LICENSE AGREEMENT

License Agreement

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OREXIGEN THERAPEUTICS, INC. | DUKE UNIVERSITY

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Title: LICENSE AGREEMENT
Governing Law: California Date: 12/19/2006

LICENSE AGREEMENT

, Parties: orexigen therapeutics inc. , duke university

EXHIBIT 10.10

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

LICENSE AGREEMENT

THIS AGREEMENT made and entered into this 31st day of March, 2004 (“EFFECTIVE DATE”), by and between DUKE UNIVERSITY, a nonprofit educational and research institution organized under the laws of North Carolina (“DUKE”), having its principal office at Durham, North Carolina 27708, and Orexigen Therapeutics, Inc., a corporation organized under the laws of Delaware (“OREXIGEN”), with its corporate headquarters and principal office at One Palmer Square, Suite 515, Princeton, NJ 08540.

WHEREAS, DUKE owns certain DUKE PATENT RIGHTS (as hereinafter defined) relating to the following technology (collectively, the “GADDE/KRISHNAN INVENTIONS”):

	•		Duke Office of Science and Technology File #2081, entitled “The Combination of Bupropion (Wellbutrin ^tm , Wellbutrin-SR ^tm , Zyban ^tm ) and zonisamide (Zonegram ^tm ) Can Be an Effective Weight Loss and Weight Maintenance Treatment for Obese Patients” and invented by Dr. Kishore Gadde and Dr. Ranga Krishnan (hereinafter, Dr. Gadde and Dr. Krishnan collectively referred to as “INVENTORS”);

	•		Duke Office of Science and Technology File # 2308, entitled “A Method of Reducing Weight Gain Risk Associated with Antidepressant Therapy” and invented by INVENTORS; and

	•		Duke Office of Science and Technology File # 2294, entitled “Zonisamide for Reduction of Weight Gain Risk Associated with Atypical Antipsychotics” and invented by INVENTORS; and

WHEREAS, DUKE has the right to grant licenses under said DUKE PATENT RIGHTS; and

WHEREAS, OREXIGEN has filed a U.S. provisional patent application entitled [***] (hereinafter the “OREXIGEN PROVISIONAL”); and

WHEREAS, DUKE possesses certain DUKE DATA (as hereinafter defined) not covered by the DUKE PATENT RIGHTS, but relating to the OREXIGEN PROVISIONAL which OREXIGEN desires to license; and,

WHEREAS, DUKE desires to have the DUKE PATENT RIGHTS and DUKE DATA developed and commercialized to benefit the public and is willing to grant licenses to each hereunder; and


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WHEREAS, OREXIGEN desires to obtain licenses under DUKE PATENT RIGHTS and DUKE DATA and to DUKE’s rights in OREXIGEN PATENT RIGHTS (as hereinafter defined) upon the terms and conditions hereinafter set forth; and

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

ARTICLE 1 — DEFINITIONS

For the purposes of this AGREEMENT, and solely for that purpose, the terms and phrases set forth below and elsewhere in this AGREEMENT in capital letters shall be defined as follows:

	1.01		“AFFILIATE” shall mean any corporation or non-corporate entity which controls, is controlled by or is under the common control with a party hereto. A corporation or a non-corporate entity, as applicable, 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, or in the absence of ownership of at least fifty percent (50%) of the voting stock of a corporation, or in the case of a non corporate entity, if it possesses directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation or non-cooperate entity, as applicable.

	1.02		“FIELD OF USE” shall mean any and all uses.

	1.03		“FULLY DILUTED BASIS” means the total number of issued and outstanding shares of the OREXIGEN’s common stock, calculated to include (i) conversion of all issued and outstanding securities then convertible into common stock, (ii) the exercise of all then outstanding options and warrants to purchase shares of common stock, whether or not then exercisable (other than options covered under the following clause (iii)), and (iii) the issuance or grant of all securities reserved for issuance pursuant to any stock or stock option plan of OREXIGEN in effect on the date of the calculation.

	1.04		“DUKE DATA” shall mean data generated by Dr. Gadde at DUKE prior to the EFFECTIVE DATE documenting the weight loss effect of treatment with a combination of Fluoxetine and Naltrenxone in humans.

	1.05		“DUKE PATENT RIGHTS” shall mean the patents, patent applications listed in APPENDIX A (such patent applications hereinafter collectively referred to as “INITIAL DUKE PATENT APPLICATIONS” and any patent hereafter issuing on any such INITIAL DUKE PATENT APPLICATIONS), together with all divisions, continuations, continuations-in-part (but only to the extent that the subject matter of each such continuation-in-part application is described in and enabled by the disclosure of said INTITIAL DUKE PATENT APPLICATIONS),

			re-examinations, reissues, substitutions, or extensions thereof and patents issuing therefrom in the United States and non-U.S. jurisdictions. Notwithstanding the foregoing or anything else to the contrary in this AGREEMENT, DUKE PATENT RIGHTS shall not include those patents and/or patent applications which, during the term of this AGREEMENT, cease to be DUKE PATENT RIGHTS pursuant to Section 6.01 or Section 6.03. It is understood and agreed that subject matter that is PATENTABLY DISTINCT (defined below) from the subject matter described within the INITIAL DUKE PATENT APPLICATIONS is not within the scope of the DUKE PATENT RIGHTS even though that PATENTABLY DISTINCT subject matter may fall within the scope of one or more claims of said INITIAL DUKE PATENT APPLICATIONS. PATENTABLY DISTINCT improvements relating to the subject matter of INITIAL DUKE PATENT APPLICATIONS shall not be considered DUKE PATENT RIGHTS. As used herein, “PATENTABLY DISTINCT” subject matter is subject matter that is novel and unobvious over subject matter described within said INITIAL DUKE PATENT APPLICATIONS.

	1.06		“DUKE PATENT RIGHTS EXPENSES” shall mean all patent-related expenses (including, but not limited to, filing fees, maintenance fees, and reasonable fees and expenses of patent counsel) incurred in connection with the DUKE PATENT RIGHTS, including but not limited to all reasonable expenses incurred in connection with the assembly and copying of files for transfer to and from as the case may be OREXIGEN’s legal counsel in connection with OREXIGEN’s assuming responsibility for DUKE PATENT RIGHTS or transferring some of all of that responsibility back to DUKE (as the case may be) pursuant to Section 6.01(a) and/or Section 6.02(b).

	1.07		“VALID CLAIM” shall mean (i) an issued and unexpired claim within the DUKE PATENT RIGHTS or OREXIGEN PATENT RIGHTS, as the case may be, that has not been permanently revoked or held invalid or unenforceable by a decision of a court or other governmental agency of competent jurisdiction and that has not been dedicated to the public or admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or (ii) a claim of a pending patent application that was filed in good faith, has not been pending for more than [*] ([*]) years, and which has not been abandoned or finally disallowed without the possibility of appeal or refilling of such application contained in the DUKE PATENT RIGHTS or OREXIGEN PATENT RIGHTS, as the case may be, in the country in which any such product or part thereof is made, used or sold.

	1.08		“DUKE LICENSED PRODUCT” shall mean any product or part thereof which:

(a)

is covered in whole or in part by any VALID CLAIM contained in the DUKE PATENT RIGHTS in the country in which any such product or part thereof is made, used or sold; and/or


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	(b)		is manufactured by using a process or is employed to practice a process which is covered in whole or in part by a VALID CLAIM contained in the DUKE PATENT RIGHTS in the country in which any DUKE LICENSED PROCESS is used or in which such product or part thereof is used or sold; and/or

	(c)		in its intended use, practices, incorporates, or otherwise utilizes, in whole, or in part, a VALID CLAIM contained in the DUKE PATENT RIGHTS in the country in which any such product or part thereof is made, used, or sold.

	1.09		“DUKE LICENSED PROCESS” shall mean any process which is covered in whole or in part by a VALID CLAIM contained in the DUKE PATENT RIGHTS.

	1.10		“DUKE LICENSED SERVICE” shall mean any service provided by OREXIGEN (and/or SUBLICENSEES, as the case may be) to a THIRD PARTY which utilizes DUKE LICENSED PRODUCTS and/or DUKE LICENSED PROCESSES.

	1.11		“MAINTENANCE FEE” shall mean the fee described in Section 4.01 hereof.

	1.12		“OREXIGEN PATENT RIGHTS” shall mean the OREXIGEN PROVISIONAL and any patent hereafter issuing therefrom, together with all divisions, continuations, continuations-in-part (but only to the extent that the subject matter of each such continuation-in-part application is described in and enabled by the disclosure of said OREXIGEN PROVISIONAL or other related patent applications owned, in part or in whole by OREXIGEN, for which Dr. Gadde and/or Dr. Krishnan is/are an inventor/inventors in accordance with appertaining patent law/regulations as a result of inventive contributions made in his/her position as an employee/employees of DUKE), re-examinations, reissues, substitutions, or extensions thereof and patent issuing therefrom in the United States and non-U.S. jurisdictions.

	1.13		“OREXIGEN PATENT RIGHTS EXPENSES” shall mean all patent-related expenses (including, but not limited to, filing fees, maintenance fees, and reasonable fees and expenses of patent counsel) incurred in connection with the OREXIGEN PATENT RIGHTS.

	1.14		“OREXIGEN LICENSED PRODUCT” shall mean any product or part thereof which:

(a)

is covered in whole or in part by any VALID CLAIM contained in the OREXIGEN PATENT RIGHTS in the country in which any such product or part thereof is made, used or sold; and/or

	(b)		is manufactured by using a process or is employed to practice a process which is covered in whole or in part by a VALID CLAIM contained in the OREXIGEN PATENT RIGHTS in the country in which any OREXIGEN LICENSED PROCESS is used or in which such product or part thereof is used or sold; and/or

	(c)		in its intended use, practices, incorporates, or otherwise utilizes, in whole, or in part, a VALID CLAIM contained in the OREXIGEN PATENT RIGHTS in the country in which any such product or part thereof is made, used, or sold.

	1.15		“OREXIGEN LICENSED PROCESS” shall mean any process which is covered in whole or in part by a VALID CLAIM contained in the OREXIGEN PATENT RIGHTS.

	1.16		“OREXIGEN LICENSED SERVICE” shall mean any service provided by OREXIGEN (and/or SUBLICENSEES, as the case may be) to a THIRD PARTY which utilizes OREXIGEN LICENSED PRODUCT(S) and/or OREXIGEN LICENSED PROCESS(ES).

	1.17		“LICENSED PRODUCTS” shall mean the following terms, collectively: DUKE LICENSED PRODUCTS, OREXIGEN LICENSED PRODUCTS, DUKE LICENSED PROCESSES, OREXIGEN LICENSED PROCESSES, DUKE LICENSED SERVICES and OREXIGEN LICENSED SERVICES, and a DUKE LICENSED PROCESS, OREXIGEN LICENSED PROCESS, DUKE LICENSED SERVICE and OREXIGEN LICENSED SERVICE shall be included within such term notwithstanding such process or service is not literally a “product”.

	1.18		“SUBLICENSE” and “SUBLICENSE AGREEMENT” shall mean, and include without limitation, any relationship/agreement in which a THIRD PARTY gains any rights—temporary or otherwise—to any of the rights granted by DUKE to OREXIGEN under this AGREEMENT (including, but not limited to, OREXIGEN AFFILIATES, assignee(s), licensee(s), sublicensee(s), marketing partner(s) and the like, hereinafter, such THIRD PARTIES referred as “SUBLICENSEES”), including, but not limited to those granted via options, rights of first refusal, material transfer agreements, sublicenses (implied or expressed), and the like.

	1.19		“NET SALES” shall mean:

(a)

in the case of DUKE LICENSED PRODUCTS and OREXIGEN LICENSED PRODUCTS, OREXIGEN’S (and/or those of SUBLICENSEES, as the case may be) revenues received from sale and/or lease of the subject DUKE LICENSED PRODUCTS and/or OREXIGEN LICENSED PRODUCTS; and

	(b)		in the case of DUKE LICENSED PROCESSES and OREXIGEN LICENSED PROCESSES, OREXIGEN’S (and/or those of SUBLICENSEES, as the case may be) revenues received from sale and/or lease of the subject DUKE LICENSED PROCESSES and/or OREXIGEN LICENSED PROCESSES; and

	(c)		in the case of DUKE LICENSED SERVICES and OREXIGEN LICENSED SERVICES, revenue received by OREXIGEN (and/or SUBLICENSEES, as the case may be) for provision of the subject DUKE LICENSED SERVICE and/or OREXIGEN LICENSED SERVICE to a THIRD PARTY.

and each of (a) (b), and (c), above shall be less the sum of the following:

	(w)		discounts allowed in amounts customary in the trade;

	(x)		sales, tariff duties and/or use taxes directly imposed and with reference to particular sales;

	(y)		outbound transportation prepaid or allowed; and

	(z)		amounts allowed or credited on returns.

No deductions to NET SALES shall be made for commissions paid to individuals whether they are associated with independent sales agencies or regularly employed by OREXIGEN (and/or SUBLICENSEES, as the case may be) and on its payroll, or for cost of collections. LICENSED PRODUCTS shall be considered “sold” when the consideration for provision thereof is received by OREXIGEN (and/or SUBLICENSEES, as the case may be). DUKE LICENSED PRODUCTS, OREXIGEN LICENSED PRODUCTS, DUKE LICENSED SERVICES, and OREXIGEN LICENSED SERVICES used by OREXIGEN (and/or SUBLICENSEES, as the case may be) for its own use in the FIELD (and not in connection with the sale to THIRD PARTIES) shall be considered to be “NET SALES” for purposes of computing royalty obligations, except to the extent that such DUKE LICENSED PRODUCTS, OREXIGEN LICENSED PRODUCTS, DUKE LICENSED SERICES, and/or OREXIGEN LICENSED SERVICES are used for clinical field trials or for OREXIGEN’s own internal non-commercial research (and/or SUBLICENSEES, as the case may be).

1.20

“SUBLICENSE REVENUES” shall mean any and all initial upfront fees, license fees, option fees, milestone payments, and other amounts (other than running royalties on NET SALES of LICENSED PRODUCTS) payable to OREXIGEN (and/or any of SUBLICENSEES, as the case may be) under a SUBLICENSE to any of the licenses granted by DUKE to OREXIGEN under this AGREEMENT,

but excluding any payments that are (a) reimbursements of documented research and development costs and expenses; (b) reimbursement of cost of goods directly relating to LICENSED PRODUCTS supplied by OREXIGEN to such SUBLICENSEE; (c) loans granted to OREXIGEN by such SUBLICENSEE; (d) reimbursement of documented costs directly related to pursuit of patent protection and/or maintenance of patents for DUKE PATENT RIGHTS and/or OREXIGEN PATENT RIGHTS; or (e) an equity investment by a commercial THIRD PARTY (but solely to the extent that such investment is at a price equal to or less than one hundred percent (100%) of the fair market value of stock sold or otherwise transferred in such investment). It is agreed that [***] shall not receive from [***] for any SUBLICENSE under this AGREEMENT, without the express prior written permission of DUKE, such approval not to be unreasonably withheld.

	1.21		“TERRITORY” shall mean the world.

	1.22		“THIRD PARTY” means any individual or other entity other than DUKE and/or OREXIGEN..

	1.23		Where appropriate, words denoting a singular number only shall include the plural and vice versa.

	1.24		Certain other defined terms shall have the meanings given them elsewhere in this AGREEMENT.

ARTICLE 2 — LICENSE

	2.01		DUKE hereby grants to OREXIGEN and OREXIGEN hereby accepts from DUKE, subject to the terms and conditions of this AGREEMENT, the exclusive right and sublicenseable license for the FIELD OF USE in the TERRITORY to practice under the DUKE PATENT RIGHTS to develop, make, have made, import, use, lease, offer for sale, sell, and distribute DUKE LICENSED PRODUCTS for the FIELD OF USE in the TERRITORY only, to develop, make, have made, import, use, lease, offer for sale, sell, and distribute DUKE LICENSED PROCESSES in/for the FIELD OF USE in the TERRITORY, and/or to develop, make, have made, perform, provide, import, use, lease, offer for sale, sell, and distribute DUKE LICENSED SERVICES in the FIELD OF USE in the TERRITORY only until the end of the term for which the DUKE PATENT RIGHTS are granted unless this AGREEMENT shall be sooner terminated according to the terms hereinafter provided.

	2.02		DUKE hereby grants OREXIGEN and OREXIGEN and hereby accepts from DUKE, subject to the terms and conditions of this AGREEMENT, the exclusive right and sublicenseable license for the FIELD OF USE in the TERRITORY to


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			utilize the DUKE DATA in patent filings relating to and/or corresponding with the OREXIGEN PROVISIONAL and other OREXIGEN PATENT RIGHTS. Further, DUKE hereby grants OREXIGEN and OREXIGEN hereby accepts from DUKE, subject to the terms and conditions of this AGREEMENT, the exclusive right and sublicenseable license for the FIELD OF USE in the TERRITORY to practice under DUKE’s rights in the OREXIGEN PATENT RIGHTS (as such rights of DUKE arise pursuant to Section 6.01(b) to develop, make, have made, import, use, lease, offer for sale, sell, and distribute OREXIGEN LICENSED PRODUCTS for the FIELD OF USE in the TERRITORY, to develop, make, have made, import, use, lease, offer for sale, sell, and distribute OREXIGEN LICENSED PROCESSES in/for the FIELD OF USE in the TERRITORY, and/or to develop, make, have made, provide, perform, import, use, lease, offer for sale, sell, and distribute OREXIGEN LICENSED SERVICES in the FIELD OF USE in the TERRITORY until the end of the term for which the OREXIGEN PATENT RIGHTS are granted unless sooner terminated according to the terms hereinafter provided.

	2.03		Notwithstanding anything to the contrary in this AGREEMENT, it is understood and agreed that it shall be the responsibility of OREXIGEN to secure rights under any THIRD PARTY intellectual property rights that may be required to practice the technology and to exercise any and all of the rights granted under Sections 2.01 and 2.02. Further, OREXIGEN will use its best efforts to secure from any such THIRD PARTY a covenant not to sue DUKE, or any of its faculty, students, employees or agents, for any research and development efforts conducted at DUKE that resulted in the creation of any of the GADDE/KRISHNAN INVENTIONS and/or DUKE DATA and/or any licensing thereof, and any intellectual property or other rights arising therefrom, including, but not limited to, DUKE PATENT RIGHTS and DUKE’s rights in OREXIGEN PATENT RIGHTS.

	2.04		All SUBLICENSES shall be subject to the terms and conditions of this AGREEMENT, shall be no less favorable to or protective of DUKE than this AGREEMENT except as expressly stated in this AGREEMENT, and shall not be further sublicenseable without the express written approval of DUKE, such approval not to be unreasonably withheld. All SUBLICENSES will be assigned to DUKE in the event the AGREEMENT is terminated, subject to DUKE’s approval, such approval not to be unreasonable withheld or delayed. OREXIGEN shall use commercially reasonable efforts to enforce the terms of the SUBLICENSE agreements. OREXIGEN further agrees to provide DUKE with a copy of all SUBLICENSES within thirty (30) days of execution of each subject SUBLICENSE.

	2.05		Notwithstanding anything to the contrary in this AGREEMENT, DUKE shall have the right to practice under the DUKE PATENT RIGHTS and under its rights to the OREXIGEN PATENT RIGHTS, for its own internal, non-commercial,

			educational, research and clinical purposes without restriction and without payment of royalties or other fees.

	2.06		The licenses granted under this AGREEMENT will not be construed to confer any rights upon OREXIGEN by implication, estoppel or otherwise as to any data, technology, patents, patent applications or other property rights held by DUKE (solely or jointly) not specifically set forth herein, regardless of whether such property rights are dominant or subordinate to any of the DUKE PATENT RIGHTS and/or OREXIGEN PATENT RIGHTS.

	2.07		The license granted hereunder shall be subject to Public Law 96-517 and Public Law 98-260. Any right granted in this AGREEMENT which is greater than that permitted under Public Law 96-517 and Public Law 98-260 shall be modified as may be required to conform with the provisions of those laws.

ARTICLE 3 — LICENSE FEE, ROYALTIES AND OTHER FEES

3.01

In consideration of the rights granted to OREXIGEN pursuant to this AGREEMENT and subject to the terms and conditions of this AGREEMENT, OREXIGEN agrees to pay or otherwise compensate DUKE as follows:

(a)

Equity Consideration . OREXIGEN shall issue to DUKE eight hundred eighty five thousand, two hundred and forty-nine (885,249) shares of OREXIGEN common stock as represent, on a FULLY DILUTED BASIS, an amount not less than [***] percent ([***]%) of OREXIGEN’s common stock outstanding at the time of execution of this AGREEMENT (hereinafter referred to as “DUKE STOCK”). OREXIGEN shall issue DUKE STOCK directly to DUKE in the name of “Duke University” and shall deliver the DUKE STOCK to DUKE within thirty (30) days of the EFFECTIVE DATE. It is understood and agreed that [***] shall promptly reimburse [***] for any out-of-pocket costs (not to exceed [***] dollars ($[***]) incurred by [***] in effecting such transfer of DUKE STOCK to DUKE. It is further understood and agreed that, notwithstanding anything to the contrary in this AGREEMENT, such DUKE STOCK is non-refundable. It is understood and acknowledged that DUKE shall be treated as a founder of OREXIGEN and that the DUKE STOCK will be subject to the terms and conditions provided for in OREXIGEN’s Certificate of Incorporation and Bylaws, which are attached as APPENDIX B, and also subject to the Right of First Refusal and Co-Sale Agreement by and among OREXIGEN, DUKE, and other THIRD PARTY signatories thereto, the form of which is attached as APPENDIX F (the “RIGHT OF FIRST REFUSAL AGREEMENT”), and will be marketable by DUKE under the same conditions and subject to the same limitations as are the restricted shares of common stock of OREXIGEN held by any founder or equivalent.

Subject to the prior sentence, as well as restrictions on transfer set forth in the Right of First Refusal Agreement and the Securities Act of 1933, as amended, OREXIGEN will permit and promptly effect any request from DUKE to transfer any of the DUKE STOCK to any persons as DUKE will direct, and OREXIGEN, DUKE and such persons will execute such documents and instruments as are reasonably necessary to effect such transfer. In connection with the issuance of the DUKE STOCK, DUKE shall execute a Common Stock Purchase Agreement for the DUKE STOCK, in the form attached as APPENDIX E and the Right of First Refusal Agreement in the form attached as APPENDIX F. In the event that the Right of First Refusal Agreement is amended without the consent of Duke, Duke shall retain all rights set forth in Section 1 thereof regarding rights of first refusal as if such agreement had not been so amended. In addition, DUKE shall have the rights of a “Majority Holder” as set forth in Sections 2.1 and 2.2 of the Investors’ Rights Agreement by and among OREXIGEN and other THIRD PARTY signatories thereto, the form of which is attached as APPENDIX G (the “INVESTORS’ RIGHTS AGREEMENT”), so long as DUKE meets the definition of a “Major Holder” under the INVESTORS’ RIGHTS AGREEMENT and there has been no termination of the covenants of OREXIGEN pursuant to Section 2.3 thereunder. DUKE shall not be made a party to the INVESTORS’ RIGHTS AGREEMENT, but shall be conferred the benefits of a Majority Holder under Sections 2.1 and 2.2 of the INVESTORS’ RIGHTS AGREEMENT by the independent provisions of this Section 3.01(a).

(b)

Royalty on NET SALES of DUKE LICENSED PRODUCTS, DUKE LICENSED PROCESSES, and DUKE LICENSED SERVICES . At the times and in the manner set forth hereinafter, OREXIGEN (and/or appertaining SUBLICENSEES, as the case may be) shall pay to DUKE a non-refundable running royalty of [***] percent ([***]%) on NET SALES of DUKE LICENSED PRODUCTS, DUKE LICENSED PROCESSES, and DUKE LICENSED SERVICES (hereinafter such running royalty referred to as the “DUKE RUNNING ROYALTY”). Notwithstanding the foregoing, if OREXIGEN (and/or appertaining SUBLICENSEES, as the case may be) obtains from any THIRD PARTY any licenses and/or sublicenses for patent rights in order to practice DUKE PATENT RIGHTS in the FIELD OF USE or in order to develop, make, have made, use, import, offer for sale, sell, import, export or provide DUKE LICENSED PRODUCTS, DUKE LICENSED PROCESSES, and/or DUKE LICENSED SERVICES (as the case may be), then OREXIGEN (and/or appertaining SUBLICENSEES, as the case may be) shall be entitled to credit its/their payment of additional running royalties to such THIRD PARTY(ies), if any, on DUKE LICENSED PRODUCTS, DUKE LICENSED PROCESSES, and/or DUKE LICENSED SERVICES (as the case may be) against the DUKE RUNNING ROYALTY for the subject

			DUKE LICENSED PRODUCTS, DUKE LICENSED PROCESSES, and/or DUKE LICENSED SERVICES (as the case may be) in the appertaining country(ies) during the appertaining time period, provided that in no event shall the amount otherwise payable to DUKE as DUKE RUNNING ROYALTY be reduced to less than [*] percent ([*]%) for the subject DUKE LICENSED PRODUCTS, DUKE LICENSED PROCESSES, and/or DUKE LICENSED SERVICES (as the case may be) in the appertaining country(ies) during the appertaining time period.

	(c)		Royalty on NET SALES of OREXIGEN LICENSED PRODUCTS, OREXIGEN LICENSED PROCESSES, and OREXIGEN LICENSED SERVICES . At the times and in the manner set forth hereinafter, OREXIGEN (and/or appertaining SUBLICENSEES, as the case may be) shall pay to DUKE a non-refundable running royalty of [*] percent ([]%) on NET SALES of OREXIGEN LICENSED PRODUCTS, OREXIGEN LICENSED PROCESSES, and OREXIGEN LICENSED SERVICES (hereinafter such running royalty referred to as the “OREXIGEN RUNNING ROYALTY”). Notwithstanding the foregoing, if OREXIGEN (and/or appertaining SUBLICENSEE(S), as the case may be) obtains from any THIRD PARTY any licenses and/or sublicenses for patent rights in order to practice OREXIGEN PATENT RIGHTS in the FIELD OF USE or in order to develop, make, have made, use, import, offer for sale, sell, import, export or provide OREXIGEN LICENSED PRODUCTS, OREXIGEN LICENSED PROCESSES, and/or OREXIGEN LICENSED SERVICES (as the case may be), then OREXIGEN (and/or appertaining SUBLICENSEES, as the case may be) shall be entitled to credit its/their payment of additional running royalties to such THIRD PARTY(ies), if any, on OREXIGEN LICENSED PRODUCTS, OREXIGEN LICENSED PROCESSES, and/or OREXIGEN LICENSED SERVICES (as the case may be) against the DUKE RUNNING ROYALTY for the subject OREXIGEN LICENSED PRODUCTS, OREXIGEN LICENSED PROCESSES, and/or OREXIGEN LICENSED SERVICES (as the case may be) in the appertaining country(ies) during the appertaining time period, provided that in no event shall the amount otherwise payable to DUKE as OREXIGEN RUNNING ROYALTY be reduced to less than [] percent ([*]%) for the subject OREXIGEN LICENSED PRODUCTS, OREXIGEN LICENSED PROCESSES, and/or OREXIGEN LICENSED SERVICES (as the case may be) in the appertaining country(ies) during the appertaining time period.

	(d)		Milestone Payments . OREXIGEN (and/or appertaining SUBLICENSEES, as the case may be) shall pay DUKE the following one-time, noncreditable, non-refundable payments within [*] ([*]) days of the first

			occurrence of each of the following milestones as relates to a DUKE LICENSED PRODUCT:

			[***]

	(e)		Royalty on SUBLICENSE REVENUES . OREXIGEN (and/or appertaining SUBLICENSEES, as the case may be) shall pay to DUKE a royalty of [*] percent ([*]%) on SUBLICENSING REVENUES.

3.02

Notwithstanding reports, correspondence or other communications from OREXIGEN, it is understood that DUKE shall, in accordance with its policies and procedures, apply any amounts received from OREXIGEN under the terms of this AGREEMENT as follows:

	(a)		first to [***]; and

	(b)		thereafter to [***] of this AGREEMENT.

			Application of amounts received under (a) above shall in no respect alter the aggregate amount due to DUKE.

	3.03		Notwithstanding anything to the contrary in this AGREEMENT, all payments due hereunder shall be paid in full, without deduction of taxes or other fees which may be imposed by any government and which shall be paid by OREXIGEN (and/or appertaining SUBLICENSEES, as the case may be).

	3.04		All payments due from OREXIGEN (and/or appertaining SUBLICENSEES, as the case may be) pursuant to this AGREEMENT shall be due and payable in accordance with the terms and conditions of this AGREEMENT, and if a payment due pursuant to this AGREEMENT is not paid within [*] ([]) days of the payment due date, then a late payment fee equal to [] percent ([*]%) of such payment shall be added to the payment due; provided, however, in addition to the

			late fee described above, all past due payments shall bear interest at the [***] from the due date of such payment until paid. The payment of such interest and late fees shall not foreclose DUKE from exercising any other rights it may have as a consequence of the lateness of any payment.

	3.05		No multiple royalties on NET SALES shall be payable to DUKE on a single LICENSED PRODUCT because its manufacture, use, lease, sale or practice are or shall be covered by more than one of the DUKE PATENT RIGHTS and/or OREXIGEN PATENT RIGHTS.

	3.06		All payments due to DUKE under this AGREEMENT shall be paid in United States Dollars in Durham, North Carolina, or at such place as DUKE may reasonably designate consistent with the laws and regulations controlling in any foreign country. If any currency conversion shall be required in connection with such payments due hereunder, such conversion shall be made by using the exchange rate prevailing at Wachovia Bank (N.A.) (or its successor, as the case may be) on the last business day of the reporting period to which such payments relate. If payments are made by wire, electronic or other transfer form for which a fee is charged (“PAYMENT TRANSFER FEES”), OREXIGEN (and/or appertaining SUBLICENSEES, as the case may be) shall be responsible for the full amount of such fees and shall promptly reimburse DUKE for DUKE’s payment of such reasonable PAYMENT TRANSFER FEES within [*] ([*]) days of invoice of the same from DUKE.

	3.07		It is understood and acknowledged that in partial consideration for the licenses granted to OREXIGEN under this AGREEMENT, OREXIGEN has issued or will issue OREXIGEN stock to the INVENTORS. It is further understood and acknowledged that each of the INVENTORS has waived in writing in a form acceptable to DUKE, any and all rights which he may have to share, either individually (personally) or through his laboratory, under the Duke University Inventions, Patents and Technology Transfer Policy, in the equity, financial and other considerations that DUKE receives from LICENSEE, AFFILIATES, SUBLICENSEES, and/or any THIRD PARTIES as a result of this AGREEMENT, including, but not limited to, shares of DUKE STOCK (and any proceeds therefrom), royalties, fees, milestone payments and the like.

	3.08		Payments due to DUKE pursuant to Sections 3.01(b), 3.01(d), 3.01(e), 6.02(a) and/or otherwise relating to DUKE PATENT RIGHTS shall cite “Duke File # 2081”. Payments due to DUKE pursuant to Sections 3.01(c), 3.01(e), 6.03 and/or otherwise relating to OREXIGEN PATENT RIGHTS shall cite “Duke File #2358”. All payments due to DUKE under this AGREEMENT shall be made payable to “Duke University.” Payments may be made by wire or electronic transfer, provided that an accompanying notice is delivered with reference to the pertinent DUKE file numbers and PAYMENT TRANSFER FEES associated with

such wire or electronic transfer are paid in full by OREXIGEN (and/or appertaining SUBLICENSEES, as the case may be) at the time of such transfer or within thirty (30) days of receipt of invoice from DUKE for the same as set forth in Section 3.04. Such payments, as well as reports due to DUKE in accordance with Sections 5.02 and 5.03 shall be sent to DUKE at the following address:

For delivery via the U.S. Postal Service:

Duke University Office of Science and Technology
Attention: Financial Administrator
Box 90083 Duke University
Durham, NC 27708 USA

For delivery via nationally/internationally recognized courier:

Duke University Office of Science and Technology
Attention: Financial Administrator
2020 West Main Street, Suite 10
Durham, NC 27705 USA

For payment via wire transfer:
[***]

ARTICLE 4 — DUE DILIGENCE REQUIREMENTS

4.01

OREXIGEN shall use commercially reasonable efforts to bring LICENSED PRODUCTS to market through a thorough, vigorous and diligent program for exploitation of the DUKE PATENT RIGHTS and OREXIGEN PATENT RIGHTS, and to continue active, diligent marketing efforts for LICENSED PRODUCTS throughout the life of this AGREEMENT. The development and commercialization schedule set forth on attached APPENDIX C (hereinafter “COMMERCIALIZATION SCHEDULE”) is hereby agreed upon as a reasonable one to be followed. Variations from the schedule set forth in the COMMERCIALIZATION SCHEDULE must be expressly approved by DUKE in writing, such approval not to be unreasonably withheld. OREXIGEN may extend the targets through the payment to DUKE of a MAINTENANCE FEE of [***] [***] dollars ($[***]) for each year OREXIGEN desires to extend such targets (not to exceed a total extension period of [***] ([***]) years for any one such target), provided that each MAINTENANCE FEE payment is received by DUKE

			at least than [*] ([*]) days prior to the then applicable target date. However, if any of the targets set forth in the COMMERCIALIZATION SCHEDULE are not reached within the stated time periods set out in APPENDIX C, or within those amended periods of time approved in writing by Duke, and such targets are not extended by the payment of a MAINTENANCE FEE, then DUKE may, at its sole discretion, convert the exclusive licenses granted hereunder to non-exclusive licenses and DUKE may in its sole discretion require OREXIGEN (and/or its assignee(s), as the case may be) to assign to DUKE any SUBLICENSES for which exclusive rights have previously been granted and, in the event of such assignment(s), OREXIGEN’s rights under this AGREEMENT to such rights sublicensed exclusively to under the subject SUBLICENSES shall terminate as of the effective date of the appertaining assignment(s) to DUKE. For any rights that OREXIGEN may be permitted to retain, LICENSEE will still be responsible to DUKE for any royalty payments and payments with respect to non-royalty income.

	4.02		During the term of this AGREEMENT, OREXIGEN will submit [*] progress reports to DUKE as set forth in Section 5.02. DUKE shall have the right to request [] ([]) [] to discuss such information with representatives of OREXIGEN at mutually acceptable times and places. It is agreed that should any of [] personnel be required by [] to consult with [] outside of [], [**] will reimburse reasonable travel and living expenses incident thereto.

ARTICLE 5 — REPORTS AND RECORDS

	5.01		OREXIGEN shall keep full, true and accurate books of accounts and other records containing all particulars which may be necessary to properly ascertain and verify the amounts payable to DUKE hereunder and shall require SUBLICENSEES, as the case may be, to do the same. Said books of account shall be kept at OREXIGEN’s (and/or SUBLICENSEES’) principal place of business or the principal place of business of the appropriate division of OREXIGEN (and/or SUBLICENSEE) to which this AGREEMENT relates. Said books and the supporting data shall be open at all reasonable times for [*] ([]) years following the end of the calendar year to which they pertain, to the inspection of DUKE or its agents for the purpose of verifying the OREXIGEN’s (and/or SUBLICENSEE’s) royalty statement or compliance in other respects with this AGREEMENT. Should such inspection lead to the discovery of a greater than [] percent ([*]%) discrepancy in reporting, OREXIGEN agrees to pay the full cost of such inspection in addition to any amounts due to DUKE, such amounts to be subject to the provisions of Section 3.04.

	5.02		OREXIGEN shall report the status of development of each LICENSED PRODUCT [*] to DUKE by [*]. Such report shall include descriptions of OREXIGEN’s (and/or SUBLICENSEES’s plans and

			commercially reasonable estimated timeframes for testing, development, governmental approvals and marketing/sale of each LICENSED PRODUCT.

	5.03		After the first commercial sale of a LICENSED PRODUCT, and in addition to the reports required under Section 5.02, OREXIGEN shall render to DUKE prior to [*] a written account of the NET SALES of LICENSED PRODUCTS made during the prior [] period ending [], respectively, and shall simultaneously pay to DUKE the royalties due on such NET SALES in United States dollars. Reports tendered shall include the calculation of royalties by product by country in substantially the format provided in APPENDIX D hereto. Further, OREXIGEN shall render to DUKE prior to [] a written account of royalties on SUBLICENSE REVENUES due to DUKE for the prior [] period ending [*], respectively, and shall simultaneously pay to DUKE the royalties due on such NET SALES in United States dollars.

ARTICLE 6 — PATENTS

6.01

Patent Prosecution

(a)

DUKE shall use its reasonable best efforts to have the prosecution of the DUKE PATENT RIGHTS transferred to OREXIGEN’S patent firm (Knobbe Martens Olson & Bear LLP, attn: Ned A. Israelsen, 550 West C Street, Suite 1200, San Diego, CA 92101, (619) 235-8550 (voice), (619) 235-0176 (fax), email nisraelsen@kmob.com) within [***] ([***]) days of the EFFECTIVE DATE so that OREXIGEN may assume primary responsibility for all activities associated with the prosecution and maintenance of the DUKE PATENT RIGHTS. OREXIGEN will use reasonable commercial efforts to file, prosecute and maintain the DUKE PATENT RIGHTS during the term of this Agreement. OREXIGEN will keep DUKE advised as to all developments with respect to any INITIAL DUKE PATENT APPLICATIONS, and/or applicable divisional, continuation, continuation-in-part and reissue application(s) within the scope of the DUKE PATENT RIGHTS (hereinafter, such INITIAL DUKE PATENT APPLICATIONS and applicable divisions, continuation, continuation-in-part, and reissue applications within the scope of the DUKE PATENT RIGHTS collectively referred to as “DUKE PATENT APPLICATIONS”). OREXIGEN shall keep DUKE advised as to the status of the DUKE PATENT RIGHTS and OREXIGEN’s designated patent attorneys will provide DUKE, in a timely manner, with copies of all official documents and correspondence relating to the prosecution, maintenance, and validity of the DUKE PATENT RIGHTS. OREXIGEN shall consult with DUKE in such prosecution and maintenance, shall diligently seek advice of DUKE on all matters pertaining to the DUKE PATENT RIGHTS, shall diligently seek strong and broad claims under the

			DUKE PATENT RIGHTS, and shall not abandon prosecution of any DUKE PATENT RIGHTS or any of the claims of the DUKE PATENT RIGHTS without first notifying DUKE in a timely manner of OREXIGEN’s intention and reason therefore, and providing DUKE with reasonable opportunity to assume responsibility for prosecution and maintenance of the appertaining DUKE PATENT RIGHTS (which thereafter shall be subject to the provisions of Section 6.02(b) as regards status as DUKE PATENT RIGHTS and DUKE LICENSED PRODUCTS, DUKE LICENSED PROCESSES, and DUKE LICENSED SERVICES and OREXIGEN’s rights therein). All decisions with respect to the prosecution of the DUKE PATENT RIGHTS by OREXIGEN pursuant to this Section 6.01(a) shall be made by OREXIGEN, subject to the approval of DUKE which approval shall not be unreasonably withheld or delayed. OREXIGEN’s obligations under this Section 6.01(a) shall include, without limitation, an obligation to inform DUKE in a timely manner (no less than [*] ([*]) days prior to the appertaining filing deadlines) that OREXIGEN will not pursue patents in any non-US country so that DUKE may pursue such patents if it so desires in which case from the date of such filing of such patent applications by DUKE shall not be considered DUKE PATENT RIGHTS and OREXIGEN shall be deemed to have forfeited all rights under this AGREEMENT to such patent applications and resulting patents. (APPENDIX A shall be deemed to be so amended.) For avoidance of doubt, it is understood that OREXIGEN shall assume direct and full responsibility for payment of expenses it incurs as a result of its assumption of responsibility for prosecution of DUKE PATENT RIGHTS under this Section 6.01(a).

	(b)		OREXIGEN will control, and be responsible for, all filings, prosecution, and maintenance of the OREXIGEN PATENT RIGHTS. It is understood and acknowledged that OREXIGEN may use the DUKE DATA to support OREXIGEN PATENT RIGHTS, including, but not limited to the OREXIGEN PROVISIONAL and that Dr. Gadde shall be identified as a co-inventor of the OREXIGEN PROVISIONAL and such other patent filings relating to or corresponding with the OREXIGEN PROVISIONAL and other OREXIGEN PATENT RIGHTS for which Dr. Gadde is an inventor in accordance with appertaining patent law/regulations regarding inventorship. It is understood and acknowledged that DUKE shall be a co-owner of those OREXIGEN PATENT RIGHTS for which Dr. Gadde is an inventor and OREXIGEN shall take appropriate and necessary steps to effect such co-ownership. OREXIGEN shall keep DUKE advised as to the status of the OREXIGEN PATENT RIGHTS by providing to DUKE, in a timely manner, with copies of all official documents and correspondence relating to the prosecution, maintenance, and validity of the OREXIGEN PATENT RIGHTS. DUKE shall be offered the opportunity to make suggestions regarding the prosecution and

maintenance of OREXIGEN PATENT RIGHTS, such suggestions to be given due consideration. However, notwithstanding the foregoing, it is understood that all decisions with respect to the prosecution and maintenance of the OREXIGEN PATENT RIGHTS shall be made by OREXIGEN.

6.02

Patent Costs.

(a)

During the term of this AGREEMENT, payment of all DUKE PATENT RIGHTS EXPENSES shall be the responsibility of OREXIGEN, whether such fees and costs were incurred before or after the EFFECTIVE DATE of this AGREEMENT. Notwithstanding anything to the contrary in this AGREEMENT, except as OREXIGEN declines interest in non-US patent pursuit, OREXIGEN shall be responsible for all DUKE PATENT RIGHTS EXPENSES associated with the preparation and filing of the PCT application(s) contained within the DUKE PATENT RIGHTS as well as all DUKE PATENT RIGHTS EXPENSES associated with pursuit and maintenance of the DUKE PATENT RIGHTS. Within [***] ([***]) days of the EFFECTIVE DATE of this AGREEMENT, OREXIGEN agrees to reimburse DUKE in the amount of nineteen thousand, eight hundred seventeen dollars and seventy-five cents (US$19,817.75) for DUKE PATENT RIGHTS EXPENSES which were incurred by DUKE, and for which attorney invoices were received and processed by DUKE, before the EFFECTIVE DATE. As regards all other DUKE PATENT RIGHTS EXPENSES, OREXIGEN agrees to pay such DUKE PATENT RIGHTS EXPENSES within [***] ([***]) days of receipt of an invoice for the same, and failure to pay such each such invoice within such thirty-day period shall be a default hereunder for which DUKE may terminate this AGREEMENT in accordance with Section 10.05. Notwithstanding the foregoing or anything else to the contrary in the AGREEMENT, if at any time OREXIGEN fails to reimburse DUKE for any DUKE PATENT RIGHTS EXPENSES within the thirty-day period following receipt of a subject invoice from DUKE, then henceforth during the term of this AGREEMENT, DUKE may, at its sole discretion, require OREXIGEN to make payment for estimated associated DUKE PATENT RIGHTS EXPENSES prior to incurring such DUKE PATENT RIGHTS EXPENSES, including, but without limitation, DUKE PATENT RIGHTS EXPENSES associated with national phase filings of DUKE PATENT APPLICATIONS, preparation and filing of responses to patent office actions on DUKE PATENT APPLICATIONS, etc., such requirement by DUKE not to preclude DUKE from exercising any other recourse it may have under this AGREEMENT as regards lack of prompt reimbursement of DUIKE PATENT RIGHTS EXPENSES by OREXIGEN.

(b)

If OREXIGEN decides to discontinue the financial support of the prosecution or maintenance of a subject DUKE PATENT APPLICATION or patent falling within the scope of DUKE PATENT RIGHTS, OREXIGEN will give DUKE timely written notice at least [***] ([***]) months in advance of the effective date of OREXIGEN’s decision and DUKE will be free to continue prosecution or maintain any such application(s)/patents, and to maintain any protection issuing thereon in the U.S. and in any foreign country at DUKE’s sole expense. In such instances, from the date of DUKE’s receipt of such written notice from OREXIGEN, such patent and/or DUKE PATENT APPLICATION shall no longer be considered to fall within the definition of DUKE PATENT RIGHTS (APPENDIX A shall be deemed to be so amended) and OREXIGEN shall forfeit all rights under this AGREEMENT to the subject issued patent(s) and/or subject DUKE PATENT APPLICATION and patent(s) arising from such PATENT APPLICATION. Accordingly, DUKE shall be free, at its sole discretion to license said patent(s) and patent application(s) to any THIRD PARTY or otherwise dispose of such patent(s) and patent applications(s) as it deems appropriate.

	6.03		Payment of all OREXIGEN PATENT RIGHTS EXPENSES shall be the sole responsibility of OREXIGEN and OREXIGEN shall reimburse DUKE for any reasonable out-of-pocket expenses that DUKE may incur relating to the filing, prosecution, and/or maintenance of the OREXIGEN PATENT RIGHTS.

	6.04		OREXIGEN agrees to mark the LICENSED PRODUCTS (as the case may be), and/or their containers, labels, and/or other packaging, in such a manner as to conform to the patent laws and practices of the country of manufacture or sale, as appropriate.

ARTICLE 7 — INFRINGEMENT OF THIRD-PARTY RIGHTS

7.01

In the event that DUKE or OREXIGEN is charged with infringement of a patent by a THIRD PARTY or is made a party in a civil action as a result of the activity of OREXIGEN and/or a SUBLICENSEE (and not from the activity of DUKE or its AFFILIATES other than the granting of this license to OREXIGEN) as a result (directly or indirectly) of the licenses granted hereunder to OREXIGEN, OREXIGEN:

	(a)		must defend and/or settle any such claim of infringement or civil action;

	(b)		must assume all costs, expenses, damages, and other obligations for payments incurred as a consequence of such charges of infringement and/or civil action;

	(c)		must indemnify and hold DUKE harmless from any and all damages, losses, liability, and costs resulting from a charge of infringement or civil action which shall be brought against DUKE and attributable to technology added to, incorporated into or sold with a LICENSED PRODUCT by OREXIGEN, and/or SUBLICENSEE (as the case may be) or to manufacturing processes utilized by OREXIGEN or SUBLICENSEE (as the case may be); and

	(d)		may, if such claim of infringement or civil action shall be based on patent claims contained in any pending or issued patent included in the DUKE PATENT RIGHTS, terminate this AGEEMENT effective immediately upon DUKE’s receipt of written notice of termination.

7.02

DUKE will give OREXIGEN reasonable assistance, at OREXIGEN’s expense, in the defense of any such infringement charge or lawsuit, as may be reasonably required. OREXIGEN shall reimburse DUKE for such expenses within [***] ([***]) days of receiving an invoice for the same.

ARTICLE 8 — INFRINGEMENT OF DUKE PATENT RIGHTS BY THIRD PARTIES

	8.01		Each party to this AGREEMENT is obligated to inform the other promptly in writing of any alleged infringement of which it becomes aware and of any available evidence of infringement by a THIRD PARTY of any patents within the DUKE PATENT RIGHTS.

	8.02		If during the term of this AGREEMENT, OREXIGEN becomes aware of any alleged infringement by a THIRD PARTY, OREXIGEN shall have the right, but not the obligation, to either:

	(a)		settle the infringement suit by sub-licensing the alleged infringer or by other means; or

	(b)		prosecute at its own expense any infringement of the DUKE PATENT RIGHTS and/or OREXIGEN PATENT RIGHTS. In the event OREXIGEN prosecutes such infringement of DUKE PATENT RIGHTS and/or OREXIGEN PATENT RIGHTS for which DUKE is a co-owner of one or more of the subject OREXIGEN PATENT RIGHTS, OREXIGEN may, for such purposes, request to use the name of DUKE as party plaintiff. DUKE, at its sole discretion, may agree to become a party plaintiff, and all costs associated therewith shall be borne by OREXIGEN.

8.03

In the event that OREXIGEN undertakes the enforcement and/or defense of the DUKE PATENT RIGHTS and/or OREXIGEN PATENT RIGHTS by litigation, including any declaratory judgment action, the total cost of any such action commenced or defended solely by OREXIGEN shall be borne by OREXIGEN.

			Any recovery of damages by OREXIGEN as a result of such action shall be applied first in satisfaction of any unreimbursed expenses and attorneys’ fees of OREXIGEN relating to the action, and second in satisfaction of unreimbursed legal expenses and attorneys’ fees of DUKE, if any, relating to the action. If applicable, OREXIGEN shall receive an amount equal to its lost profits, a reasonable royalty on sales of the infringer, or other measure of damages the court shall have applied, less a reasonable approximation of the royalties that OREXIGEN would have owed to DUKE on NET SALES that may have been made by OREXIGEN but, instead, were lost to the infringer, which amount shall be promptly paid by OREXIGEN to DUKE. Any balance remaining from such recovery shall be distributed between OREXIGEN and DUKE as follows: (i) OREXIGEN receiving [*] percent ([]%) and DUKE receiving [] percent ([]%) as regards DUKE PATENT RIGHTS; and (ii) OREXIGEN receiving [] percent ([]%) and DUKE receiving [] percent ([*]%) as regards OREXIGEN PATENT RIGHTS.

	8.04		In the event OREXIGEN does not undertake action to prevent the infringing activity within [*] ([]) months of having been made aware and notified thereof, DUKE shall have the right, but not the obligation, to prosecute at its own expense any such infringements of the DUKE PATENT RIGHTS and, in furtherance of such right, DUKE may use the name of OREXIGEN as a party plaintiff in any such suit without expense to OREXIGEN. The total cost of any such infringement action commenced or defended solely by DUKE shall be borne by DUKE. Any recovery of damages by DUKE for any infringement shall be applied first in satisfaction of any unreimbursed expenses and attorneys’ fees of DUKE relating to the suit, and second toward reimbursement of OREXIGEN’s reasonable expenses, including reasonable attorneys’ fees, relating to the suit. Any balance remaining from such recovery shall be distributed between OREXIGEN and DUKE with DUKE receiving [] percent ([]%) and OREXIGEN receiving [] percent ([*]%).

	8.05		In any infringement suit instituted by either party to enforce the DUKE PATENT RIGHTS and/or OREXIGEN PATENT RIGHTS where DUKE is a co-owner of one or more of the subject OREXIGEN PATENT RIGHTS pursuant to this AGREEMENT, the other party hereto shall, at the request and expense of the party initiating such suit, reasonably cooperate in all respects and, to the extent reasonably possible, have its employees testify when requested and make available relevant records, papers, information, samples, specimens, and the like.

	8.06		OREXIGEN has the sole right in accordance with the terms and conditions herein to sublicense any LICENSED PRODUCT to an alleged infringer under the DUKE PATENT RIGHTS and/or OREXIGEN PATENT RIGHTS in the TERRITORY in order to avoid infringement in the future.

8.07

Any of the foregoing notwithstanding, if at any time during the term of this AGREEMENT any of the DUKE PATENT RIGHTS are held invalid or unenforceable in a decision which is not appealable or is not appealed within the time allowed, OREXIGEN shall have no further obligations to DUKE with respect to its future use or sale of any DUKE LICENSED PRODUCT, DUKE LICENSED PROCESS, and/or DUKE LICENSED SERVICE covered solely by such DUKE PATENT RIGHTS, including the obligation of paying royalties. For avoidance of doubt it is understood and agreed that in such event, OREXIGEN shall not have any damage claim or any claim for refund or reimbursement against DUKE for any amounts previously paid to DUKE under this AGREEMENT, including, but not limited to, the payment of DUKE STOCK.

ARTICLE 9 — GOVERNMENT CLEARANCE, PUBLICATION, EXPORT

	9.01		Insofar as such clearance is required, OREXIGEN agrees to use its best efforts to have the LICENSED PRODUCTS cleared for marketing in those countries in which OREXIGEN intends to sell LICENSED PRODUCTS by the responsible government agencies requiring such clearance. To accomplish said clearances at the earliest possible date, OREXIGEN agrees to file or have filed any necessary data with said government agencies as quickly as commercially reasonable. Should this AGREEMENT terminate in accordance with Section 10.02, 10.03, or 10.04, LICENSEE shall, within forty-five (45) days following such termination and at its own expense, assign to DUKE its full interest and title in and full documentation of (i) all market clearance applications (including all data relating thereto) which relate to DUKE LICENSED PRODUCTS, DUKE LICENSED PROCESSES, and/or DUKE LICENSED SERVICES and (ii) all data that could relate to market clearance applications for DUKE LICENSED PRODUCTS, DUKE LICENSED PROCESSES, and/or DUKE LICENSED SERVICES, including, but not limited to, all in vitro and in vivo pre-clinical data, pharmacology data, toxicology data, human data and the like. Notwithstanding anything to the contrary in this AGREEMENT, effective upon receipt of such information, data, etc. by DUKE, such information shall not be considered the confidential information of OREXIGEN under Article 11 but instead shall henceforth be considered the confidential information of DUKE and subject to the provisions of restricted use and non-disclosure set forth in Article 11.

	9.02		It is understood and agreed that the right of publication/presentation of the DUKE PATENT RIGHTS shall reside in the INVENTORS, faculty, staff, and students of DUKE. OREXIGEN shall also have the right to publish and/or co-author any publication/presentation on the DUKE PATENT RIGHTS in accordance with academic custom. In the event that either one or more of the INVENTORS or OREXIGEN desires to so publish/present, the party desiring publication shall notify the other party of its desire to publish/present at least thirty (30) days in advance of each subject publication/presentation and shall furnish to the non-publishing party a written description of the subject matter of the


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publication/presentation in order to permit the non-publishing party to review and comment thereon, such obligation of notification of the publishing/presenting party and associated right of the non-publishing/presenting party to review and comment thereon to expire upon the [***] ([***] ^th ) anniversary of the Effective Date.

9.03

This AGREEMENT is subject to all of the United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes and other commodities and technology. It is understood that DUKE is subject to United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes and other commodities (including the Arms Export Control Act, as amended and the Export Administration Act of 1979), and that its obligations hereunder are contingent on compliance with applicable United States export laws and regulations. The transfer of certain technical data and commodities may require a license from the cognizant agency of the United States Government and/or written assurances by OREXIGEN that OREXIGEN shall not export data or commodities to certain foreign countries without prior approval of such agency. DUKE neither represents that a license shall not be required nor that, if required, it shall be issued.

ARTICLE 10 — DURATION AND TERMINATION

	10.01		This AGREEMENT shall become effective upon the EFFECTIVE DATE, and unless sooner terminated in accordance with any of the provisions herein, shall remain in full force and effect for the life of the last-to-expire of the patents included in the DUKE PATENT RIGHTS or OREXIGEN PATENT RIGHTS, whichever shall occur last.

	10.02		Subject to the provisions of this AGREEMENT, DUKE may terminate this AGREEMENT in accordance with Section 10.05 if OREXIGEN fails to meet any of the development/commercialization milestones (as extended through the payment of MAINTENANCE FEES to DUKE by OREXIGEN) set forth in APPENDIX C unless DUKE expressly approves such variations in writing.

	10.03		OREXIGEN may terminate this AGREEMENT by giving DUKE written notice at least [*] ([*]) months prior to the effective date of such termination. It is understood that OREXIGEN shall remain responsible for the timely payment of all amounts due DUKE under this AGREEMENT through the effective date of the termination.

	10.04		Either party may immediately terminate this AGREEMENT for fraud, willful misconduct, or illegal conduct of the other party, in all such cases with respect to the subject matter of this AGREEMENT, upon written notice of same to that other party.


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	10.05		If either party fails to fulfill any of its material obligations under this AGREEMENT including, but not limited to, lack of payment or failure to meet the provisions of Section 10.02, the non-breaching party may terminate this AGREEMENT, upon written notice to the breaching party, as provided below. Such notice must contain a full description of the event or occurrence constituting a breach of the AGREEMENT. The party receiving notice of the breach will have the opportunity to cure that breach within [*] ([]) days of receipt of notice. If the breach is not cured within that time, the termination will be effective as of the [] ([]) day after receipt of notice. A party’s ability to cure a breach will apply only to the first [] ([*]) breaches properly noticed under the terms of this AGREEMENT, regardless of the nature of those breaches. Any subsequent breach by that party will entitle the other party to terminate this AGREEMENT upon receipt of notice by the breaching party, where such notice must contain a full description of the event or occurrence constituting a breach of this AGREEMENT.

	10.06		If during the term of this AGREEMENT, OREXIGEN shall become bankrupt or insolvent or if the business of OREXIGEN shall be placed in the hands of a receiver or trustee, whether by the voluntary act of OREXIGEN or otherwise, or if OREXIGEN shall cease to exist as an active business, this AGREEMENT shall immediately terminate.

	10.07		Notwithstanding anything to the contrary in this AGREEMENT, neither expiration nor any termination of this AGREEMENT shall remove any financial obligations to DUKE which OREXIGEN incurred under this AGREEMENT prior to and as of the effective date of any expiration or termination.

	10.08		On or before the effective date of any expiration or termination of this AGREEMENT, OREXIGEN shall cease the manufacture, use, practice, lease, and sale, offering, distribution, and other commercialization of DUKE LICENSED PRODUCTS, DUKE LICENSED PROCESSES, and DUKE LICENSED SERVICES.

	10.09		Within thirty (30) days of any expiration or termination of this AGREEMENT, OREXIGEN shall (i) return to DUKE or destroy, as directed by DUKE, all information, data, and any relevant materials provided to OREXIGEN during the term of this AGREEMENT and (ii) destroy all DUKE LICENSED PRODUCTS in a safe and legal manner. Further, OREXIGEN shall provide DUKE with a written statement signed by an authorized representative of OREXIGEN certifying the destruction of all DUKE LICENSED PRODUCTS in a safe and legal manner, as well as the destruction of said information data, and relevant materials if such instructions for destruction are given by DUKE.

	10.10		The licenses granted to OREXIGEN pursuant to Section 2.02 shall survive termination of this AGREEMENT for any reason (as shall the appertaining


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obligations to DUKE, financial and otherwise) except for termination (i) under Section 10.04 for fraud, willful misconduct, or illegal conduct of OREXIGEN which is directly related to the licenses granted under Section 2.02, or to OREXIGEN PATENT RIGHTS, OREXIGEN LICENSED PRODUCTS, OREXIGEN LICENSED PROCESSES, and/or OREXIGEN LICENSED SERVICES; and/or (ii) under Section 10.05 for breaches by OREXIGEN directly related to the licenses granted under 2.02, or to OREXIGEN PATENT RIGHTS, OREXIGEN LICENSED PRODUCTS, OREXIGEN LICENSED PROCESSES, and/or OREXIGEN LICENSED SERVICES, including, but not limited to, lack or delayed remittance of payments due to DUKE under Sections 3.01(c), 3.01(e), 3,04, 3.06, and/or 6.03.

ARTICLE 11 — CONFIDENTIALITY

11.01

DUKE and OREXIGEN each agree to treat any confidential information disclosed to it by the other party under this AGREEMENT with reasonable care and to avoid disclosure of such information to any other person, firm or corporation, except AFFILIATES bound by the obligations of confidentiality and restricted use set forth in this Article 11, and either party shall be liable for unauthorized disclosure or failure to exercise such reasonable care. Further, the receiving party will not use the disclosing party’s confidential information other than for the benefit of the parties hereto and relating to this AGREEMENT. These obligations of non-disclosure and restricted use shall remain effect for each subject disclosure of confidential information for a period of time of [***] ([***]) years from such disclosure, however, neither party shall have an obligation, with respect to confidential information disclosed to it, or any part thereof, which:

	(a)		is already known to the party at the time of the disclosure;

	(b)		becomes publicly known without the wrongful act or breach of this AGREEMENT by the party;

	(c)		is rightfully received by the party from a THIRD PARTY on a non-confidential basis;

	(d)		is subsequently and independently developed by employees of the party who had no knowledge of the information, as verified by written records;

	(e)		is approved for release by prior written authorization of the party disclosing the information; or

	(f)		is disclosed pursuant to any judicial or government request, requirement or order, provided that the party so disclosing takes reasonable steps to provide the other party sufficient prior notice in order to contest such request, requirement or order and provided and provided that such


***		Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions .

disclosed confidential information otherwise remains subject to the obligations of confidentiality set forth in this Article 11.

	11.02		DUKE and OREXIGEN agree that any information to be treated as confidential information under this Article 11 must be disclosed in writing or other tangible medium and must be clearly marked “CONFIDENTIAL”. Confidential information disclosed orally must be summarized and reduced to writing or other tangible medium and communicated to the other party within thirty (30) days of such disclosure, and the other party agrees that such disclosed information shall be deemed confidential.

	11.03		Notwithstanding the foregoing, OREXIGEN shall have the right to use and disclose any confidential information related to the DUKE PATENT RIGHTS to investors, prospective investors, employees, consultants and agents with a need to know, collaborators, prospective collaborators and other THIRD PARTIES in the chain of manufacturing and distribution provided that OREXIGEN obtains from such parties written confidentiality agreements, the provisions of which are at least as restrictive and protective of DUKE’s confidential information as those provided in this Article 11.

	11.04		Notwithstanding anything to the contrary in this AGREEMENT, all information relating to filing, prosecution, maintenance, defense, infringement, and the like regarding the DUKE PATENT RIGHTS (no matter how disclosed) shall be considered the confidential information of DUKE and subject to the obligations of restricted use and non-disclosure set forth in this Article 11.

ARTICLE 12 — NOTICES

12.01

It shall be a sufficient giving of any notice, request, report, statement, disclosure or other communication hereunder if the party giving the same shall

	(a)		hand deliver such communication; or

	(b)		mail such a communication, postage prepaid, first class, certified mail; or

	(c)		send such communication, shipping prepaid by national/international courier service

to the party to receive such communication at the address given below or as given in Section 3.08, in the case of payments and/or reports due in accordance with Sections 3.01, 3.06, 3.08, 4.01, 4.02, 5.01, 5.02, 5.03, 6.02, 6.03, and 8.03or such other address as may hereafter be designated by notice in writing by the appertaining party.


DUKE		OREXIGEN

For delivery via the U.S. Postal Service

Office of Science and Technology		Orexigen Therapeutics, Inc.
Duke University		Attn: Chief Executive Officer
Attn: Agreement Coordinator		One Palmer Square, Suite 515
Box 90083		Princeton, NJ 08540 USA
Durham, NC 27708 USA

For delivery via nationally/internationally recognized courier

Office of Science and Technology		(same as above)
Duke University
Attn: Agreement Coordinator
2020 West Main Street, Suite 10
Durham, NC 27705 USA

cc: (if of a legal nature)
Office of University Counsel		Biotech Law Associates, P.C.
Duke University		Attn: Douglas A. Branch
2400 Pratt Street, Suite 4000		800 Research Parkway, Suite 310
Durham, North Carolina 27710		Oklahoma City, OK 73104

12.02

The date of giving any such notice, request, report, statement, disclosure or other communications, and the date of making any payment hereunder required (provided such payment is received), shall be the actual date of receipt.

ARTICLE 13 — ASSIGNMENT

13.01

This AGREEMENT shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto. However, OREXIGEN may not assign its rights in this AGREEMENT without approval by DUKE, such approval not to be unreasonably withheld. Notwithstanding the foregoing, a change of control transaction, merger, consolidation or sale of substantially all of the assets of OREXIGEN shall not be deemed an assignment for purposes of this clause and no consent of DUKE shall be required for such transactions.

ARTICLE 14 — INDEMNITY, INSURANCE, REPRESENTATIONS, STATUS

	14.01		DUKE, and its trustees, officers, employees, faculty members, students, and agents (collectively, “DUKE Indemnitees”) will be indemnified, defended by counsel reasonably acceptable to DUKE, and held harmless by OREXIGEN and appertaining SUBLICENSEES, as the case may be, from and against any claim, liability, cost, expense, damage, deficiency, loss or obligation, of any kind or nature (including, without limitation, reasonable attorneys’ fees and other costs and expenses of defense) (collectively, “CLAIMS”) based upon, arising out of, or otherwise relating to this AGREEMENT including, but not limited to, (i) any action relating to product liability, and (ii) any CLAIM that a LICENSED PRODUCT and/or practice of any of the DUKE PATENT RIGHTS and/or OREXIGEN PATENT RIGHTS infringes the intellectual property of a THIRD PARTY. However, the foregoing indemnity shall not apply to CLAIMS to the extent that they are (x) caused by the gross negligence of DUKE, DUKE employees, DUKE faculty members, students, and/or agents acting solely within the performance of their respective responsibilities at DUKE, (y) caused by a material breach of this AGREEMENT by DUKE, and/or (z) pertain solely to claims that the activities of DUKE employees, faculty members, students, and/or agents in their performance of their respective responsibilities at DUKE (excluding any research or other responsibilities such individuals may have as a result of an association each may have with OREXIGEN and/or SUBLICENSEES) infringe the intellectual property of a THIRD PARTY.

	14.02		OREXIGEN will purchase and maintain in effect, at its sole expense, with reputable insurance companies, appropriate insurance policies, including, but not limited to a policy of product liability insurance and a policy of general liability insurance, in such amounts as is reasonably sufficient and commercially reasonable to protect against its liability under Section 14.01 above. Further, OREXIGEN will require that every SUBLICENSEE, purchase and maintain in effect, at its sole expense, with reputable insurance companies, appropriate insurance policies, including, but not limited to a policy of product liability insurance and a policy of general liability insurance, in such amounts as is reasonably sufficient and commercially reasonable to protect against their respective liability as regards Section 14.01 above. It is understood and agreed that OREXIGEN and/or SUBLICENSEES (as the case may be) shall not be required to possess product liability insurance under this Section 14.02 until the first of the following to occur as regards OREXIGEN and/or appertaining SUBLICENSEES (i) commencement of clinical trials of DUKE LICENSED PRODUCT and/or OREXIGEN LICENSED PRODUCT; or (ii) commencement of sale, lease, or provision of LICENSED PRODUCTS (including, but not limited to provision of DUKE LICENSED SERVICES or OREXIGEN LICENSED SERVICES in connection with a clinical trial). DUKE shall have the right to ascertain from time to time that any required coverage under this Section 14.02 exists, such right to be exercised by DUKE in a reasonable manner.

14.03

DUKE MAKES NO REPRESENTATIONS NOR EXTENDS ANY WARRANTIES OF ANY KIND. IN PARTICULAR, THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR THAT THE USE OF THE DUKE PATENT RIGHTS AND/OR OREXIGEN PATENT RIGHTS DOES NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER RIGHTS. IN ADDITION, NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO BE A REPRESENTATION OR WARRANTY BY DUKE OF THE VALIDITY OF ANY OF THE DUKE PATENT RIGHTS OR THE OREXIGEN PATENT RIGHTS OR THE ACCURACY, SAFETY, EFFICACY, OR USEFULNESS, FOR ANY PURPOSE, OF THE DUKE PATENT RIGHTS OR OREXIGEN PATENT RIGHTS. DUKE SHALL HAVE NO OBLIGATION, EXPRESS OR IMPLIED, TO SUPERVISE, MONITOR, REVIEW OR OTHERWISE ASSUME RESPONSIBILITY FOR THE PRODUCTION, MANUFACTURE, TESTING, MARKETING OR SALE OF ANY LICENSED PRODUCT. (FOR AVOIDANCE OF DOUBT, IT IS UNDERSTOOD AND AGREED THAT ANY SUCH ACTIVITY DESCRIBED IN THE PRECEDING SENTENCE BY ONE OR MORE OF THE INVENTORS OR ANY OTHER DUKE TRUSTEE, FACULTY MEMBER, EMPLOYEE, STUDENT, AND/OR AGENT SHALL BE DEEMED TO BE OUTSIDE THEIR RESPECTIVE CAPACITY AS A DUKE TRUSTEE, FACULTY MEMBER, EMPLOYEE, STUDENT, AND/OR AGENT, AS THE CASE MAY BE.) FURTHER, DUKE SHALL HAVE NO LIABILITY WHATSOEVER TO OREXIGEN, ITS AFFILIATES, SUBLICENSEES, OR ANY THIRD PARTIES FOR OR ON ACCOUNT OF ANY INJURY, LOSS, OR DAMAGE, OF ANY KIND OR NATURE, SUSTAINED BY, OR ANY DAMAGE ASSESSED OR ASSERTED AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR IMPOSED UPON OREXIGEN OR ANY OTHER PERSON OR ENTITY, ARISING OUT OF OR IN CONNECTION WITH OR RESULTING FROM:

	(a)		the production, use, practice, offering, lease, or sale of any LICENSED PRODUCT;

	(b)		the use of the DUKE PATENT RIGHTS and/or the OREXIGEN PATENT RIGHTS; or

	(c)		any advertising or other promotional activities with respect to any of the foregoing.

14.04

Neither party hereto is an agent of the other party for any purpose whatsoever.

ARTICLE 15 — USE OF A PARTY’S NAME

15.01

Neither party will, without the prior written consent of the other party:

	(a)		use in any publication, advertising, publicity, press release, promotional activity or otherwise, any trade-name, personal name, trademark, trade device, service mark, symbol, image, icon, or any abbreviation, contraction or simulation thereof owned by the other party;

	(b)		use the name or image of any employee, faculty member, student, or agent of the other party in any publication, publicity, advertising, press release, promotional activity or otherwise; or

	(c)		represent, either directly or indirectly, that any product or service of the other party is a product or service of the representing party or that it is made in accordance with or utilizes the information or documents of the other party.

ARTICLE 16 — SEVERANCE AND WAIVER

	16.01		Each clause of this AGREEMENT is a distinct and severable clause and if any clause is deemed illegal, void or unenforceable, the validity, legality or enforceability of any other clause or portion of this AGREEMENT will not be affected thereby.

	16.02		The failure of a party in any instance to insist upon the strict performance of the terms of this AGREEMENT will not be construed to be a waiver or relinquishment of any of the terms of this AGREEMENT, either at the time of the party’s failure to insist upon strict performance or at any time in the future, and such terms will continue in full force and effect.

ARTICLE 17 — TITLES

17.01

All titles and article headings contained in this AGREEMENT are inserted only as a matter of convenience and reference. They do not define, limit, extend or describe the scope of this AGREEMENT or the intent of any of its provisions.

ARTICLE 18 — SURVIVAL OF TERMS

18.01

The provisions of Sections 2.04, 2.07, 3.01(a), 3.01(b)-(e) (as regards financial obligations described therein incurred during the term of this Agreement), 3.03, 3.04, 3.06, 3.08, 5.01, 5.03 (as regards obligations for reports and payments due to Duke for activities occurring during the term of this Agreement) 6.02(a), 6.03, 9.01 (as regards assignment to Duke by Orexigen of full title and interest in and full documentation of said market clearance applications and all data that could

relate to market clearance applications), 9.03, 10.07, 10.09, 10.10 and Articles 1, 7, 8 (to the extent, but only to the extent, that such infringement occurs during the term of this Agreement and excluding Section 8.06 which shall only apply during the term of this Agreement), 11, 12, 13, 14, 15, 16, 18 and 19 shall survive the expiration or termination of this AGREEMENT. (

ARTICLE 19 — GOVERNING LAW

19.01

This AGREEMENT shall be construed as having been entered into in the State of North Carolina and shall be interpreted in accordance with and its performance governed by the laws of the State of North Carolina. Notwithstanding the foregoing, questions affecting the construction and effect of any patent in DUKE PATENT RIGHTS and OREXIGEN PATENT RIGHTS shall be determined by the law of the country in which the patent was granted.

ARTICLE 20 — ENTIRE UNDERSTANDING

20.01

This AGREEMENT represents the entire understanding between the parties, and supersedes all other agreements, express or implied, between the parties concerning the subject matter hereof, and shall not be subject to any change or modification except by the execution of a written instrument subscribed to by the parties hereto.

[Signature page follows

IN WITNESS WHEREOF , the parties hereto have executed this AGREEMENT on the dates set forth below.


DUKE UNIVERSITY		OREXIGEN THERAPEUTICS, INC.

By:	/s/ Robert L. Taber	By:	/s/ John F. Crowley

Robert L. Taber, Ph.D.		John F. Crowley
Vice Chancellor, Science and		President and Chief Executive Officer
Technology Development

Date: 4/2/04		Date: 3/31/04

Read and Understood by the INVENTORS


By:		/s/ Kishore Gadde

		Kishore Gadde, M.D.

Date:		19 April 2004

By:		/s/ Ranga Krishnan

		Ranga Krishnan, M.B., Ch.B.

Date:		19/4/04

APPENDICES

APPENDIX A—DUKE PATENT RIGHTS

APPENDIX B—ARTICLES OF INCORPORATION AND BY-LAWS

APPENDIX C—COMMERCIALIZATION SCHEDULE

APPENDIX D—ROYALTY REPORT FORM (SAMPLE)

APPENDIX E—COMMON STOCK PURCHASE AGREEMENT

APPENDIX F—RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT

APPENDIX G—INVESTOR RIGHTS AGREEMENT

APPENDIX A

DUKE PATENT RIGHTS

[***]


***		Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions .

APPENDIX B

CERTIFICATE OF INCORPORATION AND BY-LAWS

[Attached]

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OREXIGEN THERAPEUTICS, INC.

(incorporated on September 12, 2002)

ARTICLE 1

The name of the corporation is Orexigen Therapeutics, Inc.

ARTICLE 2

The address of the registered office of the corporation in the State of Delaware is to be located at 1201 North Market Street, P.O. Box 1347, in the City of Wilmington, County of New Castle, Zip Code 19801. The registered agent in charge thereof is Delaware Corporation Organizers, Inc.

ARTICLE 3

The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

ARTICLE 4

A. Classes of Stock . This corporation is authorized to issue two classes of stock to be designated, respectively, “ Common Stock ” and “ Preferred Stock .” The total number of shares which this corporation is authorized to issue is Twenty-Nine Million Four Hundred Six Thousand Seven Hundred Eighty-One (29,406,781) shares each having a par value of one tenth of one cent ($0.001) per share. Twenty Million (20,000,000) shares shall be Common Stock and Nine Million Four Hundred Six Thousand Seven Hundred Eighty-One (9,406,781) shares shall be Preferred Stock. The Preferred Stock authorized by this Amended and Restated Certificate of Incorporation shall consist of the “Series A Preferred Stock.”

Nine Million Four Hundred Six Thousand Seven Hundred Eighty-One (9,406,781) shares are designated “ Series A Preferred Stock .” The Series A Preferred Stock is sometimes referred to as the “ Preferred Stock .”

B. Preferred Stock . The powers, preferences, rights, restrictions, and other matters relating to each series of Preferred Stock are as follows:

1. Dividends .

a. The holders of the Preferred Stock shall be entitled to receive in any fiscal year of this corporation, out of any assets legally available therefor, dividends at the rate of eight percent (8%) of the applicable Original Issue Price (as defined herein) per share of Preferred Stock (as adjusted for any stock dividends, combinations or splits with respect to such

shares) per annum payable out of funds legally available therefor. The “ Original Issue Price ” of the Series A Preferred Stock shall be $1.18 per share (as adjusted for any stock dividends, combinations or splits with respect to such shares) (the “Series A Original Issue Price”) . Such dividends shall be payable only when, as, and if declared by the Board of Directors and shall be non-cumulative.

No dividends (other than those payable solely in the Common Stock of the corporation for which adjustments to the respective Conversion Prices (as defined below) are effected in accordance with Section 5(f) below) shall be paid on any shares of Common Stock of the corporation during any fiscal year of the corporation until dividends at an equal rate on each share of Preferred Stock shall have been paid or declared and set apart during that fiscal year and any prior year in which dividends accumulated but remain unpaid.

b. In the event the corporation shall declare a distribution payable in securities of other persons, evidences of indebtedness issued by the corporation or other persons, assets (excluding cash dividends) or options or rights to purchase any such securities or evidences of indebtedness, then, in each such case the holders of the Preferred Stock shall be entitled to a proportionate share of any such distribution as though the holders of the Preferred Stock were the holders of the number of shares of Common Stock of the corporation into which their shares of Preferred Stock are convertible as of the record date fixed for the determination of the holders of Common Stock of the corporation entitled to receive such distribution.

2. Liquidation Preference

a. In the event of any liquidation, dissolution or winding up of the corporation, whether voluntary or involuntary, the holders of shares of Preferred Stock shall be entitled to receive, on a pari passu basis and prior and in preference to any distribution of any of the assets or surplus funds of the corporation to the holders of the Common Stock by reason of their ownership thereof, an amount equal to the Original Issue Price for each share of Preferred Stock then held by such holder, plus all accrued or declared but unpaid dividends on each such share. If upon the occurrence of such event, the assets and funds thus distributed among the holders of the Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amount, then the entire assets and funds of the corporation legally available for distribution shall be distributed ratably among the holders of the Preferred Stock in proportion to the preferential amount each such holder is otherwise entitled to receive.

b. After payment to the holders of the Preferred Stock of the amounts set forth in Article 4(B)(2)(a) above, the entire remaining assets and funds of the corporation legally available for distribution, if any, shall be distributed ratably among the holders of the Common Stock.

c. Each holder of an outstanding share of Preferred Stock shall be deemed to have consented, for purposes of Section 160 of the General Corporation Law of the Delaware (and, if applicable, Sections 502, 503 and 506 of the California Corporations Code), to distributions made by this corporation in connection with the repurchase of shares of Common Stock at a price per share no greater than cost issued to or held by employees or consultants upon termination of their employment or services pursuant to agreements providing for the right of

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said repurchase between this corporation and such persons provided that such repurchases are effected in accordance with Section 6(a)(7) below.

d. A sale, conveyance or disposition (in one or a series of related transactions) of all or substantially all of the assets of this corporation, a grant of an exclusive license or other transfer (in one or a series of related transactions) of all or substantially all of the corporation’s intellectual property or a consolidation or merger of this corporation with or into any other entity or entities, shall be deemed to be a liquidation, dissolution or winding up within the meaning of this Article (4)(B)(2); provided, however, that a consolidation or merger involving this corporation shall not be deemed to be a liquidation, dissolution or winding up within the meaning of this Article (4)(B)(2)(d) if following completion of the transaction, the holders of shares of this corporation immediately prior to the transaction own shares which represent at least a majority of the voting power of the surviving corporation.

e. Whenever the distribution provided for in this Article 4(B)(2) shall be payable in securities or property other than cash, the value of such distribution shall be the fair market value of such securities or property. Any securities shall be valued as follows:

(i) Freely traded securities:

(A) If traded on a securities exchange or through the NASDAQ National Market, the value shall be based on the formula specified in the definitive agreements for the deemed liquidation transaction(s) or if no such formula exists, then the value of such securities shall be deemed to be the average of the closing prices of the securities on such exchange or system over the thirty (30) day period ending three (3) days prior to the closing;

(B) If actively traded over-the-counter but not on the NASDAQ National Market, the value shall be based on the formula specified in the definitive agreements for the deemed liquidation transaction(s) or if no such formula exists, then the value of such securities shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty (30) day period ending three (3) days prior to the closing; and

(C) If there is no active public market, the value shall be the fair market value thereof, as mutually determined by the corporation and the holders of at least a majority of the voting power of all then outstanding shares of Preferred Stock, voting together as a single class and on an as-converted to Common Stock basis.

(ii) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in (i)(A), (B) or (C) above to reflect the approximate fair market value thereof, as mutually determined by the corporation and the holders of at least a majority of the voting power of all then outstanding shares of Preferred Stock, voting together as a single class and on an as-converted to Common Stock basis.

(iii) In the event the requirements of this Section 2 are not complied with, this corporation shall forthwith either:

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(A) cause such closing to be postponed until such time as the requirements of this Section 2 have been complied with; or

(B) cancel such transaction, in which event the rights, preferences and privileges of the holders of the Preferred Stock shall revert to and be the same as such rights, preferences and privileges existing immediately prior to the date of the first notice referred to in Section 2(e)(iv) below.

(iv) This corporation shall give each holder of record of Preferred Stock written notice of such impending transaction within ten (10) days after the Board of Directors approves such transaction or within ten (10) days after the commencement of any involuntary proceeding, whichever is earlier. Such written notice shall describe the material terms and conditions of the impending transaction and the provisions of this Section 2, and this corporation shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) days after this corporation has given the first notice provided for herein or sooner than ten (10) days after this corporation has given notice of any material changes provided for herein; provided, however, that such periods may be shortened upon the written consent of the holders of the Preferred Stock that are entitled to such notice rights or similar notice rights and that represent a majority of the voting power of all such outstanding shares of Preferred Stock, voting together as a single class and on an as-converted to Common Stock basis.

3. Redemption of Series A Preferred Stock .

a. At the election of the holders of at least a majority of the outstanding shares of Series A Preferred Stock, this corporation shall redeem, at any time after the fifth (5th) anniversary of the Original Issue Date (as defined below), on the date specified in a written notice from the required holders of Series A Preferred Stock (which redemption date shall be no earlier than sixty (60) days after the date of the notice) (the “ Redemption Date ”), all shares of Series A Preferred Stock then outstanding as of the Redemption Date by paying in cash therefor, the Series A Original Issue Price for each share of Series A Preferred Stock (as adjusted for any stock dividends, combinations or splits with respect to such shares) plus all declared but unpaid dividends on such shares. Notwithstanding the provisions of this Article (4)(B)(3), this corporation will not be required to redeem shares in any calendar quarter to the extent funds are not legally available. If funds are not legally available to consummate a redemption under this Article (4)(B)(3), this corporation shall redeem the maximum number of shares for which funds are legally available on a pro rata basis from each holder of Series A Preferred Stock then outstanding and will continue to do so each calendar quarter thereafter until the total number of shares that it has redeemed is equal to the total number of shares that it would have redeemed at such time as if it had redeemed in accordance with the provisions of this Article (4)(B)(3).

b. This corporation shall give notice by certified mail, postage prepaid, return receipt requested, to the holders of record of Series A Preferred Stock to be redeemed, such notice to be addressed to each holder at the address shown in this corporation’s records, which notice shall specify the date of redemption, the number of shares of Series A Preferred Stock to be redeemed, and the date on which conversion rights terminate. Such notice shall be given no more than sixty (60) but no less than thirty (30) days prior to the date fixed for

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redemption. On or after the date of redemption as specified in such notice, each holder shall surrender its or his certificate (or comply with applicable lost certificate provisions) for the number of shares to be redeemed as stated in the notice to this corporation at the place specified in such notice. If less than all of the shares represented by such certificate are redeemed, a new certificate shall forthwith be issued for the unredeemed shares. Provided such notice by this corporation is duly given, and provided that on the Redemption Date specified there shall be a source of funds legally available for such redemption, then all rights with respect to such shares shall, after the specified Redemption Date, terminate, whether or not said certificates have been surrendered, excepting only in the right of the holder to receive the redemption price thereof, without interest, upon such surrender (or compliance with lost certificate provisions).

4. Voting Rights .

a. Each holder of shares of the Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which such shares of Preferred Stock could be converted and shall have voting rights and powers equal to the voting rights and powers of the Common Stock (except as otherwise expressly provided herein or as required by law, voting together with the Common Stock as a single class) and shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the corporation. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares into which shares of Preferred Stock held by each holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward).

b. The holders of a majority of the Preferred Stock, voting together as a single class on as-converted basis, shall be entitled to elect three (3) members of the Board of Directors at each meeting or pursuant to each consent of the corporation’s stockholders for the election of directors, and to remove from office such directors and to fill any vacancy caused by the resignation, death or removal of such directors. The holders of a majority of the Common Stock, voting as a separate class, shall be entitled to elect two (2) members of the Board of Directors at each meeting or pursuant to each consent of the corporation’s stockholders for the election of directors, and to remove from office such director and to fill any vacancy caused by the resignation, death or removal of such director. The holders of a majority of the Common Stock and Preferred Stock, voting together as a single class on an as-converted to Common Stock basis, shall be entitled to elect the remaining member or members of the Board of Directors at each meeting or pursuant to each consent of the corporation’s stockholders for the election of director, and to remove from office such directors and to fill any vacancy caused by the resignation, death or removal of such directors.

5. Conversion . The holders of the Preferred Stock shall have conversion rights as follows (the “ Conversion Rights ”):

a. Right to Convert . Each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the corporation or any transfer agent for such stock, into such number of fully paid and nonassessable shares of Common Stock as provided herein.

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b. Conversion of Preferred Stock . Each share of Common Stock to which a holder of Preferred Stock shall be entitled upon conversion of a share of Series A Preferred Stock shall be determined by dividing the Series A Original Issue Price by the Series A Conversion Price (as defined herein) in effect at the time that the certificate is surrendered for conversion.

c. Conversion Price . The conversion price for the Series A Preferred Stock shall initially be $1.19, subject to adjustment as hereinafter provided (the “ Series A Conversion Price ”).

d. Automatic Conversion . Each share of Preferred Stock shall automatically be converted into shares of Common Stock at the applicable Conversion Price upon the earlier to occur of: (i) the date specified by written consent or agreement of holders of at least a majority of the shares of Preferred Stock then outstanding, voting together as a single class and on an as-converted to Common Stock basis, or (ii) immediately upon the closing of the sale of the corporation’s Common Stock in a firm commitment, underwritten public offering registered under the Securities Act of 1933, as amended (the “ Securities Act ”), with aggregate offering proceeds to the corporation (before deduction for underwriters’ discounts and expenses relating to the issuance) of at least $30,000,000 and a public offering price per share that is not less than $3.60 (as adjusted for any stock dividends, stock splits, recapitalizations or the like).

e. Mechanics of Conversion .

(i) Before any holder of Preferred Stock shall be entitled to convert the same into shares of Common Stock, he shall surrender the certificate or certificates therefor, duly endorsed, (or comply with applicable lost certificate provisions) at the office of the corporation or of any transfer agent for such stock, and shall give written notice to the corporation at such office that he elects to convert the same and shall state therein the name or names in which he wishes the certificate or certificates for shares of Common Stock to be issued. The corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Preferred Stock, a certificate or certificates for the number of shares of Common Stock (together with a certificate for any shares of Preferred Stock not converted, if applicable) to which he shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date (i) of surrender of the shares of Preferred Stock to be converted or (ii) specified in Section 5(d), and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date.

(ii) If the conversion is in connection with an underwritten offering of securities pursuant to the Securities Act, the conversion may, at the option of any holder tendering shares of Preferred Stock for conversion, be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive the Common Stock upon conversion of the Preferred Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of such sale of securities.

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f. Adjustments to Conversion Price for Stock Dividends and for Combinations or Subdivisions of Common Stock . In the event that this corporation at any time shall declare or pay, without consideration, any dividend on the Common Stock payable in Common Stock or in any right to acquire Common Stock for no consideration, or shall effect a subdivision of the outstanding shares of Common Stock into a greater number of shares of Common Stock (by stock split, reclassification or otherwise than by payment of a dividend in Common Stock or in any right to acquire Common Stock), or in the event the outstanding shares of Common Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of Common Stock, the Series A Conversion Price prior to such event shall, concurrently with the effectiveness of such event, be proportionately decreased or increased, as appropriate. In the event that this corporation shall declare or pay, without consideration, any dividend on the Common Stock payable in any right to acquire Common Stock for no consideration, then the corporation shall be deemed to have made a dividend payable in Common Stock in an amount of shares equal to the maximum number of shares issuable upon exercise of such rights to acquire Common Stock.

g. Adjustments for Reclassification and Reorganization . If the Common Stock issuable upon conversion of the Preferred Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares provided for in Article 4(B)(5)(f) above or a deemed liquidation transaction(s) referred to in Article 4(B)(2)(c) above), the Series A Conversion Price, concurrently with the effectiveness of such reorganization or reclassification, be proportionately adjusted so that the Preferred Stock shall be convertible into, in lieu of the number of shares of Common Stock which the holders would otherwise have been entitled to receive, a number of shares of such other class or classes of stock equivalent to the number of shares of Common Stock that would have been subject to receipt by the holders upon conversion of the Preferred Stock immediately before such reorganization or reclassification.

h. Adjustments for Issuance of Additional Equity Securities :

(i) Special Definitions . For purposes of this Section 5(h), the following definitions shall apply:

(A) “ Option ” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

(B) “ Original Issue Date ” shall mean the date on which a share of Series A Preferred Stock was first issued.

(C) “ Convertible Securities ” shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock.

(D) “ Additional Shares of Common Stock ” shall mean all shares of Common Stock issued (or, pursuant to Section 5(h)(iii) below, deemed to be issued)

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by the corporation after the Original Issue Date, other than shares of Common Stock issued or issuable:

(I) upon the conversion of shares of Series A Preferred Stock or as a dividend or distribution on Series A Preferred Stock;

(II) pursuant to the acquisition of another corporation or entity by the corporation by way of merger, purchase of all or substantially all of the assets of the other corporation or stock for stock exchange approved by the Board of Directors;

(III) to officers, directors or employees of, or consultants to, the corporation or a subsidiary under a stock option or other equity incentive plan or agreement approved by and in a manner determined by the Board of Directors (including stock grants to officers, directors, employees or consultants);

(IV) upon the closing of a public offering of the corporation’s securities pursuant to the Securities Act in which all shares of Preferred Stock are automatically converted to Common Stock pursuant to Section 5(d) hereof;

(V) by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock for which adjustment is otherwise made pursuant to this Section 5; or

(VI) Options or Convertible Securities, issued not primarily for equity financing purposes to financial institutions, strategic partners or lessors in connection with commercial credit arrangements, equipment financings, debt financings, strategic partnerships, research and development partnerships, licensing or collaborative arrangements or similar transactions approved by the Board of Directors.

(ii) No Adjustment of Conversion Price . No adjustment in the Series A Conversion Price shall be made, unless the consideration per share (determined pursuant to Section 5(h)(v)) for an Additional Share of Common Stock issued or deemed to be issued by the corporation is less than the Series A Conversion Price in effect on the date of, and immediately prior to, the issue of such Additional Shares.

(iii) Issue of Securities Deemed Issue of Additional Shares of Common Stock . If the corporation at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto without regard to any provision contained therein designed to protect against dilution) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that Additional Shares of Common Stock shall not be deemed to have been issued unless the consideration per share (determined pursuant to Section 5(h)(v) hereof) of such Additional

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Shares of Common Stock would be less than the Series A Conversion Price in effect on the date of, and immediately prior to, the deemed issuance, or such record date, as the case may be, provided further that in any such case in which Additional Shares of Common Stock are deemed to be issued:

(A) No further adjustment in the Series A Conversion Price shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities;

(B) If such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase in the consideration payable to the corporation, or decrease in the number of shares of Common Stock issuable upon the exercise, conversion or exchange thereof, the Series A Conversion Price computed upon the original issue of such Options or Convertible Securities (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities;

(C) Upon the expiration of any such Options or rights, the termination of any such rights to convert or exchange or the expiration of any options or rights related to such convertible or exchangeable securities, the Series A Conversion Price, to the extent in any way affected by or computed using such options, rights or securities, shall be recomputed to reflect the issuance of only the number of shares of Common Stock (and convertible or exchangeable securities which remain in effect) actually issued upon the exercise of such options or rights, upon the conversion or exchange of such securities or upon the exercise of the options or rights related to such securities;

(D) No readjustment pursuant to clause (B) or (C) above shall have the effect of increasing the Series A Conversion Price to an amount which exceeds the lower of (a) the Series A Conversion Price on the original adjustment date and (b) the Series A Conversion Price that would have resulted from any issuance of Additional Shares of Common Stock between the original adjustment date and such readjustment date;

(E) In the case of any Options which expire by their terms not more than ninety (90) days after the date of issue thereof, no adjustment of the Series A Conversion Price shall be made until the expiration or exercise of all such Options issued on the same date, whereupon such adjustment shall be made in the manner provided in clause (C) above; and

(F) If such record date shall have been fixed and such Options or Convertible Securities are not issued on the date fixed therefore, the adjustments previously made in the Series A Conversion Price which became effective on such record date shall be cancelled as of the close of business on such record date, and thereafter the Series A Conversion Price shall be adjusted pursuant to this subsection 5(h)(iii) as of the actual date of their issuance.

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(iv) Adjustment of the Series A Conversion Price Upon Issuance of Additional Shares of Common Stock . Subject to the provisions of Section 5(h)(ii) and 5(h)(v), in the event the corporation shall at any time after the Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 5(h)(iii)), but excluding shares issued as a dividend or distribution or upon a stock split or combination as provided in Section 5(f)), without consideration or for a consideration per share less than the Series A Conversion Price in effect on the date of and immediately prior to such issue, then and in such event, the Series A Conversion Price shall be reduced concurrently with such issue to a price (calculated to the nearest cent) determined by multiplying the Series A Conversion Price by a fraction, (x) the numerator of which shall be the number of shares of Common Stock issuable upon conversion of all shares of Preferred Stock outstanding immediately prior to such issue plus the number of shares of Common Stock which the aggregate consideration received by the corporation for the total number of Additional Shares of Common Stock so issued would purchase at the Series A Conversion Price and (y) the denominator of which shall be the number of shares of Common Stock issuable upon conversion of

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