AMENDED AND RESTATED LICENSE AGREEMENT

1.1

PATENT RIGHTS shall mean [**], the inventions described and claimed therein, and any divisions, continuations, continuations-in-part to the extent that their claims are dominated by existing PATENT RIGHTS, patents issuing thereon or reissues thereof, and any and all foreign patents and patent applications corresponding thereto, to the extent these are owned by or controlled by HARVARD; which will be automatically incorporated in and added to this Agreement and shall periodically be added to Appendix A attached to this Agreement and made a part thereof.

1.2

CLAIM shall mean (a) a valid and enforceable claim of an issued patent included in the PATENT RIGHTS and (b) with respect to a patent application of the PATENT RIGHTS, a claim of such patent application which has not been abandoned or rejected by an administrative agency from which no appeal can be taken.

1.3

BIOLOGICAL MATERIALS shall mean the proprietary materials developed in the laboratories of Drs. A. McMahon, C. Tabin and D. Melton as a result of research concerning the licensed subject matter, identified in Appendix B, such Appendix to be periodically updated by mutual agreement, and supplied to LICENSEE by HARVARD together with any progeny, mutants or derivatives, to the extent that they contain a substantial portion of the original BIOLOGICAL MATERIALS. Proprietary materials shall mean materials which are not generally available from another source and which are under the control of HARVARD.

1.4

ROYALTY PRODUCTS shall mean products, the manufacture, use or sale of which would, absent the license granted hereunder, infringe a CLAIM, with the exception of any antibodies which bind to a hedgehog protein which shall be designated as MILESTONE PRODUCTS.

1.5

MILESTONE PRODUCTS shall mean products which are not ROYALTY PRODUCTS and (a) are identified or discovered in material part through the use of processes or subject matter covered in a CLAIM or (b) agonize or antagonize members of the hedgehog gene family or (c) agonize or antagonize follistatin or (d) incorporate a substantial portion of a BIOLOGICAL MATERIAL or which could not be made except by utilizing a BIOLOGICAL MATERIAL or (e) are antibodies which bind to a hedgehog protein.

1.6

NET SALES shall mean the amount billed or invoiced for sales of ROYALTY PRODUCTS or MILESTONE PRODUCTS:

(a)

Customary trade, quantity or cash discounts and non-affiliated brokers’ or agents’ commissions actually allowed and taken;

(b)

Amounts repaid or credited by reason of rejection or return; and/or

(c)

To the extent separately stated on purchase orders, invoices or other documents of sale, taxes levied on and/or other governmental charges made as to production, sale, transportation, delivery or use and paid by or on behalf of LICENSEE.

(d)

Amounts charged for shipping, packaging, insurance, storage or handling to the extent these are individually itemized on invoices.

1.7

AFFILIATES shall mean any third party company, corporation, or business controlling, controlled by or under common control with LICENSEE. Control shall mean ownership or control of at least fifty percent (50%) of the voting stock.

2.1

HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the terms and conditions hereof, a worldwide license, under PATENT RIGHTS to make and have made, to use and have used, to sell and have sold the ROYALTY PRODUCTS for the life of PATENT RIGHTS, and a worldwide license to use BIOLOGICAL MATERIALS to make and have made, to use and have used, to sell and have sold or to identify the

2.2

The granting and acceptance of this license is subject to the following conditions:

(a)

HARVARD’s “Statement of Policy in Regard to Inventions, Patents and Copyrights” dated March 17, 1986, Public Law 96-517, Public Law 98-620 and HARVARD’s obligations under agreements with other sponsors of research. Any right granted in this Agreement greater than that permitted under Public Law 96-517 or Public Law 98-620 shall be subject to modification as may be required to conform to the provisions of that statute.

(b)

HARVARD shall have the right to make and to use and to grant non-exclusive licenses to make and to use, for research purposes only and not for any commercial purpose, the BIOLOGICAL MATERIALS and the subject matter described and claimed in PATENT RIGHTS. HARVARD, to the extent it is aware of any patent rights arising from such research conducted during the term of this Agreement, shall notify LICENSEE of said rights.

(c)

LICENSEE shall use reasonable efforts to effect introduction of the ROYALTY PRODUCTS into the commercial market as soon as practicable, consistent with sound and reasonable business practices and judgment; thereafter, until the expiration of this Agreement, LICENSEE shall endeavor to keep such ROYALTY PRODUCTS reasonably available to the public.

(d)

If, in HARVARD’s reasonable judgment, LICENSEE and/or LICENSEE’s sublicensee fails to satisfy both of the following conditions for either the hedgehog technology or the follistatin technology, which failure is not cured within ninety (90) days after written notice of such failure by HARVARD to LICENSEE, HARVARD shall have the right to terminate this license or render it non-exclusive with respect to the technology which is not under development:

(i)

is demonstrably engaged in research, development, manufacturing, marketing or licensing program, as appropriate, directed toward the development and commercialization of the licensed subject matter, and

(ii)

has devoted at least $[**] annually to the development and commercialization of the licensed subject matter as of June 10, 2003, and annually thereafter.

(e)

HARVARD shall have the right to terminate this Agreement if LICENSEE does not adhere to the following performance milestones for at least one potential ROYALTY PRODUCT or MILESTONE PRODUCT.

(f)

All sublicenses granted by LICENSEE hereunder shall include a requirement that the sublicensee use reasonable commercial efforts to bring the subject matter of the sublicense into commercial use as quickly as is reasonably possible. Such sublicenses shall be subject and subordinate to the terms and conditions of this Agreement. Copies of all sublicense agreements shall be provided to HARVARD.

(g)

If LICENSEE (or its sublicensees) does not devote at least $[**] to the development and commercialization of the licensed subject matter for any calendar year (commencing in 2003) to the development and/or commercialization, as appropriate, of any part of the subject matter of the PATENT RIGHTS for use in any specific field and if HARVARD requests in writing that LICENSEE grant a sublicense to a third party to develop and/or commercialize such part of the subject matter for use in such field, LICENSEE shall within ninety (90) days after receipt of such notice either (i) commit at least two FTEs toward such development and/or commercialization or (ii) grant such requested sublicense, unless LICENSEE reasonably satisfies HARVARD that such sublicense would be contrary to sound and reasonable business practice and that the granting of such sublicense would not materially increase the availability to the public of products manufactured under this license.

2.3

HARVARD hereby grants to LICENSEE the right to assign the licenses granted or to be granted in paragraph 2.1 to an AFFILIATE subject to the terms and conditions hereof.

2.4

All rights reserved to the United States Government and others under Public Law 96-517 and 98-620 shall in no way be affected by this Agreement.

3.1

Upon execution of Amendment 1, effective January 1, 1997, of the license agreement of the Original Effective Date, LICENSEE agreed to pay to HARVARD a non-refundable, non-creditable fee of [**] ($[**]) dollars. HARVARD hereby acknowledges receipt of [**] ($[**]) dollars of such fee.

3.2    (a)

Upon execution of the license agreement of the Original Effective Date, LICENSEE’s predecessor in interest, Ontogeny, Inc., issued to HARVARD 450,000 shares of Ontogeny Inc. Common Stock that was converted upon the merger of Ontogeny, Inc. into 115,380 shares of LICENSEE’s fully registered, unrestricted common stock (“Common Stock”). Such shares were deemed part of the royalty consideration for the grant of this license.

(b)

As further consideration for HARVARD’s agreement to enter into this Agreement, the parties agree as follows:

(i)

On the Effective Date the parties are entering into a Stock Agreement on substantially the terms attached hereto as Appendix C (the “Stock Agreement”), pursuant to which LICENSEE shall issue as directed by HARVARD 100,000 shares (collectively, the “Shares”), of LICENSEE Common Stock, $0.01 par value per share (“Common Stock”). The Stock Agreement provides, among other things, that (i) HARVARD shall have the right on one occasion beginning anytime after the date which is six (6) months from the date of execution of the Stock Agreement (the “Registration Date”) to request the registration of the Shares for resale on a Form S-3 registration statement and (ii) until the Registration Date, HARVARD shall not sell, transfer, or otherwise dispose of the Shares. Notwithstanding the foregoing, the Company may elect, upon notice to and request from HARVARD, in its sole discretion, to include the Shares in any resale registration statement that it files for the benefit of other LICENSEE stockholders prior to the Registration Date; provided that, in any event the Shares shall remain subject to the limitations of (ii) above until the Registration Date.

(ii)

Upon the earlier of (i) the day immediately preceding the date of a Change of Control (as defined below) or (ii) the date which is no later than the thirty (30) calendar days after the date on which the first Royalty Product or Milestone Product enters Phase III clinical trials, LICENSEE will issue as directed by HARVARD an additional 100,000 shares of LICENSEE Common Stock to be covered by the Stock Agreement attached as Appendix C, provided that each party to whom LICENSEE Common Stock is issued has agreed in writing that such Common Stock is subject to the terms of Section 3 of the Stock Agreement. The number of such shares shall be adjusted appropriately to reflect stock dividends, stock splits, reverse splits and similar capital changes.

(1)

the consummation of the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control Event: (A) any acquisition directly from the Company (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of the Company, unless the Person exercising, converting or exchanging such security acquired such security directly from the Company or an underwriter or agent of the Company), (B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (C) any acquisition by any corporation pursuant to a Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (iii) of this definition; or

(2)

such time as the Continuing Directors (as defined below) do not constitute a majority of the Board (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term “Continuing Director” means at any date a member of the Board (x) who was a member of the Board on the date of the initial adoption of this Plan by the Board or (y) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (y) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or

(3)

the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (x) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination).

3.3    (a)

LICENSEE shall pay HARVARD during the term of this license a royalty of [**] percent ([**]%) of NET SALES of all ROYALTY PRODUCTS sold by LICENSEE and its AFFILIATES; provided, however, that in the case of ROYALTY PRODUCTS covered by a pending patent claim, such royalty of [**]percent ([**]%) shall be due and payable as follows: [**] percent ([**]%) shall be payable to HARVARD pursuant to Section 4.4(a), and the remainder shall accumulate and shall not be required to be paid by LICENSEE to HARVARD unless and until such claim is issued as part of a patent in the applicable jurisdiction. A ROYALTY PRODUCT that is a ROYALTY PRODUCT solely as a result of any such claim that has been abandoned, has been

(b)

If LICENSEE grants a sublicense under this Agreement to a sublicensee (other than an AFFILIATE), LICENSEE shall pay to HARVARD [**] percent ([**]%) of any royalties, fees or other amounts received by LICENSEE or its AFFILIATES as a result of the sublicensee’s development and/or sale of ROYALTY PRODUCTS, or [**] percent ([**]%) with respect to MILESTONE PRODUCTS, excluding: (i) amounts paid in partial or full consideration of equity of LICENSEE or its AFFILIATES at fair market value; (ii) amounts paid to fund research and development activities conducted by LICENSEE or its AFFILIATES for that sublicensee; and (iii) non-monetary consideration, including, without limitation, intellectual property rights, noncompetition covenants and the like. In the event a sublicense granted under this Agreement also includes a sublicense to patent rights contained in the 2000 License Agreement, then LICENSEE may reduce the royalty on sublicense income due in this Section to [**] percent ([**]%) or [**] percent ([**]%), respectively. LICENSEE shall not grant a sublicense hereunder (other than to an AFFILIATE) pursuant to a transaction in which LICENSEE surrenders substantially all of its legal rights and economic interest in the PATENT RIGHTS and ROYALTY PRODUCTS to a third party in exchange for the transfer by such third party to LICENSEE of rights to a different technology or products.

(c)

If LICENSEE, in order to make, use, sell or otherwise exploit the ROYALTY PRODUCTS in any jurisdiction, reasonably determine that they must make royalty payments (“Third Party Payments”) to one or more independent third parties to obtain a license or similar right to make, use, sell or otherwise exploit the ROYALTY PRODUCTS such that the total royalty burden for such ROYALTY PRODUCT equals or exceeds [**] ([**]%) percent, LICENSEE may reduce the royalty due to HARVARD by [**] ([**]%) for each percent above [**] ([**]%) percent, but in no event shall any such payment due to HARVARD be reduced by more than [**]% as a result of such reduction.

(d)

If this license is converted to a non-exclusive one and if other non-exclusive licenses are granted, the above royalties shall not exceed and shall be reduced to the royalty being paid by other licensees during the term of the non-exclusive license.

(e)

LICENSEE shall pay HARVARD during the term of this license a non-reductible royalty of [**] percent ([**]%) of NET SALES of all MILESTONE PRODUCTS sold by LICENSEE and its AFFILIATES. LICENSEE’s obligation to make royalty payments for MILESTONE PRODUCTS under this Section 3.3 (e) shall expire (10) years after the first commercial sale of a MILESTONE PRODUCT. The parties agree that such payments are consideration for LICENSEE’s use of PATENT RIGHTS.

(f)

On sales between LICENSEE and its AFFILIATES or sublicensees for resale, the royalty shall be paid only on the resale by the AFFILIATE or sublicensee, and a single royalty shall be paid by LICENSEE and its AFFILIATES with respect to amounts received by them as a result of such resale.

(g)

If any of the ROYALTY PRODUCTS or MILESTONE PRODUCTS include one or more material, active components not covered by a CLAIM of PATENT RIGHTS (a “Combination Product”), NET SALES for purposes of determining royalties for the Combination Product shall be calculated by multiplying NET SALES for the Combination Product by a fraction, A/A+B, where A is the total invoice price of the component or components covered by a CLAIM of PATENT RIGHTS if sold separately in the relevant market and B is the total invoice price of any other material components in the combination if sold separately in the relevant market. In the event that the material component covered by a CLAIM of PATENT RIGHTS or any other material component in the Combination Product is not sold separately, NET SALES for purposes of determining royalties shall be calculated by multiplying NET SALES of the Combination Product by a fraction, n/C, where n is the number of components covered by a CLAIM of PATENT RIGHTS and C is the number of material, active components in the Combination Product.

(h)

If LICENSEE, in order to enable its sublicense to make, use, sell or otherwise exploit the ROYALTY PRODUCTS or MILESTONE PRODUCTS in any jurisdiction, reasonably determines that they must make royalty payments to one or more independent third parties to obtain a license or similar right to make, use, sell or otherwise exploit the ROYALTY PRODUCTS or MILESTONE PRODUCTS, then LICENSEE may reduce the share of LICENSEE’s sublicensing income due HARVARD by the amount paid to such one or more independent third parties, but in no event shall any such payment due to HARVARD be reduced by more than [**]% as a result of such reduction.

3.4

On January 1 of each calendar year after the effective date of this Agreement, LICENSEE shall pay HARVARD a non-refundable license maintenance royalty and/or advance on royalties of [**] dollars ($[**]); such payment may be credited against running royalties due for that calendar year and royalty reports should reflect the use of this credit. None of these payments are creditable against milestone payments nor against royalties due for any subsequent calendar year. HARVARD shall have the right to terminate this license, subject to the cure period defined in Section 8.2, in the event that LICENSEE does not pay the following license maintenance fees and/or advance on royalties.

3.5.

In consideration of the license to United States Patent Application Serial No[**] filed September 10, 1999 and the inventions set forth therein, on January 1 of each calendar year after the effective date of this Agreement, LICENSEE shall pay to HARVARD a non-refundable license maintenance royalty and/or advance on royalties of [**] dollars ($[**]). Such payments may be credited against running royalties due in connection with such license for that calendar year and Royalty Reports shall reflect such a credit. Such payments shall not be credited against milestone payments (if any) nor against royalties due for any subsequent calendar year.

4.1

Prior to signing this Agreement, LICENSEE has provided to HARVARD LICENSEE’s corporate overview and will provide, within nine (9) months of the date of execution of this Agreement, a written business plan and a reasonable written research and development plan under which LICENSEE intends to bring the subject matter of the licenses granted hereunder into commercial use upon execution of this Agreement. Such plan, which is subject to change, shall include proposed marketing efforts.

4.2

LICENSEE shall provide written annual reports within sixty (60) days after June 30 of each calendar year which shall include but not be limited to: reports of progress on research and development, regulatory approvals, manufacturing, sublicensing, marketing

4.3

LICENSEE shall report to HARVARD the date of first sale of ROYALTY PRODUCTS and MILESTONE PRODUCTS in each country within sixty (60) days of occurrence.

4.4    (a)

After the commencement of sales, LICENSEE agrees to submit to HARVARD within sixty (60) days after the calendar half years ending June 30 and December 31, reports setting forth for the preceding six (6) month period at least the following information:

(i)

the number of the ROYALTY PRODUCTS sold by LICENSEE, its AFFILIATES and sublicensees in each country;

(ii)

total billings for such ROYALTY PRODUCTS;

(iii)

deductions applicable to determine the NET SALES thereof;

(iv)

sublicense income subject to sharing with HARVARD

(v)

such other information as shall be necessary to determine royalty payments or other payments due to HARVARD

(vi)

the amount of royalty due thereon;

(b)

All payments due hereunder shall be payable in United States dollars. Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States (as reported in the New York Times or, if not in the New York Times, then in the Wall Street Journal) on the last working day of each royalty period. Such payments shall be without deduction of exchange, collection or other charges.

(c)

All such reports shall be maintained in confidence by HARVARD, except as required by law, including Public Law 96-517 and 98-620; however, HARVARD may include annual amounts of royalties paid in its usual financial reports.

(d)

Late payments shall be subject to an interest charge of one and one half percent (1 ¹/2%) per month.

5.1

LICENSEE shall keep, and shall require its AFFILIATES and sublicensees to keep accurate and correct records of ROYALTY PRODUCTS and MILESTONE PRODUCTS made, used or sold under this Agreement, appropriate to determine the amount of royalties due hereunder to HARVARD. Such records shall be retained for at least three (3) years following a given reporting period. They shall be available during normal business hours for inspection at the expense of HARVARD by HARVARD’s Internal Audit Department or by a Certified Public Accountant selected by HARVARD and approved by LICENSEE for the sole purpose of verifying reports and payments hereunder. Such accountant shall not disclose to HARVARD any information other than information relating to accuracy of reports and payments made under this Agreement. In the event that any such inspection shows an underreporting and underpayment in excess of five percent (5%) for any twelve (12) month period, then LICENSEE shall pay the cost of such examination as well as any additional sum that would have been payable to HARVARD had the LICENSEE reported correctly, plus interest.

6.1

LICENSEE shall assume primary responsibility for the filing, prosecution and maintenance of any and all patents and patent applications included in PATENT RIGHTS, using patent counsel reasonably acceptable to HARVARD, and LICENSEE shall be responsible for all costs relating thereto. Counsel will directly notify HARVARD and LICENSEE and provide them copies of any official communications from the United States and foreign patent offices relating to said prosecution. Counsel shall also provide HARVARD with advance copies of all relevant communications to the various patent offices, so that HARVARD may be informed and apprised of the continuing prosecution of patent applications in PATENT RIGHTS. HARVARD shall have reasonable opportunities to participate in decision making on all key decisions affecting filing, prosecution and maintenance of patents and patent applications in PATENT RIGHTS including, without limitation, the right to approve or disapprove the abandonment of any patent or claims thereof and LICENSEE will use reasonable efforts to incorporate HARVARD’s reasonable suggestions regarding said prosecution. LICENSEE shall use all reasonable efforts to amend any patent application to include claims reasonably requested by HARVARD to protect ROYALTY PRODUCTS.

6.2

HARVARD and LICENSEE agree to cooperate fully in the preparation, filing, prosecution and maintenance of PATENT RIGHTS and of all patents and patent applications licensed to LICENSEE hereunder, executing all papers and instruments or

6.3

If LICENSEE elects no longer to pay the expenses of a patent application or patent included within PATENT RIGHTS, LICENSEE shall notify HARVARD not less than sixty (60) days prior to such action, such date being at least 30 (thirty) days prior to any pending action or expenditure, and shall thereby surrender its rights under such patent or patent application.

6.4

In the event that LICENSEE elects not to prosecute or maintain any of the patents or patent applications relating to the PATENT RIGHTS or any portion thereof in any jurisdiction, then HARVARD shall have the right, at its own expense to prosecute or maintain the patents or patent applications relating to the PATENT RIGHTS or portion thereof in such jurisdiction, but LICENSEE shall have no further rights to such patents or patent applications or portion thereof.

6.5

If HARVARD can demonstrate that it is not being adequately informed or apprised of the continuing prosecution of patents or patent applications in PATENT RIGHTS, or that it is not being provided with reasonable opportunities to participate in decision making or that its interests are not being adequately protected, HARVARD shall be entitled to engage, at LICENSEE’s expense, independent patent counsel to review and evaluate patent prosecution and filing of patents and patent applications included in PATENT RIGHTS. Henceforth HARVARD and LICENSEE shall share responsibility for patent prosecution, with LICENSEE reimbursing HARVARD in full for any patent expenses incurred by HARVARD.

7.1

With respect to any PATENT RIGHTS under which LICENSEE is exclusively licensed pursuant to this Agreement, LICENSEE or its sublicensee shall have the right to prosecute in its own name and at its own expense any suspected infringement of such patent, so long as such license is exclusive at the time of the commencement of such action. HARVARD agrees to notify LICENSEE promptly of each infringement of such patents of which HARVARD is or becomes aware. Before LICENSEE or its sublicensees commences an action with respect to any infringement of such patents, LICENSEE shall give careful consideration to the views of HARVARD and to potential effects on the public interest in making its decision whether or not to sue and in the case of a LICENSEE sublicense, shall report such views to the sublicensee.

7.2

If LICENSEE or its sublicensee elects to commence an action as described above and HARVARD is a legally indispensable party to such action, HARVARD shall have the right to assign to LICENSEE all of HARVARD’s right, title and interest in each patent which is a part of the PATENT RIGHTS and is the subject of such action (subject to all

7.3

If LICENSEE or its sublicensee elects to commence an action described above and HARVARD is a legally indispensable party to such action, HARVARD may join the action as a co-plaintiff. Upon doing so, HARVARD shall be consulted on any actions LICENSEE or its sublicensees intend with respect to the suspected infringement.

7.4

LICENSEE shall reimburse HARVARD for any reasonable costs it incurs as part of an action brought by LICENSEE or its sublicensee, irrespective of whether HARVARD shall become a co-plaintiff.

7.5

If LICENSEE or its sublicensee elects to commence an action as described above, LICENSEE may reduce, by up to [**] percent ([**]%), the royalty due to HARVARD earned under the patent subject to suit by [**]percent ([**]%) of the amount of the expenses and costs of such action, including attorney fees. In the event that such [**]percent ([**]%) of such expenses and costs exceed the amount of royalties withheld by LICENSEE for any calendar year, LICENSEE may to that extent reduce the royalties due to HARVARD from LICENSEE in succeeding calendar years, but never by more than [**] percent ([**]%) of the royalty due in any one year.