Common use of EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES Clause in Contracts

EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES. 7.1 Licensee shall also pay to The Regents an earned royalty on Net Sales as follows: (1) *** of the Net Sales of Type I Therapeutic Licensed Products; (ii) *** of the Net Sales of Type II Therapeutic Licensed Products; (iii) *** of the Net Sales of Diagnostic Licensed Product; and (iv) and *** of the Net Sales of any other Licensed Products and (v) *** of the Net Sales of a Licensed Product that is not covered by Regents Patent Rights but is identified from use of, covered by, utilizes or is developed from use of Regents’ Technology Rights. 7.2 Licensee shall pay to The Regents a minimum annual royalty of *** for the life of Regents’ Patent Rights, beginning with the year of the first commercial sale of any Licensed Product, but no later than December 2011. For the first year of commercial sales, Licensee’s obligation to pay the minimum annual royalty will be pro-rated for the number of months remaining in that calendar year when commercial sales commence and will be due the following March 31, to allow for crediting of the pro-rated year’s earned royalties. For subsequent years, the minimum annual royalty will be paid to The Regents by March 31 of each year and will be credited against the earned royalty due for the calendar year in which the minimum payment was made. 7.3 Licensee shall, however, be entitled to reduce the earned royalty provided for in Paragraph 7.1 in the event that it becomes necessary (either by order or judgment of any court or otherwise) for Licensee to license patent rights owned by third parties to make, have made, use or sell Licensed Product. Such reduction shall be equal to *** of any payment made to such third party under such license against up to *** of the amounts payable to The Regents under Paragraph 7.1 above on a going forward basis. Credits with respect to this Paragraph shall be available to Licensee with respect to the full royalty payable pursuant to Paragraph 7.1 and no such credit shall be available with respect to any Combination Product. 7.4 Royalties payable under this Article will be payable only once with respect to a particular Licensed Product or Licensed Method and will be paid only once regardless of the number of patents, or patent applications in Regents Patent Rights covering such Licensed Product or Licensed Method. In the event any Licensed Product qualifies as more than one type of Licensed Product under this Agreement, only the highest earned royalty percentage amongst the relevant types of Licensed Products shall apply. *** Material has been omitted pursuant to a request for confidential treatment.

EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES. 7.1 9.1 The Licensee shall will also pay to The Regents an earned royalty on Net Sales as follows: of (1i) [*** ] percent ([**]%) of the Net Sales of Type I Therapeutic Licensed Products; Product or Licensed Method by the Licensee or any Affiliate or Joint Venture (ii) “Royalty”). 9.2 In the event it becomes necessary for the Licensee to license patent rights owned by a third party to make, use or Sell Licensed Products or to practice Licensed Methods, then the Licensee shall have the right to obtain a license from such third party and to credit [*** ] percent ([**]%) of any payment made to such third party under such license against up to [**] percent ([**]%) of the amounts payable to The Regents under Paragraph 9.1 above on a going-forward basis. Any credit pursuant to this Paragraph shall be available to the Licensee with respect to the full royalty payable pursuant to Paragraph 9.1, provided that in no event shall the royalty payable to The Regents be reduced to less than [**] percent ([**]%) of Net Sales of Type II Therapeutic Licensed Products; (iii) *** of the Net Sales of Diagnostic Licensed Product; and (iv) and *** of the Net Sales of any other Licensed Products or Licensed Methods by the Licensee or any Affiliate as a result of all credits applied under this Agreement and (v) *** of provided further that no such credit shall be available with respect to any Combination Product to the Net Sales of a Licensed extent attributable to payments under such third party license for patent rights that cover the Combination Product Component. In addition, any credit must be used within the royalty reporting period that such credit is earned and may not covered by Regents Patent Rights but is identified roll forward from use of, covered by, utilizes or is developed from use of Regents’ Technology Rightsone royalty reporting period to the next. 7.2 9.3 The Licensee shall will also pay to The Regents a minimum annual royalty of *** for the life of Regents’ Patent Rights, Rights as follows: (i) [**] dollars ($[**]) beginning with the year of the first commercial sale Sale of any Licensed Product, but no later than December 2011calendar year 2015; (ii) [**] dollars ($[**]) for the second year of Sales of Licensed Product; (iii) [**] dollars ($[**]) for the third and fourth years of Sales of Licensed Product; and (iv) [**] dollars ($[**]) for the fifth year of Sales of Licensed Product and for each year thereafter for the life of Patent Rights. 9.4 The minimum annual royalty will be paid to The Regents by [**] of each year and will be credited against the Earned Royalty due for the calendar year in which the minimum payment was made. For However, if the year of the first Sale is earlier than calendar year of commercial sales2015, then the Licensee’s obligation to pay the minimum annual royalty will be pro-rated for the number of months remaining in that calendar year when commercial sales Sales commence and will be due the following March 31[**] (along with the minimum annual royalty payment for that year), to allow for crediting of the pro-rated year’s earned royalties. For subsequent years, the minimum annual royalty will be paid to The Regents by March 31 of each year and will be credited against the earned royalty due for the calendar year in which the minimum payment was madeEarned Royalties. 7.3 Licensee shall, however, be entitled to reduce the earned royalty provided for in Paragraph 7.1 in the event that it becomes necessary (either by order or judgment of any court or otherwise) for Licensee to license patent rights owned by third parties to make, have made, use or sell Licensed Product. Such reduction shall be equal to *** of any payment made to such third party under such license against up to *** of the amounts payable to The Regents under Paragraph 7.1 above on a going forward basis. Credits with respect to this Paragraph shall be available to Licensee with respect to the full royalty payable pursuant to Paragraph 7.1 and no such credit shall be available with respect to any Combination Product. 7.4 Royalties payable under this Article will be payable only once with respect to a particular Licensed Product or Licensed Method and will be paid only once regardless of the number of patents, or patent applications in Regents Patent Rights covering such Licensed Product or Licensed Method. In the event any Licensed Product qualifies as more than one type of Licensed Product under this Agreement, only the highest earned royalty percentage amongst the relevant types of Licensed Products shall apply. *** Material has been omitted pursuant to a request for confidential treatment.

EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES. 7.1 Licensee shall also pay to The Regents an earned royalty on Net Sales as follows: (1) of [*** ] percent ([**]%) of the Net Sales of Type I Therapeutic Licensed Products; (ii) *** Product or practice of the Licensed Method. However, for Net Sales of Type II Therapeutic Licensed Products; (iii) *** of the Net Sales of Diagnostic Licensed Product; and (iv) and *** of the Net Sales of any other Licensed Products and (v) *** of the Net Sales of by a Licensed Product that is not covered by Regents Patent Rights but is identified from use ofsublicensee, covered by, utilizes or is developed from use of Regents’ Technology Rights. 7.2 Licensee shall pay to The Regents an earned royalty equal to [**] percent ([**]%) of the royalty payable by the sublicensee to Licensee, but in no event shall the royalty rate payable to The Regents by Licensee be less than [**] percent ([**]%) and not more than [**] percent ([**]%) of the sublicensee’s Net Sales. 7.2 Licensee shall, however, be entitled to reduce the earned royalty provided for in Paragraph 7.1 in the event that it becomes necessary for Licensee to license intellectual property rights covering ingredients, methods or devices owned by third parties to make, use or sell Combination Product or Licensed Product or practice Licensed Method, provided that the combined royalty payable to The Regents and the third parties exceeds [**] percent ([**]%) prior to the reduction set forth in this Paragraph 7.2. The reduction shall be equal to [**] the sum of the royalty rates due to such third parties. However, in no event shall the royalty rate payable to The Regents on Net Sales as provided for in Paragraph 7.1 be less than [**] percent ([**]%). 7.3 Notwithstanding anything contained herein, if a Licensed Product is a component of a Combination Product the Net Sales used to calculate earned royalties shall be determined as follows: 7.3.1 If the Licensed Product is sold independently from the Combination Product, then the gross invoice price for such Licensed Product to be used in the calculation of Net Sales in any given quarter will be the [**] of the Licensed Product when sold independently measured over such quarter. 7.3.2 If the Licensed Product is not sold independently from the Combination Product, then the Net Sales in any given quarter will be the percentage that the cost of the Licensed Product contributes to the Combination Product cost times the Net Sales of the Combination Product. However, in no event will the percentage that the cost of the Licensed Product contributes to the Combination Product be less than [**] percent ([**]%). 7.4 Licensee shall also pay to The Regents a minimum annual royalty of *** for the life of Regents’ Patent Rights, beginning with with: 7.4.1 the first year of the first commercial sale of any Licensed Product or Combination Product; or 7.4.2 the first full calendar year after the [**] anniversary of the Effective Date, but no later than December 2011. whichever is earlier, equal to the fees set forth below: 7.4.2.1 [**] thousand dollars ($[**]) due the first year; 7.4.2.2 [**] dollars ($[**]) due the second year; 7.4.2.3 [**] dollars ($[**]) due the third year; and each subsequent year for the life of The Regents’ Patent Rights. 7.5 For the first year of commercial sales, Licensee’s obligation to pay the minimum annual royalty will be pro-rated for the number of months remaining in that calendar year when commercial sales commence and will be due the following March 31[**], to allow for crediting of the pro-rated year’s earned royalties. For subsequent years, the minimum annual royalty will be paid to The Regents by March 31 [**] of each year and will be credited against the earned royalty due for the calendar year in which the minimum payment was made. 7.3 Licensee shall, however, be entitled to reduce the earned royalty provided for in Paragraph 7.1 in the event that it becomes necessary (either by order or judgment of any court or otherwise) for Licensee to license patent rights owned by third parties to make, have made, use or sell Licensed Product. Such reduction shall be equal to *** of any payment made to such third party under such license against up to *** of the amounts payable to The Regents under Paragraph 7.1 above on a going forward basis. Credits with respect to this Paragraph shall be available to Licensee with respect to the full royalty payable pursuant to Paragraph 7.1 and no such credit shall be available with respect to any Combination Product. 7.4 Royalties payable under this Article will be payable only once with respect to a particular Licensed Product or Licensed Method and will be paid only once regardless of the number of patents, or patent applications in Regents Patent Rights covering such Licensed Product or Licensed Method. In the event any Licensed Product qualifies as more than one type of Licensed Product under this Agreement, only the highest earned royalty percentage amongst the relevant types of Licensed Products shall apply. *** Material has been omitted pursuant to a request for confidential treatment.

EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES. 7.1 6.1 Licensee shall also pay to The Regents an earned royalty on Net Sales as follows: (1) of [*** Redacted] percent ([*** Redacted]%) of the Net Sales of Type I Therapeutic Licensed Products; (ii) *** of Product or Licensed Method. 6.2 In the Net Sales of Type II Therapeutic Licensed Products; (iii) *** of event that Licensee must pay additional royalties on the Net Sales of Diagnostic Licensed Product; and (iv) and *** of the Net Sales of any other Licensed Products and (v) *** of the Net Sales sale of a Licensed Product or Licensed Method to one or more independent, unaffiliated third parties (who have patent rights that are required to make or sell the Licensed Product or Licensed Method), and the sum of royalties to be paid by Licensee (prior to any reductions) to all such third parties (such royalty for each individual third party, a "Third Party Royalty" and the sum, the "Total Royalties") would exceed [*** Redacted] percent ([*** Redacted]%), then The Regents will agree to reduce the royalties due on that Licensed Product or Licensed Method by multiplying with the ratio [*** Redacted], where X is the percentage value of the Total Royalties; provided that each such third party also agrees to a reduction of its royalty rate to an amount equal to or less than Y, where Y is equal to the corresponding Third Party Royalty multiplied with the ratio [*** Redacted]. If any such third party does not covered reduce its royalty rate to at least Y, then The Regents shall reduce its royalty rate by a percentage equal to the minimum reduction *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. (percentage wise) agreed to by such third parties. However, in no case shall royalties due The Regents Patent Rights but according to Paragraph 6.1 be reduced to less than [*** Redacted] percent ([*** Redacted]%). For example: If Licensee licenses intellectual property rights from two other entities E1 and E2 for use in Licensed Products, at the respective royalty rates of [*** Redacted]% and [*** Redacted]%, the total royalties before a proportionate reduction is identified from use ofequal to [*** Redacted]. The Regents will then agree to reduce its royalty rate at a ratio of [*** Redacted], covered byi.e. to [*** Redacted]%, utilizes if the other licensing entities E1 and E2 agree to reduce their royalty rate to [*** Redacted]% or is developed from use below. Licensing entity Initial royalty rate ratio Reduced royalty rate The Regents [*** Redacted]% [*** Redacted] [*** Redacted]% 6.3 To implement a reduction in royalties due under Paragraph 6.2, Licensee will provide written evidence of license agreements with third parties that include the third parties' agreement to a reduction in royalties due to them sufficient under Paragraph 6.2. Licensee shall provide written evidence of payments made to such third parties under such license agreements. 6.4 Licensee shall pay to The Regents a minimum annual royalty as follows: - [*** Redacted] dollars ($[*** Redacted]) in [*** Redacted]; - [*** Redacted] dollars ($[*** Redacted]) in [*** Redacted]; - [*** Redacted] dollars ($[*** Redacted]) in [*** Redacted]; - [*** Redacted] dollars ($[*** Redacted]) in [*** Redacted]; - [*** Redacted] dollars ($[*** Redacted]) in [*** Redacted]; - [*** Redacted] dollars ($[*** Redacted]) in [*** Redacted]; - and beginning in [*** Redacted] and for the remaining life of Regents’ Technology ' Patent Rights. 7.2 , Licensee shall pay to The Regents a minimum annual royalty of [*** for the life of Regents’ Patent Rights, beginning with the year of the first commercial sale of any Licensed Product, but no later than December 2011Redacted] dollars ($[*** Redacted]). For the first year of commercial sales, Licensee’s obligation to pay the minimum annual royalty will be pro-rated for the number of months remaining in that calendar year when commercial sales commence and will be due the following March 31, to allow for crediting of the pro-rated year’s earned royalties. For subsequent years, the The minimum annual royalty will be paid to The Regents by March 31 November 30 of each year and will be credited against the earned royalty due for the calendar year in which the minimum payment was made. 7.3 Licensee shall, however, be entitled to reduce the earned royalty provided for in Paragraph 7.1 in the event that it becomes necessary (either by order or judgment of any court or otherwise) for Licensee to license patent rights owned by third parties to make, have made, use or sell Licensed Product. Such reduction shall be equal to *** of any payment made to such third party under such license against up to *** of the amounts payable to The Regents under Paragraph 7.1 above on a going forward basis. Credits with respect to this Paragraph shall be available to Licensee with respect to the full royalty payable pursuant to Paragraph 7.1 and no such credit shall be available with respect to any Combination Product. 7.4 Royalties payable under this Article will be payable only once with respect to a particular Licensed Product or Licensed Method and will be paid only once regardless of the number of patents, or patent applications in Regents Patent Rights covering such Licensed Product or Licensed Method. In the event any Licensed Product qualifies as more than one type of Licensed Product under this Agreement, only the highest earned royalty percentage amongst the relevant types of Licensed Products shall apply. *** Material has been omitted Confidential treatment requested pursuant to a request for confidential treatmenttreatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 6.5 In no event shall more than one royalty be payable hereunder with respect to any particular Licensed Product unit or practice of Licensed Method. No royalty shall be payable under this Agreement with respect to sales of Licensed Products among Licensee, its Affiliates or sublicensees for resale; nor shall a royalty be payable hereunder with respect to the practice of Licensed Methods or the sale or provision of Licensed Products as samples, for research and development efforts by or for Licensee, or transactions that are not a full commercial sale (i.e. for transactions that are at fully burdened cost or for which there is no profit). 6.6 The amounts payable under this Agreement are based on the parties' understanding that The Regents owns or controls sufficient right, title and interest in each of the patent rights listed in the table of Section 1.5 to grant Licensee an exclusive license thereunder apart from the license to the government hereunder. In the event The Regents breaches this Section 6.6 (i.e. it does not have such ownership or control), then the parties shall negotiate in good faith to appropriately reduce the amounts payable under this Agreement, in addition to any other remedies which may be available.

EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES. 7.1 8.1 The Licensee shall will also pay to The Regents an the following earned royalty on royalty, with respect to cumulative Net Sales as follows: by the Licensee, Affiliates, Joint Ventures and Sublicensees, in a given calendar year (1collectively, the “Royalty”): (i) [*** ] of the cumulative annual Net Sales of Type I Therapeutic Licensed ProductsProduct (other than Third Party Compounds) up to and including [*]; and [*] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. (ii) [*** ] of the cumulative annual Net Sales of Type II Therapeutic Licensed ProductsThird Party Compounds up to and including [*]; and (iii) [*** ] of the any amount of annual Net Sales of Diagnostic Licensed ProductProduct (other than Third Party Compounds) in excess of [*]; and and (iv) and [*** ] of the any amount of annual Net Sales of any other Licensed Products and (v) Third Party Compounds in excess of [*** of the Net Sales of a Licensed Product that is not covered by Regents Patent Rights but is identified from use of, covered by, utilizes or is developed from use of Regents’ Technology Rights]. 7.2 8.2 The Licensee shall will also pay to The Regents a minimum annual royalty of *** fifty thousand dollars ($50,000) for the life of Regents’ Patent Rights, beginning with the year of the first commercial sale Sale of any Licensed Product, but no later than December 2011Licensed Service or Licensed Method. For The minimum annual royalty will be paid to The Regents by [*] of each year and will be credited against the first Earned Royalty due for the calendar year of commercial sales, in which the minimum payment was made. Licensee’s obligation to pay the minimum annual royalty will be pro-rated for the number of months remaining in that the calendar year when commercial sales Sales commence and will be due and, in the following March 31, to allow for crediting of the event that such pro-rated year’s earned royalties. For subsequent years, the minimum annual royalty will be amount exceeds Earned Royalties paid to The Regents by March 31 in the remainder of each year and will be credited against the earned royalty due for the calendar year in which the minimum payment first Sale of Licensed Product, Licensed Service or Licensed Method was made, the difference between the pro-rated minimum annual royalty for the first calendar year and the sum of the amount of Earned Royalties paid and to be paid to The Regents in such first year will be due the following [*] (along with the minimum annual royalty payment for the second calendar year). 7.3 8.3 Notwithstanding Paragraph 8.1, if Licensee shall, however, be entitled finds it necessary or desirable to reduce the earned royalty provided for in Paragraph 7.1 in the event that it becomes necessary (either by order obtain a license under a patent of one or judgment of any court or otherwise) for Licensee to license patent rights owned by more third parties to make, have madesell, use offer for sale or sell import a Licensed Product. Such reduction , and if the combined royalty due to UCSF and these unaffiliated third party(ies) exceeds [*], then the royalty to be paid to UCSF by Licensee shall be equal reduced by the amount determined by the following formula: [*], in which [*]. However, in no event shall the amount paid to UCSF be reduced below [*** of any payment made to such third party under such license against up to *** ] of the original royalty amounts payable due UCSF. Furthermore, at the time that the first royalty payment reduction described in this Paragraph 8.3 with respect to any Licensed Product occurs, Licensee shall pay to The Regents a one-time, non-refundable, non-creditable payment of [*]. 8.4 With respect to each Licensed Product, if Licensee is obligated to make royalty payments to The Regents under Paragraph 7.1 above this Agreement and under the T3 Licensed Agreement on a going forward basis. Credits with respect to this Paragraph shall be available to Licensee with respect to the full royalty payable pursuant to Paragraph 7.1 and no such credit shall be available with respect to any Combination Product. 7.4 Royalties payable under this Article will be payable only once with respect to a particular Licensed Product or Licensed Method and will be paid only once regardless Net Sales of the number of patents, or patent applications in Regents Patent Rights covering such Licensed Product or Licensed Method. In the event any Licensed Product qualifies as more than one type of Licensed Product Product, then Licensee shall make royalty payments under this Agreement, only and shall have no obligation to pay and The Regents shall have no right to receive royalties under the highest earned royalty percentage amongst T3 License Agreement on the relevant types Net Sales of such Licensed Products shall applyProduct. [*** Material has been omitted ] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to a request for confidential treatmentRule 406 of the Securities Act of 1933, as amended.

EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES. 7.1 6.1 Licensee shall also pay to The Regents an earned royalty on Net Sales as follows: (1) of [*** Redacted] percent ([*** Redacted]%) of the Net Sales of Type I Therapeutic Licensed Products; (ii) *** of the Net Sales of Type II Therapeutic Licensed Products; (iii) *** of the Net Sales of Diagnostic Licensed Product; and (iv) and *** of the Net Sales of any other Licensed Products and (v) *** of the Net Sales of a Licensed Product that is not covered by Regents Patent Rights but is identified from use of, covered by, utilizes or is developed from use of Regents’ Technology RightsLicensed Method. 7.2 Licensee shall pay to The Regents a minimum annual royalty of *** for the life of Regents’ Patent Rights, beginning with the year of the first commercial sale of any Licensed Product, but no later than December 2011. For the first year of commercial sales, Licensee’s obligation to pay the minimum annual royalty will be pro-rated for the number of months remaining in that calendar year when commercial sales commence and will be due the following March 31, to allow for crediting of the pro-rated year’s earned royalties. For subsequent years, the minimum annual royalty will be paid to The Regents by March 31 of each year and will be credited against the earned royalty due for the calendar year in which the minimum payment was made. 7.3 Licensee shall, however, be entitled to reduce the earned royalty provided for in Paragraph 7.1 in 6.2 In the event that it becomes necessary (either by order or judgment Licensee must pay additional royalties on the sale of any court or otherwise) for Licensee to license patent rights owned by third parties to make, have made, use or sell Licensed Product. Such reduction shall be equal to *** of any payment made to such third party under such license against up to *** of the amounts payable to The Regents under Paragraph 7.1 above on a going forward basis. Credits with respect to this Paragraph shall be available to Licensee with respect to the full royalty payable pursuant to Paragraph 7.1 and no such credit shall be available with respect to any Combination Product. 7.4 Royalties payable under this Article will be payable only once with respect to a particular Licensed Product or Licensed Method and will be paid only once regardless of to one or more independent, unaffiliated third parties (who have patent rights that are required to make or sell the number of patents, or patent applications in Regents Patent Rights covering such Licensed Product or Licensed Method. In ), and the event sum of royalties to be paid by Licensee (prior to any Licensed Product qualifies as more than one type of Licensed Product under this Agreementreductions) to all such third parties (such royalty for each individual third party, only a "Third Party Royalty" and the highest earned royalty percentage amongst sum, the relevant types of Licensed Products shall apply. "Total Royalties") would exceed [*** Material has been omitted Redacted] percent ([*** Redacted]%), then The Regents will agree to reduce the royalties due on that Licensed Product or Licensed Method by multiplying with the ratio [*** Redacted], where X is the percentage value of the Total Royalties; provided that each such third party also agrees to a reduction of its royalty rate to an amount equal to or less than Y, where Y is equal to the corresponding Third Party Royalty multiplied with the ratio [*** Redacted]. If any such third party does not reduce its royalty rate to at least Y, then The Regents shall reduce its royalty rate by a percentage equal to the minimum reduction *** Confidential treatment requested pursuant to a request for confidential treatment.treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. (percentage wise) agreed to by such third parties. However, in no case shall royalties due The Regents according to Paragraph 6.1 be reduced to less than [*** Redacted] percent ([*** Redacted]%). For example: If Licensee licenses intellectual property rights from two other entities E1 and E2 for use in Licensed Products, at the respective royalty rates of [*** Redacted]% and [*** Redacted]%, the total royalties before a proportionate reduction is equal to [*** Redacted]. The Regents will then agree to reduce its royalty rate at a ratio of [*** Redacted], i.e. to [*** Redacted]%, if the other licensing entities E1 and E2 agree to reduce their royalty rate to [*** Redacted]% or below. Licensing entity Initial royalty rate ratio Reduced royalty rate The Regents [*** Redacted]% [*** Redacted] [*** Redacted]%

EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES. 7.1 8.1 The Licensee shall will also pay to The Regents an earned royalty on Net Sales as follows: of (1i) *** four percent (4%) of the Net Sales of Type I Therapeutic Licensed ProductsProduct or Licensed Method by the Licensee or any Affiliate or Joint Venture; and (ii) *** four percent (4%) of any Service Income of the Licensee, any Affiliate or Joint Venture ("Royalty"). For clarity, these earned royalties and other provisions related thereto under this Article 8 include and apply to, without limitation, such Net Sales of Type II Therapeutic Licensed Products; (iii) *** of the Net Sales of Diagnostic Licensed Product; and (iv) and *** of the Net Sales of any other Licensed Products and (v) *** of the Net Sales of a Licensed Product that is not covered or Licensed Method and Service Income received by Regents Patent Rights but is identified Licensee from use of, covered by, utilizes or is developed from use of Regents’ Technology Rightsany Customer Sublicensee ("Customer Sublicensee Royalty"). 7.2 8.2 The Licensee will also pay to The Regents a minimum annual royalty for the life of Patent Rights, beginning with the first full calendar year (i.e., beginning with January 1st and ending with December 31st) of Sales following the first Sale of Licensed Product or Licensed Service, but no later than calendar year 2016. The Licensee shall pay to The Regents a minimum annual royalty of *** twenty thousand dollars ($20,000) for the first full calendar year of Sales of Licensed Product or Licensed Service. For the second calendar year of Sales of Licensed Product or Licensed Service and for each year thereafter for the life of Regents’ the Patent Rights, beginning with the year of the first commercial sale of any Licensed Product, but no later than December 2011. For the first year of commercial sales, Licensee’s obligation Licensee shall pay to pay the The Regents a minimum annual royalty will be pro-rated for the number of months remaining in that calendar year when commercial sales commence and will be due the following March 31, to allow for crediting of the pro-rated year’s earned royaltiesfifty thousand dollars ($50,000). For subsequent years, the The minimum annual royalty will be paid to The Regents by March 31 February 28 of each year and will be credited against the earned royalty due Earned Royalty clue for the calendar year in which the minimum payment was made. 7.3 Licensee shall8.3 Notwithstanding other provisions hereunder to the contrary with respect to Earned Royalty, however, the Earned Royalty noted above hereunder this Section 8 (the "Initial Earned Royalty") shall be entitled reduced by a royalty stacking adjustment to reduce the earned royalty provided for in Paragraph 7.1 instead equal an "Adjusted Royalty" in the event that it becomes necessary (either by order the Earned Royalty plus any additional royalty Licensee owes to one or judgment of any court or otherwise) for Licensee to license patent rights owned by more third parties to makefor Net Sales of Licensed Products or Licensed Services (Third Party Royalty)(together the "Total Stacked Royalty") exceeds a "Total Maximum Royalty" of eight percent (8%). In this case, have made, use or sell Licensed Product. Such reduction the Royalty shall be reduced to equal to *** of any payment made to such third party under such license against up to *** the Adjusted Royalty which shall be a pro-rata portion of the amounts payable Total Maximum Royalty according to the following formula: Adjusted Royalty = (Earned Royalty / Total Stacked Royalty) x Total Maximum Royalty. For example, in order to provide absolute clarity, where the Initial Earned Royalty is 4% and additional royalty burden to Licensee for Licensed Product equals 5%, then the Total Stacked Royalty of 9% exceeds the Total Maximum Royalty of 8% and therefore the Earned Royalty instead due to The Regents under Paragraph 7.1 above on a going forward basisshall equal an Adjusted Royalty = (4% / 9%) x 8% = 3.56%. Credits with respect Notwithstanding the foregoing, however, in no event shall the Earned Royalty be reduced to this Paragraph shall be available to Licensee with respect to the full royalty payable pursuant to Paragraph 7.1 and no such credit shall be available with respect to any Combination Product. 7.4 Royalties payable under this Article will be payable only once with respect to a particular Licensed Product or Licensed Method and will be paid only once regardless an Adjusted Royalty that is less than 50% of the number of patents, or patent applications in Regents Patent Rights covering such Licensed Product or Licensed Method. In the event any Licensed Product qualifies as more than one type of Licensed Product under this Agreement, only the highest earned royalty percentage amongst the relevant types of Licensed Products shall apply. *** Material has been omitted pursuant to a request for confidential treatmentInitial Earned Royalty.

EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES. 7.1 8.1 The Licensee shall will also pay to The Regents an earned royalty on Net Sales as follows: of (1i) [*** ] of the Net Sales of Type I Therapeutic Licensed ProductsProduct or Licensed Method by the Licensee, any Affiliate, Sublicensee or Joint Venture; and (ii) [*** ] of any Service Income of the Net Sales of Type II Therapeutic Licensee, any Affiliate, Sublicensee or Joint Venture (“Earned Royalty”). 8.2 In the event it becomes necessary for Licensee (or its Affiliate or Sublicensee) to license patent rights owned by an unaffiliated third party(ies) in order to make, use, Sell, offer to Sell or import Licensed Product or Licensed Method, and Licensee (or its Affiliate or Sublicensee) is required to pay a royalty to the unaffiliated third party(ies) under a separate license agreement in order to practice Licensed Methods, and/or to make, use, Sell, offer to Sell or import Licensed Products; , in addition to Licensee paying to The Regents a royalty under this Agreement for such activity, and the combined earned royalty due all the parties exceeds eight percent (iii8%), then the Earned Royalty to be paid to The Regents under this Agreement by Licensee shall be reduced on a going-forward basis by an amount equal to one-half (1/2) of the royalty rate due to such unaffiliated third party(ies) that is in excess of the [*** ] percent ([**]%) combined royalty rate due to all parties. However, in no event shall the amount paid to The Regents be reduced below fifty percent (50%) of the Net Sales of Diagnostic Licensed Product; original Earned Royalty amount due The Regents under Paragraph 8.1 above. In addition, any credit must be used within the royalty reporting period that such credit is earned and (iv) and *** of may not roll forward from one royalty reporting period to the Net Sales of any other Licensed Products and (v) *** of the Net Sales of a Licensed Product that is not covered by Regents Patent Rights but is identified from use of, covered by, utilizes or is developed from use of Regents’ Technology Rightsnext. 7.2 8.3 The Licensee shall will also pay to The Regents a minimum annual royalty of [*** ] for the life of Regents’ Patent Rights, beginning with the year of the first commercial sale Sale of any Licensed ProductProduct or Licensed Service. The minimum annual royalty will be paid to The Regents by February 28 of each year and will be credited against the Earned Royalty due for the calendar year in which the minimum payment was made. However, but no later than December 2011. For if the first year of commercial salesSale occurs after February 28, then the Licensee’s obligation to pay the minimum annual royalty will be pro-rated for the number of months remaining in that calendar year when commercial sales Sales commence and will be due the following March 31February 28 (along with the minimum annual royalty payment for that year), to allow for crediting of the pro-rated year’s earned royalties. For subsequent years, the minimum annual royalty will be paid to The Regents by March 31 of each year and will be credited against the earned royalty due for the calendar year in which the minimum payment was madeEarned Royalties. 7.3 Licensee shall, however, be entitled to reduce the earned royalty provided for in Paragraph 7.1 in the event that it becomes necessary (either by order or judgment of any court or otherwise) for Licensee to license patent rights owned by third parties to make, have made, use or sell Licensed Product. Such reduction shall be equal to *** of any payment made to such third party under such license against up to *** of the amounts payable to The Regents under Paragraph 7.1 above on a going forward basis. Credits with respect to this Paragraph shall be available to Licensee with respect to the full royalty payable pursuant to Paragraph 7.1 and no such credit shall be available with respect to any Combination Product. 7.4 Royalties payable under this Article will be payable only once with respect to a particular Licensed Product or Licensed Method and will be paid only once regardless of the number of patents, or patent applications in Regents Patent Rights covering such Licensed Product or Licensed Method. In the event any Licensed Product qualifies as more than one type of Licensed Product under this Agreement, only the highest earned royalty percentage amongst the relevant types of Licensed Products shall apply. *** Material has been omitted pursuant to a request for confidential treatment.