OTHER PRODUCTS COLLABORATION AGREEMENT

EXHIBIT 2.1.2

OTHER PRODUCTS COLLABORATION AGREEMENT

This Other Products Collaboration Agreement (this “ Agreement ”) is entered into as of the      ^th day of                 , 2009 (“ Effective Date ”) by and between Astellas Pharma Inc., a Japanese corporation, with its principal place of business at 3-11, Nihonbashi-Honcho 2-chome, Chuo-ku, Tokyo 103-8411 Japan (“ Astellas ”), and CPC, a Delaware limited liability company with its principal place of business at 515 Galveston Drive, Redwood City, California 94063 USA (“ CPC ”). Astellas and CPC are each referred to herein by name or, individually, as a “ Party ” or, collectively, as the “ Parties .”

BACKGROUND

A. CPC owns or possesses certain Patents (as defined below) and Know-How (as defined below) with respect to certain proteins with potential therapeutic applications and has certain rights and expertise with respect to Enabling Technology (as defined below) as a result of an Asset Contribution Agreement and a Technology License Agreement (the “ Technology License Agreement ”) between Maxygen, Inc., a Delaware corporation with its principal place of business at 515 Galveston Drive, Redwood City, California, 94063 (“ Maxygen ”), and CPC of even date herewith;

B. CPC desires to collaborate with a pharmaceutical company with development, manufacturing and commercialization expertise with regard to pharmaceutical products, so as to pursue the therapeutic and commercial potential of such proteins, and Astellas desires to collaborate with CPC in the discovery, research, and preclinical development of such proteins for one or more indications in accordance with the terms and conditions of this Agreement;

C. Astellas possesses pharmaceutical development, manufacturing and commercialization capabilities; and

D. CPC and Astellas desire to collaborate in the discovery, research, and preclinical development of pharmaceutical products incorporating proteins, all on the terms and conditions set forth herein below.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

The following capitalized terms shall have the corresponding meanings as used in this Agreement:

1.1 “ Accounting Standards ” means generally accepted accounting principles applicable internationally or in a particular country (e.g., International Accounting Standards, Japanese Accounting Standards, U.S. Accounting Standards), as consistently applied by or on behalf of the relevant Party.

1.2 “ Affiliate ” means any corporation or other business entity that controls, is controlled by, or is under common control with a Party, for so long as such control exists. A corporation or other entity shall be regarded as in control of another corporation or entity if it owns or directly or indirectly controls at least fifty percent (50%) of the outstanding shares or other voting rights of the other corporation or entity having the right to elect directors or such lesser percentage that is the maximum permitted to be owned by a foreign entity in those jurisdictions where majority ownership by foreign entities is prohibited, or (i) in the absence of the ownership of at least fifty percent (50%) of the outstanding shares or other voting rights of a corporation, or (ii) in the case of a non-corporate business entity, if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or non-corporate business entity, as applicable, whether through the ownership or control of voting securities, by contract or otherwise. Notwithstanding a Party’s ownership interest in, or control over, the other Party, a Party hereunder shall not be deemed an Affiliate of the other Party under this Agreement.

1.3 “ Astellas Technology ” means (i) Astellas Know-How, (ii) Astellas Patents, and (iii) Astellas’ rights and interest in all Other Program Technology.

1.3.1 “ Astellas Know-How ” means any and all Know-How, and any and all non-Patent intellectual property rights therein, Controlled by Astellas or its Affiliates during the Term that is reasonably necessary or useful for the Preclinical Development, development, manufacture or commercialization of an Other Compound or Other Product within the Field in the Territory in accordance with this Agreement.

1.3.2 “ Astellas Patents ” means any and all Patents Controlled by Astellas or its Affiliates during the Term claiming or covering (specifically or generically) (i) compositions of matter of any Other Compound or Other Product (or any formulation of either), (ii) methods or processes for the manufacture or synthesis of any Other Compound or Other Product (or any formulation of either) or (iii) methods of use, administration or formulation of any Other Compound or Other Product (or any formulation of either), including Patents that claim Astellas Independent Inventions and Astellas’ interest in Patents claiming Joint Inventions.

1.4 “ Budget ” means the budget set forth in the Preclinical Development Plan, as may be modified from time-to-time as set forth herein.

1.5 “ Business Day ” means any day other than a Saturday, Sunday or any other day on which commercial banks in Tokyo, Japan or San Francisco, California (as applicable) are authorized or required by Law to remain closed.

1.6 “ Buy-Out Option ” shall have the meaning provided in the Investors’ Rights Agreement by and between CPC, Maxygen, Astellas Bio Inc., Astellas and Astellas US Holding, Inc. of even date herewith (the “ Investors’ Rights Agreement ”).

 

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1.7 “ Co-Development Agreement ” means the Co-Development and Commercialization Agreement by and between CPC (as successor-in-interest to Maxygen) and Astellas, dated September 18, 2008, as the same may be amended from time to time.

1.8 “ Control ” means, with respect to particular Know-How and any and all non-Patent intellectual property rights therein, or a particular Patent, possession by the Party granting the applicable right, license or sublicense to the other Party as provided herein, of the power and authority, whether arising by ownership, license, or other authorization, to disclose and, if applicable, to deliver the particular Know-How to the other Party, and to grant and to authorize under such Know-How or Patent the right, license or sublicense, as applicable, to such other Party in this Agreement without giving rise to a violation of the terms of any written agreement with any Third Party. “ Controlled ” and “ Controlling ” have their correlative meanings.

1.9 “ CPC Technology ” means (i) CPC Know-How, (ii) CPC Patents, and (iii) CPC’s rights and interest in all Other Program Technology; provided, however, CPC Technology shall only include CPC’s rights and interest in any Enabling Technology to the extent necessary to perform non-Shuffling preclinical development, development, manufacture, commercialization or other exploitation of any Other Protein Variant or Other Product.

1.9.1 “ CPC Know-How ” means any and all Know-How, and any and all non-Patent intellectual property rights therein, Controlled by CPC or its Affiliates during the Term, or by Maxygen and its Affiliates prior to the Effective Date in accordance with Section 3.5, that is reasonably necessary or useful for the Preclinical Development, development, manufacture or commercialization of an Other Compound or Other Product within the Field in the Territory in accordance with this Agreement.

1.9.2 “ CPC Patents ” means any and all Patents Controlled by CPC or its Affiliates during the Term, or by Maxygen and its Affiliates prior to the Effective Date in accordance with Section 3.5, claiming or covering (specifically or generically) (i) compositions of matter of any Other Compound or Other Product (or any formulation of either), (ii) methods or processes for the manufacture or synthesis of any Other Compound or Other Product (or any formulation of either), (iii) methods of use, administration or formulation of any Other Compound or Other Product (or any formulation of either), (iv) nucleic acid sequences encoding any Other Compound, or (v) cell lines expressing any Other Compound, including (A) those Patents set forth on Exhibit 1.9.2 as of the Effective Date, and (B) Patents that claim CPC Independent Inventions. For clarity, CPC Patents include CPC’s interest in Patents claiming Joint Inventions.

1.10 “CTLA-4 Program” means any and all activities performed by or on behalf of CPC pursuant to the Co-Development Agreement.

1.11 “CTLA-4 Variant ” shall have the meaning provided in the Co-Development Agreement.

1.12 “ Data ” means any and all research data, results, pharmacology data, medicinal chemistry data, preclinical data, clinical data (including investigator reports (both preliminary and final), statistical analysis, expert opinions and reports, safety and other electronic databases), in any

 

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and all forms, including files, reports, raw data, source data (including patient medical records and original patient report forms (excluding patient-specific data to the extent required by applicable law) and the like, in each case directed to, or used in the Preclinical Development or development, manufacture or commercialization of an Other Product hereunder.

1.13 “ Dollars ” or “ $ ” refers to United States dollars.

1.14 “ EMEA ” means the European Medicines Agency, or any successor entity thereto.

1.15 “ Enabling Technology ” means the Enabling Technology as defined under the Technology Licensed Agreement. For clarity, Enabling Technology excludes (i) any Patents listed on Schedules 2.1(a), 2.1(b)(2) or 2.1(e) of the Asset Contribution Agreement between CPC and Maxygen of even date herewith, and (ii) any CTLA-4 Variants and Other Protein Variants resulting from the use of the Enabling Technology, together with genetic materials encoding, and cell lines expressing, any such CTLA-4 Variant or Other Protein Variant.

1.16 “ Excluded Protein Variant ” means (i) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a (A) granulocyte colony stimulating factor (G-CSF), (B) Exclusively Out-Licensed Protein, (C) a protein from an infectious agent or a polynucleotide encoding such protein that in each case is intended to be used as a Vaccine (including infectious agents or other constructs incorporating a Vaccine and/or genetic material encoding a Vaccine (including live-attenuated or whole killed virus), but solely when such agent, construct or material is included with or otherwise incorporates a protein from an infectious agent (or variant, homolog, derivative, mutant or fragment of such protein as described in (D), below) or a polynucleotide encoding such protein (or such variant, homolog, derivative, mutant or fragment) and is intended to be used as a Vaccine), or (D) any variant, homolog, derivative, mutant, or fragment of subsection (A) or (B) or (C), which in the case of (C) is intended to be used as a vaccine (each, an “ Excluded Protein Molecule ”) and (ii) any Excluded Protein Molecule that is conjugated or otherwise coupled to any other molecule (e.g., polyethylene glycol, immunoglobulin domain, sialylation, pegylated, or glycosylation). In no event shall Excluded Protein Variants include any CTLA-4 Variants or (x) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a protein or polypeptide listed on Schedule 2.1(b)(1) of the Asset Contribution Agreement, or (y) any variant, homolog, derivative, mutant, or fragment of subsection of (x), provided that in the case of (y) such variant, homolog, derivative, mutant, or fragment has not been altered or modified in such a way as to cause such variant, homolog, derivative, mutant, or fragment to fall within (A), (B), or (C) of the definition of Excluded Protein Variant or Vaccine set forth in the first sentence of this Section 1.16, or to fall within (D) above such that a reasonable, independent expert knowledgeable and experienced in working with protein pharmaceuticals would primarily consider such variant, homolog, derivative, mutant, or fragment to be a variant of a protein or polypeptide within (A), (B) or (C) above or a material portion thereof (rather than as a variant of some other protein or material portion thereof). For purposes of this definition of Excluded Protein Variant or Vaccine:

1.16.1 “ Exclusively Out-Licensed Protein ” has the meaning set forth in Exhibit 1.16.1 attached hereto.

 

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1.17 “ FDA ” means the United States Food and Drug Administration, or any successor entity thereto.

1.18 “ Field ” means: (i) with respect to Other Compounds and Other Products that are Resulting Products derived in whole or part from Shuffling conducted prior to January 1, 2017, the Treatment of human diseases or conditions, and (ii) with respect to all other Other Compounds and Other Products, the Treatment or diagnosis of human diseases or conditions.

1.19 “ Fiscal Year ” means each twelve (12) month period beginning on 1 April of each year and ending on the following 31 March and so on year-by-year. “ Fiscal Year 2010 ” means such period beginning on 1 April 2010 and ending on 31 March 2011; “ Fiscal Year 2011 ” means such period beginning on 1 April 2011 and ending on 31 March 2012, and so on, year-by-year.

1.20 “ FTE ” shall mean a full-time equivalent person year, on or directly related to performing applicable activities hereunder. Notwithstanding the foregoing, CPC shall not charge more than one FTE (or pro-rata portion thereof for the applicable period) for the time worked by any individual.

1.21 “ FTE Rate ” shall be Three Hundred Thousand Dollars ($300,000) per FTE.

1.22 “G-CSF Program Support” means all activities, if any, performed by CPC scientific or technical personnel during the Term of this Agreement in support of Maxygen (or its successor-in-interest), or one or more of its licensees with respect to one or more G-CSF Variants or products containing a G-CSF Variant, related to the discovery, research, development, manufacture, commercialization or other exploitation of one or more G-CSF Variants or products containing a G-CSF Variant.

1.23 “G-CSF Variant” means (i) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a granulocyte colony stimulating factor (G-CSF) or any variant, homolog, derivative, mutant, or fragment thereof (each, a “ G-CSF Molecule ”) and (ii) any G-CSF Molecule that is conjugated or otherwise coupled to any other molecule (e.g., polyethylene glycol, immunoglobulin domain, sialylation, pegylated, or glycosylation).

1.24 “ IND ” means, with respect to the United States, an investigational new drug application filed with the FDA as more fully defined in 21 C.F.R. §312.3 or, with respect to a jurisdiction other than the United States, a corresponding filing with the applicable Regulatory Authority for purposes of obtaining permission to initiate human clinical testing in such jurisdiction (e.g., a clinical trial authorization in the United Kingdom or other countries within Europe).

1.25 “ IND Enabling Studies ” means, with respect to a particular Other Compound, any and all studies which in each case are reasonably necessary to support filing of an IND for such Other Compound, including pharmacokinetic, pharmacodynamic, preclinical safety, toxicology and any other studies (including studies relating to manufacturing, analytical methods and purity analysis, and formulation and process development studies) required for an IND filing.

1.26 “ Know-How ” means any and all data, information and tangible materials including (i) ideas, discoveries, inventions, improvements or trade secrets; (ii) research and development data,

 

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such as medicinal chemistry data, nonclinical data, preclinical data, pharmacology data, chemistry data (including analytical, product characterization, manufacturing, and stability data), toxicology data, clinical data (including investigator reports (both preliminary and final), statistical analyses, expert opinions and reports, safety and other electronic databases), analytical and quality control data and stability data, in each case together with supporting data; (iii) databases, specifications, formulations, formulae; (iv) practices, knowledge, techniques, methods, formulas, processes, manufacturing information; and (v) research materials, reagents and compositions of matter, including Other Compounds and biological material. Know-How excludes any Patent rights with respect thereto (but does include information in unpublished patent applications).

1.27 “ Law ” means, individually and collectively, any and all laws, ordinances, rules, directives and regulations of any kind whatsoever of any governmental or regulatory authority within the applicable jurisdiction.

1.28 “ Licensed Technology ” means, with respect to Astellas, Astellas Technology, and with respect to CPC, CPC Technology.

1.29 “ Other Compound ” means any Other Protein Variant that (i) is owned or Controlled by CPC as of the Effective Date, including those Other Protein Variants described on Exhibit 1.29 (each, an “ Existing Compound ”) or (ii) is discovered, conceived, or first reduced to practice by, for, or on behalf of CPC (solely or jointly with others) during the Term (each, a “ New Compound ”). For the avoidance of doubt, Other Compounds exclude Other Protein Variants proprietary to Astellas (e.g., for which Astellas owns or Controls Patents or Know-How that cover such Other Protein Variants or formulations thereof) (i) that are discovered, acquired, conceived, or first reduced to practice by, for, or on behalf of Astellas prior to the Effective Date, or (ii) that are discovered, acquired, conceived, or first reduced to practice by, for, or on behalf of Astellas, independently of CPC, during the Term (collectively, the “ Astellas Compounds ”), unless expressly added to the Agreement in writing in accordance with Section 5.4. For the avoidance of doubt, if any Existing Compound or New Compound is also a Astellas Compound, then such compound shall be included in this definition of Other Compound but any and all Know-How or Patents Controlled by Astellas independently of activities by or on behalf of Astellas under this Agreement with respect to such compound shall not be deemed included under Astellas Know-How or Astellas Patents for purposes of this Agreement, unless expressly added to the Agreement in writing in accordance with Section 5.4.

1.30 “ Other Product ” means any pharmaceutical product that contains an Other Compound as an active ingredient. For avoidance of doubt, Other Product shall include any formulation, delivery device, dispensing device or packaging required for effective use of the Other Product.

1.31 “ Other Program Technology ” means all Know-How and other subject matter conceived, generated or first reduced to practice by or on behalf of a Party (solely or jointly with the other Party) in the course of conducting the Other Programs, or by Maxygen and its Affiliates prior to the Effective Date in accordance with Section 3.5, together with any and all intellectual property rights (including Patents) therein.

 

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1.32 “ Other Programs ” means, individually and collectively, any and all of the activities performed (i) by or on behalf of either Party pursuant to the Preclinical Development Plan or (ii) by or on behalf of CPC otherwise directed to any Other Protein Variant for the discovery, research, development, manufacture, commercialization or other exploitation of any Other Protein Variant or Other Product for use in the Field during the Term.

1.33 “ Other Protein Variant ” means (i) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a human or animal protein, including, without limitation, any protein or polypeptide listed on Schedule 2.1(b)(1) of the Asset Contribution Agreement, or any variant, homolog, derivative, mutant or fragment of the foregoing subsection (i), including, without limitation, amino acid chains resulting from the use of Shuffling, in each case other than any (A) CTLA-4 Variant or (B) Excluded Protein Variant or Vaccine, (each such protein or variant, homolog, derivative, mutant or fragment thereof, an “ Other Protein Molecule ”) and (ii) any Other Protein Molecule that is conjugated or otherwise coupled to any other molecule (e.g., polyethylene glycol, immunoglobulin domain, sialylation, pegylated, or glycosylation).

1.34 “ Patent ” means any of the following, existing at any time in any country or other jurisdiction anywhere in the world: (i) any issued patent (including inventor’s certificates, utility model, petty patent and design patent), extensions, confirmations, reissues, re-examination, renewal, supplementary protection certificates or any like governmental grant for protection of inventions; and (ii) any pending application for any of the foregoing, including any request for continued examination (RCE), continuations, continuations-in-part, divisionals, provisionals, converted provisionals, continued prosecution applications, or substitute applications.

1.35 “ Preclinical Development ” means any and all processes and activities for the discovery and research of Other Protein Variants and development of Other Compounds and associated Other Products including those processes and activities, whether in vitro or in vivo conducted to: (i) discover, screen, optimize, clone, express, purify, formulate, characterize or enhance any Other Compound, including synthesis or Shuffling of any Other Compound, conjugation thereof, or similar activities; (ii) perform IND Enabling Studies with respect to an Other Compound and (iii) discover, develop, optimize, characterize or enhance technologies and tools including assays, screens, biological models, software and databases reasonably for the support of or in connection with any of the activities described in clauses (i) and (ii) above or development or manufacture.

1.36 “ Preclinical Development Costs ” means the (i) external out-of-pockets costs and expenses, and (ii) internal costs and expenses calculated on an FTE basis as the FTE Rate, in each case incurred after the Effective Date by CPC in accordance with the Preclinical Development Plan and Budget that are reasonably attributable and fairly allocable to Preclinical Development activities performed pertaining to any Other Protein Variants or Other Compounds, including the costs of (a) processes and activities, whether in vitro or in vivo , conducted to discover, screen, optimize, clone, express, purify, formulate, characterize or enhance any Other Compound, including synthesis or Shuffling of any Other Compound, conjugation thereof, or similar activities; (b) the conduct of IND Enabling Studies with respect to an Other Compound; (c) processes and activities conducted to discover, develop, optimize, characterize or enhance technologies and tools including assays, screens, biological models, software and databases reasonably necessary for the support of any of the

 

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activities described in clauses (a) and (b) above, or development or manufacture of Other Compounds, and (d) manufacture of Other Compounds or Other Products for such activities; and (iii) any other costs or expenses that are expressly included in the Preclinical Plan and Budget as approved by the JSC.

1.37 “ Regulatory Authority ” means any federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity with authority over the Preclinical Development, development, manufacture, commercialization or other exploitation (including the granting of Marketing Approvals) with respect to any Other Product in any jurisdiction, including the FDA, EMEA, and the Ministry of Health, Labor and Welfare in Japan.

1.38 “Resulting Product” means any of the following (i) any Resulting Genetic Material, (ii) any vector of any type (e.g., cosmid, plasmid, spore, phage, virus, and/or virus-like particle), and subunits of the foregoing, which contain any Resulting Genetic Material, (iii) any organism, including any prokaryotic and/or eukaryotic cell and/or animal containing any Resulting Genetic Materials; (iv) any Resulting Protein; (iv) any eukaryotic cell, prokaryotic cell and/or expression systems expressing, secreting and/or otherwise producing a Resulting Protein; and/or (v) any product containing in whole and/or part, and/or made with and/or using in whole and/or part, any of the foregoing, in each case, in purified or unpurified form, and alone and/or in combination with other substances, and including any modifications, derivatives, progeny (altered and/or unaltered) and/or fragments of any of the foregoing.

1.38.1 “Resulting Genetic Material” means any genetic material (including DNA and/or RNA) that is generated, created and/or otherwise results directly from exercise of the Shuffling Technology.

1.38.2 “Resulting Protein” means any protein, polypeptide, antibody and/or other molecule encoded in whole and/or part by any Resulting Genetic Material.

1.39 “ Shuffle ” means techniques, methodologies, processes, materials or instrumentation for performing recombination-based modification of genetic material for the creation of potentially useful variant nucleic acids or proteins. “ Shuffled ” and “ Shuffling ” have their correlative meanings.

1.40 “ Shuffling Technology ” means Know-How or Patents owned by or licensed to CPC directed to the use of or comprising or claiming compositions or methods for Shuffling.

1.41 “ Territory ” means all countries and territories of the world.

1.42 “ Third Party ” means any entity other than Astellas or CPC, or their respective Affiliates. For the avoidance of doubt, sublicensees which are not an Affiliate of Astellas or CPC shall be included in the definition of Third Party.

1.43 “ Treatment ” means, with respect to a particular indication, the prophylaxis, cure, reduction, mitigation, prevention, slowing or halting the progress of, or otherwise management of such indication. “ Treat ” and “ Treating ” means providing Treatment.

 

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1.44 “ United States ” means the United States of America and its possessions and territories.

1.45 “ Vaccine ” means a formulation intended to be administered in a formulation containing one or more Antigen(s) (and/or a nucleic acid sequence encoding an Antigen) in the form of (i) an infectious agent (e.g., bacteria, viruses, parasite, protozoa) whether live, attenuated or dead, (ii) protein(s), (iii) nucleic acid(s), (iv) cells, spores and vectors (i.e., viruses and/or virus-like particles, liposomes, beads and/or other substrates for Antigen presentation), (v) fragments of any of the foregoing, and/or (vi) a combination of any of the preceding, which formulation is administered for the purpose of inducing an Immune Response in the human and/or animal recipient specifically directed to at least one such Antigen for the prevention or treatment of a disease state, symptom and/or condition in humans and/or animals caused by an infectious agent. For the purposes of this definition of Vaccine:

1.45.1 “ Antigen ” means a molecule ( i.e ., protein, polypeptide, peptide, carbohydrate, glycoprotein, glycolipid and/or any combination of the foregoing that is, or is derived in whole or part from, a molecule associated with an infectious agent) that produces an Immune Response to such molecule in a human and/or animal recipient; and

1.45.2 “ Immune Response ” means an immune state directed to the applicable infectious agents (or a molecule associated with such infectious agent) resulting from the modulation of activity (i.e., an increase, decrease and/or qualitatively different activity) of one or more lymphoid cells (e.g., B cells, NK cells, T cells and/or professional antigen-presenting cells, such as monocytes, macrophages, Langerhans cells, dendritic cells) following the administration of a stimulus.

1.46 Additional Definitions . Each of the following definitions shall have the meaning defined in the corresponding sections of this Agreement indicated below:

 

 

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1.47 Interpretation . The captions and headings to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless specified to the contrary, references to Articles, Sections or Exhibits mean the particular Articles, Sections or Exhibits to this Agreement and references to this Agreement include all Exhibits hereto. Each accounting term used herein that is not specifically defined herein shall have the meaning given to it under applicable Accounting Standards, but only to the extent consistent with its usage and the other definitions in this Agreement. Unless context otherwise clearly requires, whenever used in this Agreement: (i) the words “include” or “including” shall be construed as incorporating, also, “but not limited to” or “without limitation;” (ii) the word “day” or “year” means a calendar day or calendar year unless otherwise specified; (iii) the word “notice” means notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other communications contemplated under this Agreement; (iv) the words “hereof,” “herein,” “hereby” and derivative or similar words refer to this Agreement (including all Exhibits); (v) the word “or” shall be construed as the inclusive meaning identified with the phrase “and/or;” (vi) provisions that require that a Party, the Parties or any committee or team hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise; (vii) words of any gender include the other gender; and (viii) references to any specific Law or article, section or other division thereof shall be deemed to include the then-current amendments thereto or any replacement Law thereof. This Agreement was prepared in the English language, which language shall govern the interpretation of, and any dispute regarding, the terms of this Agreement.

 

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ARTICLE 2

SCOPE AND GOVERNANCE OF THE OTHER PROGRAMS

2.1 Scope and Conduct of the Other Programs; Diligence . Subject to the terms and conditions of this Agreement, CPC shall use commercially reasonable efforts to perform Preclinical Development of Other Compounds and Other Products. Accordingly, the Parties shall establish the Preclinical Development Plan in accordance with Section 3.2 to provide for a commitment of resources by CPC (and Astellas, to the extent provided in Section 3.2) so as to satisfy its diligence obligations described in the preceding sentence; provided, however, CPC’s obligation to commit resources shall take into account, and be subject to, its obligations to commit resources to the CTLA-4 Program and, in addition, subject to prior written consent of Astellas to the extent required in accordance with Section 3.4.2, CPC may make a reasonable number of its scientific and technical personnel reasonably available for G-CSF Program Support as long as such provision of personnel for the G-CSF Program does not impair its ability to, or the availability of its personnel to, perform the Preclinical Development Plan or the CTLA-4 Program or otherwise conflict with its obligations hereunder. CPC shall not be obligated hereunder to commit resources or incur expenses to perform Preclinical Development of Other Compounds or Other Products that are not required to be paid for or reimbursed by Astellas hereunder. Each Party shall make all decisions and conduct all of its obligations under the Other Programs in a manner, in its good faith determination, consistent with the terms of this Agreement. Each Party shall cooperate with and provide reasonable support to the other Party in the conduct of such activities. For the avoidance of doubt, a Party’s obligations to use commercially reasonable efforts in this Section 2.1 or anywhere else in this Agreement may be satisfied by such Party’s Affiliates and permitted contractors and sublicensees.

2.2 Joint Steering Committee . Promptly after the Effective Date, the Parties shall establish a joint steering committee (the “ Joint Steering Committee ” or “ JSC ”). The JSC shall be responsible for:

(a) establishing the direction and objectives for the Other Programs;

(b) reviewing the possibility of allocating additional resources of the Parties to perform Preclinical Development specifically directed to Other Compounds, and providing for such additional resources of the Parties as appropriate, consistent with the Preclinical Development Plan, in accordance with Section 3.2;

(c) preparing and approving the Preclinical Development Plan and associated Budget (the draft Initial Preclinical Development Plan and associated Budget, is attached hereto as Exhibit 3.2 ) including allocation of responsibilities between the Parties thereunder in accordance with the applicable terms and conditions of this Agreement;

(d) reviewing and monitoring the performance of each Party of activities assigned to it under the Preclinical Development Plan;

(e) monitoring and reporting CPC’s costs and expenditures with respect to Preclinical Development against the applicable Preclinical Development Plan and Budget for such activities;

 

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(f) evaluating the Preclinical Development Plan based on the results and progress of the activities thereunder, and preparing and approving draft Preclinical Development Plans and/or modifications to the Preclinical Development Plan in accordance with Section 3.2;

(g) reviewing and approving, to the extent provided in Section 2.10, any material agreements to be entered into by a Party with a Third Party contractor for the conduct on any activities under the Preclinical Development Plan;

(h) establishing subcommittees or joint project teams, as the JSC may from time to time agree is necessary or useful, to conduct activities within the scope of the JSC’s authority, and to oversee such subcommittees or joint project teams including, without limitation, establishing a JPT with substantially the same scope of activities as provided in the Co-Development Agreement; and

(i) undertaking or approving such other matters that pertain to the Preclinical Development Plan or Other Programs as are specifically provided for the JSC under this Agreement.

2.3 JSC Membership .

2.3.1 General . The JSC shall be comprised of two (2) representatives from each of CPC and Astellas. CPC’s and Astellas’ initial representatives to the JSC are set forth on Exhibit 2.3 . Each Party shall appoint to the JSC at least one representative with relevant decision-making authority from such Party such that the JSC is able to effectuate all of its decisions within the scope of the JSC’s responsibilities. Subject to the foregoing, either CPC or Astellas may at any time replace or remove its respective JSC representatives upon prior written notice to the other Party, provided that any replacement shall be of comparable authority and scope of functional responsibility within that Party’s organization as the person he or she is replacing.

2.3.2 Co-Chairs . Each Party shall appoint one of its members to the JSC to co-chair the meetings for the JSC (each, a “ Co-Chair ”). The Co-Chairs shall (i) coordinate and prepare the agenda and ensure the orderly conduct of the JSC’s meetings, (ii) attend (subject to below) each meeting of the JSC, (iii) prepare and issue minutes of each meeting within thirty (30) days thereafter accurately reflecting the discussions and decisions of the JSC, and (iv) call ad hoc meetings if necessary to address pressing matters. Such minutes from each meeting shall not be finalized until the applicable Co-Chair from each Party has reviewed and confirmed the accuracy of such minutes in writing. The Co-Chairs shall solicit agenda items from its JSC members and provide an agenda along with appropriate information for such agenda reasonably in advance of any meeting. It is understood that such agenda will include all items requested by either Co-Chair for inclusion therein. In the event the Co-Chair or another JSC member from either Party is unable to attend or participate in a particular JSC meeting, the Party who designated such Co-Chair or member may designate a substitute Co-Chair or other representative for the meeting.

2.4 Committee Meetings . The JSC shall meet at least three (3) times during each year, or as more often as otherwise agreed by the Parties by telephone, videoconference or in person as determined by the JSC, provided that at least once annually such meeting shall be held in person.

 

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All in-person meetings of the JSC shall be held on an alternating basis between CPC’s and Astellas’ facilities, unless otherwise agreed by the Parties. As appropriate, other representatives of the Parties and their Affiliates may attend committee meetings as nonvoting observers, but no Third Party personnel may attend unless otherwise agreed by the Parties (such agreement not to be unreasonably withheld). Each Party may also call for special meetings on an ad hoc basis to resolve particular matters requested by such Party. Each Co-Chair shall provide the JSC members with no less than fifteen (15) Business Days notice of each regularly scheduled meeting, and no less than five (5) Business Days notice of any special meetings called by either Party. The first meeting of the JSC shall occur within thirty (30) days of the Effective Date and the last meeting of the JSC shall occur (unless this Agreement is otherwise earlier terminated) within sixty (60) days prior to the expiration of this Agreement.

2.5 Decision Making . Decisions of the JSC shall be made by unanimous vote of the members present in person or by other means (e.g., telephone or video) at any meeting, with each Party having one vote (regardless of the number of representatives such Party has appointed to the JSC). In order to make any decision, the JSC must have present (in person or telephonically) at least one representative of each Party. If the JSC does not reach consensus with respect to a particular matter within the scope of its authority as stated under Section 2.2 of the Agreement (a “ JSC Matter ”) after endeavoring for seven (7) days (or such other agreed upon period) to do so, then the JSC, at its determination based on the specific circumstances of the matter, shall refer such JSC Matter to (i) the CEOs (or an executive officer designated by the CEO) of the Parties for resolution as provided in Section 10.1.2 and then, if not resolved (ii) dispute resolution as provided in Section 10.2 or 10.3.

2.6 Reporting to the JSC . Each Party shall keep the JSC fully informed of progress and results of activities, including appropriate summaries of relevant Data generated therefrom, for which it is responsible under the Preclinical Development Plan, as well as progress and results of its other activities, including appropriate summaries of relevant Data generated therefrom, with respect to Preclinical Development of Other Compounds and Other Products, through its members on the JSC.

2.7 Performance of Representatives . CPC and Astellas shall cause each of their representatives on the JSC to vote, and shall otherwise perform their respective activities under this Agreement, in a good faith manner consistent with the terms and conditions of this Agreement and such Party’s respective obligation to use commercially reasonable efforts under Section 2.1.

2.8 Day-to-Day Decision Making Authority . Each Party (itself or through a designee) shall have decision making authority with respect to the day-to-day operations of the Preclinical Development of Other Compounds and Other Products in the Territory for which it is responsible under the Preclinical Development Plan, provided that such decisions are not inconsistent with the Preclinical Development Plan or the express terms and conditions of this Agreement (including the allocation of operation responsibility for various activities as set forth herein). Without limiting the foregoing, CPC shall, and, to the extent Astellas has agreed in accordance with Section 3.2 to perform activities hereunder, Astellas shall, in each such Party’s discretion, determine the allocation of its specific personnel and resources to perform the activities with respect to Preclinical Development of Other Compounds and Other Products for which it is responsible under the Preclinical Development Plan, provided that such decisions are not inconsistent with the Preclinical Development Plan and such Party’s obligations under this Agreement.

 

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2.9 Co-Development Agreement Separation . The JSC and other governance, planning and budgets provided herein are applicable only to the Other Programs and are separate from, and not applicable to, the governance and decision-making provisions under the Co-Development Agreement and will in no way override, supersede or limit such provisions or the control provided to Astellas or CPC under the Co-Development Agreement.

2.10 Use of Contractors . Each Party shall each have the right to use the services of Third Party contractors, including contract research organizations, contract manufacturing organizations and the like, to assist such Party in fulfilling its obligations and exercising its rights under this Agreement, provided that such Third Party is bound by a written agreement that is consistent with terms of this Agreement, including intellectual property ownership and confidentiality provisions consistent with those set forth in Article 6 and Article 7, and the terms of such written agreement is consistent with industry norms for payments, quality and in other material respects. When practicable, each Party shall use commercially reasonable efforts to compare the services available from multiple contractors for each task to optimize the time, cost and quality delivered to the Other Programs. Notwithstanding the foregoing, each Party shall consider the possibility of using the other Party’s resources to perform such activities as an alternative to utilizing the services of a contractor. Any such agreement with a Third Party contractor under which anticipated payments would reasonably be expected (as determined at the time of signing) to exceed Fifty Thousand Dollars ($50,000) in a given calendar quarter, or One Hundred Thousand Dollars ($100,000) in total, shall be submitted to the JSC for its review and approval, prior to the relevant Party entering in such agreement with the Third Party contractor. Each Party shall remain responsible for ensuring the compliance of its Affiliates with the applicable terms of this Agreement. Each Party shall contractually obligate its licensees, sublicensees and contractors that are performing activities by, for or on behalf of such Party under this Agreement or are otherwise licensed or sublicensed under the CPC Technology or the Astellas Technology to comply with all relevant restrictions, limitations and obligations in this Agreement applicable to such licensees, sublicensees and contractors, and agrees to reasonably enforce such contractual obligations in the event of material breach by one of its licensees, sublicensees and contractors of such obligations. CPC shall have the right (i) to continue to use the services of Third Party contractors that are (or whose affiliates are) parties to those written agreements set forth in Exhibit 2.10 that are already in effect as of the Effective Date and that have been assigned from Maxygen to CPC under the Asset Contribution Agreement (which agreements may relate to activities with respect to the CTLA-4 Program or the Other Programs), and to enter into additional work orders or otherwise extend or expand such contracts for additional services of a similar nature on substantially similar terms and conditions as provided in the corresponding written agreement (which, for clarity, may include services with respect to a Program that are of a similar nature to services previously provided by such Third Party with respect to another Program), and (ii) to enter into written agreements with Third Party contractors that are substantially identical to those written agreements between Maxygen and such Third Party contractors that are set forth in Exhibit 2.10 which are not assigned to CPC under the Asset Contribution Agreement (“ Unassigned Maxygen Contractor Agreements ”), for substantially similar services as were provided to Maxygen by such Third Party contractor (but for services with respect to the Projects, and with appropriate adjustments in payments to reflect the services to be provided) in each case to assist CPC

 

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in fulfilling its obligations and exercising its rights under this Agreement, and this Section 2.10 shall not be construed to require CPC to renegotiate or amend the terms of such contracts (or, in the case of Unassigned Maxygen Contractor Agreements, to negotiate terms that are substantially different from the terms set forth in the Unassigned Maxygen Contractor Agreements); provided, however, that CPC shall be required to obtain JSC approval as set forth above in this Section 2.10 with respect to additional anticipated expenses from any such amendment or modification (including new or modified work orders) of such an agreement in excess of Fifty Thousand Dollars ($50,000) in a given calendar quarter, or One Hundred Thousand Dollars ($100,000) in total.

ARTICLE 3

PRECLINICAL DEVELOPMENT

3.1 Preclinical Development . CPC shall conduct a research and discovery program directed toward Preclinical Development of Other Compounds in accordance with the Preclinical Development Plan (as defined below), subject to the JSC’s oversight, coordination, and/or direction with respect to matters within its purview pursuant to this Agreement. Each Party will be responsible for conducting, and shall use commercially reasonable efforts to conduct, the activities allocated to such Party, if any in the case of Astellas, under the Preclinical Development Plan and shall use commercially reasonable efforts to progress and complete such activities within the timeframes set forth therein, including by allocating such personnel as reasonably necessary to progress and complete the tasks assigned to it in the then-current Preclinical Development Plan within the timeframes as set forth therein, but no less than the number of personnel set forth for such Party in the then-current Preclinical Development Plan on a task-by-task basis; provided that CPC’s obligation to commit resources shall take into account, and be subject to, its obligations to commit resources to the CTLA-4 Program, and in addition, subject to prior written consent of Astellas to the extent required in accordance with Section 3.4.2, CPC may make a reasonable number of its scientific and technical personnel reasonably available for G-CSF Program Support as long as such provision of personnel for the G-CSF Program does not impair its ability to, or the availability of its personnel to, perform the Preclinical Development Plan or the CTLA-4 Program or otherwise conflict with its obligations hereunder.

3.2 Preclinical Development Plan .

3.2.1 Plan . The Other Programs shall be carried out in accordance with a detailed workplan and budget (“ Preclinical Development Plan ”) covering the Prior Maxygen Program Activities and the Preclinical Development activities to be conducted under this Agreement with respect to any Other Protein Variant. The initial Preclinical Development Plan is attached hereto as Exhibit 3.2 . CPC hereby represents and warrants that the initial Preclinical Development Plan as attached hereto as Exhibit 3.2 does not include any activities that will be performed on or with an Excluded Protein Variant or Vaccine. The Parties shall use commercially reasonable efforts to have the JSC finalize and submit to the Parties for review and comment, and have the JSC approve, a mutually agreed final form of the initial Preclinical Development Plan based on the attached draft as soon as reasonably practicable, and no later than forty-five (45) days, following the Effective Date. Once finalized, reviewed and approved by the JSC, such plan shall become the Preclinical Development Plan hereunder (the “ Initial Preclinical Development Plan ”) and shall govern the performance of the Other Programs through the period beginning on the date of its approval and

 

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ending on March 31, 2010 (or such longer time as the JSC may decide). At least ninety (90) days prior to the end of the period covered by the Initial Preclinical Development Plan, and thereafter at each JSC meeting, the JSC shall review and revise the Preclinical Development Plan with respect to the period remaining in the Term, and the first twelve (12) months of such Preclinical Development Plan shall include a detailed description of the Preclinical Development activities to be conducted thereunder including a detailed Budget for all such activities. In the event a proposed draft or revision of the Preclinical Development Plan contemplates (i) Preclinical Development of Other Compounds or Other Products that are not already included under a previously approved Preclinical Development Plan or (ii) activities that would be materially different from the Preclinical Development activities contemplated under a previously approved Preclinical Development Plan, or upon request by a Party, the JSC shall discuss whether to conduct an assessment of intellectual property rights of Third Parties in connection with Preclinical Development, and include any such assessment agreed by the JSC in the applicable Preclinical Development Plan and associated Budget.

3.2.2 Budget Cap and Floor . The total Budget under the Preclinical Development Plan, excluding the Budget for activities, if any, provided under the Preclinical Development Plan to be conducted by Astellas or its subcontractors, and excluding amounts payable under Section 6.2 (Patent Matters), but including payments to CPC’s Third Party Contractors and amounts, if any, for assessment of intellectual property rights of Third Parties as described in Section 3.2.1, (such total Budget amounts referred to as the “Collared Amounts” ) shall not exceed Fifteen Million Dollars ($15,000,000) in any eighteen (18) consecutive month period without the prior written consent of Astellas; provided, however, that if the Co-Development Agreement is terminated and Astellas’ representatives to the JSC agree to re-allocation of some or all of the CPC personnel used for the CTLA-4 Program to Other Programs as described in Section 3.4.3(b), then written consent from Astellas shall not be required to the extent that such re-allocation approved by Astellas’ JSC representatives causes the Collared Amounts to exceed Fifteen Million Dollars ($15,000,000) in an eighteen (18) consecutive month period. The Collared Amounts in the Budget under the Preclinical Development Plan shall not be below the Minimum Quarterly FTE Funding (as defined below) for any given calendar quarter without the prior written consent of CPC. For purposes of the foregoing, “Minimum Quarterly FTE Funding” means an amount equal to a quarterly allocation of forty-two (42) FTEs less the number of CPC FTEs allocated to the CTLA-4 Program (or, if the Co-Development Agreement is terminated, the number of FTEs that were allocated to the CTLA-4 Program in the last approved plan and budget under the Co-Development Agreement which Astellas does not agree to add to the Preclinical Development Plan as described in Section 3.4.3(b)) and less the FTEs, if any, utilized by CPC for G-CSF Program Support (each such set of FTEs adjusted for a single calendar quarter), multiplied by the FTE Rate; provided , however , that the Minimum Quarterly FTE Funding shall not exceed the Fifteen Million Dollars ($15,000,000) in any eighteen (18) consecutive month period without the prior written consent of Astellas described in the first sentence of this Section 3.2.2, except to the extent that the Co-Development Agreement is terminated, and re-allocation (with approval of Astellas’ representatives to the JSC) of some or all of the CPC personnel used for the CTLA-4 Program to Other Programs, as described in Section 3.4.3(b), causes the Minimum Quarterly FTE Funding to exceed such amounts.

3.2.3 JSC Review and Modification . The JSC shall review the Preclinical Development Plan on an ongoing basis and propose changes thereto for consideration at the next JSC meeting, any approval of such changes shall be reflected in agreed and approved minutes of JSC

 

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meetings or otherwise agreed in writing. For each Preclinical Development Plan provided to the JSC for review, (i) CPC’s members of the JSC shall confirm that none of the activities provided therein will be performed on or with an Excluded Protein Variant or Vaccine, and (ii) Astellas’ members of the JSC shall inform the JSC, prior to inclusion of any proposed new Other Protein Variant program in the Preclinical Development Plan, whether such proposed new Other Protein Variant program relates to a “Astellas Compound” and whether Astellas has Patents claiming compositions (including polypeptides or genetic materials encoding such polypeptides) that are relevant to such proposed new Other Protein Variant program considered for inclusion. The Parties acknowledge that the Preclinical Development Plan is intended to cover one or more research and preclinical development programs of Other Compounds or Other Products, with the goal of generating one or more sequence-optimized compound(s) for which proof-of-concept has been verified with in vitro data within two and one-half (2  ¹ / 2 ) years of the Effective Date; provided that the preceding acknowledgement of the Parties’ intent and goal shall not be construed an agreement or commitment by either Party that such intent or goal will be achieved. No Preclinical Development Plan shall assign obligations to Astellas unless Astellas so agrees in writing.

3.3 Other Programs Information and Reports . CPC and Astellas shall make available and disclose to each other all Other Program Technology, including all Patents and Know-How therein regarding Other Compounds and results of in vitro and in vivo studies, assay techniques and new assays arising from the Preclinical Development, with significant discoveries or advances being communicated as soon as reasonably practical after such Other Program Technology is discovered or its significance is appreciated; provided, however , that with respect to tangible research material within Other Program Technology, the Parties shall exchange such material as determined by the JSC in accordance with the applicable Preclinical Development Plan or as otherwise determined by agreement of both Parties’ representatives to the JSC. At each meeting of the JSC, CPC and, to the extent Astellas has agreed in accordance with Section 3.2 to perform activities hereunder, Astellas shall provide to the other Party’s representative on the JSC a detailed written report of its progress and activities under the Other Programs or other Preclinical Development activities performed hereunder since the last such report, including: (i) the experiments conducted, (ii) any Other Program Technology developed and (iii) conclusions and results, including summaries of Data generated. Each Party shall, subject to applicable confidentiality obligations set forth herein, provide the other Party with full access to, and the ability to copy, all Data generated by such other Party in conducting the Other Programs upon the other Party’s reasonable request.

3.4 Other Activities . During the period beginning upon the Effective Date and ending upon the second anniversary of the Effective Date, CPC shall only conduct such research, development (preclinical or otherwise), manufacture and commercialization activities that are set forth in the Preclinical Development Plan approved by the JSC hereunder or such activities as are provided under the Co-Development Agreement with respect to the CTLA-4 Program and shall not conduct or participate in any other such activities except as follows:

3.4.1 Academic work . CPC shall be permitted to assist academic or other non-profit institutes in the conduct of in vivo studies or other non-clinical research activities with respect to Other Protein Variants that are not the subject of any work under the Preclinical Development Plan (“ Academic Programs ”) provided that such activities do not affect in a material adverse manner CPC’s commitment of resources and allocation of personnel to conduct activities for which

 

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Astellas provides funding to CPC as set forth under the Preclinical Development Plan; provided, however, that CPC shall not utilize more than de minimis FTEs of CPC in connection with such activities without Astellas’ consent, not to be unreasonably withheld, and shall not provide funding for such activities at the academic or other non-profit institutes without Astellas’ consent, and the costs of such activities (and associated FTEs) shall not be included in the Preclinical Development Costs for which Astellas is obligated to reimburse CPC under Section 4.1.

3.4.2 G-CSF Support Work . CPC shall have the right, without requiring JSC approval, but subject to Astellas’ prior written consent to the extent required pursuant to this Section 3.4.2, to make a reasonable number of its scientific and technical personnel available for G-CSF Program Support as long as such provision of personnel for the G-CSF Program does not impair its ability to, or the availability of its personnel to, perform the Preclinical Development Plan or the CTLA-4 Program or otherwise conflict with its obligations hereunder and provided that all such G-CSF Program Support is fully funded by a Third Party. Prior to making any such scientific and technical personnel available for G-CSF Program Support, CPC shall provide Astellas with a reasonably detailed written plan identifying the personnel who shall be made available and the approximate time periods during which the personnel would be performing G-CSF Program Support; provided, however, that submission of a written plan to Astellas, and prior consent by Astellas, shall not be required for CPC to provide up to one (1) FTE for G-CSF Program Support within the first year following the Effective Date. If Astellas provides written notice approving such detailed written plan, such approval not to be unreasonably withheld, CPC shall thereafter have the right to make only the identified personnel available only for the approved identified time periods to perform G-CSF Program Support.

3.4.3 Other activities .

(a) Activities after Second Anniversary . Beginning upon the second anniversary of the Effective Date, CPC shall be able to conduct research, development (preclinical or otherwise), manufacture and commercialization activities of its own choosing without requiring approval of the JSC; provided, however , that CPC shall continue to conduct any ongoing Other Programs in a manner consistent with the Preclinical Development Plan and Budget therefor as may be amended by the JSC.

(b) Utilization of Personnel after Termination of CTLA-4 Program . If t