Common use of Diligence Clause in Contracts

Diligence. 5.1 LICENSEE agrees to use reasonable efforts and diligence to proceed with the development, manufacture, or sale of Licensed Product(s) and shall endeavor to achieve the following: (a) receive financing of at least [**] dollars ($[**]) within [**] following the Effective Date; (b) establish a facility at which it will practice the Licensed Patents within [**] following the Effective Date; (c) sequence at least [**] base pairs of DNA from one or more [**] within [**] from the Effective Date; (d) generate a polyketide library of at least [**] polyketide compounds within [**] of the Effective Date; (e) generate a polyketide library of at least [**] polyketide compounds within [**] of the Effective Date; and (f) file an IND for a Licensed Product within [**] from the Effective Date. For purposes of determining whether LICENSEE has met its diligence obligations, Sections 5.1 (c)-(f) above may be satisfied by LICENSEE or its sublicensees. In the event that LICENSEE has not achieved any one or more of the foregoing milestones but has exercised reasonable efforts to accomplish the same, STANFORD and LICENSEE shall negotiate in good faith an extension of time in which LICENSEE may accomplish such milestone and all subsequent milestones. 5.2 STANFORD may terminate LICENSEE's rights under this Agreement with respect to a particular Licensed Product if, after final FDA approval of a NDA for such Licensed Product, LICENSEE has not sold the Licensed Product for a continuous period of [**] after such final approval. 5.3 On or before [**] of each year during the term of this Agreement until LICENSEE markets a Licensed Product, LICENSEE shall make a written annual report to STANFORD covering the preceding year ending [**], regarding the progress of LICENSEE toward commercialization of Licensed Product(s). Such report shall include, as a minimum, [**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. information sufficient to enable STANFORD to satisfy reporting requirements of the U.S. Government and for STANFORD to ascertain progress by LICENSEE toward meeting the diligence requirements of this Article 5.

Diligence. 5.1 LICENSEE agrees to use reasonable efforts and diligence to 6.1. Licensee, upon execution of this Agreement, will diligently proceed with the development, manufacture, or sale and Sale of Licensed Product(sProducts, Licensed Services, and Licensed Methods, and will diligently market them in quantities sufficient to meet the market demand. 6.2. In addition to its obligations under Paragraph 6.1, Licensee specifically commits to achieving the following milestones (either itself, or through its Sublicensees) and shall endeavor to achieve the followingin its activities under this Agreement: (a) receive financing Milestone #1: Greenhouse Proof of at least Concept — on or before […**] dollars ($[**…]) within [**] following the Effective Date; (b) establish a facility at which it will practice the Licensed Patents within Milestone #2: Field Proof of Concept — on or before […**] following the Effective Date…]; (c) sequence at least Milestone #3: Regulatory Submission — on or before […**] base pairs of DNA from one or more [**] within [**] from the Effective Date…]; (d) generate a polyketide library of at least Milestone #4: Regulatory Approval — on or before […**] polyketide compounds within [**] of the Effective Date;…]; and (e) generate a polyketide library Milestone #5: Commercial Launch of at least [**] polyketide compounds within [**] of the Effective Date; and (f) file an IND for a Licensed Product within [**] from the Effective Date. For purposes of determining whether LICENSEE has met its diligence obligations, Sections 5.1 (c)-(f) above may be satisfied by LICENSEE or its sublicensees. In the event that LICENSEE has not achieved any one or more of the foregoing milestones but has exercised reasonable efforts to accomplish the same, STANFORD and LICENSEE shall negotiate in good faith an extension of time in which LICENSEE may accomplish such milestone and all subsequent milestones. 5.2 STANFORD may terminate LICENSEE's rights under this Agreement with respect to a particular Licensed Product if, after final FDA approval of a NDA for such Licensed Product, LICENSEE has not sold the Licensed Product for a continuous period of [**] after such final approval. 5.3 On — on or before […*…]. 6.3. If The Regents believes that Licensee has failed to meet any milestone set forth in Paragraphs 6.1 and 6.2 by the date set forth therein (if applicable), The Regents will provide written notice to Licensee of the same within a reasonable time. License will have one hundred and twenty (120) days from the date of such written notice (“Cure Period”) to complete the stated milestone or otherwise fulfill the stated diligence obligations. If Licensee is unable to complete the stated milestone or otherwise fulfill the stated diligence obligations within the Cure Period, Licensee may extend the completion date of such milestone or diligence obligation for a period of six (6) months from the expiration of the Cure Period upon the payment of […*] …], due within ten (10) days of each year during expiration of the term Cure Period. Licensee may further extend the completion date of any milestone or diligence obligation for an additional six (6) months upon payment of an additional […*…]. Additional extensions may be granted only by mutual written agreement of the Parties. All such payments to extend deadlines are in addition to the annual License Maintenance Fee payment specified in Paragraph 4.2. Should Licensee opt not to pay to extend the completion date or if Licensee should fail to complete the stated milestone or otherwise fulfill the stated diligence obligations by any extended target date, then The Regents may provide written notice to Licensee that the license granted in Paragraph 2.1 has been converted to a non-exclusive license, effective as of the date of expiration of the Cure Period or any extended target date, whichever is later. (a) Unless earlier terminated in accordance with other provisions of this Agreement until LICENSEE markets a Licensed ProductAgreement, LICENSEE shall make a written annual report to STANFORD covering the preceding non-exclusive license will remain in effect for one (1) year ending [**], regarding from the progress date of LICENSEE toward commercialization of Licensed Product(s). Such report shall include, as a minimum, [**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. information sufficient to enable STANFORD to satisfy reporting requirements of the U.S. Government and for STANFORD to ascertain progress by LICENSEE toward meeting the diligence requirements of conversion under this Article 5Paragraph 6.

Diligence. 5.1 7.1 LICENSEE agrees will use commercially reasonable and diligent efforts to use reasonable research, develop and market Licensed Products and or Licensed Services for commercial sale and distribution throughout the Licensed Territory, and to such end, such efforts and diligence to proceed with the development, manufacture, or sale of Licensed Product(s) and shall endeavor to achieve will include the following: 7.1.1 Within [***] after the Effective Date of this Agreement, LICENSEE will provide an updated financing and business plan for the research, development and marketing of Licensed Products and Licensed Services reasonably acceptable to REGENTS. 7.2 In addition, LICENSEE, an Affiliate of LICENSEE or a Sublicensee will meet the following milestones: [***] 7.3 No less than [***] after the Effective Date of this Agreement, LICENSEE will submit to REGENTS a written report on progress made toward the diligence objectives set forth above, including updated business plans, together with the amount of research and development monies related to Licensed Products and/or Licensed Services and expended during that time period. 7.4 Without limiting the foregoing, in the event that LICENSEE Is unable to complete the milestones and diligence requirements set forth in Paragraphs 7.1 and 7.2, despite using its diligent efforts to do so, due to delays which are out of the reasonable control of LICENSEE (a) receive financing e.g., changes to the regulatory pathways or other regulatory delays, problems with clinical trial protocols or designs or adverse events and the like), LICENSORS agree to grant reasonable extensions of the timeline for the applicable diligence milestones. Subject to the foregoing, failure by LICENSEE to achieve any of the diligence obligations under this Article 7 will result in LICENSORS in their sole discretion having the option of terminating all of the exclusive licenses granted under Article 3, in accordance with Article 18 of this Agreement, or converting any or all of such exclusive licenses to nonexclusive licenses; provided that prior to any such termination, LICENSORS, at LICENSEE’s request, shall negotiate in good faith for at least [**] dollars ($[**]) within [**] following the Effective Date; (b) establish a facility at which it will practice the Licensed Patents within [**] following the Effective Date; (c) sequence at least [**] base pairs of DNA from one or more [**] within [**] from the Effective Date; (d) generate a polyketide library of at least [**] polyketide compounds within [**] of the Effective Date; (e) generate a polyketide library of at least [**] polyketide compounds within [**] of the Effective Date; and (f) file an IND for a Licensed Product within [**] from the Effective Date. For purposes of determining whether LICENSEE has met its diligence obligations, Sections 5.1 (c)-(f) above may be satisfied by LICENSEE or its sublicensees. In the event that LICENSEE has not achieved any one or more of the foregoing milestones but has exercised reasonable efforts to accomplish the same, STANFORD and LICENSEE shall negotiate in good faith an extension of time in which LICENSEE may accomplish such milestone and all subsequent milestones. 5.2 STANFORD may terminate LICENSEE's rights under this Agreement with respect to a particular Licensed Product if, after final FDA approval of a NDA for such Licensed Product, LICENSEE has not sold the Licensed Product for a continuous period of [**] after such final approval. 5.3 On or before [**] of each year during the term days regarding amendment of this Agreement until LICENSEE markets a Licensed Product, LICENSEE shall make a written annual report and maintaining the exclusive licenses granted to STANFORD covering the preceding year ending [**], regarding the progress of LICENSEE toward commercialization of Licensed Product(s). Such report shall include, as a minimum, [**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. information sufficient to enable STANFORD to satisfy reporting requirements of the U.S. Government and for STANFORD to ascertain progress by LICENSEE toward meeting the diligence requirements of this Article 5LICENSEE.

Diligence. 5.1 3.1 LICENSEE agrees to and its sublicensees shall use commercially reasonable efforts to bring Licensed Products or Licensed Processes to market through a [ * ] exploitation of the Patent Rights. Non-compliance with this Section 3.1 shall be grounds for termination. 3.2 in addition, LICENSEE and diligence to proceed with the development, manufacture, or sale of Licensed Product(s) and UNIVERSITY shall endeavor to achieve adhere is the following: (a) receive financing LICENSEE shall deliver to UNIVERSITY within [ * ] of at least [**Effective Date of this Agreement a business plan including [ * ], to the extent formed by LICENSEE. Similar reports shall be provided to UNIVERSITY within [ * ] dollars ($[**]) within [**] following to relay update and status information on LICENSEE’s progress on development of the Effective Date;Patent Rights, including projections of activity anticipated for the next reporting year. (b) establish LICENSEE shall be responsible for diligently and promptly taking all reasonable steps to secure all required and/or necessary governmental approvals to sell, exploit, or market any and all Licensed Products. Subject to the terms and conditions of the Research Agreement, the Licensee shall meet the Milestones set forth below. Licensee can request extension of each Milestone deadline for a facility at which it will practice period of one (1) year upon payment of a fee of [ * ] for each extension requested (“Extended Deadline”). (i) If Licensee fails to [ * ], or within the Extended Deadline, than the licenses set forth in Section 2.1 for that particular Licensed Patents Product shall terminate and be no longer valid, unless Licensee shall have earlier demonstrated to the satisfaction of the University that there is a valid cause for delaying the [ * ]. (ii) If Licensee fails to [ * ], or within [**] following the Effective Date;Extended Deadline, than the licenses set forth in Section 2.1 for that particular Licensed Product shall terminate and be no longer valid, unless Licensee shall have earlier demonstrated to the satisfaction of the University that there is a valid cause for delaying the [ * ]. (c) sequence at least [**] base pairs UNIVERSITY agrees to provide existing back-up data and documentation as may be required by regulatory agencies for purposes of DNA from one or more [**] within [**] from the Effective Date;supporting applications under government review. (d) generate a polyketide library of at least [**] polyketide compounds within [**] of the Effective Date; (e) generate a polyketide library of at least [**] polyketide compounds within [**] of the Effective Date; and (f) file an IND for a Licensed Product within [**] from the Effective Date. For purposes of determining whether LICENSEE has met its diligence obligations, Sections 5.1 (c)-(f) above may be satisfied by LICENSEE or its sublicensees. In the event that LICENSEE has not achieved any one or more of the foregoing milestones but has exercised reasonable efforts to accomplish the same, STANFORD and LICENSEE shall negotiate in good faith an extension advise UNIVERSITY, through [ * ] reports to be provided [ * ] pursuant to Section 5.2 below, of time in which LICENSEE may accomplish such milestone its program of development for and all subsequent milestonesstatus of obtaining said approvals. 5.2 STANFORD may terminate LICENSEE's rights under this Agreement with respect to a particular Licensed Product if, after final FDA approval of a NDA for such Licensed Product, LICENSEE has not sold the Licensed Product for a continuous period of [**] after such final approval. 5.3 On or before [**] of each year during the term of this Agreement until LICENSEE markets a Licensed Product, LICENSEE shall make a written annual report to STANFORD covering the preceding year ending [**], regarding the progress of LICENSEE toward commercialization of Licensed Product(s). Such report shall include, as a minimum, [**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. information sufficient to enable STANFORD to satisfy reporting requirements of the U.S. Government and for STANFORD to ascertain progress by LICENSEE toward meeting the diligence requirements of this Article 5.

Diligence. 5.1 LICENSEE agrees to 4.1 Licensee will use commercially reasonable efforts to develop, commercialize, market, promote, and diligence sell Licensed Products in each of the XLMTM Field and the Pompe Field. Commercially reasonable efforts means efforts equivalent to proceed with those utilized by ****. Without limiting the developmentforegoing, manufacture, or sale of Licensed Product(s) and shall endeavor to achieve Licensee will meet the following: (a) receive financing Acceptance by the FDA of at least [an Investigational New Drug application for a Licensed Product in the XLMTM Field by no later than **] dollars ($[**]) within [**] following the Effective Date;; and (b) establish a facility at which it will practice Acceptance by the Licensed Patents within [**] following the Effective Date; (c) sequence at least [**] base pairs FDA of DNA from one or more [**] within [**] from the Effective Date; (d) generate a polyketide library of at least [**] polyketide compounds within [**] of the Effective Date; (e) generate a polyketide library of at least [**] polyketide compounds within [**] of the Effective Date; and (f) file an IND Investigational New Drug application for a Licensed Product within [in the Pompe Field by no later than **] from the Effective Date**. For purposes of determining whether LICENSEE has met its diligence obligations, Sections 5.1 (c)-(f) above may be satisfied by LICENSEE or its sublicensees. In the event that LICENSEE has not achieved any one or more of the foregoing milestones but has exercised reasonable efforts to accomplish the same, STANFORD and LICENSEE shall negotiate Licensee will notify Licensor in writing as soon as Licensee believes in good faith an extension that Licensee will not be able to achieve either milestone set forth in Section 4.1(a) or (b) by the relevant deadline date, and, upon the payment to Licensor of time in which LICENSEE may accomplish **** within **** of the original deadline date, the deadline date for such milestone set forth in Section 4.1(a) or (b), as applicable, will be extended for **** from the original deadline date; provided that Licensee will only be entitled to **** for the XLMTM Field and all subsequent milestones**** for the Pompe Field, each of which extensions will require a payment of **** as provided in this Section 4.1. 5.2 STANFORD 4.2 Within **** after the Effective Date and within **** of each December 1 thereafter, Licensee shall provide Licensor with written progress reports, setting forth in such detail as Licensor may terminate LICENSEE's rights under this Agreement with respect to a particular Licensed Product ifreasonably request, after final FDA approval the progress of a NDA for such the development, evaluation, testing, and commercialization of each Licensed Product. Licensee will also notify Licensor within **** of the first commercial sale by Licensee, LICENSEE has not sold its Affiliates, or any Sublicensees of each Licensed Product. Such a report (“Development Progress Report”), setting forth the current stage of development of Licensed Products, shall include: 4.2.1 Date of Development Progress Report and time covered by such report; 4.2.2 Major activities and accomplishments completed by Licensee, its Affiliates, and any Sublicensees relating directly to the Licensed Product for a continuous period of [since the last Development Progress Report; **] after such final approval. 5.3 On or before [**] of each year during the term of this Agreement until LICENSEE markets a Licensed Product, LICENSEE shall make a written annual report to STANFORD covering the preceding year ending [**], regarding the progress of LICENSEE toward commercialization of Licensed Product(s). Such report shall include, as a minimum, [**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. information sufficient to enable STANFORD to satisfy reporting requirements of the U.S. Government and for STANFORD to ascertain progress by LICENSEE toward meeting the diligence requirements of this Article 5.

Diligence. 5.1 LICENSEE agrees to 4.1 Licensee will use commercially reasonable efforts to develop, commercialize, market, promote, and diligence sell Licensed Products in each of the XLMTM Field and the Pompe Field. Commercially reasonable efforts means efforts equivalent to proceed with those utilized by [*] Without limiting the developmentforegoing, manufacture, or sale of Licensed Product(s) and shall endeavor to achieve Licensee will meet the following: (a) receive financing Acceptance by the FDA of at least an Investigational New Drug application for a Licensed Product in the XLMTM Field by no later than [**] dollars ($[**]) within [**] following the Effective Date;; and (b) establish Acceptance by the FDA of an Investigational New Drug application for a facility at which it will practice Licensed Product in the Licensed Patents within Pompe Field by no later than [**] following ]. Licensee will notify Licensor in writing as soon as Licensee believes in good faith that Licensee will not be able to achieve either milestone set forth in Section 4.l (a) or (b) by the Effective Date; (c) sequence at least relevant deadline date, and, upon the payment to Licensor of [**] base pairs of DNA from one or more [**] within [*] of the original deadline date, the deadline date for such milestone set forth in Section 4.l (a) or (b), as applicable, will be extended for [*] from the Effective Date; (d) generate a polyketide library of at least original deadline date; provided that Licensee will only be entitled to [*] for the XLMTM Field and [*] polyketide compounds for the Pompe Field, each of which extensions will require a payment of [*] as provided in this Section 4.1. 4.2 Within [*] after the Effective Date and within [*] of each December 1 thereafter, Licensee shall provide Licensor with written progress reports, setting forth in such detail as Licensor may reasonably request, the progress of the development, evaluation, testing, and commercialization of each Licensed Product. Licensee will also notify Licensor within [*] of the Effective Datefirst commercial sale by Licensee, its Affiliates, or any Sublicensees of each Licensed Product. Such a report (“Development Progress Report”), setting forth the current stage of development of Licensed Products, shall include: 4.2.1 Date of Development Progress Report and time covered by such report; (e) generate a polyketide library 4.2.2 Major activities and accomplishments completed by Licensee, its Affiliates, and any Sublicensees relating directly to the Licensed Product since the last Development Progress Report; 4.2.3 Significant research and development projects relating directly to the Licensed Product currently being performed by Licensee, its Affiliates, and any Sublicensees and projected dates of completion; 4.2.4 A development plan covering the next two years at least [**] polyketide compounds within [**] least, which will include future development activities to be undertaken by Licensee, its Affiliates, or any Sublicensees during the next reporting period relating directly to the Licensed Product, Licensee’s strategy to bring the Licensed Product to commercialization, and projected timeline for completing the necessary tasks to accomplish the goals of the Effective Datestrategy; 4.2.5 Projected total development remaining before product launch of each Licensed Product; and (f) file an IND for a 4.2.6 Summary of significant development efforts using the Licensed Product within [**] from Patents being performed by Third Parties, including the Effective Date. For purposes of determining whether LICENSEE has met its diligence obligations, Sections 5.1 (c)-(f) above may be satisfied by LICENSEE or its sublicensees. In the event that LICENSEE has not achieved any one or more nature of the foregoing milestones but has exercised reasonable efforts to accomplish the same, STANFORD relationship between Licensee and LICENSEE shall negotiate in good faith an extension of time in which LICENSEE may accomplish such milestone and all subsequent milestonesThird Parties. 5.2 STANFORD 4.3 The Parties agree that Development Progress Reports shall be deemed Licensee’s Confidential Information; provided that Licensor may terminate LICENSEE's rights under this Agreement share a copy of such reports with respect to a particular Licensed Product if, after final FDA approval of a NDA for such Licensed Product, LICENSEE has not sold the Licensed Product for a continuous period of [**] after such final approvalits direct and indirect licensors. 5.3 On or before [**] 4.4 Simultaneously with the Development Progress Report, Licensee shall deliver a detailed description of each year during the term of this Agreement until LICENSEE markets a any Licensed ProductBack Improvements, LICENSEE shall make a written annual report if not previously provided pursuant to STANFORD covering the preceding year ending [**], regarding the progress of LICENSEE toward commercialization of Licensed Product(s). Such report shall include, as a minimum, [**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. information sufficient to enable STANFORD to satisfy reporting requirements of the U.S. Government and for STANFORD to ascertain progress by LICENSEE toward meeting the diligence requirements of this Article 5Section 2.5.2.

Diligence. 5.1 LICENSEE agrees to use reasonable efforts and diligence to 6.1 Licensee will diligently proceed with the development, manufacture, or sale marketing, and Sale of Licensed Product(s) and shall endeavor Products, Licensed Methods, and/or Licensed Services in quantities sufficient to achieve meet the followingmarket demand. 6.2 In addition to Licensee’s obligations under Paragraph 6.1, Licensee will accomplish the following milestones in Licensee’s activities under this Agreement: (a) receive financing [***]; and (b) [***]. 6.3 If Licensee is unable to meet any of at least its diligence obligations set forth in Paragraphs 6.1 and 6.2, then The Regents will so notify Licensee of failure to perform. Licensee will CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. have the right and option to extend the target date of any such diligence obligation for a period of [***] upon the payment of [***] dollars ($[***]) within the thirty (30)-day period prior to the date to be extended, for each such extension option exercised by Licensee. Licensee may further extend the target date of any diligence obligation for an additional [***] following the Effective Date; (b) establish a facility at which it will practice the Licensed Patents within upon payment of an additional [***] following the Effective Date; dollars (c) sequence at least $[**] base pairs of DNA from one or more [**] within [**] from the Effective Date; (d) generate a polyketide library of at least [**] polyketide compounds within [**] ]). Additional extensions may be granted only by written agreement of the Effective Date;Parties. These payments are in addition to any other payments owed under this Agreement. Should Licensee opt not to extend the obligation or fail to meet the obligation by the extended target date, then The Regents will have the right and option either to terminate this Agreement or to reduce Licensee’s exclusive license to a nonexclusive license. This right, if exercised by The Regents, supersedes the rights granted in Article 2 (Grant). (e) generate 6.4 To exercise either the right to terminate this Agreement or to reduce the license to a polyketide library non-exclusive license for lack of at least [**] polyketide compounds within [**] diligence under Paragraph 6.1 or 6.2, The Regents will give Licensee written notice of the Effective Date; and deficiency. Licensee thereafter will have sixty (f60) file an IND for a Licensed Product within [**] from days to cure the Effective Datedeficiency. For purposes of determining whether LICENSEE has met its diligence obligations, Sections 5.1 (c)-(f) above may be satisfied by LICENSEE or its sublicensees. In the event that LICENSEE If The Regents has not achieved any one or more received satisfactory written evidence that the deficiency has been cured by the end of the foregoing milestones but has exercised reasonable efforts to accomplish sixty (60)-day period, then The Regents may, at its option, either terminate the same, STANFORD and LICENSEE shall negotiate in good faith an extension of time in which LICENSEE may accomplish such milestone and all subsequent milestones. 5.2 STANFORD may terminate LICENSEE's rights under this Agreement with respect or reduce Licensee’s exclusive license to a particular Licensed Product if, after final FDA approval of a NDA for such Licensed Product, LICENSEE has not sold the Licensed Product for a continuous period of [**] after such final approvalnon-exclusive license by giving written notice to Licensee. These notices will be subject to Article 22 (Notices). 5.3 On or before [**] of each year during the term of this Agreement until LICENSEE markets a Licensed Product, LICENSEE shall make a written annual report to STANFORD covering the preceding year ending [**], regarding the progress of LICENSEE toward commercialization of Licensed Product(s). Such report shall include, as a minimum, [**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. information sufficient to enable STANFORD to satisfy reporting requirements of the U.S. Government and for STANFORD to ascertain progress by LICENSEE toward meeting the diligence requirements of this Article 5.

Diligence. 5.1 LICENSEE agrees From and after the Amendment No. 13 Effective Date, the Borrower shall promptly respond to use and comply with all reasonable efforts diligence requests delivered to the Borrower by ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP (“▇▇▇▇▇▇”), ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP (“Akin”) or FTI Consulting, Inc. (“FTI”), including by providing all relevant documents and diligence information in connection with such requests. Board MattersMilestones. The Borrower shall ensure the satisfaction of each of the following milestones: (a) On or before July 15, 2025 (or such later date as agreed to proceed with by the developmentAdministrative Agent at the direction of the Required Lenders and the Required Class A Revolving Lenders in their sole discretion), manufacturethe Borrower shall deliver a revised business plan in form and substance reasonably acceptable to the Required Lenders and the Required Class A Revolving Lenders; and (b) On or before August 7, 2025 (or sale such later date as agreed to by the Administrative Agent at the direction of Licensed Product(s) the Required Lenders and the Required Class A Revolving Lenders in their sole discretion), the Borrower shall endeavor deliver definitive documentation related to achieve a strategic financing transaction in form and substance satisfactory to the following:Required Lenders and the Required Class A Revolving Lenders. (a) receive financing of at least [**] dollars ($[**]) within [**] following Prior to the Effective Date; (b) establish a facility at which it will practice the Licensed Patents within [**] following the Effective Date; (c) sequence at least [**] base pairs of DNA from one or more [**] within [**] from the Effective Date; (d) generate a polyketide library of at least [**] polyketide compounds within [**] fourth anniversary of the Amendment No. 14 Effective Date; (e) generate a polyketide library Date and subject to Section 5.17(b)(ii), upon the expiration of at least [**] polyketide compounds within [**] of the Effective Date; and (f) file an IND for a Licensed Product within [**] from the Effective Date. For purposes of determining whether LICENSEE has met its diligence obligations, Sections 5.1 (c)-(f) above may be satisfied by LICENSEE or its sublicensees. In the event that LICENSEE has not achieved any one or more of the foregoing milestones but has exercised reasonable efforts to accomplish the same, STANFORD and LICENSEE shall negotiate in good faith an extension of time in which LICENSEE may accomplish such milestone and all subsequent milestones. 5.2 STANFORD may terminate LICENSEE's rights under this Agreement with respect to a particular Licensed Product if, after final FDA approval of a NDA for such Licensed Product, LICENSEE has not sold the Licensed Product for a continuous period of [**] after such final approval. 5.3 On or before [**] of each year during the term of this Agreement until LICENSEE markets a Licensed Productdirector service for any Appointed Director’s (as defined in the Superpriority Credit Agreement) term, LICENSEE as applicable, the Borrower shall make a written annual report cause the Board of Directors of the Parent to STANFORD covering renominate such Appointed Director to such seat (including such Appointed Director’s seat on the preceding year ending [**]Transformation Committee (as defined in the Superpriority Credit Agreement), regarding the progress of LICENSEE toward commercialization of Licensed Product(sif applicable). Such report At any time prior to the earlier of the Termination Date and the fourth anniversary of the Amendment No. 14 Effective Date, the Borrower shall includenot permit the Board of Directors of the Parent to increase the number of directors on the Board of Directors of the Parent without the prior written consent of the Required ▇▇▇▇ ▇▇▇▇▇▇▇. At any time prior to the fourth anniversary of the Amendment No. 14 Effective Date, unless required by applicable law, the Borrower shall not permit the Board of Directors of the Parent to (i) remove or replace any of the Appointed Directors as a director on the Board of Directors of the Parent or as a member of the Transformation Committee, as a minimumapplicable, [**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. information sufficient to enable STANFORD to satisfy reporting requirements (ii) decrease the number of directors on the Board of Directors of the U.S. Government and Parent, (iii) in the event any Appointed Director’s seat is vacant, fill such vacancy (including such Appointed Director(s) vacancy on the Transformation Committee, if applicable) or (iv) modify, amend, revoke or terminate the authority of the Transformation Committee set forth in resolutions provided for STANFORD to ascertain progress by LICENSEE toward meeting in Section 7(i) of Amendment No. 14 without the diligence requirements prior written consent of this Article 5the Required ▇▇▇▇ ▇▇▇▇▇▇▇.

Diligence. 5.1 LICENSEE agrees to use reasonable efforts and diligence to Licensee will diligently proceed with the development, manufacture, or sale marketing, and Sale of Licensed Product(s) Products and shall endeavor Licensed Services in quantities sufficient to achieve meet the followingmarket demand. 5.2 In addition to Licensee’s obligations under Paragraph 5.1, Licensee will accomplish the following milestones in Licensee’s activities under this Agreement: (a) receive financing Dose the first patient in a Phase III Clinical Trial or foreign equivalent using the Licensed Product within three (3) years of at least [**] dollars ($[**]) within [**] following the Effective Date;Date of this Agreement; and (b) establish a facility at which it will practice the Licensed Patents within [**] following the Effective Date; (c) sequence at least [**] base pairs of DNA from one or more [**] within [**] Obtain marketing authorization from the Effective Date; (d) generate a polyketide library of at least [**] polyketide compounds within [**] of the Effective Date; (e) generate a polyketide library of at least [**] polyketide compounds within [**] of the Effective Date; and (f) file an IND FDA or foreign equivalent for a Licensed Product within five (5) years of the Effective Date of this Agreement. [**] from the Effective Date. For purposes of determining whether LICENSEE has met its diligence obligations, Sections 5.1 (c)-(f) above may be satisfied by LICENSEE or its sublicensees. In the event that LICENSEE has not achieved any one or more of the foregoing milestones but has exercised reasonable efforts to accomplish the same, STANFORD and LICENSEE shall negotiate in good faith an extension of time in which LICENSEE may accomplish such milestone and all subsequent milestones. 5.2 STANFORD may terminate LICENSEE's rights under this Agreement with respect to a particular Licensed Product if, after final FDA approval of a NDA for such Licensed Product, LICENSEE has not sold the Licensed Product for a continuous period of [**] after such final approval. 5.3 On or before [**] of each year during the term of this Agreement until LICENSEE markets a Licensed Product, LICENSEE shall make a written annual report to STANFORD covering the preceding year ending [**], regarding the progress of LICENSEE toward commercialization of Licensed Product(s). Such report shall include, as a minimum, [**] CERTAIN INDICATES INFORMATION IN THIS EXHIBIT THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED INFORMATION HAS BEEN FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE OMITTED PORTIONS. information sufficient to enable STANFORD to satisfy reporting requirements SECURITIES ACT OF 1933, AS AMENDED. 5.3 As part of the U.S. Government consideration under this Agreement, Licensee shall pay to Licensor the following milestone payments: (a) $[****] upon enrolling the first patient in a Phase III Clinical Trial or foreign equivalent using a Licensed Product; and (b) $[****] upon obtaining marketing authorization from the FDA or foreign equivalent for each Licensed Product. 5.4 If Licensee is unable to meet any of its diligence obligations set forth in Paragraphs 5.1, 5.2 and 5.3, then Licensor will so notify Licensee of failure to perform. Licensee will have the right and option to extend the target date of any such diligence obligation for STANFORD a period of six (6) months upon the payment of Five Thousand dollars ($5,000) within the thirty (30)-day period prior to ascertain progress the date to be extended, for each such extension option exercised by LICENSEE toward meeting Licensee. Licensee may further extend the target date of any diligence requirements obligation for an additional six (6) months upon payment of an additional Five Thousand dollars ($5,000). Additional extensions may be granted only by written agreement of the Parties. These payments are in addition to any other payments owed under this Agreement. Should Licensee opt not to extend the obligation or fail to meet the obligation by the extended target date, then Licensor will have the right and option either to terminate this Agreement or to reduce Licensee’s exclusive license to a non-exclusive license. This right, if exercised by Licensor, supersedes the rights granted in Article 52 (Grant). 5.5 To exercise either the right to terminate this Agreement or to reduce the license to a non-exclusive license for lack of diligence under Paragraph 5.1, 5.2 or 5.3, Licensor will give Licensee written notice of the deficiency. Licensee thereafter will have sixty (60) days to cure the deficiency. If Licensor has not received satisfactory written evidence that the deficiency has been cured by the end of the sixty (60)-day period, then Licensor may, at its option, either terminate the Agreement or reduce Licensee’s exclusive license to a non-exclusive license by giving written notice to Licensee. These notices will be subject to Article 20 (Notices).

Diligence. 5.1 LICENSEE agrees to use reasonable efforts and diligence to 6.1 Licensee, upon execution of this Agreement, will diligently proceed with the development, manufacture, or sale and Sale of Licensed Product(s) Products, Licensed Services, and shall endeavor Licensed Methods, and will diligently market them in quantities sufficient to achieve meet the followingmarket demand. 6.2 In addition to its obligations under Paragraph 6.1, Licensee specifically commits to achieving the following objectives and milestones in its activities under this Agreement: (a) receive financing Milestone #1: Funding of at least [**] dollars (Licensee: $[**]) within [**] following the Effective Date250,000.00 by December 31, 2010; (b) establish Milestone #2: Manufacturing of Licensed Product: begins (including by a facility at which it will practice the Licensed Patents within [**] following the Effective Datethird party on behalf of Licensee) by May 31, 2010; (c) sequence at least [**] base pairs Milestone #3: First Sales of DNA from one Licensed Product or more [**] within [**] from the Effective Date;Licensed Services: by August 31, 2010; and (d) generate Milestone #4: 1,000 units of Licensed Product Sold: by August 31, 2011. 6.3 If Licensee is unable to meet any of its diligence obligations set forth in Paragraphs 6.1 and 6.2, then The Regents will so notify Licensee of failure to perform. Licensee will have the right and option to extend the target date of any such diligence obligation for a polyketide library period of at least [**] polyketide compounds six (6) months upon the payment of five thousand dollars ($5000) within [**] thirty (30) days of the Effective Date; date to be extended for each such extension option exercised by Licensee. Licensee may further extend the target date of any diligence obligation for an additional six (e6) generate a polyketide library months upon payment of at least [**] polyketide compounds within [**] an additional five thousand dollars ($5000). Additional extensions may be granted only by mutual written agreement of the Effective Date; andParties. These payments are in addition to the Minimum Annual Royalty payments specified in Paragraph 5.3. Should Licensee opt not to extend the obligation or fail to meet it by the extended target date, then The Regents will have the right and option either to terminate this Agreement or to reduce Licensee's exclusive license to a non-exclusive license. This right, if exercised by The Regents, supersedes the rights granted in Article 2. 6.4 To exercise either the right to terminate this Agreement or to reduce the license to a non-exclusive license for lack of diligence under Paragraph 6.1 or 6.2, The Regents will give Licensee written notice of the deficiency. Licensee thereafter has sixty (f60) file an IND for a Licensed Product within [**] from days to cure the Effective Datedeficiency or to request arbitration. For purposes of determining whether LICENSEE has met its diligence obligations, Sections 5.1 (c)-(f) above may be satisfied by LICENSEE or its sublicensees. In the event that LICENSEE If The Regents has not achieved any one or more received satisfactory tangible evidence that the deficiency has been cured by the end of the foregoing milestones but has exercised reasonable efforts to accomplish sixty (60)-day period, then The Regents may, at its option, either terminate the same, STANFORD and LICENSEE shall negotiate in good faith an extension of time in which LICENSEE may accomplish such milestone and all subsequent milestones. 5.2 STANFORD may terminate LICENSEEAgreement or reduce Licensee's rights under this Agreement with respect exclusive license to a particular Licensed Product if, after final FDA approval of a NDA for such Licensed Product, LICENSEE has not sold the Licensed Product for a continuous period of [**] after such final approvalnon-exclusive license by giving written notice to Licensee. These notices will be subject to Article 22 (Notices). 5.3 On or before [**] of each year during the term of this Agreement until LICENSEE markets a Licensed Product, LICENSEE shall make a written annual report to STANFORD covering the preceding year ending [**], regarding the progress of LICENSEE toward commercialization of Licensed Product(s). Such report shall include, as a minimum, [**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. information sufficient to enable STANFORD to satisfy reporting requirements of the U.S. Government and for STANFORD to ascertain progress by LICENSEE toward meeting the diligence requirements of this Article 5.

Diligence. 5.1 LICENSEE 2.6.1 Until the earlier of (i) the fifth anniversary of the date of this Agreement or (ii) the date when BUYER has paid to SELLER royalties and, if applicable Additional Payments (as defined below) pursuant to this Agreement of at least $1,000,000 (the "Reversion Term"), BUYER agrees that, unless otherwise agreed to by SELLER, BUYER will allocate during each fiscal year at least fifty percent (50%) (the "Requisite Percentage") of the funds it expends on sales, marketing, research and development (the "Exploitation Activities") on Exploitation Activities relating to use reasonable efforts of the Intellectual Property, including any changes or improvements to the Intellectual Property (the "Technology Package"), in the Field. 2.6.2 Within sixty (60) days after the beginning of each fiscal year of BUYER, BUYER shall deliver to SELLER a copy of the budget that has been approved by the Board of Directors of BUYER for such fiscal year, which shall describe in general terms BUYER's proposed allocation of funds for Exploitation Activities for such fiscal year for (i) the Technology Package, and diligence (ii) any other products or technology. 2.6.3 Within sixty (60) days after the end of each fiscal year, BUYER shall deliver to proceed with the development, manufacture, or sale of Licensed Product(sSELLER a statement that will indicate (i) and shall endeavor to achieve the following: BUYER's total expenditures in such fiscal year on (a) receive financing of at least [**] dollars ($[**]) within [**] following Exploitation Activities relating to the Effective Date; Technology Package and (b) establish a facility at which it will practice all of its Exploitation Activities, and (ii) the Licensed Patents within [**] following actual percentage (the Effective Date;"Actual Percentage") of BUYER's expenditures on Exploitation Activities that were spent on Exploitation Activities relating to the Technology Package. (c) sequence 2.6.4 If such statement does not indicate that SELLER has expended at least [**] base pairs the Requisite Percentage on Exploitation Activities relating to the Technology Package, then SELLER may, by written notice (the "Reversion Notice") to BUYER given within fifteen (15) days of DNA its receipt of such statement, elect to have the rights to the Intellectual Property revert from one or more [**] within [**] from BUYER to SELLER. Such reversion, if so elected by SELLER, shall take effect (30) days after the Effective Date; (d) generate a polyketide library of at least [**] polyketide compounds within [**] date of the Effective Date; Reversion Notice, unless, prior to the end of such 30-day period, BUYER either (ei) generate a polyketide library of at least [**] polyketide compounds within [**] agrees by written notice to SELLER to increase the Requisite Percentage for the current fiscal year and the remainder of the Effective DateReversion Term (provided that BUYER may agree to increase the Requisite Percentage not more than twice) or (ii) pays to SELLER an amount in cash (an "Additional Payment") equal to the product of (x) $20,000 multiplied by (y) the difference between the Requisite Percentage and the Actual Percentage (e.g., if the Actual Percentage was 45%, then the payment due from BUYER to SELLER to prevent reversion would be $100,000 ($20,000 times (50-45)); and (f) file an IND for a Licensed Product within [**] from provided, however, that if the Effective Date. For purposes of determining whether LICENSEE has met its diligence obligations, Sections 5.1 (c)-(f) above may be satisfied by LICENSEE or its sublicensees. In the event that LICENSEE has not achieved any one or more sum of the foregoing milestones but has exercised reasonable efforts royalties and Additional Payments (including a prospective Additional Payment) made pursuant to accomplish this Agreement would exceed $1,000,000, then the same, STANFORD and LICENSEE amount of the last prospective Additional Payment shall negotiate in good faith an extension of time in which LICENSEE may accomplish be reduced so that such milestone and all subsequent milestonessum will not exceed $1,000,000. 5.2 STANFORD 2.6.5 BUYER may also terminate LICENSEESELLER's reversion rights under pursuant to this Agreement with respect Section 2.6 at any time by making a payment to a particular Licensed Product ifSELLER which, after final FDA approval of a NDA for such Licensed Productwhen added to the royalties and Additional Payments, LICENSEE has not sold the Licensed Product for a continuous period of [**] after such final approvalif any, previously paid pursuant to this Agreement, would aggregate $1,000,000. 5.3 On or before [**] of each year during the term of this Agreement until LICENSEE markets a Licensed Product, LICENSEE shall make a written annual report to STANFORD covering the preceding year ending [**], regarding the progress of LICENSEE toward commercialization of Licensed Product(s). Such report shall include, as a minimum, [**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. information sufficient to enable STANFORD to satisfy reporting requirements of the U.S. Government and for STANFORD to ascertain progress by LICENSEE toward meeting the diligence requirements of this Article 5.