Fill and Sign the This Agreement is Entered into as of April 11 1985 by and between Form

LICENSE AGREEMENT THIS AGREEMENT is entered into as of April 11, 1985, by and between SCRIPPS CLINIC AND RESEARCH FOUNDATION, a California nonprofit corporation (hereinafter referred to as "SCRIPPS") and RICHARD A. HOUGHTEN (hereinafter referred to as "HOUGHTEN"), with respect to the following: RECITALS WHEREAS, SCRIPPS, a nonprofit institution engaged in medical and biomedical research, owns all rights to the means for sequential solid phase organic synthesis and methods using the same, [CONFIDENTIAL TREATMENT REQUESTED] and desires to grant an exclusive worldwide license to HOUGHTEN to further develop, make, have made, use, sell and otherwise commercially exploit theserights; WHEREAS, SCRIPPS has determined that nonexclusive licensing of rights to discoveries and developments will not be on a worldwide basis in a satisfactory manner and that exclusive possession of the rights is necessary for proper satisfaction of health care needs and commercial management of same; WHEREAS, HOUGHTEN, in his capacity as an independent contractor, desires to obtain such license from SCRIPPS to engage in such commercial development and worldwide distribution of the means for sequential solid phase organic synthesis and methods using the same, [CONFIDENTIAL TREATMENT REQUESTED] CONFIDENTIAL TREATMENT WHEREFORE, the parties hereto mutually agree as follows: 1. DEFINITIONS 1.1 "LICENSED PRODUCTS" shall be that disclosed and claimed in [CONFIDENTIAL TREATMENT REQUESTED] to the Research Institute of Scripps Clinic on September 11, 1984, and know-how associated therewith. 1.2 "NET SALES" shall mean the gross revenue derived by HOUGHTEN from any sale of Licensed Products, less discounts actually allowed, credits for claims or allowances and returns, prepaid freight, and less taxes and other governmental charges added to the face of the invoices and actually paid by HOUGHTEN. 2. GRANT OF LICENSE 2.1 LICENSE. Subject to the reservation of rights in Paragraph 2.7 hereof, SCRIPPS hereby grants to HOUGHTEN an exclusive worldwide license to further develop, make, have made, use, sell and otherwise commercially exploit the Licensed Products. 2.2 TERM. HOUGHTEN's license in any country shall be for the term of each patent covering any of the Licensed products in that country, or for a term [CONFIDENTIAL TREATMENT REQUESTED] years from the date of first commercial sale of said Licensed Products in that country which is not covered by any patent in that country, whichever is longer. 2.3 DUE DILIGENCE AND ABANDONMENT. HOUGHTEN agrees to use his reasonable diligence and efforts to develop commercially and market the Licensed Products. If at any time HOUGHTEN abandons his interest in pursuing commercial development of the CONFIDENTIAL TREATMENT Licensed Products or if HOUGHTEN fails to use reasonable diligence and efforts commercially to develop and market said Licensed Products, then SCRIPPS may terminate HOUGHTEN's license as to said Licensed Products sixty (60) days after so notifying HOUGHTEN, unless within a reasonable period of time after receiving such notice HOUGHTEN reasonably satisfies SCRIPPS of his interest or diligent efforts, as the case may be, to commercially develop and market the LicensedProducts. 2.4 SUBLICENSES. Subject to the approval of SCRIPPS, which approval shall not be unreasonably withheld, HOUGHTEN shall have the right to grant sublicenses to any third party with respect to any rights conferred upon HOUGHTEN under this Agreement; provided, however, that any such sublicense shall be subject in all respects to the same terms, conditions and provisions contained in this Agreement, and shall expressly so provide. Such sublicensed third parties shall thereafter report Net Sales to HOUGHTEN and HOUGHTEN shall include the activities of such third parties in any reports made by HOUGHTEN toSCRIPPS. 2.5 TERMINATION RIGHT. HOUGHTEN may terminate his license rights in part or in whole under this Agreement and cease all further development, manufacture and sale of any of the Licensed Products [CONFIDENTIAL TREATMENT REQUESTED] of his intentions to so terminate. Such termination, however, shall not release HOUGHTEN from his obligations to pay royalties accrued and unpaid for any sales of said Licensed Products prior to the effective date of said notice and for all sales of said Licensed Products which HOUGHTEN may make out of his existing inventories after the effective date of said notice. 2.6 EFFECT OF TERMINATION. Upon any termination of this Agreement prior to the scheduled expiration of the term for payment of royalties, HOUGHTEN shall have no further CONFIDENTIAL TREATMENT rights under this Agreement to develop, manufacture, use, sell, market or otherwise commercially exploit the Licensed Products; and upon such a termination, HOUGHTEN shall promptly return to SCRIPPS all of SCRIPPS' proprietary materials, including without limit all samples, reagents, hybridomas, cell lines, monoclonals, documents and other information related to the Licensed Products. 2.7 RESERVATION OF RIGHTS. Notwithstanding the foregoing, SCRIPPS reserves the right to make and use the Licensed Products for SCRIPPS' own education and research purposes, without SCRIPPS being obligated to pay any royalties or other compensation related to same and without diminishing HOUGHTEN's obligations otherwise to pay royalties to SCRIPPS. 3. ROYALTIES 3.1 BASE ROYALTY RATE. For the term of this License Agreement, HOUGHTEN shall pay to SCRIPPS a royalty of [CONFIDENTIAL TREATMENT REQUESTED] of Net Sales of the Licensed Products, or where any sublicense is granted, [CONFIDENTIAL TREATMENT REQUESTED] of royalties derived by HOUGHTEN from all such sublicenses under Section 2.4, all on a [CONFIDENTIAL TREATMENT REQUESTED] 3.2 (a) In countries where any patent is issued covering the Licensed Products, the royalty rate for such country shall be as set forth in Section 3.1. (b) In countries where there is no issued patent covering the Licensed Products, but a patent application is pending and where HOUGHTEN sells the Licensed Products falling within the scope of the claims of said patent application, the royalty rate shall be CONFIDENTIAL TREATMENT [CONFIDENTIAL TREATMENT REQUESTED] for a period not to exceed [CONFIDENTIAL TREATMENT REQUESTED] years from the priority filing date of said patent application. [CONFIDENTIAL TREATMENT REQUESTED] Upon such issuance, the royalty rate shall be as set forth in Section 3.2(a). (c) In countries where there is no patent covering the Licensed Products and where there is no pending patent application [CONFIDENTIAL TREATMENT REQUESTED]. The payment of royalties under this subsection 3.2(c) shall not exceed a period of [CONFIDENTIAL TREATMENT REQUESTED] years from the date of first sale of the Licensed Products. 3.3 REDUCTION IN ROYALTY DUE TO COMPETITION. If in the Relevant Market of any country HOUGHTEN's sales of the Licensed Products shall become subject to substantial competition, [CONFIDENTIAL TREATMENT REQUESTED] 3.5 GOVERNMENTAL PROHIBITION. HOUGHTEN's obligation to pay royalties under this Section 3 shall be waived and excused if the statutes, laws, codes or government regulations of the country as to which such payments are to be paid prohibit such payments. 3.6 CURRENCY. The remittance of royalties payable on sales outside the United States will be payable to SCRIPPS in United States dollar equivalents at the official rate of exchange of the currency of the country from which the royalties are payable as quoted by Citibank N.A. for the day upon which the check for the royalty payment is dated. If the transfer or the conversion into the remittance of United States dollar equivalents in any such instance is not lawful or possible, the payment of such part of the royalties as is necessary shall be made by the deposit thereof, in the currency of the country where the sales were made on which the CONFIDENTIAL TREATMENT royalty was based to the credit and account of SCRIPPS or its nominee in any commercial bank or trust company of HOUGHTEN's choice located in that country, prompt notice of which shall be given by HOUGHTEN to SCRIPPS. 3.7 TAX WITHHELD. Any tax required to be withheld on royalties payable to SCRIPPS under the laws of any foreign country shall be promptly paid by HOUGHTEN for and on behalf of SCRIPPS to the appropriate governmental authority, and HOUGHTEN shall furnish SCRIPPS with proof of payment of such tax together with official or other appropriate evidence issued by the appropriate governmental authority sufficient to enable SCRIPPS to support a claim for income tax credit in respect of any sum so withheld. Any such tax required to be withheld shall be an expense of and borne solely by SCRIPPS. 3.8 RECORDS; QUARTERLY PAYMENTS. HOUGHTEN shall keep complete and accurate records [CONFIDENTIAL TREATMENT REQUESTED] with respect to which royalty is payable according to this Agreement. [CONFIDENTIAL TREATMENT REQUESTED] HOUGHTEN shall render to SCRIPPS a written report setting forth the total Net Sales and the royalty due and payable, and HOUGHTEN shall, upon rendering such report, remit to SCRIPPS the amount of royalty payments shown thereby to be due. Any royalties not paid when due shall thereafter bear interest at the prime rate of interest charged by Citibank N.A., compoundeddaily. 3.9 AUDIT. SCRIPPS shall have the right at its own expense to nominate an independent certified public accountant acceptable to and approved by HOUGHTEN (which approval shall not be unreasonably withheld) who shall have access to HOUGHTEN's records during reasonable business house for the sole purpose of verifying the royalties payable as CONFIDENTIAL TREATMENT provided for in this Agreement, but this right may not be exercised more than once in any calendar year, and said accountant shall disclose to SCRIPPS only information relating solely to the accuracy of the royalty report and the royalty payments made according to this Agreement. 4. PATENT APPLICATIONS. 4.1 U.S. PATENT APPLICATION. SCRIPPS agrees to diligently prepare, file, and prosecute patent applications in the United States covering the Licensed Products to the extent SCRIPPS deems such applications to be warranted or to the extent HOUGHTEN requests any such applications. Said preparation, filing and prosecution shall be by an attorney of SCRIPPS' choosing, subject to the approval of HOUGHTEN, said approval not to be unreasonably withheld by HOUGHTEN. 4.2 FOREIGN PATENT APPLICATION. SCRIPPS agrees, when requested in writing by HOUGHTEN, to file patent applications by attorneys of SCRIPPS' own choosing, subject to the approval of HOUGHTEN, said approval not to be unreasonably withheld by HOUGHTEN, in countries outside the United States corresponding to the patent applications filed by SCRIPPS in the United States. 4.3 PATENT COSTS. [CONFIDENTIAL TREATMENT REQUESTED] 4.4 CREDIT ON ROYALTIES FOR PATENT COSTS. [CONFIDENTIAL TREATMENT REQUESTED] CONFIDENTIAL TREATMENT 5. LITIGATION. 5.1 HOUGHTEN'S RIGHT TO PROSECUTE AND DUTY TO DEFEND ACTIONS. HOUGHTEN shall have the sole right to prosecute at his discretion, any and all infringements of any patents covering the Licensed Products or other actions and agrees to defend, indemnify and hold harmless SCRIPPS and its employees and trustees from all charges of infringement arising as a result of said patents and all other actions, including product liability actions, all at his own expense. Provided, however, that SCRIPPS shall permit any action to be brought in its name if required by law, and SCRIPPS agrees to provide any assistance of a technical nature that HOUGHTEN may require in any litigation arising in accordance with the provisions of this subsection, for which SCRIPPS shall be paid reasonable compensation. In the event HOUGHTEN elects not to prosecute any such infringement or other action, HOUGHTEN shall notify SCRIPPS promptly, and thereafter SCRIPPS shall have the right to prosecute such infringement or otheraction. 5.2 ROYALTY REDUCTION. [CONFIDENTIAL TREATMENT REQUESTED] HOUGHTEN's royalty payments to SCRIPPS shall be reduced by an equitable amount to be negotiated by the parties at that time. 6. GOVERNMENTAL APPROVALS AND MARKETING OF PRODUCTS. HOUGHTEN shall bear the costs of commercializing the Licensed Products, including all costs of obtaining the necessary governmental approvals for the marketing of such product. HOUGHTEN shall utilize reasonable efforts within his sole discretion consistent with his overall business strategy in obtaining said governmental approvals and marketing said product. 7. WARRANTIES. SCRIPPS warrants and represents that it has the full right, title and power to grant the license set forth in this Agreement, and that there are no outstanding agreements, assignments, claims or encumbrances applicable to SCRIPPS which are inconsistent with the provisions of this Agreement. SCRIPPS makes no expressed or implied warranty as to merchantability or fitness for any particular purpose as to the Licensed Products. HOUGHTEN warrants and represents that he is not bound by any agreement to any other party, including without limit any present or previous employer or partner which precludes him from entering into or performing the Agreement or which would be violated or infringed upon by entering into or performing this Agreement. 8. COMMUNICATIONS. Any payment, notice or other communication required or permitted to be made or given to either party hereto pursuant to this Agreement shall be sufficiently made or given on the date of mailing if sent to such party by certified or registered mail, postage prepaid, addressed to it at its address set forth or to such other address as its shall designate by written notice given to the other party as follows: In the case of SCRIPPS: Associate Director of the Research Institute of SCRIPPS Clinic Scripps Clinic and Research Foundation 10666 North Torrey Pines Road La Jolla, California 92037 In the case of HOUGHTEN: Richard A. Houghten, Ph. D. 558 Ford Avenue Solana Beach, CA 92075 9. ASSIGNMENT. This Agreement shall not be assignable by either party without the prior written consent of the other party, except to a successor in ownership of all or substantially all of the business assets of a party hereto, and which successor shall expressly assume in writing the performance of all the terms and conditions of this Agreement to be performed by the assigning party. 10. PUBLICATION; CONFIDENTIALITY. 10.1 PUBLICATIONS. With respect to reporting results of research and development relating to the Licensed Products, SCRIPPS will submit to HOUGHTEN drafts of all proposed publications relating to said product at the earliest possible date, but in any event not less than thirty (30) days prior to the submission of said proposed publications; and HOUGHTEN shall advise SCRIPPS as to the patentability of any inventions disclosed therein. At the end of such thirty (30) day period, SCRIPPS shall have the right, at its sole discretion, to submit such proposed publications for publication, but HOUGHTEN reserves the right to request that his name not be used in connection with said publications. 10.2 PUBLICITY. Neither party will originate any publicity, news release, or other public announcement, written or oral, whether to the public press, to stockholders, or otherwise, relating to this Agreement, to any amendment hereto or to performance hereunder or the existence of an arrangement between the parties without the prior written approval of the other party. 10.3 SCRIPPS CONFIDENTIALITY. SCRIPPS shall not disclose to others or use for its own benefit any confidential information acquired from HOUGHTEN concerning existing or contemplated products, processes, techniques, know-how, marketing information or the like obtained as a result of any provisions of this Agreement or the relationship established hereunder. This covenant shall not be applicable to information which at the time of the disclosure or use is in the public domain. The obligations of confidentiality under this Section 10 shall survive any expiration or termination of thisAgreement. 10.4 HOUGHTEN CONFIDENTIALITY. HOUGHTEN shall maintain the confidentiality of SCRIPPS' trade secrets and proprietary information and materials which SCRIPPS furnishes to HOUGHTEN in connection with the Licensed Products, to the extent such confidentiality does not interfere with the full commercialization of the Licensed Products. The obligations of confidentiality under this Section 10.4 shall survive any expiration or termination of thisAgreement. 10.5 EXCHANGE OF INFORMATION. Consistent with the provisions of this Agreement and to the extent permitted by law and legal obligations respecting confidential information of third parties, SCRIPPS and HOUGHTEN shall promptly exchange any newly acquired or developed information relating to the Licensed Products. 11. GENERAL. 11.1 SIGNATURES. This Agreement will not be binding upon the parties until it has been signed hereinbelow by or on behalf of each party, in which event it shall be effective as of the date first above written. No amendment or modification hereof shall be valid or binding upon the parties unless made in writing and signed as aforesaid. 11.2 ENTIRETY. This Agreement embodies the entire understanding of the parties with respect to the license for the Licensed Products, and shall supersede all previous communications, representations or undertakings, either verbal or written, between the parties relating to the subject matter hereof. 11.3 SEVERABILITY. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 11.4 GOVERNING LAW. This Agreement shall be construed, and the legal relations between the parties determined, in accordance with the laws of the State of California. 11.5 U.S. MANUFACTURE. To the extent required by applicable laws or governmental regulations, HOUGHTEN agrees that the Licensed Products will be manufactured substantially in the United States, subject to such waivers as may be obtained from the U.S. Department of Health and Human Services, or itsdesignee. 11.6 HEADINGS. The headings of the several Sections are inserted for convenience of reference only, and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. SCRIPPS CLINIC AND RESEARCH FOUNDATION Witness: By: /s/ Raymond H. Kahn -------------------- /s/ Title: Associate Director ------------------------ ------------------ RICHARD A. HOUGHTEN Witness: /s/ /s/ Richard A. Houghten ------------------------ -------------------