Exhibit 10.33

 

CONFIDENTIAL TREATMENT

 

LICENSE AGREEMENT

 

This License Agreement (“Agreement”) made and entered into as of November 1st,
2007 (“Effective Date”) by and between Astellas Pharma Inc. having its principal
office at 3-11, Nihonbashi-Honcho 2-chome, Chuo-ku, Tokyo 103-8411, Japan
(“Astellas”) and Calixa Therapeutics, Inc. having its principal office at 12481
High Bluff Drive, San Diego, CA 92130 (“Calixa”).

 

WITNESSETH:

 

WHEREAS, Astellas has invented and developed a certain new antibiotic agent
currently identified as FR264205;

 

WHEREAS, Astellas and Domain Associates L.L.C. (“Domain”), having its principal
office at 12481 High Bluff Drive, San Diego, 92130 USA, have entered into the
Confidentiality Agreement as of May 25, 2007 (“CDA”), and have been in
discussions in order to evaluate a potential business relationship or
collaboration relating to such antibiotic agent;

 

WHEREAS, Calixa is incorporated as of July 11, 2007 and Domain is a shareholder
of Calixa; and

 

WHEREAS, Astellas wishes to grant to Calixa, and Calixa wishes to obtain, a
license under the Patents (hereinafter defined) and the Know-How (hereinafter
defined) of Astellas to develop, manufacture, have manufactured, use, import,
market, promote, sell, offer to sell and distribute the Products in the
Territory, subject to the terms and conditions set forth in this Agreement;

 

NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein, the Parties agree as follows:

 

1.                          DEFINITIONS

 

The following capitalized terms as used herein shall have the meanings set forth
in this Article, and unless otherwise expressly set forth, the singular shall
include the plural and vice versa:

 

1.1                     “Affiliate” shall mean, with respect to a Party, any
corporation or other business entity that, directly or indirectly, owns or
controls, is owned or controlled by or is under common ownership or controls
with such Party. For purposes of this definition, an entity shall be deemed to
control another entity if it owns (directly or indirectly) more

 

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*Confidential Treatment Requested.  Omitted portions filed with the Securities
and Exchange Commission (the “Commission”).

 

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than fifty percent (50%) of the outstanding voting stock of such other entity,
or otherwise has the actual ability to direct and manage the business and
management of such other entity (by contract or otherwise).

 

1.2                     “Annual Net Sales” shall mean the Net Sales accrued
during a particular twelve-month period commencing on the applicable January 1
in all countries within the Territory.

 

1.3                     “Calixa Trademark” shall mean any specific
trademark(s) owned by Calixa (or its Affiliate or sublicensee) and used in
association with marketing the Product in a country or jurisdiction in the
Territory.

 

1.4                     “Compound” shall mean the pharmaceutical compound known
as FR264205 having the chemical name of:

 

[]*.

 

1.5                     “Generic Competition” shall mean that one or more []*
Third Parties is selling, []*, a generic version of a Product being sold by
Calixa or any of its sublicensees in a particular country in the Territory,
which generic version contains the Compound.

 

1.6                     “IND” shall mean an investigational new drug application
for the FDA in the U.S. as defined in 21 C.F.R. 312 et seq., or any application
equivalent thereto in another country or jurisdiction within the Territory.

 

1.7                     “Know-How” shall mean any and all information,
processes, techniques, data, know-how and trade secrets with respect to the
Compound and/or the Product, including without limitation toxicological,
pharmacological, clinical and chemical data, specifications, medical uses,
adverse reactions, manufacture and quality control methods of the Compound
and/or the Product, existing as of the Effective Date or developed or acquired
during the term of this Agreement.

 

1.8                     “NDA” shall mean an application seeking Regulatory
Approval of any Product in the U.S. as defined in 21 C.F.R. 314 et seq., or any
application equivalent thereto in another country or jurisdiction within the
Territory.

 

1.9                     “Net Sales” shall mean the actual proceeds of sales of
the Product sold by Calixa and/or its sublicensees to Third Parties (which shall
not include Calixa’s []*), less (i) []*.

 

1.10               “Party” shall mean Astellas or Calixa. Astellas and Calixa
shall be collectively referred to as the “Parties”.

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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1.11     “Patents” shall mean the Product Patents and the Related Patents, as
defined below:

 

The term “Related Patents” shall mean all patents and patent applications
(including patents issued thereon) in the Territory that are owned or controlled
by Astellas or its Affiliate on the Effective Date and at any time during the
term of the Agreement and claim or cover the Compound, the Product, or the
manufacture or use of the Compound or Product (or any part thereof), other than
the Product Patents.

 

The term “Product Patents” shall mean all patents and patent applications (and
patents issuing thereon) listed in Exhibit A attached hereto as well as any
continuations, continuations-in-part, substitutes, divisions, reissues,
revisions, reexaminations or extensions thereof, and any foreign equivalents in
the Territory of any of the foregoing, and any other patent and patent
applications which the Parties subsequently agree to include in Exhibit A.

 

1.12               “Product” shall mean any pharmaceutical preparation
containing Compound as an active pharmaceutical ingredient, []* for
administration to humans.

 

1.13     “Regulatory Approval” shall mean any and all approvals, licenses,
registrations, or authorizations of any Regulatory Authority as required or
needed for manufacture, marketing, sale, distribution and import of the Product
in any country within the Territory, and including solely for countries outside
the United States any pricing approvals needed to sell or obtain reimbursement
for sales of the particular Product in such country.

 

1.14               “Regulatory Authority” shall mean any federal, national,
multinational, state, provincial or local regulatory agency, department, bureau,
commission, council, court, tribunal, arbitrator, official or other
instrumentality of a governmental entity in any country within the Territory.

 

1.15     “Territory” shall mean worldwide excluding Japan, Taiwan, South Korea,
China, Thailand, Indonesia, the Philippines, Australia, New Zealand, India,
Saudi Arabia, Kuwait, Oman, Qatar, United Arab Emirates, Bahrain and Yemen.

 

1.16               “Third Party” shall mean a person or entity other than a
Party or an Affiliate of a Party.

 

1.17               “Valid Claim” shall mean a claim in any issued and unexpired
patent within the Patents, which (a) has not been disclaimed, revoked or held
invalid, unpatentable or unenforceable by a court or other governmental agency
of competent jurisdiction from which no appeal can be further taken, and (b) has
not been disclaimed, revoked, or held

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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or admitted to be invalid, unpatentable or unenforceable through abandonment,
re-examination or disclaimer, opposition procedure, nullity suit or otherwise.

 

1.18     “[]*” shall mean []*, a Japanese company, having its principal office
at []*.

 

2.                          GRANT OF LICENSE

 

2.1                     Astellas hereby grants to Calixa the exclusive license,
with the full rights to grant sublicenses to its Affiliates and to Third Parties
through multiple tiers (subject to Section 2.2), under the Product Patents and
all the Know-How of Astellas and its Affiliates to develop, manufacture, have
manufactured, use, import, market, promote, sell, offer to sell and distribute
the Products in the Territory. Astellas hereby grants to Calixa the []* license,
with the full rights to grant sublicenses to its Affiliates and to Third Parties
through multiple tiers (subject to Section 2.2), under the Related Patents to
develop, manufacture, have manufactured, use, import, market, promote, sell,
offer to sell and distribute the Products in the Territory, provided that such
[]* license shall be effective as far as Astellas has the ability to grant such
license. Astellas also hereby grants to Calixa the []* license, with the right
to sublicense under the Know-How and any applicable patent rights of Astellas
and its Affiliates to manufacture and have manufactured the Compound and the
Product in any country outside the Territory solely for use and sale in the
Territory.

 

2.2                     If Calixa intends to grant a sublicense to its Affiliate
or any Third Party, it shall []* that the prospective sublicensee has the
ability to perform the obligations of Calixa under this Agreement that would be
sublicensed to such sublicensee. If Calixa grants a sublicense to such Affiliate
or Third Party, it shall identify in writing to Astellas the Affiliate or the
Third Party and the extent of the rights that Calixa has granted a sublicense
under the license rights granted in Section 2.1 above. Calixa shall ensure that:
(i) any sublicense granted by Calixa hereunder shall be fully consistent with
and subject to the terms and conditions of this Agreement and shall be []* for
any reason whatsoever; and (ii) Calixa shall remain responsible to Astellas for
performance of all obligations of Calixa under this Agreement, even if Calixa
has sublicensed some rights to sublicensees.

 

3.                          INFORMATION EXCHANGE

 

3.1                     Promptly after the execution of this Agreement, Astellas
agrees to and shall provide to Calixa any and all the Know-How then in the
possession of Astellas or its Affiliate that is []* for Calixa to exercise its
rights and/or fulfill the purposes of this Agreement, if not in English,
together with the English summary thereof. Any Know-How and

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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materials disclosed by Astellas to Domain under the CDA and further disclosed by
Domain to Calixa subject to Astellas’ prior approval provided to Domain, if any,
shall be deemed to have been disclosed hereunder. Thereafter during the term of
the Agreement, Astellas shall promptly provide to Calixa any additional Know-How
that is developed, identified or acquired by Astellas or its Affiliates and is
[]* for Calixa to exercise its rights and/or fulfill the purposes of this
Agreement, if not in English, together with the English summary thereof.

 

Astellas shall make reasonably available to Calixa, during Astellas’ business
hours and for reasonable amounts of time, such of Astellas’ employees as are
appropriate (including key research, manufacturing and/or development personnel)
for purposes of consulting with Calixa regarding the development, testing and
manufacturing of Compound or Products, procuring of Regulatory Approval of
Products, and to enable Calixa to understand and use the Know-How disclosed by
Astellas and assure disclosure of such Know-How pursuant to first paragraph of
this Section 3.1. Calixa shall reimburse Astellas for any out-of-pocket costs
(if any) of providing any such consulting, but its internal costs shall be borne
by Astellas.

 

3.2                     Calixa shall disclose to Astellas from time to time
during the term of this Agreement any and all Know-How which Calixa has
heretofore developed or acquired or which Calixa and/or its sublicensees may
hereafter develop or acquire that is []* for Astellas to exercise its rights or
fulfill the purposes of this Agreement (including Astellas confirming that
Calixa is complying with its obligations under the applicable terms of this
Agreement). The following information and documents, among others, shall be
included in such Know-How to be disclosed by Calixa to Astellas:

 

(i)                   the reports which shall be submitted by Calixa pursuant to
Section 4.4;

 

(ii)                any information on adverse reactions or animal safety
findings which shall be reported to Astellas by Calixa pursuant to Section 4.8;

 

(ii)                Upon filing of the IND and the NDA in any country within the
Territory, a copy of the documents so filed;

 

(iv)            After filing of the IND and the NDA in any country within the
Territory, a copy of the supplemental documents submitted after the filing of
such IND and/or such NDA;

 

(v)               Upon obtaining the Regulatory Approval in any country within
the Territory, a copy of such Regulatory Approval; and

 

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(vi)            Upon request by Astellas, any other Know-How of Calixa and/or
its sublicensees that is []* for Astellas to exercise its rights or fulfill the
purposes of this Agreement.

 

Calixa shall provide Astellas with such Know-How developed or acquired by Calixa
and/or its sublicensees hereunder, if not in English, together with the English
summary thereof.

 

Astellas shall have a []* right and license to use all Know-How (including any
patent claim obtained by Calixa that claims any such Know-How) developed or
acquired by Calixa and/or its sublicensees that is []* for Astellas to exercise
its rights or fulfill the purposes of this Agreement, solely for the
development, manufacture, having manufactured, use, import, marketing,
promotion, sales, offer for sale and distribution of the Product outside the
Territory as well as for manufacture or having manufactured the Compound and/or
the Product in the Territory solely for use and sale outside the Territory, and
to disclose and sublicense the same to its Affiliates and its Third Party
business partner(s) for the purpose mentioned above. In addition, Astellas shall
have the right, []*, to refer to, or to make use of, the Regulatory Approval
filed and/or obtained by Calixa or its sublicensees solely as needed for
commercialization of the Product by Astellas, its Affiliates and/or its Third
Party business partners outside the Territory.

 

Calixa hereby grants Astellas the right of negotiation to []*. If Astellas
requests []*, the Parties shall negotiate in good faith and seek to reach
agreement on []*, provided that []*. The foregoing shall not prevent Calixa from
[]*.

 

4.                          DEVELOPMENT

 

4.1                     In compliance with any and all applicable laws and
regulations, Calixa shall []* perform and complete all pre-clinical and clinical
studies and other development activities necessary to obtain and maintain the
Regulatory Approval in each country within the Territory []*, at its sole
expense and responsibilities. Calixa shall have the sole right and authority to
conduct and control all such research and development activities as to the
Compound or the Products throughout the Territory.

 

4.2                     Within ninety (90) days following the Effective Date,
Calixa shall prepare and submit to Astellas for its review and comment a summary
overview plan []* of []* (“Development Plan”). Astellas may give any comment on
the Development Plan submitted to Astellas pursuant to this Section 4.2 and
Calixa shall []* such Astellas’ comments []* and consistent with Calixa’s other
obligations and rights under this Agreement. While Calixa shall []* Astellas’
[]* comments, it is understood and agreed

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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that Calixa shall have the sole authority to prepare and control the Development
Plan, and to amend and modify the Development Plan []* over the course of the
Agreement. Calixa shall []* amendments or modifications to the Development Plan.
It is further agreed that such initial Development Plan will necessarily be in
summary form with respect to any development activities []*, and that the []*
for any such development activities []* will necessarily be []*, given the early
stage of research of the Compound as of the Effective Date.

 

Calixa shall []* carry out all of such development activities in compliance with
the Development Plan, as such plan may be amended and modified, at its sole
expense and responsibilities.

 

4.3                     Calixa shall []* file the NDA and obtain the Regulatory
Approval []* at its sole expense and responsibilities in each country []* within
the Territory. Calixa shall be responsible for preparation and submission of the
NDA in each such country. If Calixa determines that it shall not seek Regulatory
Approval of Products in a particular country within the Territory, then []*. In
such case, []* (and all other rights of Calixa under the Agreement shall remain
unaffected).

 

Calixa shall be responsible for and manage, and shall have the sole rights and
authority for, all interactions and filings with each Regulatory Authority in
the Territory. At the request of Astellas, and to the extent reasonable and not
contrary to Calixa’s or its sublicensee’s regulatory strategy and relationships
with the applicable Regulatory Authority, Calixa shall []* arrange that
representatives of Astellas may participate in []* meetings with such Regulatory
Authority. In addition, Calixa shall inform Astellas of any []* with such
Regulatory Authority. In course of the foregoing processes, Calixa shall []*
consider and accommodate the []* comments made by Astellas with respect thereto.
Calixa (or its sublicensee, as applicable) shall own all regulatory filings made
in the Territory with respect to the Compound or the Product, including INDs,
NDAs and foreign equivalents thereof.

 

4.4                     For the purpose of this Section 4.4, within []* days
after the end of each calendar year []*, Calixa shall submit to Astellas the
reports disclosing in reasonable detail the progress, results, data and other
important issues relating to Calixa’s or sublicensees’ development activities
under this Article 4 with regard to the Compound and the Products, in such form
as separately agreed upon between Astellas and Calixa.  Within []* days after
the end of each calendar

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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quarter except the last calendar quarter in a calendar year, Calixa shall submit
to Astellas the brief description of the progress of []* under this Article 4
with regard to the Compound and the Products.

 

4.5                     []* after obtaining a Regulatory Approval in a country
in the Territory, Calixa shall submit to Astellas a copy of such Regulatory
Approval.

 

4.6                     Calixa shall []* maintain each Regulatory Approval
obtained by Calixa in each country within the Territory at its sole expense and
responsibilities.

 

4.7                     Within forty (40) days after the Effective Date of this
Agreement (or such later date as mutually agreed by the Parties), Astellas shall
provide all remaining Compound and Product then in the possession of Astellas or
its Affiliate. All such materials shall meet the specifications specified in the
certificate of analysis provided by Astellas together with the materials. With
regard to any such Compound or Product to be used by Calixa for clinical
studies, Astellas shall also provide any and all Good Manufacturing Practice
documentation necessary or helpful to support an IND submission.  Calixa shall
use the materials provided hereunder only for the purpose of development
activities under this Article 4. Except as set forth above, Astellas shall not
be obligated to manufacture or supply any additional materials of the Compound
or the Product.

 

4.8                     During the term of this Agreement, both Parties shall
report to each other any information on adverse reactions or animal safety
findings associated with the use of the Compound and/or the Product in
accordance with the procedure separately agreed upon between Astellas and
Calixa.

 

5.                          PROCUREMENT OF COMPOUND AND PRODUCT

 

5.1                     Except for the materials provided by Astellas pursuant
to Section 4.7 above, Calixa shall, at its sole expense and responsibilities,
procure all its requirements of the Compound and/or the Product. Calixa shall
[]* ensure that any such amounts obtained shall be in compliance with (i) such
specifications as established by Calixa (or if applicable as contained in the
applicable Regulatory Approval); and (ii) any applicable laws and regulations
(including, but not limited to, the Good Manufacturing Practice).

 

5.2                     If requested by Astellas, Calixa and Astellas shall
negotiate and seek to enter into a supply agreement on commercially reasonable
terms, under which Calixa would, upon request by Astellas, []* on commercially
reasonable terms and conditions as agreed upon by the Parties.

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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6.                          SALES AND PROMOTION

 

6.1                     Upon Calixa’s obtaining Regulatory Approval in a country
in the Territory, Calixa shall []* market, promote, sell, offer to sell and
distribute the Product in such country in the Territory under such Regulatory
Approval in compliance with the applicable laws, regulations and rules. Calixa
shall []* Astellas’ []* requests or comments with respect to such marketing
efforts, but Calixa shall have sole rights and authority to determine and
control the marketing strategy and plan to market the Product throughout the
Territory.

 

6.2                     Calixa shall []*, at its sole expense and
responsibilities and subject to its sole discretion to determine the appropriate
marketing plans and strategies, to import, market, promote, sell, offer to sell
and distribute the Product in the Territory with the general goal of maximizing
the benefit []* from such sales of the Products in the Territory.

 

6.3                     On a country-by-country basis, Calixa shall launch the
Product in the applicable country []* after obtaining the Regulatory Approval in
such country, but no later than []* after such approval is obtained unless such
launch is not []* by such date due to factors outside of Calixa’s control.
Calixa shall promptly notify Astellas of the date of the launch of the Product
in each country within the Territory. If Calixa determines that it cannot launch
the Product in a particular country within the Territory within []* after
Regulatory Approval is obtained in that country, then Calixa shall give Astellas
written notice of such determination, and the reasons (if any) that it is not
[]* to launch the Product by such date due to []*. In such case, if Calixa []*
(and all other rights of Calixa under the Agreement shall remain unaffected).

 

6.4                     Calixa shall promptly provide to Astellas, solely for
reference of Astellas, copies of all packages and package inserts to be used by
Calixa and its sublicensees for the Product in each country within the Territory
each time they are first prepared or materially changed by Calixa and/or its
sublicensees.

 

Upon the reasonable request of Astellas, Calixa shall provide Astellas, solely
for reference of Astellas, with copies of any promotional materials for the
Product.

 

6.5                     Within []* days after the close of each month, Calixa
shall use reasonable efforts to provide Astellas with a monthly sales report for
the Product for such month, which shall show the relevant []* by Calixa (to the
level of accuracy that Calixa reasonably can determine in such period)
indicating the []*, together with its comments thereon.  Calixa shall use
reasonable efforts to include in such monthly report the []*, but it is
understood that Calixa may not be able to obtain such data.

 

6.6                     In the Territory, Calixa shall []*. For clarity, it is
understood and agreed that for []*.

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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7.                          RIGHT OF FIRST REFUSAL FOR []*

 

7.1                     If Calixa or its sublicensee intends to enter into a []*
(each such opportunity, a “Business Opportunity”), []*.

 

7.2                     If Astellas is interested in such Business Opportunity,
it shall so notify Calixa within []* days of receiving such offer together with
the material terms and conditions of such Business Opportunity and the necessary
Know-How from Calixa pursuant to Section 7.1 above.  Upon such notice provided
by Astellas and through the expiration of []* day period from Calixa’s receipt
of such notice provided by Astellas (or such longer period of time as may be
mutually agreed to by the Parties) (such period, the “Negotiation Period”), the
Parties shall negotiate in good faith the terms under which they would
collaborate on such Business Opportunity. During such Negotiation Period, []*.

 

7.3                     If either (i) Astellas fails to notify Calixa that
Astellas is interested in such Business Opportunity within such []* day period,
or (ii) the Parties fail to enter into an agreement within such Negotiation
Period despite the good faith negotiations between the Parties, then []*,
provided however, in the case of (ii) above, []*.

 

7.4                     []*.

 

8.                            MILESTONE AND ROYALTY PAYMENT

 

8.1                     In consideration of the license granted by Astellas to
Calixa hereunder, Calixa shall make the following one time, non-refundable and
non-creditable milestone payments to Astellas upon first achievement of the
applicable milestone event, as follows:

 

 

 

Milestone Event

 

Milestone Payment

 

(i)

 

Upon entering into this Agreement.

 

$

1,500,000

 

(ii)

 

Upon commencing the first phase II clinical study for []* the Product.

 

$

1,500,000

 

(iii)

 

Upon commencing the first phase III clinical study for []* the Product.

 

$

[]

*

(iv)

 

Upon commencing a phase III clinical study []* different from that triggering
milestone 8.1 (iii).

 

$

[]

*

 

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(v)

 

Upon submitting the first NDA for the []* for []* the Product.

 

$

[]

*

(vi)

 

Upon submitting the first NDA for the []* for []* different from that triggering
milestone 8.1 (v).

 

$

[]

*

(vii)

 

Upon obtaining the first Regulatory Approval in the []* for []* of the Product.

 

$

[]

*

(viii)

 

Upon obtaining the first Regulatory Approval in the []* for []* different from
that triggering milestone 8.1 (vii).

 

$

[]

*

(ix)

 

Upon first achievement of Annual Net Sales of US$[]*.

 

$

[]

*

(x)

 

Upon first achievement of Annual Net Sales of US$[]*.

 

$

[]

*

(xi)

 

Upon first achievement of Annual Net Sales of US$[]*.

 

$

[]

*

 

 

TOTAL

 

$

47,000,000

 

 

Calixa shall be obligated to make each milestone payment mentioned above only
once.

 

Calixa shall []* and shall make payment of the milestone amounts specified above
by wire transfer to a bank account to be designated by Astellas within thirty
(30) days following the occurrence of each milestone event mentioned above.

 

8.2                     In further consideration of the license granted by
Astellas to Calixa hereunder, Calixa shall pay, []* of the Products in the
Territory, to Astellas a royalty as a percentage of Net Sales made by Calixa or
its sublicensees in the Territory, where the percentage rate applicable to a
particular sale shall depend on the aggregate amount of Annual Net Sales in the
given calendar year through to the time of sale, in accordance with the
following:

 

(i)                               []* of the first []* US Dollars (US$ []*) of
Annual Net Sales in the given calendar year;

 

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(ii)                            []* of the amount of Annual Net Sales in excess
of the first []* US Dollars (US$ []*) of Annual Net Sales in such calendar year,
and []* US Dollars (US$ []*) or less of Annual Net Sales in such calendar year;

(iii)                         []* of the amount of Annual Net Sales in excess of
the first []* US Dollars (US$ []*) of Annual Net Sales, and []* US Dollars (US$
[]*) or less of Annual Net Sales; and

(iv)                        []* of the amount of Annual Net Sales in excess of
the first []* US Dollars (US$ []*) of Annual Net Sales.

 

The above royalties shall be payable on the Net Sales of the Product in each
country within the Territory, on a country-by-country basis, until the later of:
[]*, the Net Sales occurred in such country shall not be included in the Annual
Net Sales in determining the royalty rate of the Product under this Section 8.2.

 

Notwithstanding the foregoing, if Calixa, in its good faith judgment, determines
that it is []* to obtain license rights in any country in the Territory from a
Third Party (a “Third Party License”) under patent rights owned or controlled by
such Third Party that []*, (“Third Party Patent Rights”), Calixa shall have the
right to enter into such Third Party License. []*. Calixa may reduce the
royalties owed to Astellas under the above provisions of this Section 8.2 based
on sales of Product []* by a Third Party License by the following amounts, as
applicable: (a) if the particular Third Party Patent Rights that are the subject
of the such Third Party License []* of the Compound, an amount equal to []* of
the amounts of royalties Calixa pays to such Third Party based on such sales of
Product under such Third Party License during the applicable royalty period, but
provided however that such reduction shall not reduce such royalties owed to
Astellas based on such sales of the Product (in the applicable royalty period)
by more than []* of the amounts otherwise owed by Calixa as a result of
application of this subclause (a) of this provision; and (b) if the particular
Third Party Patent Rights that are the subject of such Third Party License []*
of the Compound, an amount equal to []* of the amounts of royalties Calixa pays
to such Third Party based on such sales of Product under such Third Party
License during the applicable royalty period, but provided however that such
reduction shall not reduce such royalties owed to Astellas based on such sales
of the Product (in the applicable royalty period) by more than []* of the
amounts otherwise owed by Calixa as a result of application of this subclause
(b) of this provision. In no event, the total amount of the reductions of the
royalties as a result of Third Party License under subclauses (a) and (b) of
this provision shall exceed the []* of the amounts of the royalties owed by
Calixa to Astellas based on the sales of the Product during the applicable
royalty period.

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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8.3                     For a sale of Product in a country within the Territory
at a time when (a) there does not exist any Valid Claim that claims or covers
the Compound or the Product, []*, then the royalty rate applicable to such sale
shall be the following, as applicable: (i) []* of the rate otherwise applicable
to such sale based on the royalty rate schedule in subsections (i), (ii),
(iii) or (iv) of Section 8.2 above, if at the time of such sale there is []* in
that country; and (ii) []* of the rate otherwise applicable to such sale based
on the royalty rate schedule in subsections (i), (ii), (iii) or (iv) of
Section 8.2 above if there is at the time of such sale []* in that country.

 

8.4                     Calixa shall deliver to Astellas the royalty statements
in such form as Astellas shall reasonably request, which reports generally shall
list: []*. Such reports shall be given within []* days following the close of
each calendar quarter (i.e. the quarterly period ending on 31st March, 30th
June, 30th September or 31st December), and Calixa shall at the same time pay to
Astellas, or to whomsoever Astellas shall otherwise direct in writing from time
to time, the amount of such royalties shown to be due.

 

8.5                     All payments payable hereunder by Calixa to Astellas
shall be made in US Dollar to a bank account designated by Astellas. Royalties
earned shall be first determined in the currency of the country in which they
are earned and then converted to its equivalent in US Dollar at the interbank
rate quoted by the Wall Street Journal, on the last business day of the calendar
quarter in question.

 

8.6                     Any income or other tax which Calixa is required to pay
or withhold on behalf of Astellas with respect to the payments pursuant to this
Article 8 shall be deducted from the amount of such payment due, provided,
however, that in regard to any such deduction, Calixa shall give Astellas such
assistance as may reasonably be necessary for Astellas to claim exemption
therefrom and shall, upon request of Astellas, give Astellas proper evidence
from time to time as to the payment of the tax.

 

8.7                     Late payments shall be subject to an interest charge at
an annualized interest rate equal to the average (over one month) London
Inter-Bank Offering Rate (LIBOR) []*, or maximum rate permitted by law,
whichever is lower.

 

8.8                     Calixa shall keep true and accurate accounts of all
royalties payable to Astellas under Article 8. Such records shall be retained
and made available for reasonable review by Astellas or its Affiliates, unless
Calixa has a reasonable basis for objecting to review thereby, or by an
independent, nationally-recognized public accounting firm selected by Astellas,
and to which Calixa has no reasonable objection, for the purpose of verifying
the accuracy of the calculations and payments made or payable hereunder. Such
review shall be conducted no more frequently than []* per year and shall not
cover any period

 

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ending more than []* years prior to the date of such examination. All such
reviews shall be scheduled during ordinary business hours and with reasonable
notice to Calixa, such reviewing firm shall sign a typical and reasonable
confidentiality agreement binding the firm to reasonable confidentiality
provisions regarding the information it reviews. Such firm shall not disclose
any information of Calixa gained in such review, except to confirm the accuracy
of Calixa’s royalty payments or, if applicable, to disclose the extent of any
inaccuracy.

 

9.                          TRADEMARKS

 

9.1                     Calixa and its sublicensees shall have the right to
manufacture, import, use, promote, market, sell, offer to sell and distribute
the Products throughout the Territory under the Calixa Trademark(s) or any other
trademark (other than the trademarks owned by Astellas ) as may be selected by
Calixa or its sublicensees.

 

10.                   CONFIDENTIALITY

 

10.1               Except as specifically authorized by this Agreement, during
the term of this Agreement and for a period of five (5) years thereafter, or
fifteen (15) years from the Effective Date, whichever is longer, each of
Astellas and Calixa shall keep in strict confidence any and all confidential
information obtained from the other Party under this Agreement (the
“Confidential Information” of the disclosing Party), including without
limitation the Know-How obtained from the other Party pursuant to Section 3.1 or
3.2. Each Party shall not (i) use for any purpose other than as provided for in
this Agreement and (ii) disclose to any Third Party, any Confidential
Information of the other Party without first obtaining a written consent of the
disclosing Party, except for such Confidential Information of the other Party
that:

 

(i)                   is a part of the public domain prior to the disclosure;

(ii)                becomes a part of the public domain after disclosure without
any breach by the receiving Party;

(iv)            is disclosed to the receiving Party by a Third Party who has the
right to make such disclosure; or

(v)               is independently developed by the receiving Party without any
reference to any of the disclosing Party’s Confidential Information.

 

10.2     Calixa agrees to make Confidential Information of Astellas available
only to those of its and its sublicensees’ directors, officers, employees,
consultants and advisors who need to have access thereto for the purposes
mentioned in this Agreement and who are bound by confidentiality and non-use
obligations consistent with those provided herein. Astellas agrees to make
Confidential Information of Calixa available only to those of its,

 

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its Affiliates’, []* and its Third Party business partner(s) (including its
potential Third Party business partner(s))’ directors, officers, employees,
consultants and advisors who need to have access thereto for the purposes
permitted in this Agreement and who are bound by confidentiality and non-use
obligations consistent with those provided herein.

 

10.3     Notwithstanding anything herein to the contrary, a Party may, to the
extent necessary for the purposes permitted in this Agreement and/or for
exercising its rights and/or performing its obligations under the Agreement,
disclose certain Confidential Information of the other Party to:
(i) governmental bodies, (ii) clinical organizations, (iii) clinical
investigators, (iv) the Contract Research Organizations, and (v) other
contractors as needed in assisting in performing research or development
activities with respect to Compound or Product, as well as potential investors
in Calixa provided that such entities are bound by appropriate confidentiality
and non-use obligations.

 

10.4     Notwithstanding anything herein to the contrary, a Party may disclose
specific Confidential Information of the other Party to the extent the
disclosure is required by a valid order of a court or other governmental body
having jurisdiction; provided that the disclosing Party shall provide the other
Party with reasonable prior notice of such requirement, so that the other Party
can file a motion for a protective order or otherwise seek whatever legal relief
it deems desirable or appropriate to protect its interest in such Confidential
Information.

 

10.5     Astellas and Calixa acknowledge that any breach or threatened breach of
any term of this Article 10 may cause immediate and irreparable harm to the
disclosing Party, which may not be adequately compensated by monetary damages.
Astellas and Calixa therefore agree that the disclosing Party shall have the
right to seek equitable relief in the form of injunctions, orders of specific
performance or other equitable relief as a remedy, in addition to any other
remedies that may be legally available.

 

11.                   INFRINGEMENT AND OTHER PATENT MATTERS

 

11.1               Calixa shall promptly inform Astellas of all actual or
threatened infringements of any Patent made by any Third Party in the Territory
as soon as it becomes aware of the same. Calixa shall have the first option and
right (but not the obligation) to bring any suit and/or defend any declaratory
judgment of non-infringement action to enforce the Patent as it may deem
necessary or appropriate to terminate or prevent such infringement in the
Territory at its own expense. Calixa shall keep Astellas informed of the
progress and the results of such action, and shall, upon Astellas’ request,
provide Astellas with related information regarding such action, excluding
privileged

 

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documents. Astellas shall give all reasonable assistance except for financial
assistance to Calixa in any such action. Astellas may join such suit with
counsel at its expense and seek its own damages and other relief, provided that
Calixa shall in any event control the prosecution of the suit or action. Calixa
shall be entitled to keep and retain all amounts and recoveries from such suit
or action prosecuted by Calixa, excluding any amounts of damages or relief
directly awarded to Astellas in the event Astellas joined such suit or action,
which Astellas may retain.  If Calixa does not institute any action for any of
such infringement against said Third Party within []* days after written notice
thereof, and Calixa does not provide to Astellas by such time a []*, then
Astellas may institute any action for any of such infringement against said
Third Party at its expense. In this event, Calixa shall give all reasonable
assistance except for financial assistance to Astellas, and Calixa may join such
suit with its own counsel at its own expense and seek its own damages and other
relief. Astellas shall be entitled to keep and retain all amounts and recoveries
from such suit or action prosecuted by Astellas, excluding any amounts of
damages or relief directly awarded to Calixa in the event Calixa joined such
suit or action, which Calixa may retain.

 

11.2               Calixa will own all right, title and interest in and to all
Know-How that are conceived, reduced to practice, made or developed solely by or
on behalf of Calixa (whether or not patentable), and all intellectual property
rights (including patent rights) appurtenant thereto, subject only to the
limited license rights under the Know-How of Calixa granted to Astellas under
Section 3.2 of this Agreement.

 

11.3               Astellas shall []* conduct in good faith the preparation,
filing, prosecution, issuance and maintenance (including, without limitation,
interference, opposition and similar Third Party proceedings before the relevant
patent office) of any and all patent applications or patents in the Patents
throughout the Territory (“Prosecution”), at its expense and through patent
counsel selected by Astellas. Astellas shall keep Calixa informed of all such
Prosecution efforts and the results thereof, and shall provide Calixa reasonable
opportunities to consult with Astellas regarding such Prosecution by Astellas.
Calixa shall cooperate with and assist Astellas reasonably in such Prosecution
of the Patents.

 

11.4               During the Term, Astellas shall provide or have provided to
Calixa copies of: (i) all material, substantive documents relating to Patents
received by Astellas from any patent office in the Territory promptly after
receipt from the patent office and (ii) all documents to be filed by Astellas,
in sufficient advance notice so as to give Calixa []* days for review and
comments or such lesser period as may be required by the patent office,
respectively, including without limitation copies of each patent application,
official action, response to official action, declaration, information
disclosure statement,

 

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request for terminal disclaimer, request for patent term extension, and request
for reexamination.  Calixa shall have the right to comment on such documents,
and Astellas shall reasonably consider in good faith any reasonable comments
timely received from Calixa. If requested by Astellas in good faith, Calixa
shall use good faith, diligent efforts to review and respond to Astellas with
any comments on any of the above documents []*. Calixa shall have the right to
request that Astellas file additional patent applications within the Patents in
particular countries within the Territory, and Astellas shall []* accommodate
such requests to the extent that such request made by Calixa is reasonable and
practicable.

 

11.5            Astellas shall not, without Calixa’s written consent, abandon or
cease Prosecution of any of the Patents in the United States, Canada, United
Kingdom, Germany, France, Italy or Spain (the “Major Countries”). Astellas shall
notify Calixa in the event it for any reason elects to abandon, or shall
otherwise not continue, the Prosecution of a particular patent application or
maintenance of an issued patent within the Patents in any country in the
Territory (other than in favor of a continuing application based on such parent
application).  Such notification shall specify the application to be abandoned
or patent that will no longer be maintained by Astellas and shall be given
within a reasonable period (i.e., with sufficient time for Calixa to take action
as may be necessary or desired) prior to the date on which such patent
application(s) or patent(s) will lapse or go abandoned. Calixa shall then have
the option, exercisable upon written notification to Astellas, to assume full
responsibility, at its discretion and its cost and expense, for Prosecution of
the affected patent application(s) or maintenance of any of the affected
patent(s) in such country or countries in the Territory. If Calixa so elects to
conduct Prosecution of a particular Patent in any country outside a Major
Country as provided in the foregoing, Calixa may []*. If Calixa so elects to
conduct Prosecution of a particular Patent in a Major Country as provided in the
foregoing, Calixa may []*.

 

11.6               If Calixa desires that Astellas file any or all applications
and take actions necessary to obtain patent extension pursuant to 35 U.S.C. §
156 or similar foreign statutes for the Patents in the Territory, Calixa shall
so notify Astellas promptly after obtaining Regulatory Approval in the U.S. or
other countries where Calixa desires to file such patent extension. Astellas
agrees to take all necessary actions, including filing all needed applications,
to obtain the requested patent extensions at Astellas’ cost and expense. Calixa
shall cooperate with and assist Astellas in such intended patent extension of
the Patents, including without limitation providing all necessary documents to
Astellas.  To the extent permitted under applicable law, Calixa may take

 

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all steps and make all applicable filings and applications to obtain the
requested patent extensions if and to the extent that Astellas fails to do so in
a timely manner.

 

12.                   INDEMNIFICATION

 

12.1               Calixa shall indemnify, defend and hold Astellas and its
Affiliates, and their respective directors, officers and employees, and the
successors and assigns of any of the foregoing, harmless from and against any
and all liabilities, damages, losses, costs and expenses, including without
limitation reasonable attorneys’ fees and other expenses of litigation resulting
from any Third Party claim, action, suit or proceeding (any of the foregoing, a
“Claim”) against any such indemnified party to the extent such Claim is based on
or results from: (a) the exercise or practice by Calixa of the rights and
licenses granted to Calixa under this Agreement, (b) the manufacture, use or
sale of any Product or Compound used for development activities and/or
distributed by or on behalf of Calixa and/or its sublicensees in the Territory
or manufacture by or on behalf of Calixa and/or its sublicensees outside the
Territory, (c) Calixa’s breach of any warranties, representations, or other
obligations under this Agreement, or (d) any negligence or willful misconduct of
Calixa and/or its sublicensees, but excluding from the foregoing obligations any
Claims to the extent such Claims are based on or result from: (i) Astellas’s
breach of any warranties, representations, or other obligations under this
Agreement or (ii) any negligence or willful misconduct of Astellas or its
Affiliate or Third Party business partner.

 

12.2               Astellas shall indemnify, defend and hold Calixa and its
Affiliates, and their respective directors, officers and employees, and the
successor and assigns of any of the foregoing harmless from and against any and
all Claims against any such indemnified party to the extent such Claim is based
on or results from: (a) Astellas’s breach of any warranties, representations, or
other obligations under this Agreement, or (b) any negligence or willful
misconduct of Astellas or its Affiliate, or (c) the manufacture, use or sale of
any Product or Compound used for development activities and/or distributed by or
on behalf of Astellas and/or its Affiliate or Third Party business partners
outside the Territory, or manufacture by or on behalf of Astellas and/or its
Affiliate or Third Party business partners inside the Territory, except to the
extent that such Claim is caused by (i) Calixa’s breach of any warranties,
representations, or other obligations under this Agreement, or (ii) any
negligence or willful misconduct of Calixa or its sublicensees.

 

12.3               In the event that either Party intends to claim
indemnification under this Article 12, it shall promptly notify the other Party
in writing of such alleged Claim. The indemnifying Party shall have the right to
control the defense thereof with counsel of its

 

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choice; provided, however, that any indemnified Party shall have the right to
retain its own counsel at its own expense. The indemnified Party shall cooperate
with the indemnifying Party and its legal representatives in the investigation
of any Claim covered by this Article 12. The indemnified Party shall not, except
at its own cost, voluntarily make any payment or incur any expense with respect
to any Claim or related suit without the prior written consent of the
indemnifying Party, which such Party shall not be required to give.

 

13.                   WARRANTIES AND DISCLAIMER

 

13.1               Astellas hereby represents and warrants to Calixa as of the
Effective Date that:

 

(i)                         Astellas owns, or Astellas []*, the entire right,
title and interests in and to all the Patents;

(ii)                      Astellas has the exclusive right and full legal
authority to grant to Calixa the exclusive license throughout the Territory
under all rights and interest in and to the Patents ([]*) and under the Know-How
to make, have made, use, import, offer for sale and sell Products;

(iii)                   No Third Party, including []*, has any interest or
rights in or under the Patents or Know-How to make, have made, use, import,
offer for sale and/or sell Products in any country or jurisdiction in the
Territory;

(iv)                  as far as Astellas is aware after certain internal patent
searches in the normal course of its business, the manufacture, use and/or sale
of the Compound and the Product does not infringe any patent owned or controlled
by a Third Party anywhere in the Territory;

(v)                     Astellas is not aware of any prior art or facts or
circumstances that would cause any of the Patents to be invalid, unenforceable
or not patentable;

(vi)                  Astellas has no knowledge, and is not aware of any facts
or circumstances that would lead it to believe, that any Third Party is
infringing any of the Patents or misappropriating or using any Know-How in
derogation of the rights granted to Calixa in this Agreement;

(vii)               Astellas is not aware of any facts that indicate the
existence of any material side effect, toxicity effect, carcinogenicity effect,
adverse effect or any instances of deleterious physical effects or reactions
resulting from, or alleged to result from, the Compound or Product, which have
not been previously disclosed to Calixa by Astellas in writing;

(viii)            Astellas is not aware that any of the written statements and
other writings furnished by Astellas pursuant to or in connection with this
Agreement or the transactions contemplated hereby are materially inaccurate or
are untruthful, or

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omit to disclose material facts of which Astellas is aware, where the failure to
disclose such facts makes such written statements or other writings materially
misleading; and

(ix)                    Astellas has provided to Calixa a true, correct and
complete copy of the agreement between Astellas and []* pursuant to which []*
has granted to Astellas the []*, and an English translation of the
section(s) setting forth such Astella’s exclusive rights in the agreement.

 

13.2               Calixa hereby represents and warrants to Astellas as of the
Effective Date that:

 

(i)                         Calixa is not aware that any of the written
statements and other writings furnished by Calixa pursuant to or in connection
with this Agreement or the transactions contemplated hereby are materially
inaccurate or are untruthful, or omit to disclose material facts of which Calixa
is aware, where the failure to disclose such facts makes such written statements
or other writings materially misleading; and

(ii)       Calixa has the ability to perform its obligations under this
Agreement.

 

13.3               Each Party hereby represents, warrants and covenants to the
other Party as of the Effective Date that:

 

(i)                         such Party is a corporation or entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has full corporate power and authority to
execute and deliver this Agreement and to carry out the provisions hereof;

(ii)                      such Party is duly authorized, by all requisite
corporate action, to execute and deliver this Agreement and to carry out the
provisions hereof, and the person executing this Agreement on behalf of such
Party is duly authorized to do so by all requisite corporate action;

(iii)                no consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority is required on the part of such
Party in connection with the valid execution, delivery and performance of this
Agreement, except where the failure to obtain any of the foregoing would not
have a material adverse impact on the ability of such Party to meet its
obligations hereunder;

(iv)                  this Agreement constitutes a legal and valid obligation
binding upon such Party and enforceable in accordance with its terms; and

(v)                     the execution, delivery and performance by it of this
Agreement and its compliance with the terms and provisions of this Agreement
does not and will not conflict with or result in a material breach of any of the
terms or provisions of (i) any other contractual or other obligations of such
Party, (ii) the provisions of its charter, operating documents or bylaws, or
(iii) any order, writ, injunction or decree of any court or governmental
authority entered against it or by which it or

 

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any of its property is bound except where such breach or conflict would not have
a material adverse impact on the Party’s ability to meet its obligations
hereunder.

 

13.4               EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATIONS NOR EXTENDS ANY WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
NON-INFRINGEMENT OF ANY THIRD PARTY INTELLECTUAL PROPERTY RIGHTS OR OTHER
RIGHTS, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND VALIDITY WITH
RESPECT TO THE PATENTS LICENSED HEREUNDER, NOR DOES ASTELLAS MAKE ANY WARRANTY
AS TO THE RESULTS THAT MAY BE OBTAINED BY CALIXA WITH RESPECT TO THE PATENTS
LICENSED HEREUNDER.

 

14.                   DURATION

 

This Agreement becomes effective from the Effective Date and shall, unless
sooner terminated pursuant to any other provision of this Agreement, be in
effect, on a country by country basis, as long as Calixa or its sublicensee
continues developing or selling the Product in such country within the
Territory.

 

15.                   TERMINATION

 

15.1               Material failure by a Party to comply with any of its
respective material obligations or conditions contained in this Agreement shall
entitle the other Party to give to the Party in default notice requiring it to
cure such material default and specifying in detail the basis for the allegation
of default. If such material default is not cured within []* days (or []* days
with respect to material breach by Calixa of its payment obligation under
Article 8) after receipt of such notice, the notifying Party shall be entitled
(without prejudice to any of its other rights conferred on it by this Agreement)
to terminate this Agreement by giving written notice of termination to take
effect immediately, except as otherwise provided in Section 15.3 below.

 

15.2     In the event that one of the Parties goes into liquidation, or a
receiver or a trustee is appointed over all or substantially all of the property
or estate of that Party, or the Party makes an assignment for the benefit of
creditors of all or substantially all of its assets, and whether any of the
aforesaid events be the outcome of the voluntary act of that Party, or
otherwise, the other Party shall be entitled to terminate this Agreement
forthwith by giving a written notice to the first Party.

 

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15.3               If Calixa, or its sublicensees, has []* and []*, then
thereafter, so long as Calixa, or its sublicensees, continues to []* develop
and/or commercialize Product in each country in the Territory in which it is
[]*, then notwithstanding the provisions of Section 15.1 Astellas shall not have
the right to terminate the Agreement under Section 15.1 above unless the uncured
material default by Calixa is of the following obligations: []*; in any such
case Astellas may exercise the termination rights under Section 15.1 if such
breach remains uncured; notwithstanding the foregoing, []*.

 

15.4               In the event that: (a) there occurs either (i) a substantial
change in control of Calixa (meaning that the shareholders of Calixa just prior
to the transaction own less than 50% of the voting stock of Calixa after the
transaction) pursuant to a merger with or an acquisition by a Third Party, or
(ii) a sale by Calixa to a Third Party of all or substantially all of the assets
of Calixa; (b) such Third Party is, at the time of the closing of the
transaction under subsection (a) above, []*, then Astellas shall have the right
to terminate this Agreement forthwith by written notice, solely in such
countries where such Third Party []*.

 

15.5               In the event Calixa contests or challenges in a legal
proceeding the validity of the Patent, []*.

 

15.6            Calixa shall have the right to terminate this Agreement in its
entirety without cause, or for any cause, on []* written notice to Astellas,
[]*. In the alternative, Calixa shall have the right to terminate the Agreement
solely as to particular countries, on []* prior written notice to Astellas, in
which case such country or countries covered by such notice shall be removed
from the Territory, and all rights granted by Astellas under this Agreement with
respect to such countries shall automatically terminate and revert to Astellas
upon such termination, but the Agreement shall remain in full force and effect,
and all of Calixa’s rights and obligations shall remain, as to all other
countries in the Territory.

 

16.                   RIGHTS AND OBLIGATIONS UPON EXPIRATION AND TERMINATION

 

16.1               The termination or expiration of this Agreement for any
reason shall be without prejudice to:

 

(i)                         Calixa’s obligations to disclose to Astellas any and
all Know-How which Calixa and/or its sublicensees developed or acquired (with
the right to disclose) prior to the date of such termination or expiration and
has not yet disclosed to Astellas pursuant to Section 3.2;

(ii)                      Astellas’s right to receive all payments accrued
hereunder prior to the date of such

 

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termination or expiration;

(iii)                   Calixa’s obligation provided for in Sections 8.6, 8.7
and 8.8;

(iv)                  Astellas’s right provided in Section 8.8;

(v)                     Both Party’s confidentiality obligation provided for in
Article 10;

(vi)                  Calixa’s indemnification obligation provided for in
Section 12.1;

(vii)               Astellas’s indemnification obligation provided for in
Section 12.2;

(viii)            Both Party’s agreements set forth in Article 17; and

(ix)                    Any other remedies which either Party may then or
thereafter have hereunder or otherwise.

 

16.2               In the event of termination or expiration of this Agreement
in its entirety or with respect to any particular country pursuant to
Section 4.3, 6.3 or 15.6, except for termination of this Agreement by Calixa
pursuant to Section 15.1 or 15.2, on and after the date of such termination,
Astellas shall have a []* right and license to use all Know-How (including any
patent obtained thereon) developed or acquired by Calixa and/or its
sublicensees, for the purpose of development, manufacture, import, marketing,
promotion, sales, offer for sales and distribution of the Compound, the Product
[]* (a) in any country of the world, in the case of termination of the entire
Agreement, or (b) in the particular country of termination, in the case of
termination of the Agreement only as to such country (as applicable), and to
disclose and sublicense the same to its Affiliates and its Third Party business
partner(s) for the purpose mentioned above in this Section.

 

In the event of termination or expiration of this Agreement in its entirety or
with respect to any particular country pursuant to Section 4.3, 6.3 or 15.6
except for termination of this Agreement by Calixa pursuant to Section 15.1 or
15.2, Astellas shall also have the right, []*, to refer to, or make use of, the
Regulatory Approval filed and/or obtained by Calixa or its sublicensees for
commercialization of the Product by itself, its Affiliates and/or its Third
Party business partners (a) in any country of the world, in the case of
termination of the entire Agreement, or (b) in the particular country of
termination, in the case of termination of the Agreement only as to such country
(as applicable).

 

16.3               Upon termination or expiration of this Agreement for any
reason whatsoever (other than termination by Calixa under Section 15.1 and
15.2), Calixa shall (except as needed for the limited rights set forth in
Section 16.4) cease using or practicing the Patents and the Astellas Know-How
disclosed by Astellas and return to Astellas or destroy, as requested by
Astellas, all Confidential Information received from Astellas, including any
copy, reproduction, summary and other physical embodiments thereof. In case of
destruction of the Confidential Information, Calixa shall submit to Astellas the
document which certifies said destruction without delay.

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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16.4               Upon termination of this Agreement by Calixa under
Section 15.1 or 15.2, Astellas shall cease using or practicing the Know-How
developed and acquired by Calixa or its sublicensees and return to Calixa or
destroy, as requested by Calixa, all Confidential Information received from
Calixa, including any copy, reproduction, summary and other physical embodiments
thereof, provided that above provision shall not prevent Astellas to continue
granting a non-exclusive license to use the Know-How developed or acquired by
Calixa and/or its sublicensees granted under Section 3.2 to its Third Party
business partner(s) which license was granted to said Third Party business
partners prior to termination of this Agreement by Calixa under Section 15.1 or
15.2. In case of destruction of the Confidential Information, Astellas shall
submit to Calixa the document which certifies said destruction without delay.
Calixa shall have the right, in its sole discretion, to continue the licenses
granted to it under Section 2.1, []*.

 

16.5               Subject to Calixa’s rights under Section 16.4, upon
termination or expiration of this Agreement for any reason whatsoever, Astellas
shall grant Calixa (i) the right to sell in the Territory the Product then held
by Calixa as a stock and (ii) the right to convert the remaining Compound into
the Product and to sell the same in the Territory, for a period of []* or such a
period to be agreed upon between the Parties; it being confirmed that, (i) in no
event, Astellas is obligated to take over or purchase any stock of the Product
or the Compound held by Calixa or its sublicensees and (ii) with respect to the
Product sold by Calixa and/or its sublicensees pursuant to this Section 16.4,
[]*.

 

17.                   GENERAL

 

17.1               Force Majeure: No failure, delay or omission by a Party in
the performance of any of its obligations under this Agreement shall be deemed a
breach of this Agreement nor create any liability if the same shall arise from
any cause or causes beyond the control of such Party, including an act of God,
acts or omissions of any government or any rules, regulations or orders of any
Regulatory Authority or any officer, department, agency or instrument hereto;
fire, storm, flood, earthquake, accident, acts of the public enemy, war,
terrorism, rebellion, insurrection, riot, invasion, strikes, lockouts, epidemic
or petroleum crisis, so long as such Party continues to use good faith, diligent
efforts to avoid the effects of such cause or causes and perform its
obligations.

 

17.2               Notice: Any notice required or permitted to be given under
this Agreement shall be deemed to have been duly given only if delivered
personally, by facsimile with confirmation of receipt, by mail (first class,
postage prepaid), or by express delivery using a globally recognized courier to
the Party at its address stated below, or at such other address as may hereafter
be furnished in writing to the notifying Party:

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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If to Astellas:

Astellas Pharma Inc.

3-11, Nihonbashi-Honcho 2-chome, Chuo-ku, Tokyo 103-8411, Japan

Attention: Vice President, Business Development

Facsimile: +81-3-3244-3245

 

With a copy to: Attention: Vice President, Legal

Facsimile: +81-3-3244-5811

 

If to Calixa: Calixa Therapeutics, Inc.

12481 High Bluff Drive, Suite 150, San Diego, CA 92130 USA

Attention: Chief Executive Officer

Facsimile: 858.480.2401

 

With a copy to:

Attention: Chief Financial Officer

Facsimile: 858.480.2401

 

Any such notice shall be deemed to have been received upon receipt of the
addressee.

 

17.3               Waiver: The failure on the part of Astellas or Calixa to
exercise or enforce any rights conferred upon it hereunder shall not be deemed
to be a waiver of any such rights nor operate to bar the exercise or enforcement
thereof at any time or times thereafter.

 

17.4               Severability: Nothing contained in this Agreement shall be
construed as requiring the commission of any act contrary to law. Should any
Section of this Agreement be or become legally ineffective, the validity of the
Agreement as a whole shall not be affected. The parties hereto rather undertake
to replace the ineffective Sections by legally effective ones which come as
close as possible to the sense of such ineffective Sections and the purpose of
this Agreement.

 

17.5               Entire Agreement: This Agreement contains the entire
understanding between the Parties with respect to the subject matter hereof, and
it expressly supersedes any and all prior understandings or agreements of the
Parties. This Agreement cannot be modified or amended, except by a writing
agreed to and executed by both of the Parties.

 

17.6               Independent Contractor: It is expressly agreed that Calixa
and Astellas shall be independent contractors and that the relationship between
the Parties shall not constitute a partnership or agency of any kind. Neither
Calixa nor Astellas shall have

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

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the authority to make any statements, representations or commitments of any
kind, or to take any action, which shall be binding on the other Party, without
the prior written consent of the other Party.

 

17.7               Non-Assignment: This Agreement, and all rights and
obligations hereunder, shall not be assigned in whole or in part, whether by
operation by law or otherwise, by either Party to any other person or company,
except with the prior written consent of the other Party; provided that a Party
may assign this Agreement without such consent to its Affiliate or to its
successor in interest in connection with the merger or acquisition of such Party
or sale of all or substantially all of such Party’s assets. Subject to
Section 11.5, Astellas and its Affiliates shall not assign, grant or dispose of
any right, title or interest in or to the Product Patents other than to the
permitted assignee of all of Astellas’ rights in the Agreement (as permitted
above). Further, if Astellas assigns the Agreement as permitted above, Astellas
(and its Affiliate, as applicable) shall assign to such assignee in connection
with such assignment all right, title and interest in and to the Product
Patents.

 

17.8               Headings: Headings included herein are for convenience only,
do not form a part of this Agreement and shall not be used in any way to
construe or interpret this Agreement.

 

17.9               Compliance with Law: Each Party shall comply with all
governmental requests directed to it in connection with this Agreement and will
provide all information and assistance necessary to comply with said request,
and failure to do so shall be considered a material breach of this Agreement.

 

17.10         Governing Law: This Agreement shall be governed by, and construed
and interpreted in accordance with, the laws of the State of New York, without
regard to any rules of conflict of laws.

 

17.11         Dispute Resolution: All disputes, issues or differences arising
between the Parties, out of or in connection with this Agreement (a “Dispute”),
whether based on contract, tort, or other legal theory, shall be discussed in
good faith by appropriate senior executives of each Party, who shall attempt in
good faith and diligently to find a mutually acceptable resolution to such
Dispute for up to []* days. If the Parties are not able to resolve a Dispute by
the end of such discussion period, such Dispute may be finally settled by
arbitration as the Parties may agree, or by resort to any available legal
remedies. Each Party consents to the jurisdiction and venue of the state and
federal courts located in New York, New York regarding resolution of any
unresolved Dispute under this Agreement. This Agreement has been prepared in the
English language, which language shall govern the interpretation of and any
Dispute regarding the terms

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

26

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of or performance under or breach of this Agreement. The decisions of any
arbitrator(s), if the Parties agree on binding arbitration of a Dispute, shall
be final and binding on both Parties (except as they may otherwise agree in
agreeing to such arbitration).

 

17.12         Public Announcement or Disclosure of Agreement: Neither Party
shall make any public announcements or other disclosure to any Third Party of
the existence or terms of this Agreement without first obtaining the consent of
the other Party to timing and content thereof, except to the extent that such
disclosure is required by applicable law or regulation, such as to comply with
securities laws or regulations or the regulations of a securities exchange.  The
Parties agree to consult and agree reasonably on a joint press release, or two
separate press releases, to be issued by the Parties promptly after the
Effective Date. Further, a Party may disclose the existence and terms of this
Agreement in confidence to its existing investors, directors, and professional
advisors and to prospective investors, merger partners, or acquirers and their
respective professional advisors provided that such recipients agree to be bound
by confidentiality obligations preventing further disclosure of such
information.

 

17.13         Performance by Affiliates and Contractors.   Any of Calixa’s
obligations under this Agreement may be satisfied by the performance of such
obligation by a sublicensee of Calixa (which may include an Affiliate of Calixa
that is a sublicensee), but Calixa shall remain obligated for the performance of
all its obligations, even if it has undertaken to have a sublicensee perform
such obligation.  Calixa shall have the right to engage its Affiliates and Third
Party contractors (such as contract research organizations, clinical trial
sites, and distributors) to perform specific services to assist Calixa in
exercising its rights and in carrying out its respective activities or
obligations under this Agreement, including for the purpose of development and
commercialization of Products in the Territory.

 

17.14   Interpretation. The term “include” or “including” as used in this
Agreement shall be exemplary and not limiting, and shall be interpreted to mean
“including without limitation”.

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

27

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IN WITNESS WHEREOF, the Parties have caused their duly authorized
representatives to execute this License Agreement.

 

 

Astellas Pharma Inc.

 

 

 

By:

/s/ Hirofumi Onosaka

 

 

 

 

Name:

Hirofumi Onosaka

 

 

 

 

Title:

Senior Corporate Officer

 

 

 

 

Date:

October 31, 2007

 

 

 

 

 

Calixa Therapeutics, Inc.

 

 

 

By:

/s/ Eckard Weber

 

 

 

 

Name:

Eckard Weber

 

 

 

 

Title:

President and CEO

 

 

 

 

Date:

Nov. 1, 2007

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

28

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Exhibit A

 

Country

 

Appln.No.

 

Appln.Date

 

Pat.No.

 

Expiry Date

[]*

 

[]*

 

[]*

 

[]*

 

[]*

[]*

 

[]*

 

[]*

 

[]*

 

[]*

[]*

 

[]*

 

[]*

 

[]*

 

[]*

[]*

 

[]*

 

[]*

 

[]*

 

[]*

[]*

 

[]*

 

[]*

 

[]*

 

[]*

[]*

 

[]*

 

[]*

 

[]*

 

[]*

 

 

 

 

 

 

 

 

 

[]*

 

[]*

 

[]*

 

[]*

 

[]*

 

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*Confidential Treatment Requested.  Omitted portions filed with the Commission.

 

29

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