the pre-payment by Corgentech of the purchase price of the Products in accordance with the schedule set forth in Section 3 below:

  

	 	(a)	Avecia shall use its reasonable commercial efforts to manufacture the Products, in accordance with the production schedule and specific requirements detailed in Part B of
Schedule 1. 

  

	 	(b)	In the event a batch of Product produced by Avecia does not meet the relevant Specification, the parties shall decide whether the Specification may be adjusted in order for the
batch to meet the Specification. If the parties agree that the relevant Specification can be amended, such agreement shall be recorded in writing. If a batch of Product produced by Avecia does not meet the relevant Specification, Avecia shall use
its reasonable commercial efforts to replace such batch, from production at Avecia’s Grangemouth or Milford, Massachusetts facility, at no cost to Corgentech, within six months after notice from Corgentech of such failure to meet the relevant
Specification. If a batch of Product meets the relevant Specification (whether amended under this paragraph or otherwise) Avecia shall deliver to Corgentech, a sample of each non-GMP batch and each batch of Product produced in accordance with GMP.

  

	 	(c)	Avecia shall package and deliver the Products in accordance with Section 4 below. 

  

	 	(d)	The Programme shall be deemed to be complete when all batches of the Products produced under the Programme have been delivered to Corgentech or its designee under Section 4.

  

	 	2.3	Technical Assistance. During the Programme and for one year following Completion, Avecia will offer reasonable assistance to Corgentech in respect of Corgentech’s
regulatory filing activities for the Product both during and after Completion, subject to payment by Corgentech of Avecia’s reasonable costs and expenses in providing these consultancy services. 

  

	 	2.4	Termination of Production and Technology Transfer. Upon completion of the Programme, but in no event later than March 31, 2005, Corgentech shall notify Avecia of its
intention to continue future manufacturing and production of the Products at Avecia’s Grangemouth facility (“Grangemouth”). In the event Corgentech notifies Avecia that Corgentech intends to continue future manufacturing and
production at Avecia’s Grangemouth facility the parties shall negotiate in good faith an agreement governing such production within fifteen (15) days after such notification. In the event Corgentech notifies Avecia that it does not intend
to continue production at Grangemouth, Avecia shall cooperate fully in the documentation of all manufacturing and production processes related to the Programme and the manufacture of the Products, including the Technical Information (as defined
below) (“the Technology Transfer Documentation”) and communication and delivery to Corgentech of the Technology Transfer Documentation. As part of the Technology Transfer, Avecia: (a) will deliver all equipment and assets

  

 3. 

 belonging to Corgentech to Corgentech’s facility or as it may direct, and (b) hereby grants to
Corgentech a royalty-free, irrevocable, perpetual, non-exclusive, world-wide license, with power to sub-license, under all New Intellectual Property owned by Avecia pursuant to Section 5.3 below to make, use, sell, offer for sale, import, keep
and otherwise deal in the Products. “Technical Information” shall include, but not be limited to, all know-how, experience, instructions, standards, methods, test and trial results, manufacturing processes, hazard assessments, registration
data, quality control standards, formulae, Specifications, storage data, samples, drawings, designs, descriptions of packaging materials and all other relevant information relating to the Products or the design, manufacture or storage of the
Products. In consideration for the technical consultancy services relating to the Technology Transfer to Corgentech, Corgentech shall pay Avecia’s reasonable costs of producing the documentation and transferring the assets associated with the
Business from the Grangemouth facility to Corgentech (or as it shall direct), for an agreed period, not to exceed three months. Avecia and Corgentech shall each use their reasonable efforts to determine the cost of the Technology Transfer before
February 28, 2005. 
  

	3.	Payments 

  

	 	3.1	Manufacturing Services Fees. 

  
 (a) In consideration of Avecia: (i) manufacturing, selling and delivering the Products and undertaking related activities, as more particularly
described in the Programme set forth in Part B of Schedule 1; and (ii) continuing production at its Grangemouth facility, Corgentech shall prepay the purchase price for the Products, payable as set forth in the following table in three
(3) installments. Installments 1, 2 and 3 shall be as set forth in the following table. These amounts do not include the cost of raw materials, which shall be borne by Corgentech. 
  
 Purchase Price 
  

							
	 Installment

	  	Amount
(U.S.$)

	  	 Activity

	  	 Payment
 Date

	1	  	$1,550,000	  	Programme commencement and January production as set forth in Schedule 1	  	December 28,
2004
				
	2	  	$1,550,000	  	February production as set forth in Schedule 1	  	January 15,
2005
				
	3	  	$1,550,000	  	March production as set forth in Schedule 1	  	February 15,
2005

  

	 	(a)	Avecia hereby represents and warrants to Corgentech that the information disclosed to Corgentech detailing Avecia’s cost of production (including employee costs, rent,
utilities, and all other fixed costs as summarized on Schedule 2) are true, complete and accurate as of the date hereof. 

  

	 	(b)	Avecia hereby undertakes that the Purchase Price set forth in Section 3.1 above shall be adjusted downward, based on the appropriate pro rata share of Avecia’s fixed costs
attributable to the Programme, in the event Avecia enters into any agreement or commences production, manufacturing or development activities 

  

 4. 

 for any Third Party using the same people and Grangemouth facility production weeks as would be used in
the Programme during the term of this Agreement. Such fixed costs shall be allocated among Corgentech and any such Third Party based on the people and production weeks attributable to their respective agreements with Avecia. Any such downward
adjustment to the Purchase Price paid or payable by Corgentech under this Section 3.1 shall be immediately reimbursed by Avecia to Corgentech or, at Corgentech’s option, deducted from subsequent payments to Avecia. In no event shall any
monthly installment payable hereunder by Corgentech exceed US $ 1,550,000. 
  

	 	3.2	Bank Account Details. Unless otherwise notified by Avecia, all amounts payable to Avecia under this Agreement shall be paid in U.S. Dollars, without deduction, by telegraphic
transfer to The Royal Bank of Scotland plc, Manchester Swift Code RBOSGB2L Account Number 00317962, Account: Avecia Ltd, IBAN GB93 RBOS 166300 00317962. 

  

	 	3.3	Value Added Tax. All sums payable under this Agreement are stated exclusive of any VAT which may be payable and which shall be for the account of Corgentech. In the event
that Corgentech fails to export the Product within the period set out in Clause 4.3 below, Avecia shall be entitled to issue an invoice for VAT payable in respect of the price paid for such un-exported Product and Corgentech shall pay such invoice
within 30 days of receipt thereof. 

  

	4.	Delivery of Product 

  

	 	4.1	Delivery of Material. Delivery of the Products will be made Ex Works Avecia’s Grangemouth facility (Incoterms 2000). Products shall be delivered on the due date set
forth in the table in Schedule 1 or such other date as shall be agreed in writing by the parties. 

  

	 	4.2	Packing and Shipping. Avecia shall arrange for packing of the material to be delivered under Section 4.1 and shall comply with all reasonable requirements of Corgentech
in packing the material. Risk of loss in, and title to, each shipment of Product shall pass to Corgentech under this Agreement at Avecia’s Grangemouth facility upon completion of manufacturing, and prior to any quality testing.

  

	 	4.3	Export and Storage. Corgentech shall export from the United Kingdom the Product delivered to it under Clause 4.1 within three months of delivery. Notwithstanding the
foregoing and subject to Clause 3.3, upon Corgentech’s prior written request and agreement in writing of the terms of such storage including, without limitation, conditions, fees, risk and duration, Avecia shall store the Products for up to six
(6) months. 

  

	5.	Intellectual Property 

  

	 	5.1	Ownership of Background Intellectual Property. Nothing in this Agreement shall affect the ownership by either party of its Background Intellectual Property.

  

	 	5.2	Licence to Intellectual Property for the Programme. Corgentech grants to Avecia a non-exclusive, non-transferable, non-assignable, royalty-free licence to use
Corgentech’s Background Intellectual Property and Corgentech’s New Intellectual Property whilst this Agreement remains in force for the purpose of carrying out the Programme. 

  

	 	5.3	Ownership of New Intellectual Property. New Intellectual Property shall be owned by the party inventing such New Intellectual Property as determined under applicable laws.
The parties shall jointly own all right, title and interest in and to any and all Joint Inventions. 

  

 5. 

	 	5.4	Joint Inventions The following provisions shall apply in respect of Joint Inventions: 

  

	 	(a)	Each party will promptly disclose all Joint Inventions to the other party. Each party shall take all necessary actions to vest title to all Joint Inventions (including all
intellectual property rights therein) in both parties. The parties shall agree which party shall assume responsibility for the preparation, filing, prosecution and maintenance of all registered intellectual property covering Joint Inventions, using
attorneys reasonably acceptable to both parties, and both parties shall participate and cooperate in such preparation, filing, prosecution and maintenance. Unless otherwise agreed, the parties shall share equally the expenses of such preparation,
filing, prosecution and maintenance. 

  

	 	(b)	If the parties agree that one of the party’s in-house attorneys shall be used to obtain and maintain any registered intellectual property rights, neither that party (“the
Relevant Party”) nor any of its employees, servants or agents shall be liable for any damage or loss suffered by the other party as a result of any action or inaction on the part of the Relevant Party or its employees, servants or agents in the
course of the filing, prosecution or maintenance of any such registered intellectual property rights. 

  

	 	(c)	Each party may freely use, license and otherwise commercially exploit, and transfer its share of, Joint Inventions free from any obligation of accounting by either party, provided
that any transfer shall be notified to the other party, and be subject to the preservation of the rights and obligations of this Agreement with respect of Joint Inventions. 

  

	 	(d)	The parties shall determine on a case by case basis which of the parties shall be primarily responsible for the enforcement and defence of the parties’ rights in any Joint
Invention and the other party shall fully cooperate in such defence and enforcement including, if necessary, joining as a party to such action and/or furnishing a power of appointment. Unless otherwise agreed, the enforcement and defence of such
Joint Inventions. 

  

	 	(e)	If, at any time, a party does not wish to share, or continue to share in the costs associated with obtaining or maintaining any registered intellectual property rights for any Joint
Invention, then that party shall transfer all rights in those registered intellectual property rights to the other party at no charge to the other party, but at the other party’s sole expense, provided the other party wishes to maintain such
registered intellectual property rights. The party which has transferred its rights shall have no further interest in such registered intellectual property rights, save that such party shall, if it so requests, be granted by the owning party a
world-wide, non-exclusive, royalty-bearing, licence under, and for the life of, the relevant registered intellectual property rights. Such licence shall be on reasonable commercial terms which the Parties shall negotiate in good faith. If neither
party wishes to maintain such registered intellectual property rights in any or all countries then they shall agree to abandon such registered intellectual property rights in the country or countries concerned. 

  

	 	(f)	In the event that the parties are unable to agree on any matter relating to a Joint Invention, then the matter shall be referred to the Vice-President, Biotechnology at Avecia and
the CEO at Corgentech. If agreement cannot be reached by the Vice-President, Biotechnology at Avecia and the CEO at Corgentech within 10 days of referral, then either party may refer the matter to arbitration under clause 19.3.

  

 6. 

	 	5.5	Licences under New Intellectual Property. 

  

	 	(a)	Corgentech hereby grants to Avecia a royalty-free, irrevocable, perpetual, non-exclusive, world-wide licence, with power to sub-license, under New Intellectual Property owned by
Corgentech under Clause 5.3 for use other than to use, sell, offer for sale, import, keep and otherwise deal in the Products. 

  

	 	(b)	Avecia hereby grants to Corgentech a royalty-free, irrevocable, perpetual, non-exclusive, world-wide licence, with power to sub-license, under New Intellectual Property owned by
Avecia under Clauses 5.3 to make, use, sell, offer for sale, import, keep and otherwise deal in the Products. 

  

	 	5.6	Royalty and Access to Avecia Background Intellectual Property. 

  

	 	(a)	Avecia shall not charge a royalty or other access fee in respect of Avecia’s use of Background Intellectual Property to manufacture the Product under this Agreement or any
future supply agreement in addition to the consideration for the Programme set out in this Agreement or the price for the Product agreed under such future supply agreement. 

  

	 	(b)	If Corgentech or a designee requires a licence under Avecia’s Background Intellectual Property in order to manufacture the Product, then such licence shall be granted to
Corgentech or such designee by Avecia subject to agreement of reasonable commercial terms between Corgentech and Avecia. Any such negotiations shall be carried out between the parties in good faith. 

  

	6.	Warranties, Liability and Indemnity 

  

	 	6.1	General Warranty. 

  

	 	(a)	Each party warrants to the other that it has the necessary right and authority to enter into this Agreement and that to the best of its knowledge at the date of this Agreement it is
the rightful owner or licensee of all Background Intellectual Property; 

  

	 	(b)	Each party warrants to the other that to the best of its knowledge at the date of this Agreement, the use of Background Intellectual Property made available by it to the other party
pursuant to this Agreement for the purposes set out in this Agreement will not infringe the Intellectual Property of a Third Party; and 

  

	 	(c)	Avecia warrants to Corgentech that all Products delivered hereunder will (i) conform strictly to the Specifications and other requirements set forth in Part B of Schedule 1;
and (ii) shall be manufactured in compliance with all applicable laws, rules and regulations. 

  

	 	6.2	Intellectual Property Indemnity. Each party (“the First Party”) shall be liable for and indemnify the other (“the Second Party”)
against any liability, loss, claim, damage, proceedings and costs whatsoever arising out of any actual or suspected infringement of any Third Party Intellectual Property (an “IP Infringement”) as a result of the Second Party’s
use in its performance of this Agreement of the Background Intellectual Property provided by the First Party, provided that the Second Party: 

  

	 	(a)	gives the First Party the sole conduct of the defence to any claim or action in respect of the IP Infringement and does not at any time admit liability or otherwise settle or
compromise or attempt to settle or compromise the said claim or action except upon the express instructions of the First Party; and 

  

 7. 

	 	(b)	acts in accordance with the reasonable instructions of the First Party and gives the First Party such assistance as it shall reasonably require in respect of the conduct of such
defence. 

  
 Notwithstanding the foregoing
provisions of this Clause 6.2, the First Party’s liability to indemnify the Second Party shall cease in respect of continuing use by the Second Party of the Background Intellectual Property which is the subject of the IP Infringement following
either: 
  

	 	(i)	notification (which shall be given promptly) by the First Party to the Second Party that the Background Intellectual Property provided by the First Party is actually or is believed
by the First Party to be the subject of an IP Infringement; or 

  

	 	(ii)	the Second Party becoming aware that the Background Intellectual Property provided by the First Party is the subject of an IP Infringement. 

  

	 	6.3	Liability for the Product. Avecia shall not have any liability whatsoever resulting from, and Corgentech shall fully indemnify Avecia against all claims, suits, actions,
demands, liabilities, expenses and/or losses (including reasonable legal fees) brought or suffered by Corgentech or any Third Party brought or made against Avecia, its directors, officers or employees, and against all costs incurred in connection
therewith, arising out of or resulting from the use of the Product following delivery. 

  

	 	6.4	Liability for the Technical Information. Liability in respect of use or operation of the Technical Information (or any part of the Technical Information), by or on behalf of
Corgentech shall rest solely on Corgentech, except to the extent that Avecia is required to indemnify Corgentech in accordance with Clause 6.2 above or except to the extent that such liability arises from a Third Party claim for property damage or
personal injury arising from Avecia’s failure to operate the Technical Information in accordance with mutually agreed batch records and standard procedures or methods. Corgentech shall indemnify Avecia against any liability, loss, damages,
costs, legal costs, professional and other expenses whatsoever incurred or suffered by Avecia arising out of or in respect of use or operation of the Technical Information (or any part of the Technical Information) by or on behalf of Corgentech
except to the extent that Avecia is required to indemnify Corgentech in accordance with Clause 6.2 above or except to the extent that such loss, damages, costs, legal costs, professional and other expenses arise from a Third Party claim for property
damage or personal injury arising from Avecia’s failure to operate the Technical Information in accordance with mutually agreed batch records. 

  

	 	6.5	Limitation on Liability. Subject to the provisions of Clause 6.6, Avecia’s total liability (whether for breach of contract, negligence, breach of statutory duty and/or
other tort, or otherwise) in connection with or as a result of the work carried out under this Agreement shall be limited to the sum US$500,000 per incident or series of related incidents, subject to a maximum of US$1,000,000 in any 12 month period.

  

	 	6.6	No Liability for Indirect Losses. Neither party shall be liable to the other for any indirect, consequential or special loss, loss of profits or damage suffered by the other
howsoever arising. 

  

 8. 

	7.	Confidentiality 

  

	 	7.1	Maintenance of Confidentiality. In consideration of the Disclosing Party disclosing the Confidential Information to the Receiving Party, the Receiving Party hereby undertakes
to maintain confidential all such Confidential Information, and it will accordingly not directly or indirectly use any of the Confidential Information in whole or in part save for the purposes envisaged in this Agreement, nor will it disclose any of
the Confidential Information to any Affiliate or Third Party. 

  

	 	7.2	Exceptions. The foregoing restrictions on the Receiving Party shall not apply to any Confidential Information which: 

  

	 	(a)	the Receiving Party can prove was already in its possession and at its free disposal before the disclosure hereunder to it; 

  

	 	(b)	is hereafter disclosed to, purchased or otherwise legally acquired by the Receiving Party by or from a Third Party who has not derived it directly or indirectly from the Disclosing
Party under an obligation of confidentiality; 

  

	 	(c)	is or becomes available to the public whether in printed publications or otherwise through no act or default on the part of the Receiving Party; or 

  

	 	(d)	the Receiving Party can prove to the reasonable satisfaction of the Disclosing Party has been developed independently of the Programme (including, for purposes of this
Section 7.2 development or manufacture of the Products prior to the date hereof) by the Receiving Party without reference to any of the Confidential Information disclosed by the Disclosing Party. 

  

	 	7.3	Disclosure to Affiliates. Either party may disclose Confidential Information to or via an Affiliate, provided that the party making any such disclosure shall, prior to such
disclosure, ensure each Affiliate to which Confidential Information is to be disclosed is made aware of the obligations contained in this Agreement and agrees to be subject to confidentiality obligations no less onerous than those contained in this
Agreement. Any breaches of the obligations of confidentiality contained in this agreement by such Affiliate shall be treated as a breach of such obligations by the party making the disclosure to the Affiliate. 

  

	 	7.4	Survival of Obligations. The provisions of this Section 7 shall survive termination or expiry of this Agreement and shall continue for a period of ten years from the
date of termination or expiry. 

  

	8.	Duration and Termination 

  

	 	8.1	Duration. This Agreement shall be deemed to have commenced on the Commencement Date and shall continue until Completion unless terminated in accordance with the provisions of
Section 8.2. 

  

	 	8.2	Termination. Subject to Section 9, this Agreement may be terminated as follows: 

  

	 	(a)	by either party forthwith if the other shall fail to pay its debts as they fall due or if a liquidator, receiver, manager or administrator is appointed over the business or assets
of the other, and otherwise upon thirty days’ notice at any time prior to Completion; or 

  

 9. 

	 	(b)	by either party forthwith if the other is in breach of this Agreement and does not rectify such breach within 30 days of receipt of written notice form the first party requiring
rectification of the breach, provided that it is intended that the parties will discuss any alleged breach and its remediation as soon as it is known. 

  

	9.	Consequences of Termination 

  

	 	9.1	Consequences. In the event of termination under Section 8.2(b) above, Avecia shall refund to Corgentech any monies paid to Avecia, less an agreed sum in respect of work
done by Avecia and not affected by the breach, taking into consideration the payments set out in Section 3 in respect of such unaffected work and in the absence of agreement upon such sum the provisions of Section 19 shall apply. Avecia
shall forthwith deliver all product, materials and work in progress to Corgentech or to such person or facility as it shall direct. 

  

	 	9.2	Acquired Rights. Termination or expiry of this Agreement, for whatever reason, shall not prejudice the acquired rights of either party. 

  

	 	9.3	Survival. The provisions of Sections 3, 5, 6, 7–9, 11–17 and 19 shall survive the termination or expiry of this Agreement. 

  

	10.	Independent Contractor 

  
 Nothing in this Agreement shall create, or be deemed to create, a partnership or the relationship of principal and agent or employer and employee between
the parties. Each party agrees to perform under this Agreement solely as an independent contractor. 
  

	11.	Entire Agreement 

  
 This Agreement contains the entire agreement between the parties and supersedes any previous agreements relating to the Programme and any understandings
between the parties with respect thereto. 
  

	12.	Announcements and Publicity 

  
 Any public disclosure by Avecia or its Affiliates regarding the existence or terms of this Agreement, the Programme or methods for making, using or
manufacturing the Product shall require the prior written consent of Corgentech. 
  

	13.	Assignment 

  
 This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal successors but shall not otherwise be
assignable by either party without the prior written consent of the other party, which consent shall not be unreasonably withheld, provided that either party may assign this Agreement without consent by notice in writing to the other party to a
purchaser or assignee of the whole or part of the business to which this Agreement relates. 
  

	14.	Variation 

  
 No variation or amendment of this Agreement shall bind either party unless made in writing in the English language and agreed to in writing by duly
authorised officers of both parties. 
  

	15.	Illegality 

  
 If any provision of this Agreement is agreed by the parties to be illegal, void or unenforceable under any law that is applicable hereto or if any court
of competent jurisdiction in a final decision 
  

 10. 

 so determines, this Agreement shall continue in force save that such provision shall be deemed to be
excised herefrom with effect from the date of such agreement or decision or such earlier date as the parties may agree. 
  

	16.	Waiver 

  
 A failure by either party hereto to exercise or enforce any rights conferred upon it by this Agreement shall not be deemed to be a waiver of any such
rights or operate so as to bar the exercise or enforcement thereof at any subsequent time or times. 
  

	17.	Notices and Communications 

  
 Any notice required or permitted under this Agreement shall be in writing which may take the form of a letter or facsimile and shall be sent by prepaid
post, facsimile, or hand delivery (including messenger service). The addresses for any such notice or other communication shall be those stated on the first page of this Agreement (unless otherwise changed by notice in writing to the other party)
and shall be marked for the attention of the Vice-President, Biotechnology in the case of Avecia and the CEO in the case of Corgentech. 
  

	18.	Force Majeure 

  
 Neither party shall be liable to the other party in any manner whatsoever for any failure or delay in performing its obligations under this Agreement if
and to the extent, and for the duration, that such failure or delay is due to Force Majeure. Without prejudice to Section 8, any said failure or delay shall not give either party the right to terminate this Agreement except, and to the extent
that such Force Majeure continues for a period exceeding three (3) months. 
  

	19.	Law and Jurisdiction 

  

	 	19.1	Governing Law. This Agreement is governed by and shall be construed and interpreted in accordance with the laws of England. Any proceedings between the parties shall be
conducted in the English language. 

  

	 	19.2	Reference to Parties’ Senior Representatives. Prior to any dispute, difference or disagreement concerning this Agreement proceeding to litigation to arbitration or
through the courts the parties shall seek to resolve the matter within thirty days by referring it to the Vice-President, Avecia Biotechnology and the CEO of Corgentech. 

  

	 	19.3	Arbitration. Any matter or dispute arising out of or in connection with this Agreement which is not able to be resolved pursuant to Clause 19.2 shall be finally settled by
commercial arbitration to be held in London, England. In appointing arbitrators, the parties shall consider the appointment of an arbitrator or arbitrators capable of making decisions on the technical aspects of the Validation Programme.

  

	 	19.4	Interim Steps. Neither of the parties shall be deemed to be precluded from taking such interim formal steps as may be considered necessary to protect such party’s
position while the procedures referred to in Clauses 20.2 and 20.3 are pursued. 

  

	 	19.5	Other Proceedings. In the event that the matter or dispute remains unresolved by such commercial arbitration within thirty days of commencement of such procedure, then the
parties shall be at liberty to take such other proceedings (as defined below) as they think fit. 

  

	 	19.6	Jurisdiction. Except as provided for in Clauses 19.2, 19.3 and 19.4, in relation to any legal action or proceedings to enforce this Agreement or arising out of in connection
with this Agreement (“proceedings”) each of the parties irrevocably submits to the exclusive jurisdiction of the Courts of Delaware. 

  

 11. 

 IN WITNESS WHEREOF, the authorised representatives of the parties have executed this Agreement on the
date written at the top of this Agreement. 
  

							
	For and on behalf of CORGENTECH INC.	  	For and on behalf of AVECIA LIMITED
				
	Signature	 	 /s/    J. X. REGAN

	  	Signature	  	 /s/    KEVIN COX

	Name	 	 J. X. Regan

	  	Name	  	 Kevin Cox

	Position	 	 VP Manufacturing

	  	Position	  	 VP Biotechnology

  

 12. 

 Schedule 1 
  
 PART A – THE PRODUCTS 
  
 E2F single strand intermediates 
  
 NFkB single strand intermediates and hybridized duplex products 
  
 HIF-1 alpha single strand intermediates 
  
 PART B – THE PROGRAMME 
  
 (Attached) 
  

 13. 

 

 
  
 Proposal for GMP supply of CGT
NfkappaB 
  
 single strand Oligonucleotides (6003, 6004)

  
 and Duplex (7000)
  

					
	 	 	F.A.O.	  	Jack Regan and Jim Kirchner
			
	 	 	 	  	Corgentech, Inc.
	 	 	 	  	650 Gateway Boulevard
	 	 	 	  	South San Francisco, CA 94080
			
	 	 	Prepared by:	  	Shelly Adams
	 	 	 	  	Director North American Sales
	 	 	 	  	Avecia Biotechnology
			
	 	 	 	  	Charles J Shields
	 	 	 	  	Director, Global Business Development
	 	 	 	  	Avecia Biotechnology,

  

			
	Proposal Number:	  	1250
		
	Version Number:	  	4
		
	Date:	  	December 22, 2004

  

 14. 

	1.	Request for Proposal 

  
 Corgentech have requested that Avecia provide a proposal for the supply of 2x150mmol batch of each of NfkappaB SSI’s 6003 and 6004, and for Duplexing
the SSI’s from this batch along with the remaining SSI from earlier 2004 GMP manufacture. The product is to be suitable for use in P-I or II. 
  

	2.	Project Scope 

  

	2.1	Product Description 

  

			
	Product	  	CGT NFkappaB 6003 and 6004
		
	Description	  	Two single strand intermediate oligos.
		
	Sequence	  	5’-agt tga gga ctt tcc agg c (6003)
	 	  	5’-gcc tgg aaa gtc ctc aac t (6004)
		
	Product	  	CGT NFkappaB Duplex 7000

  

	2.2	Product Specification 

  
 According to current PDF. 
  

	2.3	Project Structure 

  
 Review and update campaign documentation as appropriate for Phase of manufacture 
  
 Agree and document supply chain strategy, start vendor assurance process for any new materials or suppliers. 
  
 Engineering Review 
  
 Review and update Process Description and Process Instructions 

 
 Manufacture product 
  
 Carry out product analysis and release 
  

	3.	Project Assumptions 

  

			
	 	  	Assumptions
		
	Pricing	  	 -        Prices are USD
 -        Pricing includes raw materials

		
	Material Use	  	 -        The material is GMP and is suitable for use in human clinical trials

		
	Timelines	  	 -        Project start date Jan, 2005.
 -        Project complete April, 2005

		
	Shipping terms	  	 -        The material is supplied ex-works.

		
	Stability	  	 -        Project does not include stability studies

  

 15. 

	4.	Facilities 

  
 Avecia will use the Manufacturing Facility at Grangemouth Scotland. 
  

	5.	Compliance 

  
 Material will be GMP and will be suitable for use in human clinical trials. 
  

	6.	Raw Materials 

  
 Avecia will source materials from approved suppliers. 
  

	7.	Financial Summary 

  
 The price for cGMP project activities, manufacture of four 150mmol GMP batches of CGT NfkappaB Single Strand Intermediate oligos (6003 and 6004) and 2
batches of Duplex (7000) suitable for use in clinical trials up to and including P-II is $3,590,000. 
  
 Part of the upfront milestone payment for raw materials which was made under the Cleaning Validation proposal (Proposal 1100 V1) can be offset against
this total, since many of the reagents can be use for NFkappaB. Our assumption is $400,000 is transferable; bringing the price due to $3,190,000. 
  

	8.	Milestone Payments 

  

						
	 Proposed Milestone

	  	Estimated Timing

	  	Payment

	 Raw material cover from Cleaning Validation proposal
	  	Already paid	  	$	400,000
			
	 On agreement to proceed
	  	Jan 2005	  	$	500,000
			
	 On removal of first sequence from lyophiliser
	  	Feb 2005	  	$	900,000

  

 16. 

						
			
	 On removal of second sequence from lyophiliser
	  	Mar 2005	  	$	900,000
			
	 On release of Duplex
	  	Apr 2005	  	$	890,000
	 	  	 	  	
	

	 	  	Total	  	$	3,590,000
	 	  	 	  	
	

  

 17. 

 Schedule 2 
  
 AVECIA’s COSTS 
  

(ATTACHED) 
  

 18. 

	Avecia	DNA 

	Grangemouth	DNA costs 

  

									
	 	  	 Budgeted
 Annual
 Costs
 2005
 £000’s

	  	 Budgeted
 Annual
 Costs
 2005
 $000’s

	  	 Forecast
 monthly
 costs
 $000’s

	  	Headcount

	 Manufacturing
	  	3,267	  	6,338	  	528	  	38
	 Quality ( QC & QA )
	  	1,915	  	3,715	  	310	  	42
	 Depreciation
	  	1,536	  	2,980	  	248	  	 
	 SG & A
	  	975	  	1,892	  	158	  	 
	 R & T
	  	1,893	  	3,672	  	306	  	19
	 	  	
	  	
	  	
	  	

	 	  	9,586	  	18,597	  	1,550	  	99
	 	  	
	  	
	  	
	  	

  
 Current Exchange rate ( 12/20/04)                     1.94 
  
 The costs only relate to costs of operation of the DNA facility in Grangemouth No allocation is made for corporate overheads and similar

  

 19.Letter Agreement

 Exhibit 10.40 
  
 March 4, 2005 
  
 Kevin Cox 
 Vice President, Biotechnology 
 Avecia Limited 
 Hexagon House, Blackley 
 Manchester M9 8ZS 
 England 
  

	Re:	Agreement between Corgentech Inc. and Avecia Limited, Dated December 27, 2004 

  
 Dear Kevin: 
  
 This letter will modify the programme of work (the “Programme”) to be carried our under Schedule 1, Part B, of the Agreement dated December 27, 2004
(the “Agreement”) between Corgentech Inc. (“Corgentech”) and Avecia Limited (“Avecia”). Except as expressly set forth in this letter, all other terms of the Agreement shall remain unmodified and in full force and
effect. 
  
 Under the Programme, Avecia shall
perform the work set forth below. 
  

	1.	E2F Decoy Technical assistance 

  
 Perform activities to support CGT regulatory filling, support rapid resumption of E2F Decoy SSI and duplex production, prepare the facility for a FDA Pre
Approval Inspection (PAI) and commercial production as outlined on the attached Schedule 1 
  

	2.	NFkappaB Decoy Technical assistance 

  
 Perform activities to support CGT knowledge of the NFkappaB Decoy as outlined in the attached Schedule 1. 
  

	3.	General Assistance 

  
 Provide summary cost monthly breakdowns between NFkappaB Decoy manufacturing, E2F Decoy technical assistance and NFkappaB technical assistance allocated
by Manufacturing, QA/QC, R&T, SG&A and depreciation. 
  
 Notwithstanding
anything to the contrary in Paragraphs 7 and 8 of the Programme, the only amount Corgentech shall pay to Avecia under the Programme for raw materials or Milestones, beyond amounts already paid to Avecia as of the date of this letter, shall be USD
$304,000 as described in the attached letter from Avecia to CGT dated January 5, 2005. 
  
 Corgentech Inc. 
  

			
	 By:
	 	 /s/ Jack X. Regan

	 	 	 Jack X. Regan

	 	 	 Vice President, Manufacturing

	
	 Accepted and agreed,

	 Avecia Limited

		
	 By:
	 	 /s/ Kevin Cox

	 Name:
	 	 Kevin Cox

	 Title:
	 	 Vice President, Biotechnology

 January 5, 2005 
  
 Jerry Wroblewski 
 Senior Director, Manufacturing 
 Corgentech 
 650 Gateway Blvd. 
 South San Francisco, CA 94080 
  
 Re: Raw Material Requirements for NFkB Q1 runs 
  

Dear Jerry: 
  
 Thanks for your call on Monday as a follow up on the information you were still waiting on us for the NFKB campaigns. As requested, here is the information you needed as
a more complete breakdown of the raw material requirement for the Quarter 1 NFkappaB campaigns. 
  
 On the original schedule, when we were planning for E2F Cleaning Validation manufacture in Quarter 1, we agreed a $500,000 up-front payment to cover raw material purchase. Those material have been ordered. Many of
them can be used in NFkappaB manufacture and we have redirected them in order to minimise the material costs for the NFkappaB campaign. 
  
 In addition, part of the $500,000 E2F payment has been used to partially underwrite the strategic stock of tetrazole required to support E2F manufacture through 2005/06
(as agreed in e.mail exchanges between Andy and Matt November 17). 
  
 The detailed raw material costs are embedded below. In summary the headline figures are: 
  

				
	 	  	$000

	 
	 Material requirement for 3 x E2F
	  	440	 
	 Tetrazole strategic stock
	  	90	 
	 Material requirement for 4 x NFkappaB
	  	590	 
	 E2F stock unusable for NFkappaB
	  	214	 
	 Balance of material cost for NFkappaB
	  	304	*

	*	304 = 590 (NFkappaB cost) – 500 (E2F payment) + 214 (E2F unusable) 

  
 These costs only encompass the external spend Avecia has borne to secure the raw materials – ie they do not take account of the Avecia internal effort required to
order, receive, quarantine, test, clear, store and transfer the materials. This approach is most appropriate under these circumstances because the internal fixed costs are being covered through an alternative payment mechanism. 
  
 With this approach Corgentech will remain the named owner of the strategic stock of tetrazole
and the CPG –T and Primer Support 30 HL G which was purchased under the $500,000 up-front payment for E2F cleaning validation. 
  
 If you require any further information or explanation please do not hesitate to ask. 
  
 Assuming everything has been explained to your satisfaction it is our intention to proceed
with raising an invoice for $304,000 in the next few days. 
  
 Thanks so much. 
  
 Sincerely- 
  

	
	 /s/ Shelly Adams

	 Shelly Adams

	 Director North American Sales

 Q1 2005 Avecia Requirements 
  

					
	 	  	 In Scope to complete

	    	 Progress as possible

	 NFkB DECOY
  
  
  
	  	 •      Campaign 2, as detailed through March
  
 •      Campaign
1 - second duplex run
  
 •      Qualification of cleaning methods(complete)
  
 •      Routine stability testing Campaign 1
  
 •      Close out
complaint for particulate deviation, CGT to provide information on particulate identitiy
  
 •      Collect in-process fraction samples
  
 •      D7000/001/04K split down/release
	    	 •      Initiate Campaign 2 stability (CGT to request)
  
  
  

			
	 E2F DECOY
  
	  	 •      D1700 Restart Plan including generation/approval of all required
cleaning documentation and schedule for dedicated equipment installation
  
 •      IEX study for D1700 stress/photostability studies
  
 •      Routine
stability testing
  
 •      Insure raw material supply to support a minimum of 2 runs of D1702 &1 run of D1701(CGT to authorize orders)
  
 •      Close out cleaning failure investigation
  
 •      Incorporate vendor COA’s in PDF’s for solid support
  
 •      SOP and PI Sheet revisions
  
 •      Trial
both SSI and IP revised RP-HPLC methods and initiate SSI method qualification
	    	 •      Validate D1700 cleaning methods
  
 •      Complete
all technical reports including process validation
  
  
 •      Generate and finalize a 300mmol Scale-up Plan
  
 •      Support
for Drug Product degradation studies –LCMS(scope in development)
  
 •      Complete the stability moisture failure investigation (scope tbd)

			
	 HIF
	  	 •      * Hold inventory
	    	 
			
	  
  
  

 
 GENERAL
	  	 •      Update Intertek Quality Agreement
  
 •      Monthly
Inventory Reports (all products)
  
 •      PAI readiness
  
 •      Address major observations from pre-audit
  
 •      Control of dedicated equipment
	    	 •      Scientific Publication assistance

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