EXCLUSIVE LICENSE AGREEMENT

Exhibit 10.1

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

EXCLUSIVE LICENSE AGREEMENT

BETWEEN

CHILDREN’S MEDICAL CENTER CORPORATION

AND

ICAGEN, INC.

This Agreement is made and entered into as of the date last written below (the Effective Date), by and between Children’s Medical Center Corporation, a charitable corporation duly organized and existing under the laws of the Commonwealth of Massachusetts and having its principal office at 300 Longwood Avenue, Boston, Massachusetts, 02115, U.S.A. (hereinafter referred to as “CMCC”), and ICAgen, Inc., a business corporation organized and existing under the laws of the State of Delaware and having its principal place of business located at 4222 Emperor Boulevard, Suite 460, Durham, NC 27703 (hereinafter referred to as “Licensee”).

WHEREAS, CMCC is the owner of the CMCC Patent Rights which are identified in Appendix A and/or has the right to grant exclusive licenses under said CMCC Patent Rights for the Field of Use, subject only to a royalty-free, nonexclusive license heretofore granted to the United States Government for those patents developed with U.S. Government funding;

WHEREAS, CMCC has the right to license its interest in the Sheffield Patent Rights which are identified in Appendix B for the Field of Use, subject only to a royalty-free, nonexclusive license heretofore granted to the United States Government for those patents developed with U.S. Government funding;

WHEREAS, CMCC desires to have the Licensed Patent Rights utilized in the public interest and is willing to grant a license thereunder on the terms and conditions described herein;

WHEREAS, Licensee has represented to CMCC that Licensee is ready, willing and able, subject to obtaining necessary regulatory approvals and on the terms and conditions set forth herein, to engage in the commercial development, production, manufacture, marketing and sale of Licensed Products and/or the use of Licensed Processes and that it shall commit itself (either directly or through Affiliates, Sublicensees or contractees) to a thorough, vigorous and diligent program of exploiting the Licensed Patent Rights in accordance with the terms and conditions described herein so that public utilization shall result therefrom; and

WHEREAS, Licensee desires to obtain an exclusive license under the Licensed Patent Rights for the Field of Use on the terms and conditions of this Agreement.

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

ARTICLE I. DEFINITIONS

For the purpose of this Agreement, the following words and phrases shall have the meanings set forth below:

1.1 “Affiliate” shall mean any company or other legal entity controlling, controlled by or under common control with Licensee. For purposes of the definition of “Affiliate” the term “control” shall mean: (i) in the case of a corporate entity, the direct or indirect ownership of at least a majority of the stock or participating shares entitled to vote for the election of directors of that entity; (ii) in the case of a partnership, the power customarily held by a general partner to direct the management and policies of such partnership; or (iii) in the case of a joint venture, whether in corporate, partnership or other legal form, a more than nominal economic interest and managerial role.

1.2 “Combination Product(s) or Process(es)” shall mean a product or process that includes a Licensed Product or Licensed Process sold in combination with another component(s) whose manufacture, use or sale by an unlicensed party would not constitute an infringement of the Licensed Patent Rights.

1.3 “Field of Use” shall mean human and veterinary therapeutics and diagnostics, but excluding NEWCO’s Field of Use.

1.4 “First Commercial Sale” shall mean with respect to each country: (i) the first sale of any Licensed Product or Licensed Process by Licensee, following approval of such Licensed Product’s or Licensed Process’s marketing by the appropriate governmental agency, if any such approval is necessary, for the country in which the sale is to be made; or (ii) when governmental approval is not required, the first sale in that country of the Licensed Product or Licensed Process.

1.5 “Gross Compensation” shall mean all consideration received by Licensee and Affiliates from third parties for the manufacture, sale, commercialization, and/or sublicensing of the Licensed Patent Rights, the Technology and the Sublicensed Technology. Gross Compensation shall include:

(a) all payments received by Licensee and/or Affiliates as upfront payments, license fees, milestone payments, royalties, rentals, user fees or other sums received for the manufacturing, sales, commercialization and/or sublicensing of the Technology, and/or the Sublicensed Technology; for further clarification, Gross Compensation does not include other sums received for solely sponsoring research or development, or as a bona fide equity or debt investment in Licensee or any of its Affiliates; and

(b) all non-cash compensation received by Licensee and/or Affiliates such as stock, partnership interests, or other equity interests in a business entity when such equity interest is received by Licensee or Affiliates in return for the manufacturing, sales,

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commercialization and/or sublicensing of the Technology and/or the Sublicensed Technology.

1.6 “Licensed Patent Rights” shall mean all of the following intellectual property which CMCC owns or has rights to during the term of this Agreement:

(a) The United States and foreign patents and/or patent applications listed in Appendix A and Appendix B attached hereto and incorporated herein by reference and divisionals and continuations thereof.

(b) The United States and foreign patents issued from the applications listed in Appendix A and Appendix B and from divisionals and continuations of those applications.

(c) Claims of United States and foreign continuation-in-part applications, and of the resulting patents, which claim subject matter specifically described and enabled in the United States and foreign patent applications described in Appendix A and Appendix B.

(d) Claims of all later filed foreign patent applications, and of the resulting patents, which claim subject matter specifically described and enabled in the United States patent and/or patent applications described in subparagraphs (a), (b) or (c) of this Article I, Paragraph 1.6.

(e) Any reissues, divisions, amendments or extensions of the United States or foreign patents described in subparagraphs (a), (b), (c) or (d) of this Article I, Paragraph 1.6.

1.7 “Licensed Product” shall mean any product or part thereof:

1.8 “Licensed Process” shall mean any process that would infringe any Valid Claim contained in the Licensed Patent Rights in any country.

1.9 “NCEs” shall mean the compounds covered in whole or in part by Sheffield Patent Rights.

1.10 “Net Sales” shall mean gross receipts received by Licensee or Licensee’s Affiliates for sales of Licensed Products and/or Licensed Processes produced hereunder, less the sum of the following:

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No deductions shall be made for commissions paid to individuals whether they are with independent sales agencies or regularly employed by Licensee and on its payroll or for the cost of collections. Licensed Products and Licensed Processes shall be considered “sold” and “received” when actually collected. Notwithstanding anything herein to the contrary, the following shall not be considered a sale of a Licensed Product or Licensed Process under this Agreement: (i) the transfer of a Licensed Product or Licensed Process to an Affiliate for sale by the Affiliate in a transaction that will be royalty bearing; (ii) the transfer of a Licensed Product or Licensed Process to a third party without consideration to Licensee in connection with the development or testing of a Licensed Product or Licensed Process; or (iii) the transfer of a Licensed Product or Licensed Process to a third party without consideration in connection with the marketing or promotion of the Licensed Product or Licensed Process.

1.11 “NEWCO’s Field of Use” shall mean the use of the NCE’s in the field of cancer, actinic keratosis and Kaposi’s sarcoma.

1.12 “Sheffield Patent Rights” shall mean the patents and patent applications set forth in Appendix B hereto.

1.13 “Sublicensee” shall mean a person or entity unaffiliated with Licensee to whom Licensee has granted an arm’s length sublicense under this Agreement.

1.14 “Sublicensed Technology” shall mean any and all patentable and unpatentable technology, Licensed Products, Licensed Processes, compounds, devices, models, things, know-how, methods, documents, materials, copyrightable works, and all other information in CMCC’s custody and under CMCC’s control relating to the Licensed Patent Rights supplied by ION to CMCC.

1.15 “Technology” shall mean CMCC’s rights, as of the Effective Date hereof, to any and all patentable and unpatentable technology, Licensed Products, Licensed Processes, compounds, devices, models, things, know-how, methods, documents, materials, copyrightable works, and all other information in CMCC’s custody and under CMCC’s control relating to the Licensed Patent Rights, but excluding Sublicensed Technology.

1.16 “Valid Claim” shall mean any claim of an issued patent which has not been held invalid or unenforceable in an unappealed or unappealable by right decision by a court of competent jurisdiction, or a claim of a pending foreign patent application which has been pending not more than [**] years from its filing date in the country in which it is pending.

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ARTICLE II. GRANT

2.1 CMCC hereby grants to Licensee and its Affiliates the worldwide right and exclusive license, including the right to grant sublicenses, under the Licensed Patent Rights to make, have made, use, market, lease, import, offer for sale, sell and otherwise commercialize the Licensed Products and to practice the Licensed Processes in the Field of Use to the end of the term for which the Patent Rights are granted, unless sooner terminated as provided in this Agreement.

2.2 CMCC hereby grants to Licensee and its Affiliates the worldwide right and license, with the right to grant sublicenses exclusively under the Sublicensed Technology in the Field of Use and hereby further grants to Licensee and its Affiliates the worldwide right and license, with the right to grant sublicenses nonexclusively under the Technology (except for the Patent Rights, for which the license is exclusive), to make, have made, use, market, offer to sell, sell, import or otherwise commercialize Licensed Products and to practice the Licensed Processes. Nothing in this grant, however, shall prevent CMCC from disseminating information included within the Sublicensed Technology or the Technology solely for non-commercial research purposes with Licensee’s prior written consent, which shall not be unreasonably withheld or delayed, so long as Licensee’s commercial interests are not prejudiced by such dissemination.

2.3 The licenses granted hereunder shall not be construed to confer rights upon Licensee by implication, estoppel, or otherwise as to any technology not specifically encompassed by the terms Technology and Sublicensed Technology. It is agreed and understood that the licenses granted hereunder do not confer any right upon Licensee to any technology owned or controlled by Pharm-Eco Laboratories, Inc., including but not limited to any technology relating to methods of manufacturing the NCE’s, and that may be known to CMCC.

2.4 Notwithstanding anything above to the contrary, CMCC shall retain a royalty free, nonexclusive, irrevocable license to practice (including the right to have made solely for its own non-commercial research purposes) the Sublicensed Technology and the Technology for non-commercial research purposes only, and to provide materials under the Sublicensed Technology and the Technology to other non-profit research organizations under material transfer agreements which provide that such materials shall be used solely for non-commercial research purposes only; provided however , that if Licensee has notified CMCC in writing that a particular compound or compounds are being considered as potential clinical compound candidates, CMCC shall not distribute such clinical candidate compounds to any third party without Licensee’s written consent.

2.5 Notwithstanding anything above to the contrary, the license granted hereunder shall be subject to the rights of the United States government, if any, under Public Laws 96-517, 97-226, and 98-620, codified at 35 U.S.C. sec. 200-212 and any regulations promulgated thereunder.

2.6 The granting and acceptance of this Agreement is subject to “Harvard’s Statement of Policy in Regard to Inventions, Patents and Copyrights” dated March 17, 1986; and (ii) Public Law 96-517 and Public Law 98-620. Nothing in this Agreement shall prevent HARVARD,

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CMCC or their employees from seeking additional funding; however, in no event shall any rights under an agreement with non-profit or non-commercial sponsors of research conflict with or affect in any way the right and license granted hereunder to Licensee by CMCC. Any rights granted in this Agreement greater than permitted under Public Law 96-517, 97-226 or 98-620 shall be subject to modifications as may be required to conform to provisions of those statutes.

2.7 Licensee agrees that HARVARD retains the right to make and to use the information and technology relating to the Sheffield Patent Rights set forth in Appendix B for research purposes only and not for any commercial purpose. In the event that, pursuant to Section 3.5 of the license agreement between Ion Pharmaceuticals, Inc., and CMCC dated July 1999, ION notifies CMCC of the name and address of the scientist and the not-for-profit institution to which HARVARD has transferred any materials comprising the Sublicensed Technology, then CMCC shall promptly notify Licensee of such name and address.

2.8 Licensee understands and agrees that the licenses granted hereunder will be revoked if the activities of Licensee, its Sublicensees, Affiliates or agents under the licenses granted in this Section II infringe upon NEWCO’s Field of Use. By “infringe,” it is meant that Licensee, its Sublicensees, Affiliates or agents conduct a clinical trial, advertise or sell a product for use in NEWCO’s Field of Use or engage in activities which are determined, by a competent court or administrative body from which no further appeal can be or has been taken, to infringe, directly, contributorily or as inducement, the Sheffield Patent Rights in NEWCO’s Field of Use.

2.9 Licensee agrees that Licensed Products leased or sold in the United States shall be manufactured substantially in the United States.

2.10 In order to establish exclusivity for Licensee, CMCC hereby agrees that it shall not, without Licensee’s prior written consent, grant to any other party a license to make, have made, use, lease, import, offer for sale and/or sell Licensed Products or to use the Licensed Processes in the Field of Use during the period of time in which this Agreement is in effect, except as otherwise specified in this Agreement or as required by law to grant rights to the United States Government.

ARTICLE III. SUBLICENSING

3.1 Licensee shall have the right to enter into sublicensing agreements with respect to any of the rights, privileges, and licenses granted hereunder, subject to the terms and conditions hereof. Such sublicenses will terminate upon the termination of Licensee’s rights granted herein unless events of default are cured by Licensee or Sublicensee within [**] days of notification by CMCC of default and/or as provided by the terms of this Agreement. Any sublicensing agreement shall include an audit right by HARVARD of the same scope as provided by Article VI hereof. No such sublicensing agreement shall contain any provision which would cause it to extend beyond the term of this Agreement.

3.2 Licensee agrees that any sublicense granted by it shall provide that the obligations to CMCC of Articles II (Grant), VI (Reports and Records), VIII (Infringement), IX (Insurance and Indemnification), XII (Export Controls), XIII (Non Use of Names), XIV (Assignment), XV (Dispute Resolution), XVI (Term and Termination) and XVIII (Miscellaneous Provisions) of this

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Agreement shall be binding upon the sublicensee as if it were a party to this Agreement. Licensee further agrees to attach a copy of this Agreement to all sublicense agreements.

3.3 Licensee agrees to provide to CMCC notice of any sublicense granted hereunder and to forward to CMCC promptly upon execution a copy of any and all fully executed sublicense agreements. Licensee further agrees to forward to CMCC annually a copy of such reports received by Licensee from its sublicensees during the preceding twelve (12) month period as shall be pertinent to a royalty accounting under the applicable sublicense.

3.4 All sublicenses granted by Licensee hereunder shall include a requirement that the sublicensee use its commercially reasonable efforts to bring the subject matter of the sublicense into commercial use as promptly as is reasonably possible.

3.5 Licensee shall advise CMCC in writing of any consideration received from sublicensees under this Agreement. Licensee shall not accept from any sublicensee anything of value in lieu of cash payments to discharge sublicensee’s payment obligations under any sublicense granted under this Agreement, without the express written permission of CMCC, which permission shall not be unreasonably withheld.

3.6 CMCC agrees that if Licensee has provided to CMCC notice that Licensee has granted a sublicense to a sublicensee under this Agreement, then in the event CMCC terminates this Agreement for any reason, CMCC shall provide to such sublicensee no less than thirty (30) days prior to the effective date of said termination, written notice of said termination at the address specified by Licensee to CMCC in Licensee’s notice to CMCC under Paragraph 3.3 of this Article III. CMCC agrees that upon the sublicensee’s notice as described below and provided the sublicensee is not in breach of its sublicense, CMCC shall grant to such sublicensee license rights and terms equivalent to the sublicense rights and terms which the Licensee shall have granted to said sublicensee; provided that the sublicensee shall remain a sublicensee under this Agreement for a period of at least sixty (60) days following receipt of notice from CMCC. Sublicensee shall during said sixty (60) day period provide to CMCC notice wherein the sublicensee: (i) reaffirms the terms and conditions of this Agreement as it relates to the rights the sublicensee has been granted under the sublicense; (ii) agrees to abide by all of the terms and conditions of this Agreement applicable to sublicensees and to discharge directly all pertinent obligations of Licensee as it relates to the sublicense which Licensee is obligated hereunder to discharge; and (iii) acknowledges that CMCC shall have no obligations to the sublicensee other than its obligations set forth in this Agreement with regard to Licensee.

ARTICLE IV. DUE DILIGENCE

4.1 Licensee (either directly or through Affiliates, contractees or Sublicensees) shall use its good faith and diligent efforts to bring one or more Licensed Products and/or Licensed Processes to market as soon as reasonably practicable, consistent with sound and reasonable business practices and judgment. Thereafter, Licensee agrees that until expiration or termination of this Agreement, Licensee shall continue active and diligent efforts to keep Licensed Products and/or Licensed Processes reasonably available to the public. In the event Licensee decides not to exploit a Licensed Patent Right in a particular country, it shall promptly inform CMCC in writing and shall surrender to CMCC its license to that Licensed Patent Right in that country.

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4.2 The parties acknowledge that Licensee has provided to CMCC prior to the date of execution of this Agreement a written commercialization development plan (“Development Plan”) setting forth the initial indications and markets for Licensed Products and Licensed Processes, including to the extent practicable: (i) time-delimited targets for pre-clinical development, clinical trials, regulatory approval, manufacturing and marketing that represent reasonable efforts, consistent with industry norms for similar technology and applications, to bring Licensed Products and Licensed Processes to the marketplace; and (ii) actual or projected financial resources and/or strategic alliances that will be required to implement the Development Plan. The Development Plan is attached hereto as Appendix C and is hereby incorporated herein by reference.

4.3 Licensee and any Sublicensee or Affiliate shall use its good faith and diligent efforts to accomplish the milestones set forth in the Development Plan and to manufacture and distribute Licensed Products and Licensed Processes.

4.4 CMCC shall not unreasonably withhold its assent to any revision of the objective(s) set forth in the Development Plan when requested in writing by Licensee and supported by reasonable evidence: (i) of technical difficulties or delays in the clinical studies or regulatory process that Licensee could not have reasonably avoided; or (ii) that Licensee, its Affiliates and/or Sublicensees have expended good faith and diligent efforts and adequate resources to meet said objective.

4.5 In the event CMCC reasonably believes that Licensee is not reasonably and diligently seeking to achieve the objectives set forth in the Development Plan in a timely manner, CMCC shall so notify Licensee in writing. Licensee shall have the option, exercisable by written notice to CMCC provided within ten (10) days after receipt of any such notice, to either: (i) receive a [**] grace period to reasonably establish that Licensee is expending its good faith and diligent efforts and adequate resources to achieve said objectives; or (ii) agree to CMCC’s termination of this Agreement as provided hereafter. In the event Licensee agrees to termination of this Agreement, CMCC shall immediately terminate the license granted to Licensee under this Agreement. In the event Licensee fails to reasonably establish its diligence as provided above prior to expiration of the [**] grace period, CMCC shall have the right to terminate the license granted to Licensee under this Agreement or to convert the license granted to Licensee hereunder to a nonexclusive license on financial terms and conditions mutually agreed to by CMCC and Licensee.

4.6 In the event that CMCC believes that Licensee fails to meet the objective(s) set forth in the Development Plan in a timely manner, CMCC shall notify Licensee thereof in writing, and Licensee shall have [**] days following such notification to establish to that (i) it has met such objective(s); or (ii) a revision to the Development Plan is necessary and appropriate as contemplated above. In the event that Licensee fails to reasonably establish that it has met such objectives and Licensee has not submitted a revision to the Development Plan, then the issue of whether the objectives have been met shall be submitted to arbitration in accordance with the provisions of Article XV of this Agreement and this Agreement shall remain in effect until the arbitrator renders a decision and for a period thereafter sufficient to carry out the decision. In the event Licensee fails to reasonably establish that the objectives have been met and has submitted a revision to the development plan, but Licensor reasonably believes Licensee

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has failed to reasonably establish the need for such revision to the Development Plan and the appropriateness of such revision, the issues of whether the objectives have been met and the need for and scope of the revision shall be submitted to arbitration in accordance with the provisions of Article XV of this Agreement. In such case, the revision shall be given immediate effect. This Agreement, including such revision, shall remain in effect until the arbitrator renders a decision and for a period thereafter sufficient to carry out the decision. In considering the issues of need for and scope of the revision, the arbitrator shall be guided by considerations of the actual cause of the need for revision so that if the need for revision occurs despite the good faith efforts consistent with industry norms of Licensee, then the arbitrator shall find in favor of Licensee, as to the need for the revision. If the arbitrator does not find in favor of Licensee on whether the objectives have been met or on the need for a revision to the Development Plan, CMCC shall have the right in its discretion to, within [**] days of the arbitrator’s decision, either terminate the license granted to Licensee under this Agreement or to convert the license granted to Licensee hereunder to a non-exclusive license on financial terms and conditions mutually agreed to by CMCC and Licensee.

4.7 Licensee shall fund research at Children’s Hospital in accordance with the terms of the Sponsored Research Agreement between Licensee and CMCC to be negotiated in good faith by the parties hereto. Such Sponsored Research Agreement shall include the terms set forth in Appendix D hereto. In the event Licensee terminates the Sponsored Research Agreement within [**] years of its initiation without cause or Hospital terminates said agreement under Paragraphs 8 (b), (c), or (d) of that agreement, this License shall remain in full force until such time and thereupon shall terminate. In the event Licensee terminates the Sponsored Research Agreement for cause as defined in Article 8 (d), (f), or (j), licenses or options granted pursuant to the Sponsored Research Agreement may not be terminated by CMCC.

4.8 Licensee shall provide to CMCC and to HARVARD 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 and sales during the preceding twelve (12) months as well as plans for the coming year (“Annual Plan”). If progress differs from that anticipated in the Annual Plan, Licensee shall explain the differences and propose a modified plan for HARVARD’s review. If HARVARD is dissatisfied with the modified plan, then HARVARD and Licensee shall meet to develop a mutually agreed upon plan. HARVARD has agreed to maintain as confidential all information designated as confidential by Licensee which is provided to HARVARD under this Paragraph. HARVARD has agreed not to use such confidential information for any purpose other than the evaluation of CMCC’s or Licensee’s compliance under this Agreement and agrees not to disclose such information to anyone who is not a direct employee of HARVARD’s Office of Technology and Licensing or who has not signed a non-disclosure agreement with HARVARD covering the confidential information, which shall be in form and substance reasonably acceptable to CMCC and Licensee. Copies of such nondisclosure agreements shall be provided to CMCC and Licensee promptly after execution.

4.9 HARVARD shall have the right to terminate or render this Agreement non- exclusive, only as to the Appendix B Licensed Patent Rights, if CMCC or Licensee, or one of Licensee’s Affiliates or Sublicensees are not engaged in research, development, clinical trials, product approval, manufacturing, or marketing of Licensed Products or Licensed Processes, or

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licensing of the Appendix B Licensed Patent Rights. Prior to invoking the right to terminate or render this Agreement non-exclusive, HARVARD shall give written notice to CMCC and to Licensee and a [**] opportunity for CMCC or Licensee to demonstrate that it, its affiliate, or sublicensee is using reasonable efforts to comply with its obligations under this Paragraph. If after the [**] period, CMCC or Licensee fail to demonstrate such compliance, HARVARD may notify CMCC and Licensee of its intent to either terminate or render this Agreement non-exclusive only as to the Appendix B Licensed Patent Rights.

4.10 Subject to the other provisions of this Article IV, CMCC’s sole remedy for Licensee’s failure to meet its obligations under this Article IV shall be termination of this Agreement.

ARTICLE V. ROYALTIES AND OTHER PAYMENTS

5.1 For the rights, privileges and exclusive licenses granted hereunder, Licensee shall pay to CMCC the following amounts in the manner hereinafter provided until the end of the term of the last to expire Licensed Patent Right, unless this Agreement shall be sooner terminated as hereinafter provided:

(a) A license issue fee of [**] Dollars ($[**]), which license issue fee shall be deemed earned on the date of the execution of this Agreement.

(b) A License Maintenance Fee of [**] Dollars ($[**]),[**] Dollars ($[**]) of which shall be payable within [**] days of the first anniversary of the date of execution of this License Agreement and, [**] Dollars ($[**]) of which shall be payable [**] thereafter.

(c) Licensee shall make the following milestone payments to CMCC upon the completion of the following events by Licensee (“Licensee Milestones”):

(i) Payment of [**] Dollars ($[**]) upon [**] by Licensee, but not more than one payment shall be required for each Licensed Product or Licensed Process in the event that more than one [**] is required for the same Licensed Product or Licensed Process.

(ii) Payment of [**] Dollars ($[**]) upon [**] with respect to a Licensed Product or a Licensed Process.

(iii) The Licensee Milestones will be creditable toward running royalties due CMCC for Net Sales by Licensee, up to, and no more than, [**]% of the Net Sales due in any given payment period.

(iv) Notwithstanding anything to the contrary herein, it is understood by the parties that if Licensee ceases to develop a Licensed Product or Licensed Process prior to the payment of all milestones specified in this paragraph 5.1 (such Licensed Product being referred to as a “Canceled Product”) and Licensee decides to develop a different Licensed Product or Licensed Process for the same labeled indication as the Canceled Product, then Licensee shall, with respect to

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such other Licensed Product or Licensed Process, be obligated to pay only that/those milestone payment(s) which were not made with respect to the Canceled Product; provided however, that if Licensee does at some time in the future develop such canceled product, then appropriate and prompt adjustment with respect to milestone payments shall be made hereunder.

(d) Running royalties on a country-by-country basis in an amount equal to [**] percent ([**]%) of Net Sales by Licensee or an Affiliate of Licensed Products or Licensed Processes derived from a new chemical entity disclosed by CMCC to Licensee and which, but for this Agreement would infringe a Valid Claim of the Licensed Patent Rights. Running royalties on a country-by-country basis in an amount equal to [**] percent ([**]%) of Net Sales by Licensee or an Affiliate of Licensed Products or Licensed Processes derived from a new chemical entity discovered by Licensee or its Affiliate and which, but for this Agreement would infringe a Valid Claim of the Licensed Patent Rights.

5.2 In the event Licensee or its Affiliate has granted sublicenses under this Agreement, Licensee or its Affiliate will pay CMCC [**] percent ([**]%) of Gross Compensation received by Licensee or its Affiliate from said Sublicensees on a country-by-country basis for Licensed Products or Licensed Processes derived from a new chemical entity disclosed by CMCC to Licensee or its Affiliate which, but for this Agreement would infringe a Valid Claim of the Licensed Patent Rights in the country, and [**] percent ([**]%) of Gross Compensation received by Licensee or its Affiliate from said Sublic