EXCLUSIVE LICENSE AGREEMENT

E XHIBIT 10.41

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

EXCLUSIVE LICENSE AGREEMENT

This “Agreement”, effective on the date of last signature (“Effective Date”), is between Kosan Biosciences Incorporated, having a principal place of business at 3832 Bay Center Place, Hayward, California 94545, hereafter referred to as “Company”, and the State of Oregon, acting by and through the State Board of Higher Education on Behalf of Oregon State University, an institution of higher education in the State of Oregon, located at Corvallis, Oregon, hereafter referred to as “University”.

WITNESSETH:

WHEREAS, University is the owner by assignment from Drs. James D. White and Rich G. Carter and Kurt F. Sundermann (collectively, the “Inventors”) of their entire right, title and interest in the invention entitled “Method for Synthesizing Epothilones and Epothilone Analogs” which is the subject of United States Patent Application Serial Number 10/352,340 filed January 27, 2003 (the “‘340 Application”) and certain other United States and foreign patent applications that have been or may be filed comprising Oregon State University Docket Number 99-01, hereafter referred to as the “Invention”, and

WHEREAS, University is committed to a policy that ideas and creative works produced at University should be used for the greatest possible public benefit; and

WHEREAS, University accordingly believes that every reasonable incentive should be provided for the prompt introduction of such ideas into public use, all in a manner consistent with public interest; and

WHEREAS, Company is desirous of obtaining a license to practice the above-identified Invention, and to manufacture, use and sell in the commercial marketplace the products made in accordance therewith; and

WHEREAS, University is desirous of granting such license to Company in accordance with the terms of this Agreement; and

WHEREAS, since this Invention was made with U. S. Government support under research grant number GM 50574 awarded by the National Institutes of Health, the U.S. Government has certain rights in this Invention.

NOW, THEREFORE, in consideration of the foregoing premises, the parties agree as follows:

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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Article I

Definitions

A. “Affiliate” shall mean any entity that is in control of Company, is controlled by Company, or is under common control with Company. For purposes of this definition, “control” shall mean direct or indirect ownership or control of fifty percent (50%) or more of the equity or voting interests of the controlled entity or such lesser maximum percentage permitted in those jurisdictions where majority ownership by foreign entities is prohibited.

B. “Adjusted Gross Sales” shall mean the amount of gross sales of all Licensed Products invoiced by Roche or Roche Affiliates to third parties less deductions of returns (including allowances actually given for spoiled, damaged, out-dated, rejected, or returned Licensed Product previously sold; Licensed Product withdrawals and Licensed Product recalls) or return reserves , rebates (price reductions, rebates to social and welfare systems, chargebacks or chargeback reserves, government-mandated rebates and similar types of rebates, for example, P.P.R.S., and Medicaid), volume (quantity) discounts, and taxes (value added or sales taxes, government-mandated exceptional taxes and other taxes directly linked to the gross sales amount), to the extent included in the amounts invoiced, provided that no income taxes shall be deducted from gross sales of Licensed Product to calculate Adjusted Gross Sales. The computation of Adjusted Gross Sales shall not include amounts received by Roche or Roche Affiliates for the sale of Licensed Product to Roche or Roche Affiliates. If Roche or any Roche Affiliates receives consideration other than cash for sales of Licensed Products to third parties, the fair market value of such consideration shall be included in Adjusted Gross Sales as computed on a product-by-product basis. Quarterly, actual returns and actual chargebacks will be reconciled against the return reserves and chargeback reserves, respectively, and Adjusted Gross Sales will be credited or debited accordingly.

C. “Confidential Information” shall mean information that (i) is marked or identified, orally or in writing, as confidential or proprietary information of the disclosing party prior to, upon or promptly after receipt by the receiving party; or (ii) the receiving party should recognize from the circumstances surrounding the disclosure to be confidential.

D. “Field of Use” shall mean all fields of use.

E. “IND” shall mean Investigational New Drug Application filed with the United States Food and Drug Administration.

F. “Know-How” shall mean unpatented discoveries, inventions, and improvements, proprietary information, trade secrets, drawings, plans, designs, or specifications provided by University pertaining to Licensed Products.

G. “Licensed Processes” shall mean the processes claimed in or covered by a Valid Claim in the Patent Rights.

H. “Licensed Products” shall mean products claimed in or whose manufacture, use or sale is covered by a Valid Claim in the Patent Rights or products made by means of Licensed Processes. For purposes of payment of Milestone Payments under Article VI of this Agreement, two or more products will be considered the same Licensed Product if each contains or consists of the same active pharmaceutical ingredient (including different salts, crystalline forms, solvates, and hydrates thereof), even if such products have different formulations or are used for different indications.

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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I. “NDA” shall mean a New Drug Application filed with the United States Food and Drug Administration.

J. “Net Sales” shall mean the amount billed or invoiced on sales of Licensed Products by Company or its sublicensees of Patent Rights or distributors, less

1) Customary trade, quantity or cash discounts and commissions actually allowed and taken;

2) Amounts repaid or credited by reason of rejection, return or retroactive price reductions;

3) To the extent included in the amount stated on purchase orders, invoices or other documents of sales, taxes levied on and/or other governmental charges made as to production, sale, transportation, delivery or use, and paid by or on behalf of Company;

4) To the extent included in the amount stated on purchase orders, invoices or other documents of sales, freight, insurance and other transportation charges; and

5) any such billed or invoiced amounts not collected by Company, its sublicensees or distributors, which deduction may be taken in the calendar quarter in which such sales are no longer recorded as a receivable, all in accordance with United States GAAP.

Notwithstanding the foregoing, with respect to sales of Licensed Product by Roche or Roche Affiliates, “Net Sales” shall mean the amount of Adjusted Gross Sales less a lump sum deduction of [ * ] of Adjusted Gross Sales, such deduction being taken in lieu of those sales-related deductions which are not specifically provided for in the definition of Adjusted Gross Sales (e.g., outward freights, postage charges, transportation insurance, packaging materials for dispatch of goods, custom duties, bad debts, discounts granted later than at the time of invoicing, cash discounts and other direct sales expenses).

Net Sales shall be determined based on the first sale of Products to an independent, unrelated third party that is not an Affiliate, sublicensee of Patent Rights or distributor.

K. “Patent Rights” shall mean the U.S. Patent Application Serial Number 10/352,340 filed January 27, 2003, and any other U.S. application owned by OSU that has Valid Claims covering the manufacture, use, or sale of [ * ] , all divisions, continuations and continuations-in-part thereof and foreign patent applications corresponding to these applications, all U.S. and foreign patents issuing from such applications, divisions, continuations and continuations-in-part, and any reissues, reexaminations and extensions of all such patents.

L. “Phase I Clinical Trial” shall mean the first phase of human clinical trials of a Licensed Product to gain evidence of the safety and tolerability of such Licensed Product and information regarding pharmacokinetics and potentially pharmacological activity for such Licensed Product, which human clinical trials are completed prior to the initiation of Phase II Clinical Trials, as described in 21 C.F.R. §312.21(a), as may be amended.

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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M. “Phase II Clinical Trial” shall mean, with respect to the United States, the second phase of human clinical trials of a Licensed Product to gain evidence of the efficacy in one or more indications and expanded evidence of the safety of such Licensed Product, as well as an indication of the dosage regimen required, as described in 21 C.F.R. §312.21(b), as may be amended.

N. “Phase III Clinical Trial” shall mean, with respect to the United States, the third phase of human clinical trials of a Licensed Product which are large-scale trials to gain evidence of efficacy and safety in a number of human subjects sufficient to support registration for such Licensed Product with the United States Food and Drug Administration, as described in 21 C.F.R. §312.21(c), as may be amended.

O. “Roche” shall mean, collectively, Hoffmann-La Roche Inc. and F. Hoffmann-La Roche Ltd.

P. “Roche Affiliate” shall mean any corporation or non-corporate business entity which controls, is controlled by, or is under common control with Roche. A corporation or non-corporate business entity shall be regarded as in control of another corporation if it owns or directly or indirectly controls at least fifty percent (50%) of the voting stock of the other corporation (other than Genentech, Inc.) or such lesser maximum percentage permitted in those jurisdictions where majority ownership by foreign entities is prohibited, or (a) in the absence of the ownership of at least fifty percent (50%) of the voting stock of a corporation, or (b) in the case of a non-corporate business entity, if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or non-corporate business entity, as applicable, whether through the ownership of control of voting securities, by contract or otherwise.

Q. “Roche Agreement” shall mean that certain Collaborative Research, Development and Commercialization Agreement between the Company and Roche dated September 19, 2002, as amended.

R. “ [ * ] Species Claim” means a claim in a patent or patent application that specifically identifies [ * ] by name or by reference to a specific structural formula. The term does not include claims that generically encompass [ * ] but do not specifically identify [ * ] by name or by reference to a specific structural formula.

S. “Valid Claim” shall mean a claim of an issued patent within the Patent Rights that has not lapsed, expired, been canceled, or become abandoned, and has not been held invalid by a court or other appropriate body of competent jurisdiction, unappealable or unappealed within the time allowed for appeal and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise. The term “Valid Claim” shall also include the [ * ] Species Claim in a pending patent application within the Patent Rights. For the purposes of this Agreement, the genus claims of the ‘340 application and any patent issuing therefrom are Valid Claims covering [ * ] regardless of (a) the cancellation of [ * ] from the ‘340 application; (b) whether [ * ] is prosecuted to allowance in a continuation application; or (c) any subsequent interpretation of the scope of such genus claims by any body of competent jurisdiction.

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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Article II

Grant

A. Subject to the terms and conditions of this Agreement, University hereby grants to Company a worldwide, exclusive license under the Patent Rights to make and have made, to use and have used, and to offer to sell, sell or import, and have offered to sell, sold or imported, the Licensed Products in the Field of Use, and to practice and have practiced the Licensed Processes and Know-How.

University also hereby grants to Company the right to enter into sublicensing agreements under the Patent Rights. Company agrees that any sublicenses granted other than to Roche pursuant to the Roche Agreement shall provide that the obligations imposed on Company under Article II, Article III, Article VIII, Article X, Section XII.J, Sections XIII.A, B and E, Article XIV, Article XV and Section XVII.F and G shall apply to the sublicensee as if it were a party to this Agreement. Company agrees to incorporate, either directly or by reference, provisions substantively similar to those listed above into all sublicense agreements entered into after the Effective Date. All sublicenses granted by Company other than to Roche pursuant to the Roche Agreement shall provide for termination of the sublicense upon termination of this Agreement, subject to the terms of Section XII.J below. Company agrees to forward to University a copy of each sublicense agreement Company enters into within thirty (30) days of its execution, except that financial terms of such sublicense agreement may be redacted. To the extent permitted by the Oregon Public Records law, University will maintain each sublicense agreement in confidence.

B. Notwithstanding anything to the contrary in this Article II, Company acknowledges and agrees that, because the Invention was made in the performance of work funded by the U.S. Government, Company’s license and Company’s rights under this Agreement are subject to rights accorded to the U.S. Government and to any requirements regarding the location of manufacture of Licensed Products provided under applicable federal statutes and regulations, including 35 USC §§202-206, and 37 CFR Part 401 (a copy of which regulation is attached hereto as Appendix A and by this reference incorporated herein). University has elected to retain title to the Invention pursuant to 35 USC §202.

C. Company, its distributors, Affiliates and sublicensees, and not University, shall have the obligation to ensure that any Licensed Products it makes, uses or sells are not defective and that any Licensed Product satisfies all applicable federal, state and local statutes, and rules and regulations. Company will comply, and will use commercially reasonable efforts to ensure that its distributors, Affiliates and sublicensees will comply, with all such applicable federal, state and local statutes, rules and regulations in the performance of Company’s obligations under this Agreement.

D. The University retains for itself and for other universities within the State of Oregon University System an irrevocable, nonexclusive and nontransferable and nonsublicensable right to practice for its own educational and non-commercial research purposes (not in humans) the Patent Rights, Know How and Licensed Processes. University reserves the right to supply the Patent Rights, Know How and Licensed Processes to academic research scientists of University and of other universities within the State of Oregon University System, with such supply subject to limitation of use by such scientists for internal non-commercial research purposes (not in humans) and prohibitions on further distribution.

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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Article III

Diligence

A. Company shall use reasonable efforts, consistent with sound and reasonable business practices and judgment, to effect commercialization of Licensed Products as soon as practicable and to maximize commercial sales. “Reasonable efforts” under this clause shall be deemed to have been satisfied if the goals and requirements set forth in Appendix B are met. To the extent permitted by the Oregon Public Records Laws, the development and commercialization goals attached as Appendix B, and any amendments thereto, shall constitute Confidential Information of Company.

Article IV

License Fee

A. Company shall pay University a nonrefundable license fee in the sum of [ * ] payable upon execution of this Agreement.

Article V

Royalties; Minimum Annual Payment

A. In addition to license fees payable under Article IV, Company agrees to pay University a royalty of [ * ] of Net Sales of Licensed Products sold in countries where there is a Valid Claim by Company, its distributors, Affiliates, and its sublicensees of Licensed Patents.

B. In the event that the aggregate payments under Articles IV, V and VI for any calendar year during the term of this Agreement are less than [ * ] , University shall have the right to terminate this license upon written notice to Company in the event that Company does not pay to University the difference between [ * ] and the aggregate amounts paid under Articles IV, V and VI for such calendar year within thirty (30) days after written notice of non-payment sent by University to Company.

C. Licensed Products shall be deemed to have been sold when invoiced, or if not invoiced, then when delivered, shipped or paid for, whichever occurs first. Royalty payments shall be due to University when Licensed Products are sold and shall be payable pursuant to the terms of Section VII.C.

D. In the event Company or one or more of its Affiliates or sublicensees of Patent Rights is required to make payments to a third party for any patent or other intellectual property rights or technology to make, have made, use, offer for sale, sell, distribute, have distributed or import

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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Licensed Products or to practice or have practiced Licensed Processes, then the royalties otherwise payable under this Article V shall be reduced by one-half of the amounts paid to such third party; provided, however, that in no event shall the royalty due University in any year fall below [ * ] of Net Sales of Licensed Products for such year. Company will provide University with written proof of payments to any third party that results in reduced royalties to University.

Article VI

Milestones

A. As further consideration for the licenses rights granted to Company under Article II, Company shall make the following initiation milestone payments (“Milestone Payments”) to University in the below specified amounts, for each Licensed Product to be paid at the commencement of each phase, with payments due (30) calendar days after achieving such milestone. A milestone does not apply if achieved prior to the Effective Date of this Agreement.

Article VII

Reports and Accounting

A. Company shall provide written annual reports within [ * ] days after the end of each calendar year beginning with the calendar year ending December 31, 2005, which shall include, but not be limited to: reports of progress on research and development, regulatory approvals, manufacturing, sublicensing, marketing, and sales during the prior year.

B. Company shall provide written quarterly royalty reports within [ * ] days after each calendar quarter, which shall include the number and aggregate amount of sales for each country in which sales occurred during the preceding three (3) months, except that with respect to sales of Licensed Product by Roche or Roche Affiliates, in lieu of the foregoing requirement, Company shall be required to send University the applicable portions of the royalty report provided by Roche pursuant to the Roche Agreement within ten (10) days after Company’s receipt thereof. Quarterly sales shall also be aggregated by selling entity (i.e., Company, Affiliates, and sublicensees). Company’s quarterly royalty report shall also include its marketing plans for the coming quarter. If progress differs from that anticipated in the plan provided under Appendix B, Company shall explain the reasons for the difference and provide a modified plan for University’s review. Company shall also provide any reasonable additional data University reasonably requires to evaluate Company’s performance.

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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C. In order to minimize Company time spent on royalty reports, a brief one-page royalty report form is provided in Appendix C that will satisfy the University’s reporting requirements. With each royalty report, Company shall pay the amount of royalty due. Such report shall be certified as correct by an officer of Company and shall include the aggregate deductions from royalties as specified herein. If no royalties are due to University for any reporting period, the written report shall so state. With respect to sales of Licensed Product by Roche or Roche Affiliates, Company shall, to the extent applicable to University or this Agreement, provide University with a copy of the royalty report provided to Company by Roche.

D. Any payments to University shall be made payable to Oregon State University and be tendered to the Director of Technology Transfer, Oregon State University for distribution in keeping with State Board of Higher Education policies.

E. All payments due hereunder shall be payable in United States dollars. Conversion of foreign currency to US 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, except that with respect to sales of Licensed Product by Roche or Roche Affiliates, conversion of foreign currency to US dollars shall be made using the Roche central Swiss Francs Sales Statistics for the countries concerned. The amount of such sales by Roche or Roche Affiliates in currencies other than US dollars may be (i) first calculated in Swiss Francs and (ii) then converted into US dollars using the year-to-date average rate of exchange for such currencies as retrieved from Reuters’ system for the applicable period, in accordance with Roche’s then-current standard practices for its financial reporting purposes. All payments shall be without deduction of exchange, collection or other charges associated with currency conversion.

F. Late payments shall be subject to an interest charge of [ * ] per month, or the maximum rate allowed by law, whichever is less, payable from the date the royalty or other payment is due.

Article VIII

Record Keeping

Company shall keep, and shall require its distributors, Affiliates and sublicensees to keep accurate and correct records of Licensed Products made, used or sold under this Agreement, appropriate to determine the amount of royalties due hereunder to University. Such records shall be retained for at least [ * ] years following a given reporting period. They shall be available during normal business hours for inspection no more than once in any calendar year at the expense of University by University’s Internal Audit Department, or by a Certified Public Accountant selected by University and approved by Company for the sole purpose of verifying reports and payments hereunder. Such accountant shall not disclose to University any information other than information indicating the accuracy of reports and payments made under this Agreement. Notwithstanding the foregoing provisions in this Article VIII, University shall not have the right to inspect the records of Roche or Roche Affiliates, but shall have the right to require Company to exercise its rights under the Roche Agreement to (a) engage Roche’s independent certified accountants to perform, on behalf of Kosan, an audit in accordance with international accounting

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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standards of Roche’s books and records and (b) engage Company’s independent public accountant or audit specialty firm to interview knowledgeable employees of Roche and to examine and copy pertinent books and records, and report to University the results of any such audits to the extent applicable to University. In the event that any inspection under this Article VIII shows an under reporting and under payment by Company to University in excess of [ * ] for any [ * ] period, then Company shall pay the cost of such examination as well as any additional sum that would have been payable to University had the Company reported correctly, plus interest from the date such payments were due at the rate set forth in Section VII.F or, in the case of an under reporting and under payment with respect to sales by Roche and Roche Affiliates, interest from the date such payments were due at the LIBOR rate.

Article IX

Domestic and Foreign Patent Filing and Maintenance

A. Upon execution of this Agreement, Company shall reimburse University for all out-of-pocket expenses University has previously incurred for the preparation, filing, prosecution and maintenance of Patent Rights, which expenses are [ * ] as of the billing period through [ * ] . Subject to Section IX.C, Company shall reimburse University for all such future expenses University incurs after the billing period through [ * ] within thirty (30) days of Company’s receipt of University’s invoices for such future expenses. University shall take responsibility for the preparation, filing, prosecution and maintenance of any and all patent applications and patents included in Patent Rights, provided, however, that University shall first consult with Company as to the preparation, filing, prosecution and maintenance of such patent applications and patents and shall furnish to Company copies of documents relevant to any such preparation, filing, prosecution or maintenance. In the event that University elects not to file, prosecute or maintain any patent applications or patents within Patent Rights, Company shall have the right to do so at its own expense, and University shall cooperate with Company and execute any documents reasonably required by Company in order to perform such activities.

B. University and Company shall cooperate fully in the preparation, filing, prosecution and maintenance of Patent Rights and of all patents and patent applications licensed to Company hereunder, executing all papers and instruments or requiring members of University to execute such papers and instruments so as to enable University to apply for, to prosecute and to maintain patent applications and patents in University’s name in any country. Each party shall provide to the other prompt notice as to all matters which come to its attention and which may affect the preparation, filing, prosecution or maintenance of any such patent applications or patents.

C. Subject to the provisions of Section IX.E, if Company elects to no longer pay the patent expenses of a patent application or patent included within Patent Rights in a particular country, Company shall notify University not less than [ * ] days prior to the effective date of Company’s election, and shall thereby surrender its rights under such patent or patent application in such country, and Company’s rights, privileges and licenses with respect solely to the country for which Company has not or will not pay patent expenses under this Agreement shall terminate on the effective date of the notice. University acknowledges that Company’s election to no longer pay patent expenses pursuant to this Section IX.C shall not be a breach of this Agreement.

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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D. University agrees to cancel [ * ] from the ‘340 Application and immediately file a continuation application which includes [ * ] . The parties shall collaborate in order to draft an Information Disclosure Statement for submission by University to the United States Patent and Trademark Office in connection with the continuation application, subject to Company’s review and approval, which shall not be unreasonably withheld. Company acknowledges that University cannot compel a submission by a third party.

E. If Company, Roche, any Roche Affiliate or any licensor of Company as of the Effective Date with respect to [ * ] is awarded a United States patent having [ * ] Species Claim(s), and Company notifies University in writing that Company desires University to cancel its [ * ] Species Claim(s), then University may elect not to cancel such claims and continue to prosecute, seek or maintain such claims, but at its own expense. In such event, notwithstanding Section IX.C, Company’s license rights and obligations with respect to such claims (other than the obligation to pay University’s expenses in prosecuting, seeking or maintaining such claims) shall remain in effect, as well as Company’s rights under Sections IX.A and IX.B with respect to the preparation, filing, prosecution and maintenance of such claims.

In the event an interference or other proceeding involving a determination of priority of invention is declared between a University application or patent and another application or patent having [ * ] Species Claim(s), then University shall be obligated to use best efforts to settle such interference with such other party as promptly as possible. Any such settlement shall not be entered into without the written permission of Company. Company shall be responsible for all of University’s costs attendant to any interference proceeding, except that if Company notifies University in writing that Company is not interested in having the interference proceedings continued, University may elect to continue with such proceeding, but at its own expense. In such event, notwithstanding Section IX.C, Company’s license rights and obligations (other than the obligation to pay University’s expenses in continuing such proceeding) shall remain in effect.

Article X

Infringement

A. Company and University agree to notify each other promptly of each infringement or possible infringement of the licensed Patent Rights or subsequently issued patent of which either party becomes aware. With respect to such Patent Rights or subsequently issued patent under which Company is exclusively licensed pursuant to this Agreement, Company or its sublicensee shall have the right to prosecute in its own name and at its own expense, any infringement of such Patent Rights or subsequently issued patent. Before Company or its sublicensee commences an action with respect to any such infringement, Company shall contact University to obtain University’s view concerning any potential effects such an action may bring and shall report such views to the appropriate sublicensees. University shall have a continuing right, but not an obligation, to intervene in any suit for patent infringement involving the Patent Rights. Neither Company nor its sublicensee shall take any action to compel University to initiate a suit or to join any suit for patent infringement except if part of an action alleging breach of University’s obligation contained in the

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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following sentence. Company or its sublicensee may request that University join in such suit if necessary to avoid dismissal of the suit, and University shall join in such suit if necessary to avoid dismissal.

Neither Company (nor its sublicensee) nor any attorney engaged by Company (or its sublicensee) shall prosecute the infringement in the name of the University, the State of Oregon, or any agency of the State of Oregon, nor purport to act as legal representative of the University, the State of Oregon or any of its agencies, without the prior written consent of the Oregon Attorney General, which shall not be unreasonably withheld . The University may, at its election, assume its own defense and settlement in the event the University determines that Company or its sublicensee is prohibited from representing the University or is not adequately protecting its interests.

B. If Company or its sublicensee elects to commence an action as described above and University is a legal party to such action, University shall have the right to assign to Company all of University’s rights, title and interest in licensed Patent Rights (subject to all University’s obligations to the government and others having rights in such licensed Patent Rights). In that event, such assignment shall be irrevocable and such action by Company on that patent shall thereafter be brought or continued in the name of Company. Notwithstanding any such assignment to Company by University, University shall cooperate fully with Company in connection with any such action. Regardless of any licensed Patent Rights assigned to Company by this clause, Company shall be required to continue to meet its obligations to University under this Agreement as if licensed Patent Rights were still licensed in the name of University.

C. If Company or its sublicensee elects to commence an action described above and University is a legal party to such action, University may, but shall not be obligated to, join the action as a co-plaintiff. Upon so doing, University shall jointly control the action with Company or its sublicensee.

D. Company shall reimburse University for any legal expenses and costs, including attorney fees (“litigation costs”), it reasonably incurs as part of an action brought by Company or its sublicensee, irrespective of whether University shall become a party to such action. Company shall reimburse University for litigation costs within thirty (30) days of receipt of University’s invoices.

E. If Company or its sublicensee elects to commence an action as described above, Company may offset up to [ * ] of the litigation costs of such action against up to [ * ] of each payment of royalty fees described in Sections V.A due to University. In the event that such [ * ] of such litigation costs exceed the amount of royalties withheld by Company for any calendar year, Company may, to that extent, reduce the royalties due to University from Company in succeeding calendar years, but never by more than [ * ] of the royalty due in any one calendar year.

F. No settlement, consent judgment or voluntary final disposition of the suit, which imposes any obligations or restrictions on University or grants any rights to the Patent Rights may be entered into without the consent of University, which consent shall not be unreasonably withheld.

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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G. Recoveries or reimbursements from such action shall first be applied to reimburse Company and University for their respective litigation costs. For purposes of this Section X.G, Company’s litigation costs shall consist of litigation costs incurred by Company, plus litigation costs incurred by University and reimbursed by Company pursuant to Section X.D, less the amount of litigation costs recovered by Company by withholding royalties pursuant to Section X.E. For purposes of this Section X.G, University’s litigation costs shall consist of any litigation costs incurred by University but not reimbursed by Company pursuant to Section X.D. To the extent recoveries or reimbursements from such action are less than the parties’ aggregate litigation costs, such recoveries and reimbursements shall be apportioned pro rata based on the percentage that each party’s litigation costs bear to the total litigation costs of both parties, and then to reimburse University for royalties withheld pursuant to Section X.E. Any remaining recoveries or reimbursements shall be shared [ * ] to Company and [ * ] to University.

H. In the event that Company and its sublicensee, if any, elect not to exercise their right to prosecute an infringement of licensed Patent Rights pursuant to the above clauses, University may do so at its own expense, controlling such action and retaining all recoveries therefrom.

I. If a declaratory judgment action alleging invalidity of any licensed Patent Rights shall be brought against Company or University, then University, at its sole option, shall have the right to intervene and take over the sole defense of the action at its own expense but shall not settle or otherwise consent to a judgment without the written consent of the Company, which shall not be unreasonably withheld.

Article XI

Confidential Information

A. The receiving party shall hold the Confidential Information of the disclosing party in confidence and will use such Confidential Information only for the purposes of fulfilling its obligations under this Agreement. Without limiting the foregoing, the University agrees not to disclose any Confidential Information of Company, or anyone claiming through Company. Nothing in this Agreement will be interpreted to confer upon the receiving party any implied or express license to use the Confidential Information of the disclosing party for any purpose other than as expressly provided elsewhere in this Agreement. The receiving party shall not use the Confidential Information of the disclosing party for any purpose other than as expressly provided elsewhere in this Agreement, and will not disclose, provide, disseminate or otherwise make available any Confidential Information of the disclosing party or any part thereof in any form whatsoever to any third party, except as provided in Section B below.

B. The obligations in Section XI.A above shall not apply to the extent any (i) information that is now or later becomes publicly available through no fault of the receiving party; (ii) information that is obtained by the receiving party from a third party (other than in connection with this Agreement) without any obligation of secrecy or confidentiality; (iii) information that is independently developed by the receiving party (e.g., without reference to any Confidential

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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Information); (iv) disclosure required by applicable law, provided that the receiving party shall use reasonable efforts to give advance notice to and cooperate with the disclosing party in connection with any such disclosure; (v) disclosure by the Company required by underwriters, bankers, investors or other entities prior to providing the Company with debt or equity financing, provided that such disclosures are made under confidential terms or are made under a public offering; (vi) disclosure by Company for purposes of regulatory compliance, regulatory filings or correspondence with regulatory authorities related to the Licensed Product; and (vii) disclosure with the written consent of the disclosing party.

C. The receiving party acknowledges that the covenants contained in Section XI.A are reasonable and necessary to protect the legitimate interests of the disclosing party, and that the disclosing party would not have entered into this Agreement in the absence of such covenants, that any breach or threatened breach of such covenants will result in irreparable injury to the disclosing party and that the remedy at law for such breach or threatened breach would be inadequate. Accordingly, the receiving party agrees that the disclosing party shall, in addition to any other rights or remedies which it may have, be entitled to seek such injunctive relief without the posting of any bond or security as may be available from any court of competent jurisdiction to restrain the receiving party from any breach or threatened breach of such covenants.

D. Notwithstanding the above Sections XI.A through XI.C, Company hereby acknowledges that any disclosures Company makes to University under this Agreement are subject to the Oregon Public Records Laws, including but not limited to ORS 192.410-192.505, and the provisions for the Custody and Maintenance of Public Records, ORS 192.005-192.170. University’s obligation to disclose documents or any portion of a document submitted by Company to University may depend upon official or judicial determinations made pursuant to the Oregon Public Records Law. If University receives from a third party any request under the Oregon Public Records Law, the University shall promptly notify Company within a reasonable period of time of the request. If any requests for disclosure of such information are made to University, disclosure shall only be made consistent with and to the extent allowable under law. Neither the State of Oregon nor any of its agencies are or shall be obligated to assist in Company’s defense; provided, however, that Company hereby asserts that any Confidential Information of Company under this Agreement or concerning Licensed Products, including without limitation the financial terms in this Agreement, represents trade secrets of Company, as defined in ORS 192.501(2) or 646.461(4), or is otherwise exempt from disclosure under the Oregon Public Records Law. Company reserves the right to assert at the time that a public records request is received by University that other terms of this Agreement constitute Confidential Information and therefore represent trade secrets of Company, as defined in ORS 192.501(2) or 646.461(4), or is otherwise exempt from disclosure under the Oregon Public Records Law. Company further agrees that any disclosure made by University pursuant to an order issued pursuant to the Oregon Public Records Law by the Oregon Department of Justice shall not be a breach of this Agreement.

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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Article XII

Term and Termination

A. The term of this Agreement shall begin on the Effective Date and shall continue for a period of [ * ] years, or the life of the last to issue patent in licensed Patent Rights, whichever period is greater.

B. In the event an order for relief is entered against Company under the Federal Bankruptcy Code, or an order appointing a receiver for substantially all of Company’s assets is entered by a court of competent jurisdiction, or Company makes an assignment for the benefit of creditors, or a levy of execution is made upon substantially all of the assets of Company and such levy is not quashed or dismissed within thirty (30) days, this Agreement and the rights, privileges and licenses granted hereunder shall automatically terminate effective the date of such order or assignment or in the case of such levy, the expiration of such thirty (30) day period, provided, however, that such termination shall not impair or prejudice any other right or remedy that University might have under this Agreement.

C. Upon any material breach or default of this Agreement by Company, University shall have the right to terminate this Agreement and the rights, privileges and licenses granted hereunder by ninety (90) days’ notice to Company. Such termination shall become effective unless Company shall have cured any such breach or default prior to the expiration of the ninety (90) day notice period.

D. Company shall have the right to terminate this Agreement at any time on sixty (60) days’ notice to University and upon payment of all amounts due and payable to University through that date.

E. If at any time prior to the first commercial sale of Licensed Product under this Agreement Company shall cease to pursue commercial development of Licensed Product as contemplated in Article III herein, Company shall be obligated to so notify University and this Agreement shall automatically terminate without obligation on the part of University to refund any of the fees which may have been paid by Company prior to such termination.

F. If Company and its distributors, Affiliates and sublicensees fail to sell or otherwise dispose of for value Licensed Products during any consecutive [ * ] month period, beginning with the [ * ] year following the year in which the first commercial sale of a Licensed Product occurs, University shall have the right to terminate this Agreement by giving Company written notice of termination to take effect thirty (30) days after the notification is given pursuant to the notice provisions in Article XVI. University may exercise its termination rights under this section for failure by Company and its distributors, Affiliates and sublicensees to sell for value Licensed Products notwithstanding payment by Company of minimum royalties due under Section V.C above.

G. Within [ * ] after termination of this Agreement under this Article XII other than expiration under Section XII.A, but subject to the provisions of Section XII.H, Company shall certify to University in writing that Licensed Products in its possession for sale in a country where there is a Valid Claim in an issued patent with respect to such Licensed Products have been destroyed.

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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H Termination of this Agreement for any reason shall not be construed to release either party from any obligation that matured prior to the effective date of such termination. Company and any sublicensee thereof may, however, after the effective date of such termination, have [ * ] to sell all Licensed Products completed and in inventory or representing work-in-process.

I. Within thirty (30) days of the termination of this Agreement other than expiration under Section XII.A, Company shall duly account to University for the sale of Licensed Products and inventory in the Company’s possession for sale in a country where there is a Valid Claim in an issued patent with respect to such Licensed Products as of the date of termination.

J. Upon termination of this Agreement for any reason, any sublicensee of the Patent Rights not then in default under its agreement with Company shall be deemed to have a license from University on the same terms set forth in this Agreement.

K. The parties have agreed that University will cancel its [ * ] Species Claim from the ‘340 Application, which was allowed by the United States Patent and Trademark Office pursuant to the Notice of Allowance dated [ * ], and to re-present it for examination in a continuation application. The parties agree that University’s rights to receive royalty and milestone payments under this Agreement should not be prejudiced by such cancellation and the outcome of the prosecution of the continuation application. Accordingly, in the event of termination of this Agreement by Company prior to expiration pursuant to Section XII.D, Company’s royalty and milestone payment obligations under Articles V and VI with respect to [ * ] shall survive until the [ * ] of the [ * ] in the [ * ] .

Article XIII

Indemnification, Insurance, Warranties and Exclusion of Warranties

A. Company shall, at all times during the term of this Agreement, indemnify, defend (with counsel approved by the Oregon Attorney General, which approval shall not be unreasonably withheld) and hold University, its members, agents, officers, employees and affiliates harmless against all liability, damage (including damage to property or injury or death to persons), loss or expenses (including reasonable attorney fees and expenses of litigation) arising out of any third party claims, suits, actions or judgments based on any legal theory of product liability (including, but not limited to, tort, warranty or strict liability theories) relating to or arising from the use by Company or its distributors, Affiliates and sublicensees of the Patent Rights, or resulting from the development, marketing, sale, use or distribution of Licensed Products or Licensed Processes by Company or its distributors, Affiliates and sublicensees, or arising from any obligations of Company hereunder, except for any claims or expenses arising out of the negligence or willful actions of University or its members, agents officers, or employees.

B. Company shall maintain in effect comprehensive general liability insurance in the combined amount of [ * ] per occurrence for bodily injury and property damages, including reasonable

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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attorney fees, arising out of any alleged defects in Licensed Product and Licensed Processes or in the use thereof. Notice shall be given to University at least thirty (30) days prior to cancellation or material change in the form of such policy(ies). Any sublicense granted by Company pursuant to this Agreement shall provide insurance as provided in this Article XIII. Company shall maintain comprehensive general liability insurance coverage for a minimum period of [ * ] beyond the last date a Licensed Product is sold or distributed by Company or by any distributor, Affiliate or sublicensee of Company.

C. The University represents and warrants to Company that: (a) this Agreement, when executed and delivered by the University, will be the legal, valid and binding obligation of the University, enforceable against the University in accordance with its terms; (b) other than the Federal Government interest, the University is the owner of all right, title and interest in and to the Invention and the Patent Rights, and has not granted rights in or to the Invention or the Patent Rights to any person other than Company; (c) as of the Effective Date of this Agreement, the University has not received any notice that the Invention infringes the proprietary rights of any third party; (d) to University’s knowledge and belief, the research which led to the filing of the Patent Rights was conducted solely by employees of the University acting within the scope of their employment; (e) to University’s knowledge and belief, the inventions claimed in the Patent Rights have not been publicly used, offered for sale, or disclosed in a printed publication by employees of the University prior to the filing of the U.S. provisional application for the Patent Rights.

D. Company represents and warrants to the University as follows:

(a) Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite corporate power and authority to execute, deliver and perform this Agreement;

(b) this Agreement, when executed and delivered by Company, will be the legal, valid and binding obligation of Company, enforceable against Company in accordance with its terms; and

(c) the execution, delivery and performance of this Agreement by Company does not conflict with, or constitute a breach or default under, (i) the charter documents of Company, (ii) any law, order, judgment or governmental rule or regulation applicable to Company, or (iii) any provision of any agreement, contract, commitment or instrument to which Company is a party; and the execution, delivery and performance of this Agreement by Company does not require the consent, approval or authorization of, or notice, declaration, filing or registration with, any governmental or regulatory authority.

E. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, UNIVERSITY MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH REGARD TO ANY LICENSED PATENT RIGHTS, LICENSED PRODUCTS OR LICENSED PROCESSES HEREUNDER OR ANY PARTS THEREOF. UNIVERSITY DOES NOT WARRANT THE VALIDITY OF THE LICENSED PATENT RIGHTS, AND MAKES NO REPRESENTATIONS WITH REGARD TO THE SCOPE OF THE PATENT RIGHTS OR THAT THE PATENT RIGHTS MAY BE USED

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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WITHOUT INFRINGING OTHER PATENTS OR INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. IN NO EVENT SHALL UNIVERSITY OR ITS OFFICERS, MEMBERS, AGENTS OR EMPLOYEES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER UNIVERSITY SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT KNOW OF THE POSSIBILITY. UNIVERSITY EXPLICITLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE OF THE PATENT RIGHTS, LICENSED PRODUCTS, OR LICENSED PROCESSES CONTEMPLATED BY THIS AGREEMENT .

F. EXCEPT FOR COMPANY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION XIII.A., IN NO EVENT SHALL EITHER PARTY OR ITS DIRECTORS, OFFICERS, MEMBERS, AGENTS OR EMPLOYEES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS (OTHER THAN PAYMENTS DUE TO UNIVERSITY UNDER ARTICLES IV, V AND VI), RESULTING FROM THE BREACH OF SUCH PARTY’S OBLIGATIONS UNDER THIS AGREEMENT, REGARDLESS OF WHETHER SUCH PARTY IS ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT KNOWS OF THE POSSIBILITY.

Article XIV

University’s Name

Company agrees not to use the name of University or any of its employees, in any advertisement or sales promotion relating to any Licensed Product or Licensed Processes without prior written approval by University.

Article XV

Transfer of Rights and Obligations

A. This Agreement shall not be assignable by either party hereto without the prior written consent of the other party, except to the successor or assignee of all or substantially all of the assignor’s business to which this Agreement relates. When duly assigned in accordance therewith, this Agreement shall be binding on and inure to the benefit of the assignee.

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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Article XVI

Notices

A. All notices, demands, payments, reports or other writings provided for in this Agreement shall be deemed to have been fully given, made or sent when made in writing and delivered by hand or deposited in the U.S. mail, first class, postage paid, or nationally recognized overnight courier and addressed as follows (unless another address has been provided by the party affected):