AMENDED AND RESTATED PRODUCT DEVELOPMENT AND LICENSE AGREEEMENT

Exhibit 10.23

TABLE OF CONTENTS

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

i

TABLE OF CONTENTS

(continued)

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

ii

TABLE OF CONTENTS

(continued)

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

iii

AMENDED _. AND RESTATED

PRODUCT DEVELOPMENT AND LICENSE AGREEMENT

THIS AMENDED AND RESTATED PRODUCT DEVELOPMENT AND LICENSE AGREEMENT (this “ Agreement ”) is made as of December 21, 2001, by and between COLEY PHARMACEUTICAL GROUP, INC., a Delaware corporation having a place of business at Wellesley Gateway, 93 Worcester Street, Suite 101, Wellesley, Massachusetts 02481 (“ Coley ”), and AVENTIS PHARMACEUTICALS INC., a Delaware corporation having a place of business at Route 202-206, P.O. Box 6800, Bridgewater, New Jersey 08807 (“ Aventis ”) (each individually a “ Party ” and collectively the “ Parties” ).

WHEREAS, Coley is the owner or licensee of certain rights, title, and interests in, and know-how related to, proprietary technologies involving Immunomodulatory Oligonucleotides useful for modulation of an immune response; and

WHEREAS, Aventis is the owner of certain rights, title, and interests in, and know-how related to, asthma and allergic rhinitis and chronic obstructive pulmonary disease treatment technologies; and

WHEREAS, Coley and Aventis entered into a Product Development and License Agreement dated August 3, 2001 (the “ Initial Agreement ”) for the development and commercialization of Coley’s Immunomodulatory Oligonucleotide technology as asthma and allergic rhinitis and chronic obstructive pulmonary disease treatments; and

WHEREAS, the Parties amended the Initial Agreement pursuant to Amendment #1 To The Product Development And License Agreement dated October 3, 2001, Amendment #2 To The Product Development And License Agreement dated November 2, 2001, and Amendment #3 To The Product Development And License Agreement dated November 20, 2001; and

WHEREAS, the Parties desire to amend and restate the Initial Agreement in its entirety with this Agreement.

NOW, THEREFORE, in consideration of the covenants and obligations expressed herein and intending to be legally bound, and otherwise bound by proper and. reasonable conduct, the Parties agree as follows:

1.1 “ Achievement Milestones ” shall mean those achievement milestones described in Section 3.3.

1.2 “ Actual Development Milestone Achievement Date ” shall mean the date on which a Development Milestone is actually achieved.

1.3 “ Advisory Committee ” shall mean that certain advisory committee described in Section 4.5(a).

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

1.4 “ Affiliate ” shall mean any individual or entity directly or indirectly controlling or controlled by or under common control with a Party to this Agreement. For purposes of this Agreement, the direct or indirect ownership of over fifty percent (50%) of the outstanding voting securities of an entity, or the right to receive over fifty percent (50%) of the profits or earnings of an entity shall be deemed to constitute control (or, in either case, such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction). Such other relationship as in fact gives such individual or entity the power or ability to control the management, business and affairs of an entity shall also be deemed to constitute control. Notwithstanding the foregoing, Aventis Pasteur, SA and its subsidiaries (including, without limitation, Aventis Pasteur, France, and Aventis Pasteur, Inc.) are not Affiliates of Aventis for the purposes of this Agreement and are not effected by its terms.

1.5 “ Aventis Immune Modulators ” shall mean those Immunomodulatory Oligonucleotides designed and screened by Coley specifically for Aventis and delivered and assigned to Aventis pursuant to the Screening Agreement.

1.6 “ Aventis Immune Modulator Patent Rights ” shall mean the Patent Rights that contain only composition of matter claims that are limited to the specific sequence of any Aventis Immune Modulator.

1.7 “ Aventis Indemnified Party ” shall have the meaning set forth in Section 10.3.

1.8 “ Aventis Invention ” shall mean any Invention (other than any Coley Screening Invention as defined in the Screening Agreement) conceived or reduced to practice solely by or on behalf of Aventis in the course of activities pursuant to this Agreement.

1.9 “ Aventis Know-How ” shall mean all proprietary technical information, know- how, discoveries, improvements, processes, formulas, data, inventions (including, without limitation, Aventis Inventions and Aventis Screening Inventions (as defined in the Screening Agreement)), sequences, modifications, mechanisms of action, trade secrets, instructions and other intellectual property (other than Aventis Patent Rights) and reagents, compositions, formulations, materials (including fragments, metabolites, constituents, components, and derivatives thereof but excluding the Aventis Immune Modulators or any improvements or modifications thereto), whether or not patentable, which are owned, controlled, proprietary to, or licensed by Aventis or its Affiliates (other than with respect to Coley Know-How licensed by Aventis pursuant to this Agreement) during the Term and which arise and are developed in the course of activities pursuant to this Agreement or the Screening Agreement and under which Aventis or its Affiliates have the right to disclose and grant licenses.

1.10 “ Aventis Manual ” shall mean the then current version of the Aventis Project Progression Manual, or any successor document, and which is considered to be Confidential Information.

1.11 “ Aventis Patent Rights ” shall mean the Patent Rights (other than Joint Patent Rights or Coley Patent Rights licensed by Aventis pursuant to this Agreement) owned, controlled, or licensed by Aventis or its Affiliates (i) pursuant to the Screening Agreement, including, without limitation, the Aventis Immune Modulator Patent Rights, or (ii) which arise

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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during the Term of, and pursuant to the activities under, this Agreement and under which Aventis or its Affiliates have the right to disclose and grant licenses. The Aventis Patent Rights shall be listed on Exhibit A-l , as amended from time to time by Aventis in accordance with this Agreement and incorporated herein by reference.

1.12 “ Aventis Technology ” shall mean the Aventis Patent Rights and Aventis Know-How.

1.13 “CMR Benchmark” shall mean that certain benchmark known as the CMR International Macro Benchmarks for Drug Development published annually by LAM Platts, CE Ellis and JAN McAuslane (as the authors may change from time to time) which establishes standards for the pharmaceutical development of new chemical entities in specified fields, certain portions of which have been made (and shall continue to be made) available to Coley as Confidential Information of Aventis hereunder, and which shall only be used by Coley consistent with Sections 4.6(a), 4.6(b), and 12.3 where applicable.

1.14 “ Coley Assigned Know-How ” shall have the meaning set forth in Section 6.8(c)(i)(2).

1.15 “ Coley Assigned Patent Rights ” shall have the meaning set forth in Section 6.8(c)(i)(2).

1.16 “ Coley Assigned Technology ” shall have the meaning set forth in Section 6.8(c)(i)(2)(a).

1.17 “ Coley Exclusively Licensed Technology ” shall have the meaning set forth in Section 6.8(c)(i)(3).

1.18 “ Coley Indemnified Party ” shall have the meaning set forth in Section 10.2.

1.19 “ Coley _, Invention ” shall mean any Invention conceived or reduced to practice solely by or on behalf of Coley in the course of performing activities pursuant to this Agreement.

1.20 “ Coley Know-How ” shall mean all proprietary technical information, know-how, discoveries, improvements, processes, formulas, data (including, without limitation, data provided by Coley to Aventis under the Screening Agreement), inventions (including, without limitation, Coley Inventions and Coley Screening Inventions (as defined in the Screening Agreement)), sequences, modifications, mechanisms of action, trade secrets, instruction and other intellectual property (other than Coley Patent Rights) and reagents, compositions, formulations, materials (as well as fragments, metabolites, constituents, components, and derivatives thereof), whether or not patentable, which relate to the Immune Modulators and the development and use of the Products, and which are owned, proprietary to, licensed by or controlled by Coley or its Affiliates (other than with respect to Aventis Know-How licensed by Coley pursuant to this Agreement) as of the Effective Date or during the Term, and under which Coley or its Affiliates have the right to disclose and grant licenses. Coley Know-How shall not include discovery methods for immunomodulatory compounds, screening assays or other testing methods, trademarks, and/or copyrights.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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1.21 “ Coley Patent Rights ” shall mean the Patent Rights (other than Joint Patent Rights or Aventis Patent Rights licensed by Coley pursuant to this Agreement) owned, controlled or licensed by Coley or its Affiliates relating to the Immune Modulators that exist as of the Effective Date or which arise during the Term and under which Coley or its Affiliates have the right to disclose and grant licenses. The Coley Patent Rights licensed to Aventis hereunder are listed on Exhibit A-2, as amended from time to time by Coley in accordance with this Agreement and incorporated herein by reference.

1.22 “ Coley Technology ” shall mean the Coley Patent Rights and Coley Know-How.

1.23 “ Collaboration Manager ” shall have the meaning set forth in Section 4.4.

1.24 “ Combination Product ” shall mean a product formulated to contain at least one Selected Immune Modulator as one component and at least one other drug product approved by the appropriate Regulatory Authority for use in anti-asthma, anti-allergic rhinitis or anti-COPD indications.

1.25 “ Combined Products ” shall mean all Products in the Field in the Territory.

1.26 “ Commercialization Plan ” shall mean that certain commercialization plan described in Section 4.2, which is developed by Aventis on a country-by-country or region-by- region basis as part of its annual business plan and approved by the Executive Committee of Aventis Pharma, or any successor document.

1.27 “Confidential Information” shall mean any technical or business information furnished by one Party (the “ Disclosing Party ”) to the other Party (the “ Receiving Party ”) in connection with this Agreement. Such Confidential Information may include, without limitation, the identity, nucleotide sequence, or structure of an Immunomodulatory Oligonucleotide, the applicability or use of any Immunomodulatory Oligonucleotide for a particular indication, information relating to the mechanism of immune stimulation for a particular Immunomodulatory Oligonucleotide, information about the composition of, or modifications to the nucleotides or phosphate backbone, as well as any product specifications, trade secrets, know-how (including, without limitation, Aventis Know-Flow and Coley Know-How), inventions, intellectual property, technical data or specifications, discovery methods, screening assays or other testing methods, business or financial information, research and development activities, Advisory Committee reports, the Aventis Manual, the Development Plan, the CMR Benchmark, the Commercialization Plan, royalty reports, product and marketing plans, and customer and supplier information.

1.28 “ COPD ” shall mean chronic obstructive pulmonary disease.

1.29 “ CpG 7909 ” shall mean the compound identified by the sequence [*************************************] in which each of the bases is connected by a phosphorothioate internucleotide linkage.

1.30 “ CpG 7909 Specifications ” shall mean the drug substance and/or product quality specifications, release test methods, and typical batch release data relating to CpG 7909.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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1.31 “ CpG 7279 ” shall mean the compound identified by the sequence [*************************************] in which each of the bases is connected by a phosphorothioate internucleotide linkage.

1.32 “ Data ” shall have the meaning set forth in Section 7.8.

1.33 “ Delivery Method ” shall mean the method of administration of a Product subcutaneously, intranasally, orally, and/or via inhalation, and/or any additional method of administration requested by Aventis and approved by Coley, such approval not to be unreasonably withheld. Notwithstanding the foregoing, in no event shall Delivery Method include such an additional method of administration until Coley approves such method, and Coley may withhold such approval if Coley believes that such approval would conflict with any interest of Coley alone or with a third party.

1.34 “ Development Milestones ” shall mean those development milestones described in Section 3.2.

1.35 “ Development Plan ” shall mean that certain development plan described in Section 4.2.

136 “ Disclosing Party ” shall have the meaning set forth in Section 1.27.

1.37 “ EC Associated Countries ” shall mean the territories and countries where Articles 81(1) and 82 of the EC Treaty apply or competition provisions similar thereto apply pursuant to bilateral or multilateral agreements between the European Community and such territories and countries.

1.38 “ EDC ” shall mean an early development compound.

1.39 “ Effective Date ” shall mean August 3, 2001.

1.40 “ EMEA ” shall mean the European Agency for the Evaluation of Medicinal Products or any successor entity.

1.41 “ European Economic Area or EEA ” shall mean an area comprising the EC Member States, Norway, Liechtenstein and Iceland.

1.42 “ FDA ” shall mean the United States Food and Drug Administration or any successor entity.

1.43 “ Field ” shall mean the use of Immune Modulators solely for prophylactic and/or therapeutic treatment of asthma, allergic rhinitis or COPD, administered via a Delivery Method. The Field specifically excludes, without limitation: (i) the use of Immune Modulators for all other allergic indications, atopic indications, autoimmune disorders and/or inflammatory disorders; and/or (ii) any administration of Immune Modulators other than via a Delivery Method; and/or (iii) any and all drug combinations incorporating any antigens (including without limitation allergens) for asthma, allergic rhinitis, COPD or for any other indication, whether the materials comprising such combinations are administered simultaneously or separately at

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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different sites or times, and/or (iv) any and all drug combinations incorporating any medications, monoclonal antibodies, or other agents unless such medications, monoclonal antibodies or other agents are for the prophylactic and/or therapeutic treatment of asthma, allergic rhinitis or COPD, or such other agents are formulations with excipients, carriers, or delivery vehicles whether the materials comprising such combinations are administered simultaneously or separately at different sites or times. Notwithstanding the foregoing, the Field shall not include those indications for which this Agreement is terminated by Aventis pursuant to the provisions of Sections 6.2, 6.3 or 6.6 or by Coley pursuant to the provisions of Sections 6.3, 6.4(a) or (c), or 6.6.

1.44 “ First Commercial Sale ” shall mean the first sale of any Product for use in the Field by Aventis, its Affiliates, or its approved sublicensees to any third party in a country within the Territory after such Product has been granted Regulatory Approval for use in the Field by the competent Regulatory Authorities in such country.

1.45 “ Immune Modulators ” shall mean CpG 7909, CpG 7279 and the Aventis Immune Modulators.

1.46 “ Immune Modulator Specifications ” shall mean the drug substance and/or product quality specifications, release test methods, and typical batch release data relating to an Immune Modulator.

1.47 “ Immunomodulatory Oligonucleotide ” shall mean an Oligonucleotide which stimulates immune cells at oligo concentrations less than 10 micromolar to: (i) produce cytokines and/or chemokines; (ii) express cell surface antigens or other markers; and/or (iii) proliferate.

1.48 “ Immunomodulatory Oligonucleotide Specifications ” shall mean the drug substance and/or product quality specifications, release test methods, and typical batch release data relating to an Immunomodulatory Oligonucleotide, including, without limitation, an Immune Modulator.

1.49 “ Invention ” shall mean all ideas, information, data, writings, development, process, discoveries, improvements, methods, modifications, reagents, compositions, formulations, materials, know-how, and other technologies (whether or not patentable or copyrightable) which (i) relate to Immunomodulatory Oligonucleotides and/or Products, and/or (ii) are derived from the use of Coley Technology and/or Aventis Technology, and which are conceived or reduced to practice during the performance of activities under this Agreement. For purposes of clarification, Invention specifically excludes any of the foregoing which are conceived or reduced to practice during the performance of activities under the Screening Agreement, including without limitation, ideas, information, data, writings, development, process, discoveries, improvements, methods, modifications, reagents, compositions, formulations, materials, know-how, and other technologies (whether or not patentable or copyrightable) which relate solely to Aventis Immune Modulators.

1.50 “ Iowa Agreement ” shall mean that certain License Agreement by and between Coley and the University of Iowa Research Foundation (“ UIRF ”) dated March 31, 1997, as amended, attached hereto as Exhibit B.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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1.51 “ Joint Invention ” shall mean (a) any Invention (other than any Coley Screening Invention (as defined in the Screening Agreement)) invented jointly by or on behalf of the Parties, as determined by inventorship under U.S. patent laws and/or (b) any Joint Screening Invention (as defined in the Screening Agreement).

1.52 “ Joint Patent Rights ” shall mean Patent Rights covering Joint Inventions.

1.53 “ Liability ” shall have the meaning set forth in Section 10.2.

1.54 “ LIBOR ” shall have the meaning set forth in Section 3.6.

1.55 “ MAA Acceptance ” shall mean acceptance by the EMEA or other appropriate regulatory authority of any single country in the European Union For filing and review of a Marketing Authorization Application.

1.56 “ MAA or Equivalent Approval ” shall mean the granting of marketing approval in the European Union by the European Union Commission or by the appropriate Regulatory Authority in any single country in the European Union.

1.57 “ Major Market Country ” shall mean the United States, Japan, France or Germany.

1.58 “ NDA ” shall mean an original New Drug Application, made in the form of an FDA submission or package to the FDA, for approval to market a Product.

1.59 “ NDA Acceptance ” shall mean the determination by the FDA that the NDA has met all the criteria for “filing” and is suitable for review and potential approval.

1.60 “ NDA Approval ” shall mean the authorization by the FDA to market a Product, upon the acceptance of the content and any amendments to the NDA.

1.61 “ Net Sales ” shall mean the gross amount invoiced by Aventis and its Affiliates and approved sublicensees on account of sales of Combined Products to third parties in the Territory, less the total of the following deductions to the extent they are actually incurred and not billed separately to the customer: (i) track, cash, and/or quantity discounts not already reflected in the amount invoiced; (ii) excise, sales and other consumption taxes (including VAT on the sale of Products) and customs duties to the extent included in the invoice price; (iii) freight, insurance and other transportation charges to the extent included in the invoice price; (iv) amounts repaid or credited by reason of rejections and defects; (v) returns or retroactive price reductions; and (vi) compulsory payments and rebates directly related to the sale of Products, accrued in accordance with generally accepted accounting principles, paid or deducted pursuant to agreements (including, but not limited to managed care agreements) or governmental regulations.

In the case of any sale or other disposal of a Product between or among Aventis and its Affiliates, approved sublicensees or marketing partners, for resale, Net Sales shall be calculated as above only on the value charged or invoiced on the first arm’s length sale thereafter to a third party.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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In the case of any other sale or other disposal for value, such as barter or counter-trade, of any Product, or part thereof, other than in an arm’s length transaction exclusively for money, Net Sales shall be calculated as above on the value of the consideration given.

In the case of any sale which is not invoiced or is delivered before invoice, Net Sales shall be calculated at the time of shipment.

In the event a Product is sold as part of a Combination Product, the Net Sales of any such Product, for the purposes of determining Royalty Payments, shall be determined by multiplying the Net Sales (as defined above) of the Combination Product by the fraction A/(A+B), where A is the weighted (by sales volume) average sale price of the Product when sold separately in finished form and B is the weighted (by sales volume) average sale price of the other product(s) sold separately in finished form. In the event that such average sale price cannot be determined for both the Product and the other product(s) in combination, Net Sales for purposes of determining Royalty Payments shall be mutually agreed by the Parties based on the relative value contributed by each component; provided , however, that if the component of the Combination Product consisting of a Selected Immune Modulator is a Product which has been sold as a monotherapy, the value of such component shall be no less than the average sales price per milligram of such component when sold as a monotherapy in finished form.

1.62 “ Non-CpG Containing ” shall mean lacking cytosine-guanine dinucleotides.

1.63 “ Oligonucleotide ” shall mean any molecule with a molecular weight greater than 1000 daltons containing native or chemically modified purines (and/or analogs) and/or pyrimidines (and/or analogs), irrespective of the backbone linkages employed.

1.64 “ Option Period ” shall have the meaning set forth in Section 3.8(a).

1.65 “ Option Right ” shall have the meaning set forth in Section 3.8(a).

1.66 “ Other Payments ” shall have the meaning set forth in Section 3.8(a).

1.67 “ Owned or Controlled ” shall mean that the owning or controlling Party has rights that could be exercised to prevent the other Party from making, using or selling a particular Immunomodulatory Oligonucleotide absent a license from such owning or controlling Party, provided, however , that in the event that a third party co-owns or co-controls such rights to the Immunomodulatory Oligonucleotide, the Party otherwise owning or controlling such rights to such Immunomodulatory Oligonucleotide is still considered to Own or Control such rights to such Immunomodulatory Oligonucleotide unless the other Party obtains such rights to the Immunomodulatory Oligonucleotide from the third party.

1.68 “ Patent Rights ” shall mean all United States and foreign patents and patent applications including any substitute, divisional, continuation and continuation in-part applications, and the patents issuing therefrom, and further including patents issuing from reissue or re-examination proceedings existing as of the Effective Date or during the Term.

1.69 “ Phase 1 Clinical Trials ” shall mean clinical studies in subjects to evaluate the safety and tolerance, pharmacokinetic and pharmacodynamic properties, dosing interval, and/or absorption, distribution, metabolism, excretion (ADME) of the candidate drug, or clinical studies otherwise determined to be phase 1 clinical studies by the SRC Committee.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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1.70 “ Phase 2B Clinical Trials ” shall mean dose ranging trials to evaluate efficacy and safety in the targeted patient population and/or to define the optimal dosing regimen.

1.71 “ Phase 3 Clinical Trials ” shall mean short-term and/or long-term controlled trials to confirm the efficacy and safety of the drug in larger, targeted patient populations.

1.72 “ Planned Development Milestone Achievement Date ” shall mean the first achievement date set forth in the Development Plan as of the Effective Date and any subsequent achievement date set forth in the Development Plan as amended from time to time, provided, however, that no adjustment or amendment shall be made to the first achievement milestone set forth in the Development Plan as of the Effective Date, and provided further that no adjustment or amendment shall be made to any particular achievement date set forth in the Development Plan after thirty (30) days prior to the achievement date that immediately precedes such particular achievement date sought to be adjusted or amended.

1.73 “ Product ” shall mean (i) a drug product consisting of at least one Selected Immune Modulator formulated as a monotherapy or (ii) a Combination Product.

1.74 “ Projected Annual Net Sales ” shall mean the projected annual Net Sales as set forth in the Commercialization Plan, which shall include the projected animal Net Sales of Aventis and its Affiliates and/or approved sublicensees.

1.75 “ Proprietary to Aventis and Coley ” shall mean those Immunomodulatory Oligonucleotides that are proprietary to Coley and that Aventis has proprietary rights to other than the rights granted or developed pursuant to this Agreement or the Screening Agreement as of the effective date of termination of this Agreement.

1.76 “ Proprietary to Coley ” shall mean those Immunomodulatory Oligonucleotides that are proprietary to Coley and that Aventis has no rights to other than the rights granted or developed pursuant to this Agreement or the Screening Agreement as of the effective date of termination of this Agreement.

1.77 “ Receiving Party ” shall have the meaning set forth in Section 1.27.

1.78 “ Regulatory Approval ” shall mean safety and efficacy approval (independent of pricing approval or reimbursement approval) of a Product, or authorization of such approval of a Product, in each case by the appropriate Regulatory Authority.

1.79 “ Regulatory Authority ” shall mean the U.S. or foreign government agency or health authority that regulates and grants recommendations for approvals for the manufacture and sale of pharmaceutical products.

1.80 “ Royalty Payment Percentage ” shall have the meaning set forth in Section 3.4.

1.81 “ Royalty Payments ” shall have the meaning set forth in Section 3.4.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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1.82 “ Royalty Period ” shall mean the partial Royalty Quarter commencing on the date of the First Commercial Sale, and every complete or partial Royalty Quarter thereafter during which Aventis has the obligation to make Royalty Payments under Section 3.

1.83 “ Royalty Report ” shall have the meaning set forth in Section 3.4(b).

1.84 “ Royalty Quarter ” shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

1.85 “ Royalty Year ” shall mean each successive period of twelve (12) months commencing on January 1 and ending on December 31.

1.86 “ Screening Agreement ” shall mean that certain Screening and Evaluation Agreement between the Parties dated December 10, 2001 and attached hereto as Exhibit C.

1.87 “ Selected Immune Modulators ” shall mean up to four (4) Immune Modulators to which the rights granted to Aventis under the Coley Technology shall apply, and which shall be identified as Selected Immune Modulators pursuant to the provisions of Sections 2.1(b) and 2.1(e) hereof.

1.88 “ Significant Competition ” shall have the meaning set forth in Section 3.4(a)(ii).

1.89 “ SRC Committee ” shall mean that certain scientific review committee of Aventis which determines the initiation of Phase 1 Clinical Trials and selects the EDC(s).

1.90 “ Term ” shall have the meaning set forth in Section 6.1.

1.91 “ Territory ” shall mean all the countries of the world.

1.92 “ Third Party Payments ” shall have the meaning set forth in Section 3.8(a).

1.93 “ UIRF ” shall have the meaning set forth in Section 1.50.

1.94 “ Up-Front Payment ” shall have the meaning set forth in Section 3.1.

1.95 “ Valid Claim ” shall mean any claim of a pending patent application which has not been abandoned or finally rejected without the right of appeal, or any claim from an issued and unexpired patent included within the Patent Rights which has not been revoked or held unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, and which has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue or disclaimer or otherwise. Notwithstanding the foregoing, if a claim of a pending patent application has not issued as a claim of an issued patent within the earlier of two (2) years from First Commercial Sale of a Product covered by such claim or ten (10) years after the filing date of the pending application containing such claim, such pending claim shall cease to be a Valid Claim for purposes of this Agreement unless and until such claim becomes an issued claim of an issued patent.

1.96 “ Withholding Taxes ” shall have the meaning set forth in Section 3.5.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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2. LICENSE GRANT.

2.1 License Grant to Aventis.

(a) Subject to the terms of this Agreement (and subject to the conditions and rights set forth in Article 2 of the Iowa Agreement with respect to the Coley Technology licensed by Coley thereunder), Coley hereby grants to Aventis, during the Term,

(1) an exclusive, royalty-bearing license, including the right to grant sublicenses to third parties subject to paragraphs (i) through (iii) below, under the Coley Technology and Joint Patent Rights, to the extent necessary to make, have made, and use the Selected Immune Modulators to develop, make, have made, use, sell, have sold, offer for sale, and import the Products in the Field (including the right to make, have made, use, sell, have sold and import metabolites incidental to the manufacture, storage, and use of Products in the Field) in the Territory, and

(2) an exclusive, royalty-free license, including the right to grant sublicenses to third parties identified in Schedule 2.1(a) or approved in writing by Coley, under the Coley Technology and Joint Patent Rights, to the extent necessary for Aventis to perform in vivo testing during the Option Term (as defined in the Screening Agreement) in accordance with Schedule 2.1(a) (as may he amended by the mutual agreement of the Parties) on the up to twenty-eight (28) Immunomodulatory Oligonucleotides run through Step 2 (as defined in the Screening Agreement), and an exclusive, royalty-free license, including the right to grant sublicenses to third parties subject to paragraphs (i) through (iii) below, under the Coley Technology and Joint Patent Rights to perform (or have performed by its sublicensees as contemplated herein) research and development on the Aventis Immune Modulators in order to select the Selected Immune Modulators pursuant to Section 2.1(b) below.

(i) In the event Aventis determines that it would like to grant a sublicense in a Major Market Country with respect to any of the rights granted by Coley hereunder, Coley shall have a right of first negotiation to obtain such sublicense (without the right of further sublicense). Pursuant to such right of first negotiation, Aventis shall notify Coley in writing of its desire to negotiate such a sublicense and provide Coley with a summarized outline of proposed sublicense terms, including economic terms. Aventis shall negotiate the terms of such license solely with Coley in good faith for a period of the earlier of Coley declining the right to negotiate such a sublicense in writing, or ninety (90) days (or such longer period of time agreed to by the Parties). If Coley declines the right to negotiate or the Parties have not agreed upon the terms of such license within the ninety (90) days (or such longer period of time agreed to by the Parties), Aventis may offer such sublicense to a third party (other than Aventis Pasteur or any of its subsidiaries) with Coley’s prior written consent, which consent shall not be unreasonably withheld or delayed, provided, however , that in no event shall Aventis offer such sublicense to a third party on terms materially more favorable than those last offered to Coley.

(ii) Aventis’ right to grant sublicenses in any country other than a Major Market Country with respect to any of the rights granted by Coley hereunder shall be subject to Coley’s prior written consent, which such consent shall not be unreasonably withheld or delayed.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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(iii) Notwithstanding the foregoing, Aventis may grant sublicenses to Affiliates without complying with the provisions set forth in paragraphs (i) and (ii) above, provided, however , that unless otherwise approved by Coley, any such sublicenses to an Affiliate of Aventis shall terminate upon the transfer or sale of all or substantially all of the assets or stock of such Affiliate, or in the event of a merger or consolidation or change of control or similar transaction of such Affiliate.

(b) Except as specifically allowed in Section 2.1(a) above, Aventis shall have no rights under this Agreement to use the Immune Modulators, other than the Selected Immune Modulators, for any purpose. As of the Effective Date, the Selected Immune Modulators shall be CpG 7909 and CpG 7279. In addition to CpG 7909 and CpG 7279, at any time during the Term, Aventis shall have the right to select up to two (2) Aventis Immune Modulators for use under this Agreement by providing notice to Coley of such selection. Thereafter, such Aventis Immune Modulators shall be Selected Immune Modulators. In the event that Aventis determines that it would like to terminate its license with respect to a particular Selected Immune Modulator, and instead, select a different Aventis Immune Modulator for use under this Agreement, Aventis may do so by providing written notice to Coley at any time during the Term, such notice to include a reasonable explanation of Aventis’ determination; provided, however , that if the Selected Immune Modulator for which Aventis elects to terminate its license under this Agreement is CpG 7909 or CpG 7279, Coley and its Affiliates shall no longer be subject to the restrictions of Sections 2.1(c)(ii) and (iii) below with respect to CpG 7909 or CpG 7279 as the case may be, and CpG 7909 or CpG 7279, as the case may be, shall no longer be considered an Immune Modulator. For the avoidance of doubt, the provisions of this Section 2.1(b) in no way alter the obligation of Coley and its Affiliates or sublicensees to refrain from exploiting CpG 7909 and/or CpG 7279 in the Field during the Term.

(c) The Parties acknowledge and agree that, during the Term, neither Coley nor its Affiliates shall develop or commercialize, nor grant to any third party a commercial license to develop or commercialize under the Coley Technology and/or Joint Inventions:

(i) the Immune Modulators and/or any other Immunomodulatory Oligonucleotides for use as monotherapies or in combination with any drug product approved by the appropriate Regulatory Authority for use in anti-asthma, anti-allergic rhinitis or anti-COPD indications via any delivery method (whether the materials comprising any such combinations are administered simultaneously or separately at different sites or times), in each case for the prophylactic and/or therapeutic treatment of asthma, allergic rhinitis or COPD, solely to the extent asthma, allergic rhinitis and/or COPD have not been terminated as an indication by Aventis pursuant to the provisions of Sections 6.2, 6.3 or 6.6 or by Coley pursuant to the provisions of Sections 6.3, 6.4(a) or (c), or 6.6; provided, however , that the foregoing restrictions shall not apply to such prophylactic and/or therapeutic treatments via any and all drug combinations in a pharmaceutical composition incorporating any antigens, allergens and/or monoclonal antibodies;

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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(ii) the Immune Modulators (other than CpG 7909) outside the Field (subject to any contractual obligations Coley has to a certain third party as of the Effective Date outside the Field); or

(iii) CpG 7909 outside the Field, other than for use of CpG 7909:

(1) in antigen-based immunotherapies or in “combinations” that are either formulated and delivered together, or co-packaged with other active ingredients (but specifically excluding anti-asthma, anti-allergic rhinitis, and/or anti-COPD medications for so long as asthma, allergic rhinitis and/or COPD has or have not been terminated as an indication by Aventis pursuant to the provisions of Sections 6.2, 6.3 or 6.6 or by Coley pursuant to the provisions of Sections 6.3, 6.4(a) or (c), or 6.6); provided, however , that (A) at least one of such other active ingredients is or was required by the FDA or other Regulatory Authority to be prescribed by a physician in the indication sought to be developed and/or commercialized by Coley and/or its Affiliates and/or third party licensees, or (B) Coley obtains from Aventis a consent to include such other active ingredient, which consent shall not be unreasonably withheld or delayed, and/or

(2) for use as a cancer therapy; and/or

(3) for any prophylactic or therapeutic use as a military or civilian countermeasure against the use of any of the following as a weapon or instrument of terrorism: (A) any agent (or its toxic product) listed on Exhibit H , (B) any agent (or its toxic product) which causes a condition listed on Exhibit H, (C) any agent which Coley informs Aventis is designated as a bioterror agent by the United States, Japanese, Israeli, Canadian or British governments or by the European Commission, the Council of the European Union or the European Parliament, and (D) any agent or condition which is added to Exhibit H by mutual agreement of the Parties (the “ Biowarfare Indication ”) .

For the avoidance of doubt, CpG 7909 is a non-exclusively shared Immunomodulatory Oligonucleotide, and is the subject of multiple product development efforts by Coley and third party licensees. Subject to a certain third party’s rights outside of the Field existing as of the Effective Date, the rights granted to Aventis pursuant to this Section 2.1 with respect to the Aventis Immune Modulators and CpG 7279 will be exclusive to Aventis and will not be shared with third parties for any use.

(d) The Parties acknowledge and agree that Aventis’ right to sell or offer for sale a Selected Immune Modulator in the Field for a given indication in a given country as a component of a Combination Product is predicated on Aventis first selling or offering for sale such Selected Immune Modulator in the Field for such indication in such country as a monotherapy Product. Notwithstanding the foregoing, in the event that the Parties agree, based on reasonable scientific and/or medical opinion, that the commercialization of a particular Selected Immune Modulator as a monotherapy Product for a given indication in a particular country is not feasible, then Aventis shall not be required to first market such Selected Immune Modulator as a monotherapy Product for such indication in such country.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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(e) Notwithstanding the above provisions of this Section 2.1, the Parties acknowledge and agree that:

(i) in the event Aventis does not initiate Phase 1 Clinical Trials for CpG 7909 within two (2) years of the Effective Date, upon Coley’s election, CpG 7909 shall no longer be a Selected Immune Modulator or an Immune Modulator, Aventis’ rights with respect to CpG 7909 shall terminate, and Coley and its Affiliates shall no longer be subject to the above restrictions of Section 2.1(c)(iii) with respect to CpG 7909; and

(ii) in the event Aventis does not initiate Phase 1 Clinical Trials for CpG 7279 within two (2) years of the Effective Date, upon Coley’s election, CpG 7279 shall no longer be a Selected Immune Modulator or an Immune Modulator, Aventis’ rights with respect to CpG 7279 shall terminate, and Coley and its Affiliates shall no longer be subject to the above restrictions of Section 2.1(c)(ii) with respect to CpG 7279.

The provisions of this Section 2.1(e) in no way alter the obligation of Coley and its Affiliates to refrain from exploiting CpG 7909 and CpG 7279 in the Field during the Term.

2.2 No Other Rights to Aventis . No other rights, express or implied, are granted to Aventis except as expressly granted pursuant to this Agreement.

2.3 License Grant to Coley . Subject to the terms of this Agreement, Aventis hereby grants to Coley a non-exclusive, worldwide, royalty-free license, including the right to grant sublicenses with prior written consent from Aventis, which consent shall be in Aventis’ sole discretion, under the Aventis Technology to the extent necessary for Coley to practice the Coley Technology and/or the Joint Inventions outside the Field. Notwithstanding the foregoing, to the extent that Aventis incurs any additional royalty obligations to a third party (other than Aventis Pasteur or its subsidiaries for so long as Aventis Pasteur is an affiliate of Aventis) as a direct result of the license granted hereunder, Coley shall pay Aventis such additional royalty obligation amounts. The Parties acknowledge and agree that the license granted herein shall not apply to (i) Aventis Know-How relating to formulations, propellants, Delivery Methods, and/or delivery devices, unless the Aventis Know-How is specifically directed to the delivery of Immunomodulatory Oligonucleotides Owned or Controlled by Coley or Proprietary to Coley, (ii) Aventis Patent Rights relating to claims directed to formulations, propellants, Delivery Methods and/or delivery devices, unless, and then only to the extent that, any such Aventis Patent Rights contain claims directed to Immunomodulatory Oligonucleotides, (iii) Aventis Technology relating to the manufacture of Immunomodulatory Oligonucleotides, and/or (iv) Data, NDAs or other regulatory filings relating to the foregoing. Notwithstanding the foregoing, Coley may grant sublicenses to Affiliates without the prior written consent of Aventis; provided, however , that unless otherwise approved by Aventis, any such sublicenses to an Affiliate of Coley shall terminate upon the transfer or sale of all or substantially all the assets or stock of such Affiliate, or in the event of a merger or consolidation or change of control or similar transaction of such Affiliate.

2.4 No Other Rights to Coley . No rights, express or implied, to the intellectual property of Aventis are granted to Coley except as expressly granted pursuant to this Agreement.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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3. PAYMENTS AND ROYALTIES.

3.1 Up Front Payment . In partial consideration of Coley’s investment in the Coley Technology and the exclusive licenses granted to Aventis pursuant to Section 2.1, the Parties acknowledge payment by Aventis of a non-refundable, up-front license fee of [*****************************************] dollars ($[*********] which was paid by Aventis to Coley upon the execution of the Screening Agreement (the “ Up-Front Payment” ).

3.2 Development Milestone Payments.

(a) Unless otherwise specifically stated, for the first Product developed in an asthma indication and the first Product developed in an allergic rhinitis indication (even if the Products are the same), in each case by Aventis, its Affiliates, and/or its approved sublicensees, Aventis shall pay Coley the amount corresponding to each development milestone (the “ Development Milestones” ) set forth below within thirty (30) days after: (a) in the case of a Development Milestone listed under “Regulatory Acceptance/Approval,” the Actual Development Milestone Achievement Date or (b) in the case of a Development Milestone listed under “EDC Selection” or “Clinical Trials,” the earlier of (i) the Actual Development Milestone Achievement Date or (ii) the Planned Development Milestone Achievement Date.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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(b) Notwithstanding the above provisions, in the event that Aventis does not initiate Phase 1 Clinical Trials for either (a) the first Selected Immune Modulator by March 1, 2004 or (b) the second Selected Immune Modulator by October 1, 2004, Aventis shall pay Coley, for the first such missed date only, a non-refundable, non-creditable additional payment of [************] dollars ($[*********]) within thirty (30) days after either March 1, 2004 or October 1, 2004 as the case may be; provided, however, that such dates shall be extended: (y) if the Parties agree, based on reasonable scientific and/or medical opinion, that it is not reasonable to initiate Phase 1 Clinical Trials for such Selected Immune Modulator within such time periods, in which. case, the extension shall be for a period of time mutually agreed by the Parties; or (z) if Coley fails to deliver to Aventis [***] ([*]) to [***] ([*]) [**********] of research grade material for each of the up to [*************] ([**]) Immunomodulatory Oligonucleotides run through the Step 2 screening cascades pursuant to Section 2.2(c)(v) of the Screening Agreement, or fails to deliver to Aventis [***********] ([***]) [**********] of research-grade material for up [***] ([*])(but in no event more than [***] ([*]) in any given six (6) month period) Immunomodulatory Oligonucleotides selected by Aventis for in vivo testing within six (6) weeks of receipt of written request from Aventis pursuant to Section 2.2(e) of the Screening Agreement, and either such failure was the direct cause of Aventis missing the applicable October date, in which case, the extension shall be for a period equal to the delay in delivery by Coley. Notwithstanding anything to the foregoing contained in this Section 3.2(b), in the event that either Party provides notice to the other Party of its intention to terminate this Agreement in whole pursuant to the provisions of Section 6 prior to the date the payment in this Section 3.2(b) becomes due, Aventis shall not be required to pay such [************] dollar ($[*********]) payment.

(c) For the first Product developed in a COPD indication, Aventis shall pay Coley [***************] dollars ($[**********]) for the earlier achieved (by Aventis, its Affiliates, or its approved sublicensee) of the “NDA Approval” Development Milestone in the COPD indication or the “MAA or Equivalent Approval” Development Milestone in the COPD indication within thirty (30) days of the Actual Development Milestone Achievement Date; provided, however , Aventis shall not be required to make any payment pursuant to this Section 3.2(c) if Aventis has substituted the COPD indication for the asthma indication pursuant to Section 6.2(c) prior to this payment becoming due.

(d) In the event that, with respect to a Development Milestone listed under “Clinical Trials” above, Aventis is required to make a payment on a Development Milestone on the Planned Development Milestone Achievement Date, Aventis shall deposit such Development Milestone payment in an interest-bearing escrow account. Such escrowed Development Milestone payment (including interest) shall be released to Coley upon the Actual Development Milestone Achievement Date. Notwithstanding the foregoing, if prior to the applicable Actual Development Milestone Achievement Date, Coley terminates this Agreement in whole or with respect to the indication(s) relating to such Development Milestone due to Aventis’ lack of diligence as finally determined by the appropriate parties pursuant to Section 4.6 and/or the arbitrators pursuant to Section 12.3, as the case may be, then such escrowed Development Milestone payment(s) shall be released to Coley and (in the event of termination of one or more indications, the Field shall no longer include such indication(s)). In the event of termination prior to the applicable Actual Development Milestone Achievement Date, in whole or with respect to the indication(s) relating to such Development Milestone, for any reason other than Aventis’ lack of diligence, such escrowed amount shall be released to Aventis.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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(e) With respect to the foregoing, in the event any Phase 2B Clinical Trials and Phase 3 Clinical Trials are combined (i.e., as a Phase 2B/3 Clinical Trials), the Development Milestone payment for the Initiation of Phase 2B Clinical Trials shall be due no later than the initiation of the Phase 3 Clinical Trials, and the Development Milestone payment for the Initiation of Phase 3 Clinical Trials shall be due upon the initiation of that portion of the Phase 2B/3 Clinical Trials.

3.3 Achievement Milestone Payments . Aventis shall pay Coley the following non-refundable, non-creditable payments within thirty (30) days after Aventis, its Affiliates, and/or its approved sublicensees reach the achievement milestones set forth below (the “ Achievement Milestones ”):

3.4 Royalty Payments.

(a) Royalty Payments Due. Aventis shall pay to Coley royalty payments on annual Net Sales by Aventis, its Affiliates and/or its approved sublicensees for all Combined Products in the Field in the amounts set forth below (“ Royalty Payments ”). For the first three Royalty Quarters of a Royalty Year, the calculation of the Royalty Payments will be based on an estimated effective Royalty Payment percentage (“ Royalty Payment Percentage ”) to be calculated on the basis of the Projected Annual Net Sales for that Royalty Year. The Royalty Payment for the last Royalty Quarter of that Royalty Year will be based on actual Net Sales for the full Royalty Year. The Royalty Payment for the last Royalty Quarter will be calculated by applying the actual effective Royalty Payment Percentage to the Net Sales for the full Royalty Year and then subtracting the Royalty Payments made for the three prior Royalty Quarters of that Royalty Year.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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(i) For Products covered by a Valid Claim of the Coley Patent Rights, Joint Patent Rights, and/or the Aventis Immune Modulator Patent Rights, on a country-by- country basis and Product-by-Product basis, the following Royalty Payment Percentages shall apply:

(ii} For Products covered by a Valid Claim of the Coley Patent Rights, Joint Patent Rights and/or the Aventis Immune Modulator Patent Rights in a particular Major Market Country, and where Significant Competition exists in a particular Royalty Period in such Major Market Country, the following Level 2 Royalty Payment Percentages shall apply.

For the purposes of this Agreement, “ Significant Competition ” shall mean, on a Major Market Country-by-Major Market Country basis and Product-by-Product basis, the presence of (A) a third party (other than Aventis Pasteur and its subsidiaries for so long as Aventis Pasteur is an affiliate of Aventis) selling a product utilizing Immunomodulatory Oligonucleotides as a monotherapy approved in the same indication as the Product and such product obtains a market share of greater than [******] percent ([**]%) of a three-month moving total of total prescriptions of all products (including Product) sold as monotherapy Immunomodulatory Oligonucleotides written in that same indication in such Major Market Country, or (B) two (2) or more third parties (other than Aventis Pasteur and its subsidiaries for so long as Aventis Pasteur is an affiliate of Aventis) selling product(s) utilizing Immunomodulatory Oligonucleotides as a monotherapy approved in the same indication as the Product and such product obtains a market share of [***********] percent ([**]%) or more of a three-month moving total of total prescriptions of all products (including Product) sold as monotherapy Immunomodulatory Oligonucleotides written in that same indication in such Major Market Country.

The market share calculations in each case above shall be determined by utilizing IMS Panel data (or, if not available, such market research data as mutually agreed upon by the Parties) based on the total number of prescriptions written in the Field during any rolling three-month period. Aventis shall obtain such IMS Panel data or market research data at Aventis’ expense and shall provide such information to Coley, at no charge.

In all events, Significant Competition must be first initiated and first achieved within the first three (3) years after the First Commercial Sale of a Product in a particular Major Market Country in order for the Level 2 Royalty Payment Percentages to apply. During the time period(s) in which Significant Competition does not exist (and to the extent Level 3 Royalty Payment Percentages do not apply), the Royalty Payment Percentage will return to the applicable Level 1 Royalty Payment Percentage.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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The following Level 2 Royalty Payment Percentages in a given Major Market Country will be applied starting with the first month after which Significant Competition is found to exist in such Major Market Country. If, for example, Significant Competition is initiated in a three-month period December to February, then Level 2 Royalty Payment Percentages would apply to Net Sales invoiced in March but would not apply to Net Sales invoiced before March. In the event that the Significant Competition does not exist in April, then Level 1 Royalty Payment Percentages would be applied to Net Sales invoiced in April and thereafter until such time as Significant Competition may again exist in such Major Market County.

(iii) For Products (a) not covered by a Valid Claim of the Coley Patent Rights, Joint Patent Rights, and/or the Aventis Immune Modulator Patent Rights, or (b) not covered by a Valid Claim of the Coley Patent Rights and/or the Aventis Immune Modulator Patent Rights, but covered by a Valid Claim of Joint Patent Rights and where Generic Competition exists, then for so long as such Generic Competition exists, or (c) covered by a Valid Claim of the Coley Patent Rights other than a Valid Claim to a composition of matter or method of use in the Field and a third party (other than Aventis Pasteur and its subsidiaries for so long as Aventis Pasteur is an affiliate of Aventis) (but specifically excluding Coley, and/or its Affiliates, licensees and/or other third party collaboration partners of Coley) markets the same Immune Modulator as a monotherapy, then for so long as such third party (other than Aventis Pasteur for so long as Aventis Pasteur is an affiliate of Aventis) markets the Immune Modulator as a monotherapy, in the case of (a), (b) or (c) above, on a country-by-country basis and Product-by-Product basis, the following Royalty Payment Percentages shall apply.

As used herein, “ Generic Competition ” means on a country-by-country basis and Product-by-Product basis, the presence of a third party or third parties (other than Aventis Pasteur and its subsidiaries for so long as Aventis Pasteur is an affiliate of Aventis) (but specifically excluding Coley, and/or its Affiliates, licensees and/or other third party collaboration partners of Coley) marketing as a monotherapy the same Immune Modulator as the Product and obtains a market share of greater than [******] percent ([**]%).

In the case of (b) above, the Royalty Payment Percentage will return to the applicable Level 1 Royalty Payment Percentage during the time periods that Generic Competition does not exist. In the case of (c) above, the Royalty Payment Percentage will return to the applicable Level 1 Royalty Payment Percentage (or Level 2 Royalty Payment Percentage in the event Significant Competition exists) during the time periods that no third party (other

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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than Aventis Pasteur for so long as Aventis Pasteur is an affiliate of Aventis) (but specifically excluding Coley, and/or its Affiliates, licensees and/or other third party collaboration partners of Coley) markets the same Immune Modulator as a monotherapy.

(iv) In calculating the applicable Royalty Payment Percentage applicable in the event that more than one of paragraphs (i), (ii) and (iii) apply, the Parties shall first determine the relative share of total annual Net Sales in such country falling into the categories described by paragraphs (i) through (iii) above. The Royalty Payment shall be equal to the sum of the amounts calculated by multiplying each of these relative shares by the amount falling within a given royalty level (i.e. Level 1, Level 2, or Level 3 above) (as determined by total annual Net Sales) and by the corresponding Royalty Payment Percentages. At the end of each Royalty Year, adjustments for (i) through (iii) above will be made.

By way of example, if, for a given year, the Commercialization Plan forecast calls for Aventis to achieve $[*************]of annual Net Sales of all Combined Products, of which $[***********] is expected to be achieved with no Significant Competition, thus falling into the category described by paragraph (i), with the remaining $[*******] of Net Sales achieved under the impact of Significant Competition, thus falling into the category described by paragraph (ii). In this example, no Net Sales are expected to fall into the category described by paragraph (iii).

The relative share of expected Net Sales falling into the categories described by paragraphs (i), (ii) and (iii) would be [**]% ([**********] divided by [**********]), [**]% ([**********]divided by [************] and [*]%, respectively.

Of the total expected Net Sales falling within the first royalty tier, defined as applying to Net Sales up to and including $[**********], [**]% would be paid at the Royalty Payment Percentage described in. paragraph (i) corresponding to the first tier and [**]% would be paid at the Royalty Payment Percentage described in paragraph (ii) corresponding to the first tier. Expected Royalty Payments on the first tier would thus equal $[**********] (i.e., [**]% x $[**********] x [**]% + [**]% x $[**********] x [*]%).

Similarly, of the total expected Net Sales falling within the second royalty tier, defined as applying to Net Sales greater than $[**********] but up to and including $[**********], [**]% would be paid at the Royalty Payment Percentage described in paragraph (i) corresponding

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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to the second tier and [**]% would be paid at the Royalty Payment Percentage described in paragraph (ii) corresponding to the second tier. Expected Royalty Payments on the second tier would thus equal $[******] (i.e., [**]% x $[**********] x [**]% + [**]% x $[**********] x [**]%).

Since, in this example, expected total Net Sales fall below the level of the third tier, defined as applying to Net Sales greater than $[**********], no Royalty Payments would be expected on the third tier.

The total expected Royalty Payments due to Coley for the year would equal $[**********] ($[**********] plus $[**********]). The estimated effective Royalty Payment Percentage would equal [****]% ($[**********] divided by $[**********]).

In the course of the first three quarters, Aventis achieves actual Net Sales of $[**********], $[**********] and $[**********], respectively, during the first, second and third Royalty Quarters and Aventis makes Royalty Payments of $[**********], $[**********] and $[**********] respectively (e.g., [***]% x $[**********], $[**********] and $[**********]). In the fourth quarter, Aventis achieves Net Sales of $[**********], bringing the total for the year to $[**********]. Of this amount, $[**********] or [**]% was achieved under Significant Competition.

For the full year, Royalties due on the first tier would therefore be $[**********] ($[**********] x [**]% x [**]% + $[**********] x [**]% x [**]%), second tier royalties would be $[**********] ($[**********] x [**]% x [**]% + $[**********] x [**]% x [**]%) and the total Royal Payment for the year would be $[**********]. Having paid Coley $[**********] for the first three Royalty Quarters, Aventis would pay Coley $[**********] for the last Royalty Quarter ($[**********] minus $[**********]).

(v) Notwithstanding the foregoing provisions of this Section 3.4(a), in the event that the Iowa Agreement is terminated with Coley due to a material breach by Coley thereunder, and as a result, Aventis elects to maintain such license directly with UIRF as contemplated in the Iowa Agreement, then Aventis may deduct the royalty amounts due UIRF by Aventis pursuant to the Iowa Agreement from the Royalty Payments otherwise due hereunder.

(b) Tender of Royalty Payments and Royalty Reports . Within thirty (30) days after the conclusion of each Royalty Period, Aventis shall tender payment of any Royalty Payments due under this Agreement, and shall concurrently deliver to Coley a report on the Net Sales activity of Aventis, its Affiliates, and/or its approved sublicensees (the “ Royalty Report ”). The Royalty Report for the final Royalty Quarter of the Royalty Year shall indicate whether an adjustment to the Royalty Payment Percentage for a Product is required under Section 3.4, as well as any additional Royalty Payment due to Coley as a result of retroactive application of the new Royalty Payment Percentage, as required under Section 3.4. If no Royalty Payment is due, the Royalty Report shall so state. All such Royalty Reports shall be considered Confidential Information of both Parties under this Agreement and shall contain the following information:

(i) Net Sales of any Products sold by Aventis, its Affiliates and/or its approved sublicensees, on a country-by-country basis and Product-by-Product basis, during the applicable Royalty Period;

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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(ii) total Royalty Payments due for each Product; and

(iii) relevant market share data supporting the existence of Significant Competition.

(c) Commencement of Royalty Payments. Aventis’ Royalty Payment obligations under this Section 3.4 (with respect to Net Sales by Aventis, its Affiliates and/or its approved sublicensees) shall become effective upon the First Commercial Sale of any Product in any country within the Territory, and shall continue on a country-by-country basis until the later to occur of (i) the expiration or termination of the last Valid Claim of a Coley Patent Right or Aventis Immune Modulator Patent Right covering such Product in such country, or (ii) ten (10) years from the First Commercial Sale of a Product in such country.

3.5 Withholding and Payment in U.S. Dollars . Any payments made by Aventis to Coley under this Agreement shall be reduced by the amount that Aventis is required to withhold pursuant to any applicable United States federal, state, or local tax law (“ Withholding Taxes ”). Aventis shall submit reasonable proof of payment of the Withholding Taxes to Coley within a reasonable period of time after such Withholding Taxes are remitted to the proper taxing authority. Any payments due under Section 3 shall be made in United States Dollars, using a mutually acceptable method of payment. With respect to sales of Product(s) invoiced in a currency other than United States Dollars, the Net Sales and amounts due to Coley hereunder shall be expressed in the domestic currency of the Party making the sale, together with the United States Dollar equivalent of the count payable to Coley, calculated using the arithmetic average of the spot rates on the last business day of each month of the Royalty Quarter in which the Net Sales were made. The “Closing mid-point rates” found in the “Dollar spot forward against the Dollar” table published by The Financial Times (or any other publication agreed to by the Parties) shall be used as the source of spot rates to calculate the average as set forth in the preceding sentence.

3.6 Late Payments . Any payments due under Section 3 that are not made on or before the date specified under the terms of this Agreement shall bear interest, to the extent permitted by law, at a rate of [***] ([*]) percentage point above the London InterBank Offering Rate (“ LIBOR ”) as reported in The Financial Times (or any other publication agreed to by the Parties) on the date such payment is due, with interest calculated based on the number of days such payment is delinquent.

3.7 Failure to Make Payments . In the event Aventis fails to make payments due to Coley under this Section 3, then, at the election of Coley, the Agreement may be terminated in whole, or with respect to a particular indication or Immune Molecule, pursuant to Section 6.3(a).

3.8 Third Parties Licenses . The Parties acknowledge that, during the Term, one or more royalty-bearing licenses may be necessary from one or more third parties in order to manufacture or commercialize the Products in the Field without infringing one or more patents of such third party(ies). In such an event, the following provisions shall apply:

(a) Coley shall use commercially reasonable efforts, at its sole cost and expense, to obtain and maintain any third party licenses to any Patent Rights (other than

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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Patent Rights owned, controlled, or licensed (with the right to sublicense royalty-free to Aventis) by Aventis Pasteur or its subsidiaries for so long as Aventis Pasteur is an affiliate of Aventis) solely relating to the composition of matter or use of Immune Modulators in Products in the Field, including research necessary for the development of such Products, the absence of which would prevent Aventis from practicing the Coley Technology licensed hereunder in the Field without infringing such third party’s Patent Rights, but specifically excluding, without limitation, Patent Rights related to formulations, propellants, delivery methods, delivery devices, and/or the manufacture of Immunomodulatory Oligonucleotides and/or Products.

In the event that Coley is unable to obtain any such third party licenses described above in this paragraph (a), Aventis shall use commercially reasonable efforts to obtain and maintain such third party licenses. If, as a result of Aventis obtaining and maintaining such third party licenses, it is necessary for Aventis to make third party royalty payments or Other Payments (as defined below) to such third party (collectively “ Third Party Payments ”) in order for Aventis to practice the rights granted hereunder to the Coley Technology without infringing such third party’s rights, Aventis may (i) offset [***********] percent ([***]%) of any such Third Party Payments against the Royalty Payments until the point that the Royalty Payments are reduced by [***********] percent ([**]%) in any Royalty Period and (ii) offset [************] percent ([**]%) of any remaining portion of any such Third Party Payments against the Royalty Payments until the point that the Royalty Payments are reduced by [*****] percent ([**]%) in any Royalty Period. Offsets for any such third party royally payments for Net Sales in a Royalty Quarter may be applied only against Royalty Payments due hereunder for the same Net Sales in the same Royalty Quarter. Offsets for Other Payments to such third parties may be amortized equally over ten (10) years and applied in each corresponding Royalty Quarter until the application of such Other Payments in their entirety. As used herein, “ Other Payments ” shall mean license issue fees or milestones, but shall specifically exclude equity investments or reimbursements for research and development costs.

Notwithstanding the foregoing, nothing contained in this Section 3.8(a) shall reduce the Royalty Payments otherwise due Coley by more than [*****] percent ([**]%), provided, however , that any Royalty Payment reductions allowed under Section 3.4(a)(v) shall be made prior to determining such [**]% and/or [**]% Royalty Payment floors allowed hereunder.

The Parties acknowledge and agree that in the event either Party terminates this Agreement with respect to one or more indications in the Field pursuant to Section 6.6 (due to an inability to obtain a third party license pursuant to this Section 3.8(a)) and within one (1) year of such termination Coley licenses such indications) to the third party from whom the third party license contemplated in this Section 3.8(a) was not obtained, then Coley shall reimburse Aventis those payments made to Coley by Aventis pursuant to Sections 3.2 and/or 3.3 with respect to that indication/those indications only. Notwithstanding the foregoing, in the event that (i) the asthma indication is terminated and Aventis credits the paid asthma milestone payments to the COPD indication pursuant to Section 6.2(c), and (ii) within one (1) year of such termination of the asthma indication, Coley licenses the asthma indication to the third party from whom the third party license contemplated in this Section 18(a) was not obtained, Coley shall have no obligation to reimburse Aventis such asthma milestone payments.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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The Parties further acknowledge and agree that in the event that (a) Coley obtains the third party license the Parties were unable to obtain pursuant to Section 3.8(a) either (i) within two (2) years of termination of this Agreement in whole pursuant to Section 6.6 or (ii) during the Term in the event of termination of this Agreement with respect to one or more indications in the Field pursuant to Section 6.6, and (b) Coley determines that it is interested in sublicensing such third party license to another party within such two (2) year period in the case of termination of this Agreement in whole or during the Term in the case of termination with respect to one or more indications, then Coley shall notify Aventis of such determination and Aventis shall have a right to elect to re-enter into the Agreement in whole (in the event the Agreement was terminated in whole) or re-include the terminated indication within the Field (in the event of termination with respect to one or more indications), as the case may be (the “Option Right”). Aventis may exercise the Option Right by providing to Coley written notice of its intention to re-enter into the Agreement in whole (in the event the Agreement was terminated in whole) or re-include the terminated indication within the Field (in the event of termination with respect to one or more indications) and returning any payments previously reimbursed to Aventis pursuant to this Section 3.8(a), such notice and repayment to be received by Coley within sixty (60) days of Aventis receiving the above referenced notice from Coley (the “Option Period”). If Aventis does not elect to exercise its Option Right, or fails to exercise the Option Right within the Option Period, Coley shall be free to sublicense such third party license to any third party.

(b) Aventis shall use commercially reasonable efforts, at its sole cost and expense, to obtain and maintain all third party licenses necessary to develop Products in the Field, other than those licenses for which Coley is responsible pursuant to Section 3.8(a), specifically including, without limitation, Patent Rights relating to formulations, propellants, Delivery Methods, delivery devices and/or the manufacture of Immunomodulatory Oligonucleotides and/or Products and/or Patent Rights owned, controlled, or licensed by Aventis Pasteur or its subsidiaries for so long as Aventis Pasteur is an affiliate of Aventis.

3.9 Audit of Records.

(a) Coley shall have the right at Coley’s expense, through an independent certified public accounting firm of nationally recognized standing reasonably acceptable to Aventis, to examine those records of Aventis and its Affiliates as may be reasonably necessary solely to confirm the accuracy of the Royalty Reports, during regular business hours during the Term, and for three (3) years after expiration or termination of this Agreement; provided, however , that such examination shall not take place more often than once per Royalty Year and shall not cover such records for more than the preceding three (3) Royalty Years. Such accounting firm shall enter into a confidentiality agreement with Aventis and shall report to Coley only the final audited Royalty Payment amounts to be paid by Aventis.

(b) In the event that any such inspection shows an underreporting or an underpayment in excess of [**************] for any consecutive 12 month period, then Aventis shall pay the reasonable costs of such an examination and in any event shall pay any additional sum, including interest charges (at a rate of [*********************] above LIBOR), shown to be due to Coley. In the event that any such inspections shows an overpayment by Aventis, then Aventis may credit such overpayment against any future amounts due Coley hereunder.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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(c) In the event that either Party in good faith disputes the conclusion of the accounting firm, or any specific aspect of the conclusion, then such Party shall inform the other Party by written notice within thirty (30) days after receiving the result of the audit containing such conclusion, specifying in detail the reasons for disputing such conclusion. The Parties shall promptly thereafter meet and negotiate in good faith a resolution to such dispute. In the event that the Parties are unable to resolve such dispute within sixty (60) days after such dispute notice is received, the matter shall be resolved in a manner consistent with the procedures set forth in Section 12.3.

3.10 Payment Contact. Aventis shall appoint one representative as the contact for Coley with respect to all payment matters contemplated in this Section 3. The initial representative shall be Mr. Jerry Corbin, US DI & A Controlling.

4. DEVELOPMENT; DILIGENCE OBLIGATIONS; ADVISORY COMMITTEE.

4.1 Diligence Generally . Aventis shall use commercially reasonable efforts consistent with the efforts and resources normally used in good faith and fair dealing for a product of its own discovery of similar market potential at a similar stage in its product life, taking into account the competitiveness of the market place, the proprietary position of the product, the regulatory structure involved, the profitability of the applicable products and other relevant factors) to pursue the development, commercialization, and marketing of the Products in each indication in the Field in the Territory, and to undertake investigations and actions required to obtain appropriate Regulatory Approval. Notwithstanding the foregoing and subject to Sections 2.1(e) and 3.2(a), Aventis shall only be required to pursue the development and commercialization of one Immune Modulator irrespective of the number of Products which are developed therefrom.

4.2 Development and Commercialization Plans. Consistent with Section 4.1, Aventis shall develop and commercialize Products in each indication within the Field in accordance with a development plan (the “ Development Plan ”) and commercialization plan (the “ Commercialization Plan ”). Aventis shall prepare and provide Coley with the Development Plan which shall set forth anticipated activities, plans and timelines for the development of Products in the Field, which shall commence upon the execution of this Agreement. The initial Development Plan is attached hereto as Exhibit D , and shall be updated by Aventis at least annually for each Product in the Field. Aventis shall also provide Coley with the Commercialization Plan no later than one (1) year prior to the anticipated First Commercial Sale of any Product, which shall be attached hereto as Exhibit E and shall set forth Projected Annual Net Sales, details of estimated quarterly market shares sufficient to establish forecasts of Significant Competition, anticipated activities, plans and timelines for the commercialization of Products in the Field.

4.3 Development Responsibility . Aventis shall make all decisions with respect to development and commercialization activities with respect to the Immune Modulators and Products, and shall keep the Advisory Committee reasonably informed with respect thereto pursuant to Section 4.5(f).

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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4.4 Collaboration Manager. Each Party shall appoint one individual who shall serve as such Party’s primary contact with respect to this Agreement and any issues which may arise hereunder (a “ Collaboration Manager ”). Each Party shall at all times keep the other Party informed of the identity of the Collaboration Manager.

4.5 Advisory Committee.

(a) Formation . The Parties shall form a committee (the “ Advisory Committee ”) comprised of three (3) named representatives of Coley and three (3) named representatives of Aventis, each of which shall be knowledgeable and experienced with respect to the issues to be discussed by the Advisory Committee from time to time. Such named representatives shall be appointed within thirty (30) days of the Effective Date. Each Party shall be permitted to substitute and/or replace its named representatives from time to time, as it deems appropriate, by providing the other Party with notice thereof In addition, each Party shall be permitted to invite additional participants to meetings of the Advisory Committee on an as- needed basis.

(b) Meetings. The Advisory Committee shall meet quarterly until Phase 3 Clinical Trials are initiated for the first Product in both the allergic rhinitis and the asthma indications. Thereafter, the Advisory Committee shall meet semiannually until the First Commercial Sale of a Product in both the allergic rhinitis and asthma indications, and then annually after the First Commercial Sale of such Products within thirty (30) days after approval of the Commercialization Plan by the Executive Committee of Aventis Pharma each year. In addition, the Advisory Committee may meet at such other times as the members of the Advisory Committee may mutually agree. The place of such meetings shall alternate between the offices of Coley and Aventis, unless otherwise agreed to by the Advisory Committee. The time and form of such meetings, including, without limitation, by videoconference, shall be agreed to by the Advisory Committee. Each Party shall independently bear the expenses of that Party’s participation in such meetings.

(c) Minutes . The Advisory Committee shall keep accurate minutes of its discussions and opinions. At each meeting, the Advisory Committee shall designate a member to act as secretary to prepare draft minutes for such meeting. Draft minutes shall be sent to each member of the Advisory Committee within twenty (20) working days of each meeting. The draft minutes shall be edited by the secretary based on the comments of each member, and the edited draft shall be distributed in advance of the next meeting to each member for review and final approval at that meeting.

(d) Responsibilities. The Advisory Committee shall provide a forum for the exchange of scientific information among the Parties, including a review of Aventis’ progress and on-going activities under the Development Plan and/or Commercialization Plan.

(e) Quorum. A quorum of the Advisory Committee shall consist of at least one Coley member and at least one Aventis member. A quorum of the Advisory Committee shall be present in order for a meeting to take place. No individual Party shall purport to act on behalf of the other Party unless and then only to the extent authorized to do so by the Advisory Committee.

Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

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(f) Aventis Reports to the Advisory Committee. Aventis shall keep the Advisory Committee reasonably informed concerning the status of the development, manufacture and commercialization for each Product in the Field and the measures taken to meet the Development Milestones, the Achievement Milestones an