Exhibit 10.25






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of
1933, as amended.


 


COLLABORATION
AND LICENSE AGREEMENT


 


This COLLABORATION AND LICENSE AGREEMENT (the “Agreement”) is entered into on June 27,
2006 (the “Effective Date”)
between AFFYMAX, INC., a Delaware
corporation, with its principal place of business at 4001 Miranda Avenue, Palo
Alto, CA  94304, U.S.A. (“Affymax”), and TAKEDA PHARMACEUTICAL COMPANY LIMITED, a company incorporated
under the laws of Japan, with a place of business at 1-1, Doshomachi 4-chome,
Chuo-ku, Osaka, 540-8645, Japan (“Takeda”).  Affymax and Takeda are sometimes referred to
herein individually as a “Party” and
collectively as the “Parties”.


 


RECITALS


 


WHEREAS, Affymax is a pharmaceutical company
focused on the development of novel, synthetic peptide-based pharmaceutical
products against targets for various diseases and conditions;


 


WHEREAS, Takeda is a worldwide pharmaceutical
company engaged in the development, manufacturing and marketing of
pharmaceutical products;


 


WHEREAS, Affymax has been developing the Product
(as hereinafter defined), which contains a proprietary pegylated [ * ] drug candidate known as HematideTM, for the treatment
of anemia in patients with chronic kidney disease and cancer;


 


WHEREAS, Affymax and Takeda have entered into a
collaboration for the development and commercialization of the Product in Japan
for the treatment of anemia under the terms of the Japan Agreement (as
hereinafter defined);


 


WHEREAS, Affymax and Takeda desire to establish
a broad collaboration under this Agreement for the joint development and
commercialization of the Product in the United States for the treatment of
anemia in patients with chronic kidney disease and cancer and other indications
as the Parties may jointly or unilaterally develop in such territory with
Affymax serving as the primary responsible Party for the treatment of anemia in
patients with chronic kidney disease and Takeda serving as the primary
responsible Party for the treatment of anemia in patients with cancer, and to
provide for the sole development by Takeda in other countries throughout the
world, except for Japan (as contemplated under the Japan Agreement);


 


WHEREAS, the Parties desire that Affymax
manufacture or have manufactured clinical and commercial supplies of the Bulk
API (as hereinafter defined) and/or the Product and Takeda perform the Finished
Manufacture (as hereinafter defined) for use by both Parties hereunder;


 

















 


WHEREAS, Affymax and Takeda desire to
co-commercialize the Product in the United States and share equally in the
costs and efforts for the purpose of and in the profits resulting from
marketing and sales of the Product in the United States and to provide for the
payment by Takeda to Affymax of certain royalty payments on sales of the
Product in the other territories of the world, except for Japan, in each case
in accordance with the terms set forth below;


 


WHEREAS, Affymax desires to grant to Takeda
exclusive rights to the Products and certain backup compounds in the United
States and other countries of the world, except for Japan (which rights have
separately been granted to Takeda), under this Agreement, and Takeda desires to
obtain such rights in each case on the terms set forth below;


 


NOW THEREFORE, in consideration of the foregoing
premises and mutual promises, covenants and conditions contained in this
Agreement, the Parties agree as follows:


ARTICLE 1



DEFINITIONS


 


The terms in this Agreement with initial letters
capitalized, whether used in the singular or the plural, shall have the meaning
set forth below or, if not listed below, the meaning designated in places
throughout this Agreement.


 


1.1          “Additional Indication” means any use for the Product in the
Field, other than the Initial Indications.


 


1.2          “Affiliate” means, with respect to a particular
Party, a person, corporation, partnership, or other entity that controls, is
controlled by or is under common control with such Party.  For the purposes of this definition, the word
“control” (including, with correlative meaning, the terms “controlled by” or “under
the common control with”) means the actual power, either directly or indirectly
through one or more intermediaries, to direct or cause the direction of the
management and policies of such entity, whether by the ownership of fifty
percent (50%) or more of the voting stock of such entity, or by contract or
otherwise.  Notwithstanding the
foregoing, TAP Pharmaceutical Products Inc. shall not be deemed to be an
Affiliate of Takeda.


 


1.3          “Affymax House Marks” means the Affymax names and logo as set
forth in Exhibit A.


 


1.4          “Affymax Know-How” means all Information that is Controlled
by Affymax or its Affiliates during the Term and is necessary or useful for the
Development, manufacture or Commercialization of the Product.  For clarity, Affymax Know-How excludes the
Affymax Patents.


 


1.5          “Affymax Patent” means any Patent, including Affymax’s
interest in any Joint Patent, that (a) is Controlled by Affymax or its
Affiliates at any time during the Term, and (b) claims the Peptide, [ * ], Hematide, Product or their manufacture or use, or any
other invention that is otherwise necessary or useful for the Development,
Finished Manufacture or Commercialization of the Product. The list of Affymax
Patents as of the Effective Date is 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


2

















 


attached hereto as Exhibit B, and shall be from time to time
amended and updated during the Term to incorporate the then-current Affymax
Patents.


 


1.6          “Affymax Technology” means the Affymax Patents and Affymax
Know-How.


 


1.7          “Alliance Representative”
has the meaning
set forth in Section 2.7.


 


1.8          “Anemia of Cancer” means anemia in patients with cancer (but
excluding Chemotherapy-Induced Anemia).


 


1.9          “Backup Compound” means any synthetic peptide-based [ * ] ESA Controlled by Affymax as of the Effective Date and
for ten (10) years after the Effective Date, which such ESA: (i) has
[ * ], which are [ * ] Hematide; and/or (ii) has
a reasonable [ * ] sufficient for the primary use of such product for the
prevention, treatment or amelioration of anemia in humans.  For the avoidance of doubt, Backup Compounds
shall exclude any [ * ] Product
subject to Section 6.6(b).  The initial list of the Backup Compounds is attached
hereto as Schedule 1.9 and shall be updated from time to time by Affymax and provided to
Takeda promptly. The list of the Backup Compounds thus updated shall include
any synthetic peptide-based [ * ] ESA which
falls in the above definition which are discovered or developed by Affymax
during the course of the Backup Research Agreement and thereafter.


 


1.10        “Backup Research
Agreement” has
the meaning set forth in Section 3.7.


 


1.11        “Bulk API” means Hematide in bulk form.


 


1.12        “Business Day” means any day other than (i) Saturday
or Sunday or (ii) any other day on which banks in San Francisco,
California, United States or Osaka, Japan are permitted or required to be
closed.


 


1.13        “Chemotherapy-Induced Anemia”
means anemia
caused by chemotherapy treatments for cancer.


 


1.14        “Claims” has the meaning set forth in Section 11.1.


 


1.15        “CTA” means an application for Clinical Trial
Authorization filed with a Regulatory Authority in the Licensed Territory to undertake
clinical trials of an investigational new drug, the filing of which is
necessary to commence or conduct clinical testing of a pharmaceutical product
in humans in the Royalty Territory.


 


1.16        “Commercial Expenses” means those expenses incurred for the
purpose of the Commercialization of the Finished Product in the U.S. which are
consistent with the budget set forth in the U.S. Commercialization Plan and are
specifically attributable to the Commercialization of Finished Products in the
U.S., and shall consist of (i) Cost of Goods Sold, (ii) Pre-Marketing
Expenses, (iii) Marketing Expenses, (iv) Distribution Expenses, (v) Clinical
Phase IV and Related Expenses, (vi) Regulatory Expenses, (vii) the
Launch Expense Allowance, (viii) Medical Science Liaison Expenses, and (ix) amounts
paid to Third Party licensors as described in Section 8.6 (as such terms
are defined in Exhibit J). 
Commercial Expenses shall exclude Development Expenses, even if incurred
after the first commercial launch of a Finished 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


3

















 


Product in the U.S., and shall exclude any costs that are deductible
from Net Sales under the definition thereof (e.g.,
distributor fees).  For avoidance of
doubt, any cost deducted in the calculation of Net Sales shall not be deducted
in the calculation of the Commercial Expenses.


 


1.17        “Commercialization”, with a correlative meaning for “Commercialize”, means all activities
undertaken before and after obtaining Regulatory Approval relating specifically
to the pre-marketing, launch, promotion, marketing, sale, and distribution
of  a pharmaceutical product, including: (a) strategic
marketing, sales force detailing, advertising, medical education and liaison,
and market and product support; and (b) any Phase IV Clinical Trials, and (c) all
customer support and Product distribution, invoicing and sales activities.


 


1.18        “Confidential
Information”
means, with respect to a Party, all confidential Information of such Party that
is disclosed to the other Party under this Agreement, which may include
specifications, know-how, trade secrets, legal information, technical
information, drawings, models, business information, inventions, discoveries,
methods, procedures, formulae, protocols, techniques, data, and unpublished
patent applications, whether disclosed in oral, written, graphic, or electronic
form.  All Confidential Information
disclosed by either Party pursuant to the Mutual Confidential Disclosure
Agreement between the Parties dated September 30, 2005 shall be deemed to
be such Party’s Confidential Information disclosed hereunder.


 


1.19        “Control” means, with respect to any material,
Information, or intellectual property right, that a Party owns or has a license
to such material, Information, or intellectual property right and has the
ability to grant to the other Party access, a license, or a sublicense (as
applicable) to such material, Information, or intellectual property right on
the terms and conditions set forth herein without violating the terms of any
agreement or other arrangement with any Third Party existing at the time such
Party would be first required hereunder to grant to the other Party such
access, license, or sublicense.


 


1.20        “Cross-License Agreement” means that certain Cross-License and
License Option Agreement entered into by and among Nektar, Enzon, and Inhale
Therapeutic Systems, Inc. on January 7, 2002, under which Nektar
obtained certain rights under the Enzon Patents and which are sublicensed to
Affymax by Nektar under the Nektar Agreement.


 


1.21        “Detail” or “Detailing” means, with respect to the Product, the
communication by a Sales Representative during a Sales Call (a) involving
face-to-face contact, (b) describing in a fair and balanced manner the
Regulatory Authority-approved indicated uses and other relevant characteristics
of the Product, (c) using the Promotional Materials in an effort to
increase the prescribing and/or hospital ordering preferences of the Product
for its approved indicated uses, and (d) made at such medical professional’s
office, in a hospital, at marketing meetings sponsored by a Party for the
Product or other appropriate venues conducive to pharmaceutical product
informational communication where the principal objective is to place an
emphasis, either primary or secondary, on the Product with such medical
professional.


 


1.22        “Develop” or “Development”
means all
activities relating to preparing and conducting preclinical testing, toxicology
testing, human clinical studies, regulatory affairs for obtaining the
Regulatory Approvals, formulation development, process development for


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


4

















 


manufacture and associated validation, quality assurance and quality
control activities (including qualification lots).  Development shall exclude all Phase IV
Clinical Trials.


 


1.23        “Development Budget” means the budget of U.S. Development
Expenses set forth in the U.S. Development Plan to be incurred by the Parties
in connection with the performance of the U.S. Development Plan.


 


1.24        “Development Expenses” means (i) the U.S. Development
Expenses, (ii) Manufacturing Development Expenses incurred by either Party
for relevant activities performed on or after January 1, 2007, (iii) the
Third Party milestone payments identified on Exhibit N (but not other
milestones payable to Third Parties on account of the Development of the
Product), (iv) the costs for Phase II Clinical Trial for Oncology
Indications incurred by Takeda for relevant activities conducted on or after
the Effective Date until the end of December 31, 2006, (v) the price
from Affymax to Takeda of Bulk API and/or the Finished Product used for the
U.S. Development of the Product as well as the freight, postage, shipping,
transportation, insurance, warehousing and handling charges actually allowed or
paid by Takeda with regard to such Bulk API, and (vi) the cost incurred by
Takeda for the Finished Manufacture of the Product used for the U.S.
Development of the Product as well as the freight, postage, shipping,
transportation, insurance, warehousing and handling charges actually allowed or
paid by Takeda with regard to such Product; but excluding, [ * ].  For clarity, any amounts payable by Affymax
for ongoing clinical, non-clinical, preclinical and other trials regarding the
Product performed on or before December 31, 2006 shall not be included as
Development Expenses and shall be borne by Affymax.


 


1.25        “Dialysis CKD Anemia” means use of the Product in the
prevention, treatment or amelioration of anemia in patients with chronic kidney
disease who are on dialysis.


 


1.26        “Diligent Efforts” means, with respect to a Party’s
obligation under this Agreement to Develop or Commercialize a Product, the
level of efforts required to carry out such obligation in a sustained manner
consistent with the efforts a similarly situated biopharmaceutical company (in
the case of Affymax) or multinational pharmaceutical company (in the case of
Takeda) devotes to a product of similar market potential, profit potential or
strategic value within its portfolio, based on conditions then prevailing.  Without limiting the foregoing, Diligent
Efforts requires, with respect to such an obligation, that the Party: (a) within
a reasonable time assign responsibility for such obligation to specific
employee(s) who are held accountable for progress and monitor such progress
on an on-going basis, (b) set and consistently seek to achieve specific,
meaningful and measurable objectives for carrying out such obligation, and (c) consistently
make and implement decisions and allocate resources designed to advance
progress with respect to such objectives.


 


1.27        “[ * ]” means Affymax’s proprietary ESA peptide [ * ]  [ * ] with the
chemical structure attached hereto as Exhibit C.


 


1.28        “Dollar” means a U.S. dollar, and “$” shall be
interpreted accordingly.


 


1.29         “EMEA” means the European Agency for the
Evaluation of Medicinal Products, or any successor thereto, which is
responsible for coordinating the centralized system for 


 






[ * ] = Certain
confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission
pursuant to Rule 406 of the Securities Act of 1933, as amended.


 


5

















 


Regulatory Approval of pharmaceutical products in the European Union
and the European Economic Area and recommending to the European Commission (the
“EC”) that the EC grant Regulatory
Approval of certain pharmaceutical products in the EU and EEA under such
centralized system.


 


1.30        “Enzon” means Enzon Pharmaceuticals, Inc.,
a Delaware corporation having its principal offices at 685 Route 202/206,
Bridgewater, New Jersey 08807, USA.


 


1.31        “Enzon Patents” means the Patents licensed from Enzon
and identified on Exhibit B.


 


1.32        “ESA” means erythropoiesis stimulating agent.


 


1.33        “European Union” or “EU”
means all of the European Union member states as of the applicable
time during the Term.


 


1.34        “Existing Third Party
License Agreements” has
the meaning set forth in Section 6.7.


 


1.35        “FDA” means the U.S. Food and Drug
Administration or its successor.


 


1.36        “FD&C Act” means the U.S. Federal Food, Drug and
Cosmetic Act, as amended.


 


1.37        “Field” means the prevention, treatment or
amelioration of any disease or condition in humans.


 


1.38        “Finance Subcommittee” has the meaning set forth in Section 2.6(c).


 


1.39        “Finished Manufacture” means the manufacture (and all
reasonably necessary testing, including release and, as appropriate, stability
testing) of Finished Product from Bulk API.


 


1.40        “Finished Product” means a Product that has been filled
into vials, syringes or manufactured into other pharmaceutical presentations
for administration, finished and labeled for use in clinical trials or for
commercial purposes in accordance with the applicable specifications and legal
requirements.


 


1.41        “First Commercial Sale” means, with respect to a particular
country and the Product, the first sale to a Third Party of the Product in such
country after Regulatory Approval has been obtained in such country.


 


1.42        “Fiscal Year” means the twelve (12)-month period
commencing on April 1 of a given year and ending on March 31 of the
following year.


 


1.43        “Good Clinical Practices” or “GCP”
means the then-current good clinical practice standards, practices and
procedures promulgated or endorsed by the FDA as set forth in the guidelines
entitled “Guidance for Industry E6 Good Clinical Practice: Consolidated
Guidance,” including related regulatory requirements imposed by the FDA, and
comparable 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


6

















 


regulatory standards, practices and procedures in jurisdictions outside
the U.S., in each case as they may be updated from time to time.


 


1.44        “Good Laboratory
Practices” or “GLP” means the then-current good
laboratory practice standards promulgated or endorsed by the FDA as defined in
21 C.F.R. Part 58, and comparable regulatory standards in jurisdictions
outside the U.S., in each case as they may be updated from time to time.


 


1.45        “Good Manufacturing
Practices” or “GMP” means the then-current good
manufacturing practices required by the FDA, as set forth in the FD&C Act
and the regulations promulgated thereunder, for the manufacture and testing of
pharmaceutical materials, and comparable Laws applicable to the manufacture and
testing of pharmaceutical materials in jurisdictions outside the U.S.,
including without limitation the guideline promulgated by the International
Conference on Harmonization designated ICH Q7A, entitled “Q7A Good
Manufacturing Practice Guidance for Active Pharmaceutical Ingredients” and the
regulations promulgated thereunder, in each case as they may be updated from
time to time.


 


1.46        “Governmental Authority” means any multi-national, federal,
state, local, municipal or other government authority of any nature (including
any governmental division, subdivision, department, agency, bureau, branch,
office, commission, council, court or other tribunal).


 


1.47        “Hematide” means Affymax’s proprietary pegylated
ESA drug candidate referred to internally as [ * ],
consisting of the [ * ] attached
to the Reagent.


 


1.48        “IND” means (a) an Investigational New
Drug application as defined in the FD&C Act and applicable regulations
promulgated thereunder by the FDA.


 


1.49        “Information” means any data, results, technology,
business information, and information of any type whatsoever, in any tangible
or intangible form, including, without limitation, know-how, trade secrets,
practices, techniques, methods, processes, inventions, developments,
specifications, formulations, formulae, materials or compositions of matter of
any type or kind (patentable or otherwise), software, algorithms, marketing
reports, expertise, technology, test data (including pharmacological,
biological, chemical, biochemical, toxicological, preclinical and clinical test
data), analytical and quality control data, stability data, other study data
and procedures.


 


1.50        “Initial Indications” means the Oncology Indications and the
Renal Indications.


 


1.51        “[ * ]” means any [ * ] agent,
[ * ], [ * ],
developed under an Affymax research or development program that is used to [ * ], either directly or indirectly, from [ * ] due to [ * ], or any
other such [ * ], including [ * ]; or to treat an [ * ], directly
or indirectly, to such [ * ] with the
intent of [ * ], subject to Section 6.6(b).  For clarity, an [ * ]
may act as an agonist or antagonist through the EPO receptor or related
receptors, or through other known or unknown receptors on the surface of the
cells in question, or it may act independently of a cell surface receptor.


 






[ * ] = Certain
confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission
pursuant to Rule 406 of the Securities Act of 1933, as amended.


 


7

















 


1.52        “Internal Expenses” means any costs for employees (to be
charged at a fixed rate to be agreed by the Parties from time to time),
overhead, or other internal handling incurred by a Party, which expenses are
generally consistent with the U.S. Development Plan and are specifically
attributable to the U.S. Development.


 


1.53        “Japan Agreement” means the Collaboration and License
Agreement dated as of February 13, 2006 between Affymax and Takeda under
which the parties have entered into a collaboration for the development and
commercialization of the Product in Japan for the treatment of anemia.


 


1.54        “Joint Steering
Committee” or “JSC” means the committee formed by the
Parties as described in Section 2.3(a).


 


1.55        “Joint Inventions” has the meaning set forth in Section 9.1.


 


1.56        “Joint Patent” has the meaning set forth in Section 9.3(c).


 


1.57        “Laws” means all relevant laws, statutes,
rules, regulations, guidelines, ordinances and other pronouncements having the
effect of law of any federal, national, multinational, state, provincial,
county, city or other political subdivision, domestic or foreign.


 


1.58        “Level 1 Market” means any of the following countries: [ * ].


 


1.59        “Level 2 Market” means any of the following countries: [ * ].


 


1.60        “Licensed Territory” means worldwide except Japan, its
territories and possessions, as adjusted from time to time pursuant to Section 3.5.


 


1.61        “Major EU Market Country” means any of the following countries: [
* ].


 


1.62        “Manufacturing Costs” has the meaning set forth in Exhibit J.


 


1.63        “Manufacturing
Development”
means any of the following with respect to Bulk API or Finished Product:
manufacturing process development and validation, process improvements,
associated analytical development and validation and the manufacture and testing
of clinical and stability or consistency lots (including process development,
qualification, QA, and test batches).


 


1.64        “Manufacturing
Development Expenses” means any costs incurred by a Party to a Third Party after the
Effective Date for the Manufacturing Development.


 


1.65        “Marketing Authorization
Application” or “MAA” means an application for Regulatory
Approval (but excluding Pricing Approval) in any particular jurisdiction other
than the U.S.


 


1.66        “NDA” means a New Drug Application filed with
the FDA for Regulatory Approval of a product in the U.S.


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


8

















 


 


1.67        “Nektar” means Nektar Therapeutics AL
Corporation, an Alabama corporation having its principal place of business at
490 Discovery Drive, Huntsville, AL 35806, USA.


 


1.68        “Nektar Agreement” means that certain License,
Manufacturing, and Supply Agreement between Affymax and Nektar Therapeutics AL,
dated as of April 8, 2004, under which Affymax is granted a right, license
and/or sublicense under certain of Nektar’s patents and technologies and Enzon
Patents, which patents are included in the Affymax Patents.


 


1.69        “Net Sales” means, with respect to a particular time
period, the total amounts received or invoiced by Takeda, its Affiliates and
their respective sublicensees for sales of Finished Product made during such
time period to unaffiliated Third Parties, less the following deductions to the
extent actually allowed or incurred with respect to such sales:


 


(a)           discounts, including cash and quantity discounts, charge-back payments,
and rebates actually granted or administrative fees actually paid to trade
customers, patients (including those in the form of a coupon or voucher),
managed health care organizations, pharmaceutical benefit managers, group
purchasing organizations, federal, state, or local government and the agencies,
purchasers and reimbursers of managed health organizations, pharmaceutical
benefit managers, group purchasing organizations, or federal, state or local
government; provided, however, that: (i) the aggregate of such discounts,
charge-back payments and rebates in each country of the Royalty Territory shall
not exceed [ * ] of the amounts received or
invoiced in such country; and, (ii) if such limit of [ * ]
in a country of the Royalty Territory is not sufficient or appropriate due to
significant amount or percentage of discounts, charge-back payments or rebates
mandatorily required by Governmental Authorities in such country, and/or, if
such limit is not sufficient for adequately maintaining the competitive
position of the Products in such country, then the Parties shall confer in good
faith regarding whether any increase in such limit is appropriate under the
circumstances;


 


(b)           credits or allowances actually granted upon prompt payment or claims, bad
debts and losses actually incurred as a result of actual write-offs of
uncollectible customer accounts, damaged goods, rejections or returns of such
Product, including in connection with recalls;


 


(c)           packaging, freight, postage, shipping, transportation, warehousing,
handling and insurance charges, credit card processing fees and any customary
payments with respect to the Products actually made to wholesalers or other
distributors, in each case actually allowed or paid for distribution and
delivery of Product, to the extent billed or recognized; and


 


(d)           taxes (other than income taxes), duties, tariffs or other governmental
charges levied on the sale of such Product, including, without limitation,
value-added and sales taxes.


 


Notwithstanding the foregoing, amounts received or
invoiced by Takeda, its Affiliates, or their sublicensees for the sale of
Finished Product among Takeda, its Affiliates or their respective sublicensees
for resale shall not be included in the computation of Net Sales hereunder.  In any event, any amounts received or
invoiced by Takeda, its Affiliates, or their sublicensees shall be accounted
for only once.  Net Sales shall be
accounted for in accordance with standard Takeda 


 






[ * ] = Certain
confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission
pursuant to Rule 406 of the Securities Act of 1933, as amended.


 


9

















 


practices for operation by Takeda, its Affiliates or
sublicensees, as practiced in the relevant country in the Licensed Territory,
but in any event in accordance with generally accepted accounting principles,
consistently applied in such country in the Licensed Territory.  Net Sales shall exclude any samples of
Product transferred or disposed of at no cost for promotional or educational
purposes, and the cost for such samples transferred or disposed of in the U.S.
shall be deemed to be included in the Commercial Expenses.


 


Further, the Parties agree to negotiate in good faith
for an equitable determination of the Net Sales of the Product in the event
Takeda, its Affiliates or their sublicensees sells the Product in such a manner
that gross sales of the Product are not readily identifiable (e.g., for Product to be sold as a
combination product or bundling with other products).


 


1.70        “Oncology Indications” means, collectively, Anemia of Cancer
and Chemotherapy-Induced Anemia.


 


1.71        “Patents” means (a) pending patent
applications, including provisional patents, issued patents, utility models and
designs; and (b) extensions, reissues, substitutions, confirmations,
registrations, validations, re-examinations, additions, continuations,
continued prosecution applications, requests for continued examination,
continuations-in-part, or divisions of or to any patents, patent applications,
utility models or designs.


 


1.72        “Patent Term Extension” means any term extensions, supplementary
protection certificates and equivalents thereof offering patent protection
beyond the initial term with respect to any issued patents.


 


1.73        “PDE” shall mean one Primary Position Detail
(as defined below), two Secondary Position Details (as defined below) or five
Tertiary Position Details (as defined below).


 


1.74        “PEG” means poly(ethylene) glycol or a
derivative thereof.


 


1.75        “Peptide” means that certain peptide ESA known as [ * ], the chemical structure of which is attached hereto as
Exhibit D.


 


1.76        “Phase I Clinical Trial” means a small scale trial of a pharmaceutical
product on subjects that generally provides for the first introduction into
humans of such product with the primary purpose of determining safety,
metabolism and pharmacokinetic properties and clinical pharmacology of such
product.


 


1.77        “Phase II Clinical Trial” means a small scale clinical trial of a
pharmaceutical product on patients, including possibly pharmacokinetic studies,
the principal purposes of which are to make a preliminary determination that
such product is safe for its intended use and to obtain sufficient information
about such product’s efficacy to permit the design of further clinical trials.


 


1.78        “Phase III Clinical
Trial” means one
or more clinical trials on sufficient numbers of patients, which trial(s) are
designed to (a) establish that a drug is safe and efficacious


 






[ * ] = Certain confidential information contained in this
document, marked by brackets, has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities Act
of 1933, as amended.


 


10
















 


for its intended use; (b) define warnings, precautions and adverse
reactions that are associated with the drug in the dosage range to be
prescribed; and (c) support Regulatory Approval of such drug.


 


1.79        “Phase IV Clinical Trial” means a clinical trial of a Product,
possibly including pharmacokinetic studies, which trial is (a) not
required in order to obtain Regulatory Approval of the Initial Indication or
the Joint Additional
Indication; (b) required by the Regulatory Authority as mandatory to be
conducted on or after the Regulatory Approval of the Initial Indications or the
Joint Additional
Indication, and (c) conducted voluntarily by a Party to enhance marketing
or scientific knowledge of the Product (e.g.,
providing additional drug profile, safety data or marketing support
information, or supporting expansion of Product Labeling or conducted due to a
request or requirement of a Regulatory Authority.


 


1.80        “Pre-Dialysis CKD Anemia” means use of the Product in the
prevention, treatment or amelioration of anemia in patients with chronic kidney
disease who are not on dialysis.


 


1.81        “Pricing Approval” means such approval, agreement,
determination or governmental decision establishing prices for the Product that
can be charged to consumers and shall be reimbursed by Governmental Authorities
in regulatory jurisdictions where the Governmental Authorities or Regulatory
Authorities approve or determine pricing of pharmaceutical products for
reimbursement or otherwise.


 


1.82        “Primary Position Detail” means a Detail during which (i) the
applicable Product is discussed either itself or along with other
pharmaceutical products, (ii) key product attributes of such Product are
verbally promoted in the first position on such Detail, and (iii) such
Product is given the majority of the emphasis during the presentation.  For clarity, no more than one Detail during a
Sales Call shall be considered a Primary Position Detail.


 


1.83        “Product” means a pharmaceutical preparation in
any formulation that contains Hematide or, subject to the terms of Section 3.11,
a Replacement Product Candidate as an active ingredient.  In addition, an Additional Product shall
become a Product pursuant to the terms of Section 3.12.


 


1.84        “Product Complaint” means any written, verbal or electronic
expression of dissatisfaction regarding the Product, including without
limitation reports of actual or suspected product tampering, contamination,
mislabeling or inclusion of improper ingredients.


 


1.85        “Product Infringement” has the meaning set forth in Section 9.5(b).


 


1.86        “Product Labeling” means (a) the full prescribing
information for the Product approved by the applicable Regulatory Authority,
and (b) all labels and other written, printed or graphic information
included in or placed upon any container, wrapper or package insert used with
or for the Product.


 


1.87        “Product Subcommittee” has the meaning set forth in Section 2.6(b).


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


11

















 


1.88         “Product Trademark” means the mark “HEMATIDE” and any logos
or symbols incorporating such mark and any product trademark selected pursuant
to Section 5.11.


 


1.89        “Profit Equalization
Payment” means
the amount payable by one Party to the other to effect an allocation of the
U.S. Product Profit between the Parties as described in Section 8.4 and
the final financial statement approved by the JSC for a calendar quarter.  By way of example, assuming an equal
allocation of profits and losses, if Takeda has an operating profit of 40 and
Affymax has an operating loss of 10, then the Profit Equalization Payment made
by Takeda to Affymax shall be 25.


 


1.90        “Promotional Materials” means all Sales Representative training
materials and all written, printed, graphic, electronic, audio or video
presentations of information, including, without limitation, journal
advertisements, sales visual aids, formulary binders, reprints, direct mail,
direct-to-consumer advertising, internet postings, broadcast advertisements and
sales reminder aides (for example, note pads, pens and other such items)
intended for use or used by or on behalf of Takeda or its Affiliates,
sublicensees or licensees in connection with any promotion of a Product in the
Licensed Territory (all to the extent applicable for the Commercialization in
the Licensed Territory), but excluding Product Labeling.


 


1.91        “Reagent” means the reagent described in Exhibit E.


 


1.92        “Regulatory Approvals” means all approvals (including without
limitation supplements, amendments, and Pricing Approvals), licenses,
registrations or authorizations of any national, supra-national, regional,
state or local regulatory agency, department, bureau, commission, council or
other governmental entity, necessary for the manufacture, distribution, use or
sale of a pharmaceutical product in a given regulatory jurisdiction.


 


1.93        “Regulatory Authority” means, in a particular country or
jurisdiction, any applicable Governmental Authority involved in granting
Regulatory Approval in such country or jurisdiction, including without
limitation, in the U.S., the FDA and any other applicable Governmental
Authority in the U.S. having jurisdiction over the Product, and, in the
European Union, the EMEA and any other applicable Governmental Authority having
jurisdiction over the Product.


 


1.94        “Regulatory Materials” means regulatory applications,
submissions, notifications, registrations, Regulatory Approvals or other
submissions made to or with a Regulatory Authority that are necessary or
reasonably desirable in order to develop, manufacture, market, sell or
otherwise commercialize the Product in a particular country, territory or
possession.  Regulatory Materials
include, without limitation, INDs, CTAs and MAAs, NDAs, and amendments and
supplements for any of the foregoing, and applications for Pricing Approvals.


 


1.95        “Renal Indications” means, collectively, Pre-dialysis CKD
Anemia and Dialysis CKD Anemia.


 


1.96        “Replacement Product
Candidate” means
any Backup Compound linked to PEG [ * ]
(including [ * ].


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


12

















 


1.97        “Royalty Territory” means all countries in the Licensed
Territory other than the U.S.


 


1.98        “ROW Commercialization
Plan” has the
meaning set forth in Section 5.2(b).


 


1.99        “ROW Development” means the Development of the Products
specifically required only in a certain country or countries of the Royalty
Territory to support Regulatory Approval of the Product for the Initial
Indications and/or the Joint Additional Indications, if any, in such country or
countries of the Royalty Territory, irrespective of the country wherein a study
thereof is conducted.  For the purpose of
this definition, Manufacturing Development shall be excluded from the ROW
Development.


 


1.100      “Sales Call” means a personal visit by a Sales
Representative to one or several medical professional(s) having
prescribing authority in the part of the Field for the indications in which the
Product is approved, as well as to other individuals or entities that have
significant impact or influence on prescribing decisions in the part of the
Field in which the Product is approved during which such Sales Representative
Details the Product.


 


1.101      “Sales Representative” means a pharmaceutical sales
representative engaged or employed by either Party to conduct Detailing and
other promotional efforts with respect to the Product, including contract sales
organizations of such Party.


 


1.102      “Secondary Position
Detail” shall
mean a Detail during which key product attributes of a Product are verbally
promoted and detailed in the second position on such Detail; provided, however,
that no more than one presentation in any Detail shall be considered a
Secondary Position Detail, which shall be the presentation on which the
second-most time is spent during the Detail.


 


1.103      “Sole Inventions” has the meaning set forth in Section 9.1.


 


1.104      “Supply Agreement” has the meaning set forth in Section 7.3.


 


1.105      “Takeda Know-How” means all Information that is Controlled
by Takeda or its Affiliates during the Term under this Agreement and is
necessary or useful for the Development, manufacture or Commercialization of the
Product.  For clarity, Takeda Know-How
excludes Takeda Patents.


 


1.106      “Takeda Patent” means any Patent, including Takeda’s
interest in any Joint Patent, that (a) is Controlled by Takeda or its
Affiliates at any time during the Term under this Agreement, and (b) claims
the Peptide, [ * ], Bulk API and/or Product or
any method or composition, or the manufacture or use of the Peptide, [ * ], Bulk API and/or Product.


 


1.107      “Takeda Technology” means the Takeda Patents and Takeda
Know-How.


 


1.108      “Tertiary Position
Detail” shall
mean a Detail during which key product attributes of a Product are verbally
promoted and detailed in the third or lesser position on such Detail.


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


13

















 


1.109      “Term” means the term of this Agreement, as
determined in accordance with Article 13.


 


1.110      “Third Party” means any entity other than Affymax or
Takeda or an Affiliate of either of them.


 


1.111      “U.S.” means the United States of America and
its possessions and territories.


 


1.112      “U.S. Development” means the Development of the Products
conducted hereunder for the primary purpose of supporting (whether pivotal or
not) the U.S. Regulatory Approvals for the Initial Indications and/or the Joint Additional Indications, if any,
irrespective of the country wherein a study thereof is conducted and
irrespective whether the result of which is also used for the purpose of
supporting the Regulatory Approvals in the Royalty Territory.  For the purpose of this definition, Manufacturing
Development shall be excluded from the U.S. Development.


 


1.113      “U.S. Commercialization
Plan” has the
meaning set forth in Section 5.2(a).


 


1.114      “U.S. Development
Expenses” means
any amounts payable by a Party for obligations to a Third Party for the U.S.
Development performed on or after January 1, 2007, which expenses are
generally consistent with the Development Budget.


 


1.115      “U.S. Development Plan” means the plan of the U.S.
Development.  The initial U.S.
Development Plan is attached hereto as Exhibit H.  Exhibit H may be from time to time added
or modified by the JSC.


 


1.116      “U.S. Product Profit” means the profits or losses resulting
from the Commercialization of the Product in the U.S. and shall be equal to Net
Sales of the Product in the U.S., less Commercial Expenses.


 


1.117      “Valid Claim” means (a) an unexpired claim of an
issued patent that has not been disclaimed, revoked or held to be invalid or
unenforceable by a court or other authority of competent jurisdiction, from
which decision no appeal can be further taken; or (b) a claim of a pending
patent application.


 


ARTICLE 2



MANAGEMENT


 


2.1          Collaboration Overview. 
The Parties desire and intend to collaborate with respect to the
Development and Commercialization of the Product in the Licensed Territory, as
and to the extent set forth in this Agreement. 
It is understood and acknowledged by each Party that such Party shall
participate in the clinical development of the Product for identified
indications, including the Initial Indications, in the Licensed Territory
pursuant to an agreed-upon U.S. Development Plan.  The Parties shall share the development costs
incurred in connection with 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


14

















 


the performance of the
U.S. Development Plan, as set forth in, and in accordance with, Article 3.  Takeda shall bear the development costs
incurred in connection with the performance of the ROW Development, as set
forth in, and in accordance with, Article 3.  Affymax shall be primarily responsible for
obtaining and maintaining Regulatory Approval of the Product in the Field in
the U.S. based on the then-current U.S. Development Plan, and Takeda shall be
solely responsible for obtaining and be solely entitled to obtain and maintain
Regulatory Approval of the Product in the Field in the Royalty Territory.  In the U.S., the Parties shall co-promote the
Product for the Initial Indications and share profits from the Initial
Indications equally, with Affymax primarily participating in the sales and
marketing efforts in the Renal Indications, subject to the payment obligations
in Article 8 and the other terms of this Agreement. Takeda shall have the
exclusive right to Commercialize the Product in the Royalty Territory, subject
to the payment obligations in Article 8 and the other terms of this
Agreement. Each Party understands and agrees that it is to the Parties’ mutual
benefit to maximize the commercial potential of the Product as far as
commercially reasonably possible, and accordingly, that time is of the essence
in addressing the market for the Product in the Field and the Licensed
Territory.


 


2.2          Commitment to U.S.
Development Plan.  Each Party agrees and acknowledges that, by
entering into this Agreement, it shall fund, as and to the extent set forth in Article 3,
the Development of the Product in the Initial Indications pursuant to the U.S.
Development Plan, and shall use Diligent Efforts to conduct the activities
assigned to such Party in the U.S. Development Plan, with the JSC overseeing
the implementation of such plan.  Neither
Party shall be obligated to expend any funds with respect to or participate in
any clinical trials in support of any Additional Indications, except as
provided in Section 3.10.  The
conduct of clinical trials and development activities in support of any such
Additional Indications and Commercialization of the Product for such
indications, if any, shall be governed by Section 3.10.


 


2.3          Joint Steering Committee.


 


(a)           Formation and Role.  The Parties
hereby establish a Joint Steering Committee that shall monitor and coordinate
communication regarding the Parties’ performance under this Agreement to
Develop, obtain Regulatory Approval for and Commercialize the Product in the
Field.  The role of the JSC shall be:


 


(i)            to review the overall strategy for Developing and seeking Regulatory
Approval for, manufacturing, and Commercializing the Product in the Licensed
Territory and in the Field;


 


(ii)           to facilitate the exchange of information between the Parties with
respect to the activities hereunder for the Licensed Territory and to establish
procedures for the efficient sharing of information and materials necessary for
each Party’s Development and Commercialization of the Product hereunder,
consistent with this Agreement;


 


(iii)         to
review, approve, and, if necessary, amend the U.S. Development Plan, the Development
Budget and the U.S. Commercialization Plan (including related budget);


 


(iv)          to
review the plan and the summary budget for the ROW Development to the extent
customarily generated by or available to Takeda from its Affiliates or
sublicensees for its internal purposes with respect to the applicable countries
in the Royalty 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


15

















 


Territory (all Level 1 Markets and Level 2 Markets wherein Takeda
decides to Develop the Product, as described in further detail in Section 3.5)
and the ROW Commercialization Plan and provide comments regarding the content
and implementation of such plans, which comments shall not be controlling but
shall be considered by Takeda in good faith;


 


(v)            to monitor the Parties’ performance against the then-current U.S.
Development Plan and Commercialization Plans;


 


(vi)          to
create subcommittees as the JSC may find necessary or desirable from time to
time for implementation of the Development and Commercialization hereunder;


 


(vii)         to
oversee the activities of subcommittees created under this Agreement, and to
seek to resolve any issues that such subcommittees cannot resolve;


 


(viii)        without
reducing Affymax’s obligation to obtain and maintain the Affymax Patents and/or
the Product Trademark provided for herein, to provide a forum to evaluate
strategies for obtaining, maintaining and enforcing patent and trademark
protection for the Product in the Licensed Territory; and


 


(ix)          to
perform such other functions as appropriate to further the purposes of this Agreement,
as determined by the Parties.


 


(b)           Guiding Principles. 
The JSC
shall perform its responsibilities under this Agreement based on the principles
of prompt and diligent Development and Commercialization of the Product in the
Licensed Territory, consistent with good pharmaceutical practices and the
maximization, to a commercially reasonable extent, of long-term profits derived
from the sale of the Product in the Licensed Territory.  The JSC shall have only the powers assigned
expressly to it in this Article 2 and elsewhere in this Agreement, and the
JSC shall not have any power to amend, modify or waive compliance with this
Agreement.  For clarity, with regard to
the Development and the Commercialization of the Product in the Royalty
Territory, Takeda shall be entitled to develop and modify the plans and budgets
therefor at its discretion, subject only to Takeda’s obligations as provided in
Section 3.5 and Article 4, and the JSC shall not be entitled to
approve or disapprove such plans and budgets.


 


2.4          JSC Membership. 
Each Party shall have an equal number of representatives on the JSC, who
initially shall be the eight (8) individuals at the [ * ]
(or other equivalent individuals having senior decision-making authority over
JSC matters) as set forth in Exhibit F. 
The JSC may change its size from time to time by mutual consent of the
Parties, provided that the JSC shall at all times consist of an equal number of
representatives of each of Affymax and Takeda. 
Either Party may designate substitutes for its representatives if one (1) or
more of such Party’s designated representatives are unable to be present at a
meeting.  From time to time each Party
may replace its representatives by written notice to the other Party specifying
the prior representative(s) and their replacement(s).  The initial representatives and any
substitutes or replacements shall be designated consistent with the following
principles:  one (1) representative
shall have appropriate expertise in the clinical Development of pharmaceutical
products, one (1) representative shall have appropriate expertise in
Commercialization of pharmaceutical products, and one (1) representative
shall have expertise appropriate to the then-current state of Product 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


16

















 


Development or
Commercialization; provided that
the JSC may vary the expertise required for JSC representatives of each Party
as it deems appropriate as the Parties gain experience with the Product, but in
any event at least one (1) of such representatives on the JSC shall be at
the [ * ] in each of the Party’s organizations. 
Affymax  shall select one (1) of
its representatives as the initial chairperson of the JSC.  On April 1 of each year after the
Effective Date, the Parties shall rotate designation of the chairperson for the
commencing year.  The chairperson shall
be responsible for (i) calling meetings, and (ii) preparing and
circulating an agenda for the upcoming meeting, but shall have no special
authority over the other members of the JSC, and shall have no additional
voting rights.


 


2.5          JSC Meetings, Decisions and Actions.


 


(a)           Meetings. The  JSC
shall hold at least three (3) meetings per year (at least two (2) of
which shall be held in person) on such dates at such times each year as it
elects.  Meetings of the JSC shall be
effective only if at least two (2) representatives of each Party are
present or participating.  Each Party
shall bear the expense of its respective members’ participation in JSC
meetings.  The Chairperson of the JSC
shall be responsible for preparing and issuing minutes of each such meeting
within thirty (30) days thereafter.  Such
minutes shall not be finalized until each Party reviews and confirms the
accuracy of such minutes in writing; provided that any minutes shall be deemed
approved unless a member of the JSC objects to the accuracy of such minutes
within thirty (30) days after the circulation of the minutes by the
Chairperson.  With the prior consent of
both Parties’ representatives (such consent not to be unreasonably withheld or delayed),
other representatives of each Party or Third Parties involved with the Products
may attend meetings as nonvoting participants.


 


(b)           Decision Making.  Except as
expressly provided in this Section 2.5, actions to be taken by the JSC
shall be taken only following unanimous vote, with each Party having one (1) vote.


 


(c)           Disputes.  If the members of the JSC cannot reach a
unanimous decision with respect to matters delegated to it under this Article 2
(including without limitation any issue involving clinical trial design,
priority of clinical trials, timelines, and the like, or the approval of any
component of an amended or updated U.S. Development Plan or U.S.
Commercialization Plan) for a period in excess of  ten
(10) Business Days from the discussion at the JSC, unless the Parties
agree to prolong such time period, the matter shall be referred to two
appropriately qualified senior executive officers of the Parties, who shall
attempt resolution by good faith negotiations for at least thirty (30) days after
such referral.  If the senior executive
officers designated by the Parties are not able to resolve such dispute within
such thirty (30) day period, then such dispute shall be finally decided by
expedited arbitration in accordance with the terms described on Exhibit M,
except that disputes described in Section 3.10(c) shall not be
subject to such arbitration procedure.


 


2.6          Subcommittees.


 


(a)           The JSC may, from time to time, form any subcommittees as it may
desire.  Each such subcommittees shall
have those responsibilities, and operate in accordance with the procedures,
established by the JSC and shall report the results of its activities to the
JSC.  


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


17

















 


Each subcommittee shall provide the JSC with guidance and consultation
regarding such subcommittee’s area of expertise; however, all final
decision-making shall be the responsibility of the JSC, in accordance with the
terms of Section 2.4.


 


(b)           The Parties hereby establish a Product Subcommittee (“Product Subcommittee”) to oversee and
manage the Development, Regulatory Approval, and Commercialization of the
Product in accordance with the U.S. Development Plan, and to coordinate such
U.S. Development with the Development activities of Takeda in the Royalty
Territory.  Each Party shall have an
equal number of representatives on such subcommittee.  The role of the Product Subcommittee shall
be:


 


(i)            to draft amendments or updates to the U.S. Development Plan and U.S.
Commercialization Plan and present such amendments or updates to the JSC for
review and approval;


 


(ii)           to develop the overall strategy for Product Development and
Commercialization activities in the U.S. performed hereunder;


 


(iii)         to
facilitate the flow of information between the Parties with respect to the
Development, Regulatory Approval, and Commercialization of the Product
hereunder; and


 


(iv)          to
perform such other functions as appropriate to further the purposes of this
Agreement as determined by the JSC.


 


(c)           The Parties hereby establish a Finance Subcommittee (“Finance Subcommittee”) to oversee the
implementation and assist the JSC and other subcommittees with budgetary,
financial and accounting issues arising out of the Development, Regulatory
Approval, and Commercialization of the Product in accordance with the terms of
this Agreement.  Each Party shall have an
equal number of representatives on such subcommittee.  The role of the Finance Subcommittee shall
be:


 


(i)            to coordinate with the JSC and other subcommittees as applicable
regarding the preparation and submission of budgets for the Development and
Commercialization of the Product in the U.S.;


 


(ii)           to develop specific schedules, procedures and methods to implement the
financial reporting and reconciliation provisions of this Agreement; and


 


(iii)         to
perform such other functions as appropriate to further the purposes of this
Agreement as determined by the JSC.


 


2.7          Alliance Representative. 
Each Party has designated on Exhibit F an appropriate employee to
facilitate communication and coordination of the Parties’ activities under this
Agreement relating to the Product and to provide support and guidance to the
JSC (each, an “Alliance Representative”).  From time to time each Party may replace its
Alliance Representative by prior written notice to the other Party specifying
the replacement.


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


18

















 


2.8          Royalty Territory
Information Sharing.  Without limiting any other provisions of this
Agreement, the Parties acknowledge and agree that Takeda shall provide Affymax,
through the JSC, with periodic updates regarding the Development and
Commercialization activities undertaken by Takeda in or for the Royalty
Territory (such updates to be provided quarterly if available or, otherwise,
semi-annually) including summary plan of ROW Development and ROW
Commercialization Plans for such activities (which such plans shall include
summary financial information in each case to the extent customarily generated
by or available to Takeda from its Affiliates or sublicensees for its internal
purposes, with respect to such activities in the Royalty Territory, but subject
to Takeda’s right to redact or exclude detailed commercially-sensitive and
proprietary information).  In addition,
Takeda shall provide such additional information regarding the ROW Development
and Commercialization of the Product in the Royalty Territory as may be
reasonably requested by Affymax and reasonably acceptable to Takeda from time
to time.


 


ARTICLE 3



CLINICAL AND NON-CLINICAL PRODUCT DEVELOPMENT


 


3.1          Overview. 
The Parties shall Develop the Product in the Initial Indications in the
Licensed Territory as provided in this Article 3 and in accordance with
the then-current U.S. Development Plan. 
The initial U.S. Development Plan sets forth the Development activities
to be performed by each Party under this Agreement in connection with the
submission for Regulatory Approval of the Product in the Initial Indications
for the U.S. and attached hereto as Exhibit H (assuming that the results
of such activities will at least be used in EU as well).  The summary plan of the ROW Development and
future updates thereof shall be submitted to the JSC for review (not for
approval) in accordance with Section 2.8. 
Without limiting the generality of the foregoing, the Parties shall have
the following Development obligations for the Product:


 


(a)           Affymax shall be responsible for all ongoing clinical, non-clinical,
preclinical and other trials regarding the Product that are listed on Exhibit G
and shall provide Takeda the data obtained therein as provided in Section 4.1;


 


(b)           Affymax shall be primarily responsible for implementing the clinical
trials of the Product for Regulatory Approval in the Renal Indications pursuant
to the U.S. Development Plan; and


 


(c)           Takeda shall be (i) primarily responsible for implementing the
clinical trials of the Product for Regulatory Approval in the Oncology
Indications pursuant to the U.S. Development Plan, and (ii) solely
responsible for the ROW Development of the Product for Regulatory Approval in
all Initial Indications in the Royalty Territory (other than pursuant to the
U.S. Development Plan) wherein Takeda Develops and Commercializes the Product.


 


3.2          U.S. Development Plan. 
The initial U.S. Development Plan for the Initial Indications has been
agreed upon by the Parties and is attached hereto as Exhibit H and
incorporated herein by reference.  The
U.S. Development Plan shall contain the following 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


19

















 


information for the Product for each Initial Indication in the Licensed
Territory, to the extent such information is available:


 


(a)           the proposed overall plan for Development for the Product for the
Initial Indications (and each Joint Additional Indication pursued pursuant to Section 3.10)
to support Regulatory Approval in the U.S. (assuming that the results of such
activities will at least be used in EU as well);


 


(b)           the Development Budget, which shall include a three (3)-year rolling
budget of U.S. Development Expenses (including a detailed binding budget for
the first year thereof and a non-binding forecast for subsequent two (2) years
based on the then-current U.S. Development Plan);


 


(c)           scope and target timelines for the Parties’ performance of all studies
within the U.S. Development, including without limitation, clinical trial protocols,
additional preclinical tests (including any and all carcinogenicity and
toxicology studies), Finished Product stability studies, enrollment numbers and
submission dates;


 


(d)           estimated dates of meetings with FDA  for
the Product; and


 


(e)           the Parties’ forecasts of their respective needs for preclinical or
clinical supply of such Product and/or Bulk API.


 


In addition to the U.S. Development Plan, Takeda shall within twelve
(12) months after the Effective Date, draft and provide to Affymax a proposed
overall plan for the Development for the Product for the Initial Indications
(and each Joint Additional Indication pursued pursuant to Section 3.10, if
any at that time) to support Regulatory Approval in each country of the Level 1
Markets.


 


3.3          Updates to U.S.
Development Plan and Development Budget.  As early as
necessary in each year beginning with the first full Fiscal Year after the
Effective Date, the Parties shall update and prepare the U.S. Development Plan
and Development Budget for the Product for the following Fiscal Year to take
into account completion, commencement or cessation of U.S. Development
activities not contemplated by the then-current U.S. Development Plan, and
submit such proposed U.S. Development Plan to the JSC no later than November 1
of such year, as follows: (a) Affymax, in consultation with Takeda, shall
update the U.S. Development Plan for Regulatory Approval of the Product in the
Renal Indications; and (b) Takeda shall update the U.S. Development Plan
for Regulatory Approval of the Product in the Oncology Indications in
consultation with Affymax.  The JSC shall
have the right to approve updates to the U.S. Development Plan and Development
Budget, subject to the final decision-making authority described in Section 2.5(c) above.  The JSC shall endeavor to finalize its
approval of each updated U.S. Development Plan by December 15 of each
year.


 


3.4          Development Expenses.


 


(a)           The Parties shall share any and all Development Expenses as follows:
Takeda shall bear the initial fifty million Dollar ($50,000,000) of total
Development Expenses;


 






[ * ] = Certain confidential
information contained in this document, marked by brackets, has been omitted
and filed separately with the Securities and Exchange Commission pursuant to
Rule 406 of the Securities Act of 1933, as amended.


 


20
















 


any Development Expenses
in excess of such amount shall thereafter be borne seventy percent (70%) by
Takeda and thirty percent (30%) by Affymax. 
For clarity, the Development expenses incurred in connection with the ROW
Development shall not be included in the Development Expenses; provided, that
if the JSC determines that the Parties will use any results of the ROW
Development to support the Regulatory Approval of the Product in the U.S.,
then, Affymax shall without delay reimburse Takeda for thirty percent (30%) of
the external expenses incurred by Takeda on and after January 1, 2007 for
the applicable ROW Development.


 


(i)            Each Party shall calculate and maintain records of all relevant
Development Expenses incurred by it for the Development of the Product, in
accordance with procedures to be agreed upon between the Parties.  The Parties understand and agree that
Internal Expenses shall not be shared, subject to Section 3.4(a)(iv).


 


(ii)           Within ten (10) Business Days following the end of each calendar
quarter, Takeda shall submit to Affymax a written report setting forth in
reasonable detail the Development Expenses it has incurred in such calendar
quarter.  Within ten (10) Business
Days following the end of each calendar quarter, Affymax shall submit to Takeda
a written report setting forth in reasonable detail the Development Expenses it
has incurred in such calendar quarter.


 


(iii)         Within
twenty (20) Business Days following the end of each calendar quarter, Takeda
shall submit to Affymax a written report setting forth in reasonable detail the
detailed calculation of all Development Expenses for the Product, and the
calculation of any net amount owed by Affymax to Takeda or by Takeda to
Affymax, as the case may be, in order to ensure the appropriate sharing of
Development Expenses in accordance with the provisions of Section 3.4(a).  The net amount payable shall be paid by
Takeda or Affymax to the other Party, as the case may be, within twenty-five
(25) Business Days following the end of each calendar quarter; provided, that,
in the event of a dispute, any amounts not in dispute shall be paid and the
disputing Party shall provide written notice without undue delay after receipt
of the written report in question to the other, specifying such dispute and
explaining the basis of the dispute. 
Affymax and Takeda shall promptly thereafter meet and negotiate in good
faith a resolution to such dispute and, promptly upon resolution of such
dispute, the applicable Party shall make the agreed-upon payment.  If such dispute is not resolved within
forty-five (45) days after delivery of a notice of dispute with respect thereto
to the other Party, the disputing Party may audit the other Party in accordance
with the provisions of Section 8.11. 
For clarity, nothing in this Section 3.4(a)(iii) shall serve
to limit a Party’s ability to seek recourse for billing errors discovered after
payment is made.


 


(iv)          The
Parties acknowledge and agree that Internal Expenses shall not be reimbursed or
shared except as set forth in this Section 3.4(a)(iv).  In connection with the U.S. Development,
either Party may refer to the Finance Subcommittee to provide certain specified
Development activities using internal resources and to include such Internal
Expenses as the Development Expenses to be shared hereunder.  Any such referral shall include a
sufficiently detailed description of the proposed Development activities, the
associated Internal Expenses, and, where possible, the costs and expenses to be
paid to Third Party contractors if the same Development activities were
contracted out to them.  If the JSC
approves (which approval shall not be unreasonably withheld) the proposal of
the Finance Subcommittee to include such Internal 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


21

















 


Expenses as the Development Expenses, then the proposing Party shall
obtain reimbursement as the Development Expenses for the Internal Expenses
actually incurred (in an amount not to exceed any approved amount) in
performing such Development activities for the Product.


(b)           Takeda shall bear all costs and expenses associated with the ROW
Development, subject to Section 3.4(a).


 


(c)           Any reimbursement payments made pursuant to this Section 3.4 shall
be subject to the general payment procedures set forth in Sections 8.7 through
8.11, inclusive.


 


3.5          Performance; Diligence.


 


(a)           Each Party shall devote Diligent Efforts to the U.S. Development of the
Product for the Initial Indications and for any Joint Additional Indication in
the U.S. consistent with the then-current U.S. Development Plan and in
accordance with this Agreement.


 


(b)           Takeda shall devote Diligent Efforts to the ROW Development of the
Product for the Initial Indications and for any Joint Additional Indications
for all the Level 1 Markets, and such other countries of the Royalty Territory
wherein Takeda at its discretion elects to Develop the Product (as described in
further detail in this Section 3.5 below), in accordance with its plan of
ROW Development, the overall plan and updates of which shall be submitted to
the JSC for such countries pursuant to Section 3.2.


 


(c)           Without limiting the generality of Section 3.5(b), Takeda shall (i) devote
Diligent Efforts to obtaining Regulatory Approval of the Product for the
Initial Indication and for any Joint Additional Indication in the Level 1
Markets, and (ii) file for Regulatory Approval of the Product with the
EMEA promptly after, but in no event more than nine (9) months after, the
submission for Regulatory Approval of the Product for such indication in the
U.S., unless Takeda is required to conduct any additional Development
activities to comply with the EMEA’s requirements.  Any failure by Takeda to comply with the
terms of this Section 3.5(c) shall be deemed a material breach of
this Agreement by Takeda in any applicable country or countries of the Level 1
Markets, and Affymax shall have the right to terminate this Agreement with
respect to the applicable country(ies) of the Level 1 Markets pursuant to the
terms of Section 13.2(b)(i).


 


(d)           Without limiting the generality of Section 3.5(b), at any time
after the date of the first approval of NDA for the Product in the U.S. (for [
* ]) of the Level 2 Markets) or the date of the first Regulatory Approval from
the EMEA (for the other countries of the Level 2 Markets), Affymax may request
Takeda, with regard to one or more countries of the Level 2 Markets where
Takeda has not yet determined or initiated efforts to Develop and Commercialize
the Product, to inform Affymax of its decision on whether or not it shall
devote the Diligent Efforts to Develop and Commercialize the Product for the
Initial Indication and the Joint Additional Indication, if any, in such country(ies).


 


(i)            If Takeda informs Affymax of its decision to devote the Diligent
Efforts in such country(ies), then:


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


22

















 


(1)           Takeda shall thereafter be obligated to devote Diligent Efforts in such
country(ies);


 


(2)           Takeda shall develop a plan setting forth, for such country(ies) of the
Level 2 Markets, a schedule of activities to be performed by Takeda for the
filing of Regulatory Approval for the Product in each such country within one
hundred and twenty (120) days after such Affymax’s request which period of
response may be extended by Affymax’s consent;


 


(3)           Affymax shall have a right to review and comment on the plan provided
by Takeda and Takeda shall consider in good faith any reasonable comments from
Affymax;  and


 


(4)            in the case of failure by Takeda to comply with such Diligent Effort
obligation with respect to such country(ies), Affymax shall have the right to
terminate this Agreement with respect to such country(ies) pursuant to the
terms of Section 13.2(b)(i).


 


(ii)           If Takeda informs Affymax of its decision not to use such Diligent
Efforts in such country(ies) or fails to provide Affymax with such a plan with
respect to such country(ies) of the Level 2 Markets within the above-mentioned
one hundred and twenty (120) day period, 
or any extension thereof as agreed jointly by the Parties, then


 


(1)           Affymax may prepare a plan it believes is commercially reasonable for
both Parties to pursue for the Development and Commercialization of the Product
in such country(ies) and provide it to Takeda within a reasonable time;


 


(2)           if the Parties agree on a plan with respect to such country(ies) of the
Level 2 Markets, then Takeda shall devote Diligent Efforts to obtaining
Regulatory Approval of the Product for the Initial Indication and for any Joint
Additional Indication in each such country(ies) under this Agreement; and


 


(3)           if Affymax informs Takeda of its intention not to provide such plan as
mentioned in Section 3.5(d)(ii)(1), or, both Parties cannot agree on such
plan within ninety (90) days after Takeda’s receipt of such plan, then such
country(ies) shall thereafter be excluded from the Licensed Territory and
Affymax shall thereafter have a right, with a right to sublicense to Third
Parties, to Develop and Commercialize the Product for the applicable Initial
Indications or Joint Additional Indications, if any, in such country(ies)
by using the Takeda Technology and the Regulatory Materials without any
consideration to Takeda.


 


(e)           With respect to any country in the Royalty Territory other than the
Level 1 Markets and Level 2 Markets, Takeda shall have the discretion to decide
whether and to what extent to Develop, seek Regulatory Approval for, and
Commercialize the Product.


 


(f)            Each Party shall conduct its Development activities under this
Agreement in good scientific manner and in compliance in all material respects
with all applicable Laws, including without limitation applicable GCP, GLP, and
GMP.


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


23

















 


3.6          Records, Reports and
Information.  Each
Party shall maintain complete, current and accurate records of all work
conducted by it under the U.S. Development Plan and all data and other
Information resulting from such work. 
Such records shall fully and properly reflect all work done and results
achieved in the performance of the U.S. Development Plan in sufficient detail
and in good scientific manner appropriate for patent and regulatory
purposes.  Each Party shall have the
right to review such records maintained by the other Party at reasonable times,
upon written request.  Each Party shall provide
written reports in English to the JSC on its Development and regulatory
activities with the Product pursuant to the U.S. Development Plan on a
quarterly basis at the end of each calendar quarter, at a level of detail
reasonably sufficient to enable the other Party to determine the reporting
Party’s compliance with its Diligent Efforts obligation pursuant to Section 3.5.


 


3.7          Backup Research
Agreement.  Promptly after the Effective Date, the
Parties shall negotiate in good faith a research agreement setting forth the
terms and conditions under which Affymax shall perform a program of research
intended to [ * ] for the Initial Indications. 
Such research agreement (the “Backup Research Agreement”),
if concluded, shall provide that Takeda shall bear the costs and expenses of
such research program in an amount not to exceed $[ * ] per year.  For the avoidance of doubt, the failure of
the Parties to enter into the Backup Research Agreement shall not constitute a
breach of this Agreement by either Party.


 


3.8          Replacement Products.


 


(a)           In the event that Takeda discontinues its Development of the Product in
its entirety within the period commencing on the Effective Date and ending five
(5) years thereafter due to patient safety concerns or pursuant to a
requirement imposed by Regulatory Authorities in the Licensed Territory or by
the external monitoring board or upon mutual agreement of the Parties, then
Takeda shall have the right to review with Affymax any and all then-existing
Replacement Product Candidates and to select within ninety (90) days, jointly
with Affymax, one such Replacement Product Candidate as a substitute for the
then-current Product and to initiate and conduct a Development for such Replacement
Product Candidate.  In such event,
products containing such Replacement Product Candidate shall be included in the
definition of the “Product” for purposes of this Agreement (including without
limitation, with respect to all relevant payment including the various
milestone payments described in Section 8.2, but only to the extent that
any such payment was not previously made for the discontinued Product and other
obligations, and the licenses set forth in Article 6).  In connection with such substitution, the
U.S. Development Plan for the Product shall be amended to reflect the
substitution of the replacement Product in a manner that is mutually acceptable
to each Party (it being understood that the Parties shall retain the respective
rights and obligations with respect to the Development and Commercialization of
such Replacement Product Candidate in accordance with the terms of this
Agreement).


 


(b)           If, in the case of Section 3.8(a) above, the Parties fail to
agree on the Replacement Product Candidate to take its place within
above-mentioned period of ninety (90) days, then Takeda may elect to proceed
with the Replacement Product Candidate of its choice pursuant to the terms of Section 3.8(a) above,
except that, notwithstanding anything to the contrary in this Agreement: (i) Takeda
shall bear all responsibilities and costs associated with the Development and
Commercialization of such Product throughout the Licensed Territory, (ii) 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


24

















 


Affymax shall have no
co-promotion right with respect to such replaced Product in the U.S., (iii) the
U.S. shall be deemed part of the Royalty Territory, except that the royalties
applicable to sale of thus replaced Product in the Royalty Territory (including
U.S.) shall be as set forth in Exhibit O rather than in Section 8.5(a),
and (iv) Takeda shall make the various milestone payments described in Section 8.2,
but only to the extent that any such payment was not previously made for the
discontinued Product.


 


(c)           Notwithstanding the foregoing, Takeda acknowledges and understands that
any Replacement Product Candidate  may
not have been manufactured at scale, or may not have been the subject of
sufficient Development or any manufacturing process development, or may not be
the subject of any manufacturing agreement in place at such time between
Affymax and its third party manufacturers, in each case at the time of the selection
of such Replacement Product Candidate, and
accordingly, that such product development, manufacturing process
development and scale up activities may need to be conducted by Takeda, alone
or in conjunction with Affymax, as agreed upon by Takeda and Affymax, and that
such Replacement Product Candidate may be subject to Third Party patent rights
which may require the acquisition of additional Third Party licenses prior to
commercialization (which such licenses shall be treated in accordance with Section 6.7(b)).  Subject to the terms of Section 3.9 and
to the exclusivity covenant set forth in Section 6.6, after the expiration
of the time period described above in Section 3.8(a), Affymax shall have
the right to pursue any Replacement Product Candidate not selected by Takeda
pursuant to Section 3.8(b), itself or with an Affiliate or Third Party,
without any further obligation to Takeda.


 


3.9          Right of First
Negotiation to Backup Compounds.  If, within ten (10) years after the
Effective Date, Affymax develops one or more potential Backup Compounds, then
Takeda shall have a right of first negotiation to develop and commercialize
such Backup Compound(s) for the Licensed Territory as provided in this Section 3.9.  During such ten (10)-year period,  Affymax shall provide Takeda on an annual
basis a report stating the results of any pre-clinical and clinical studies
conducted for such a Backup Compound for the prevention, treatment or
amelioration of anemia in humans, as well as all other material results and
data with respect to such potential Backup Compound(s), for Takeda’s
evaluation.  Takeda shall treat such
results and data as Affymax’s Confidential Information under this
Agreement.  Takeda may elect to exercise
its right with respect to a particular Backup Compound  by written notice to Affymax during the
thirty (30) day period following Takeda’s receipt of an annual report or upon
the request of Affymax delivered after the completion of the initial Phase I
Clinical Trial for such Backup Compound. 
If Takeda notifies Affymax within such period of its desire to obtain
such rights, then Affymax and Takeda shall negotiate in good faith, for up to
ninety (90) days, the terms and conditions under which Takeda may obtain such
rights.  If Takeda and Affymax enter into
an agreement under which Takeda obtains such rights with respect to certain
Backup Compound(s), then such Backup Compound(s) shall also be licensed to
Takeda under such agreed terms and conditions. 
If Takeda fails to notify Affymax of its desire to obtain such rights
within the thirty (30) day notice period, or if the Parties, despite good faith
negotiation, do not enter into an agreement governing the terms and conditions
under which Takeda may obtain such rights from Affymax within the ninety (90)
day negotiation period, then, unless the Parties agree in writing to extend
such period, Affymax shall have the right to pursue such opportunity itself or
with an Affiliate or Third Party without any further obligation to Takeda,
subject to the 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


25

















 


parallel programs
limitations set forth in Section 6.6(b).  
This Section 3.9 shall apply on a Backup Compound-by-Backup
Compound  basis.  For clarity, if and so far as a Backup
Compound  is developed by or on
behalf of Affymax, then, subject to Affymax’s obligation under Section 6.6(b),
Takeda shall have no rights under this Section 3.9 with respect to such
Backup Compound.


 


3.10        Additional Indications.


 


(a)           Proposal.  Either Party
may submit to the JSC a proposal to conduct joint Development on the Product
for any specific Additional Indication. 
Such proposal shall outline the rationale for Developing and
Commercializing the Product for the particular proposed Additional Indication
and the Development activities proposed to be conducted with respect to such
Additional Indication.  The JSC shall
promptly consider such proposal and determine whether to proceed under this
Agreement to conduct such Development and Commercialization for such proposed
Additional Indication.


 


(b)           Joint Development. If the JSC elects to proceed pursuant to a unanimous
decision, the JSC shall amend the U.S. Development Plan to include the
Development activities to be conducted for such Additional Indication (a “Joint Additional Indication”) up through
Regulatory Approval in the U.S.  Unless
otherwise agreed by the Parties, the U.S. Development Expenses for such
Development of the Product for the Joint Additional Indication shall be deemed
Development Expenses.


 


(c)           Rejection; Failure to Agree. 
If the JSC elects not to proceed with collaborative Development of the
Additional Indication that was the subject of a Party’s proposal, or if the JSC
cannot reach a decision on such proposal within ninety (90) days of the Party’s
submitting the proposal, then neither Party shall be entitled to directly or
indirectly proceed with the Development and/or Commercialization of the Product
for such Additional Indication in the Licensed Territory, and, notwithstanding
anything to the contrary contained herein, even if the JSC fails to reach unanimous
decision to proceed with the Development and/or Commercialization of the
Product in the Licensed Territory, such dispute shall not be subject to the
procedures described in Exhibit M.


 


3.11        Manufacturing Development.


 


(a)           Duties. Affymax shall be responsible for the
Manufacturing Development for Bulk API, itself or through a Third Party
contract manufacturer.  Takeda shall be
responsible for the Manufacturing Development for the Finished Manufacture,
itself or through a Third Party contract manufacturer.  Affymax shall reasonably cooperate with
Takeda for such purposes, which cooperation shall include the transfer to
Takeda of technology Controlled by Affymax relating to activities that were
conducted by Affymax as of the Effective Date and thereafter, if any, with
respect to any such Finished Manufacture.


 


(b)           Costs. Manufacturing Development Expenses are included in
Development Expenses and, as a result, shall be shared pursuant to Section 3.4
to the extent that such Manufacturing Development Expenses relate to the
Manufacturing Development for Bulk API and/or Product to be Developed and
Commercialized hereunder.


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


26

















 


(c)           Comparator Drugs. 
Each Party
conducting clinical trials for the Product shall be responsible for procuring
all of its requirements of all comparator drugs or placebos necessary for
conducting such clinical trials; provided, however, Affymax shall reasonably
cooperate with Takeda for such purposes, which cooperation shall include the
transfer to Takeda of technology Controlled by Affymax relating to activities
that were conducted by Affymax as of the Effective Date with respect to any
such placebo, in connection with the Development of the Product.  The costs and expenses incurred by either
Party for procuring the comparator drugs or placebos for the U.S. Development
shall be included in the Development Expenses.


 


3.12        [ * ] and [ * ]
Development.  Affymax shall have the right unilaterally
to develop and test [ * ]
containing the Peptide and/or [ * ] (an “Additional Product”).  Affymax shall conduct such development
activities pursuant to a development plan to be provided by Affymax to Takeda
after the Effective Date for Takeda’s review and comment.  Affymax shall conduct such development work
at its sole expense and  shall have
sole control over such work.  Affymax
shall keep Takeda informed as to progress on, results of, and expenses of
Affymax for the research and development of each Additional Product with
quarterly reports up through completion of the establishment of the [ * ] on
the Additional Product for any Initial Indication (including, without
limitation, by providing at least sixty (60) days notice of any anticipated IND
filing).  If Affymax reasonably believes
based on objective information that [ * ] has been established, Affymax shall
provide Takeda with all then-available data relating to the Additional
Product.  At any time up to and including
the date sixty (60) days after Takeda’s receipt of such data and results up to
the [ * ] from Affymax, Takeda shall be entitled to elect to include the
Additional Product into the Products under this Agreement.  If Takeda exercises such right, then, without
the need for further action by the Parties, the Additional Product shall
thereafter be deemed to be included in the Products hereunder (in which case
all obligations of the Parties under this Agreement shall apply to such
Additional Product, including without limitation the obligation to share future
Development Expenses, and, for clarity, Takeda shall not be obligated to make
any milestone payments under Section 8.2 more than once for the Products
(i.e., the Products after such inclusion of the Additional Product)); and, the
Parties shall jointly create a U.S. Development Plan for such Additional Product.  In connection with such exercise, Takeda
shall be required to pay Affymax an amount equal to a percentage of all actual
expenses incurred by Affymax (including Internal Expenses) for the performance
of such independent development activities from the Effective Date up to the
date of the option exercise, as follows: (a) if Takeda exercises such
right within [ * ] after the Effective Date,
then Takeda shall pay [ * ] of such
expenses, (b) if Takeda exercises such right after such 120-day period but
prior to [ * ] any Initial Indication, Takeda
shall pay [ * ] of such expenses, (c) if
Takeda exercises such right after the [ * ] but prior
to [ * ] Initial Indication, Takeda shall
pay [ * ] of such expenses, and (d) if
Takeda exercises such right after the [ * ] Initial
Indication which exercise right shall expire if not exercised within ninety
(90) days of [ * ] by Affymax, Takeda shall pay
[ * ] of such expenses; provided, in
each case, that Affymax shall provide Takeda with documentary evidence
demonstrating the accuracy of such expenses, that the Internal Expenses among
such expenses shall be calculated appropriately in consistent with Affymax’s
standard accounting principal and procedures, and that Section 8.11 shall
also apply with regard to such expenses. 
If Takeda does not exercise such right within the period described
above, then, notwithstanding the limitations set forth in Section 6.6,
Affymax shall have the right to Develop and Commercialize the Additional
Product in any indications without any financial or other obligation to Takeda 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


27

















 


resulting in connection with such Development and
Commercialization.  As used in this Section 3.12,
[ * ] means indication of a product’s [ * ] the
Initial Indications to [ * ] clinical
trials.


 


ARTICLE 4


 


REGULATORY
MATTERS


 


4.1          Transfer of Data and Regulatory
Materials.


 


(a)           Existing Data.  Within thirty (30) days after the
Effective Date, Affymax shall provide Takeda with copies of IND and CTA
submissions made for the Product in the U.S. and EU prior to the Effective
Date, unless previously provided.  With
regard to all other preclinical and non-clinical data relevant to an IND or CTA
submission (including, as needed for Takeda regulatory submissions, copies of [ * ] the above-mentioned IND and CTA submissions, in the
form then existing) generated as of the Effective Date and Controlled by
Affymax, Affymax shall, if requested by Takeda, provide Takeda with copies
thereof within a reasonable time after such request to the extent relevant to
the Development of Product or Takeda’s seeking Regulatory Approval for the
Product in the Field in the Licensed Territory. 
Takeda shall have the full right, without any additional consideration,
to use any and all such data and reports supplied by Affymax under this Section 4.1(a) in
connection with the Development and/or Commercialization of the Product in the
Licensed Territory, including the incorporation of such data or reports in any
regulatory submissions, including MAA and NDA submissions.


 


(b)           Future Data.  Each Party
shall, in a timely manner and compliant with requirements of the FDA, the EMEA,
and any other applicable Regulatory Authority, provide the other Party with
copies of all preclinical, non-clinical, analytical, manufacturing, and clinical
data relating to the Product, generated by or on behalf of such Party in
connection with the performance of the U.S. Development Plan and relevant to
any regulatory submission; provided, that information regarding adverse events
and serious adverse events shall be provided promptly as set forth in Section 4.8.  If the receiving Party requests that copies
of such data be provided in compliance with requirements of other Regulatory
Authorities, the disclosing Party shall reasonably consider such request.  Affymax shall have the full right, without
any additional consideration, to use any and all such data and reports in
connection with the Development of the Product in the Licensed Territory and/or
in connection with the Commercialization of the Product in the U.S., and,
Takeda shall have the full right, without any additional consideration, to use
any and all such data and reports in connection with the Development and/or the
Commercialization of the Product in the Licensed Territory, including the incorporation
of such data or reports in any regulatory submissions including MAA and/or NDA
submissions.


 


(c)           Clarification.  All preclinical, non-clinical,
analytical, manufacturing, and clinical data and associated reports disclosed
by one Party to the other under this Agreement shall be deemed Confidential
Information of the disclosing Party.   Except as otherwise provided in this Section 4.1,
the receiving Party may use such data solely for the purpose of developing the
Product, seeking and obtaining Regulatory Approval and Commercializing the
Product as permitted in this Agreement, subject to Article 12.


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


28

















 


4.2          Regulatory Submissions
and Approvals.


 


(a)           In General.  The Parties
intend that the U.S. Development Plan shall set forth the regulatory strategy
approved by the JSC. The Parties intend to seek Regulatory Approval in the
first instance in the U.S. and EU  and
thereafter the remainder of the Licensed Territory wherein Takeda Develops and
Commercializes the Product.  The Parties
also intend that each Party with responsibility for generating data will
cooperate fully with the other Party to make that data available for
preparation and submission of Regulatory Materials. Subject to the terms of
this Article 4:


 


(i)            In the U.S., Affymax, in consultation with Takeda, shall be responsible
for assembling, submitting and maintaining any source regulatory submission
components and compiled submissions of the Regulatory Materials to be used in
support of Regulatory Approval for the Product in the U.S. in accordance with
such regulatory strategy, including without limitation NDAs and associated
documents;


 


(1)           Affymax shall have primary responsibility for providing components of
Regulatory Materials relating to Bulk API and Takeda shall have primary
responsibility of providing components of Regulatory Materials relating to
Finished Product  in support of
Regulatory Approval;


 


(2)           Affymax shall have primary responsibility for providing the content of
Regulatory Materials relating to clinical data supporting Regulatory Approval
of Renal Indications. Takeda shall have primary responsibility for providing
the content of Regulatory Materials relating to clinical data supporting
Regulatory Approval of the Oncology Indications;


 


(ii)           In the Royalty Territory, Takeda, in consultation with Affymax as set
forth in Section 4.4(a), shall be responsible for assembling, submitting
and maintaining any source regulatory submission components and compiled
submissions of the Regulatory Materials to be used in support of Regulatory
Approval for the Product in the Royalty Territory including without limitation
MAAs and associated documents;


 


(1)           Affymax shall have primary responsibility for providing components of
Regulatory Materials relating to Bulk API and Takeda primary responsibility of
providing components of Regulatory Materials relating to Finished Product in
support of Regulatory Approval;


 


(2)           Affymax shall have primary responsibility for providing the content of
Regulatory Materials relating to clinical data supporting Regulatory Approval
of Renal Indications. Takeda shall have primary responsibility for providing
the content of Regulatory Materials relating to clinical data supporting
Regulatory Approval of the Oncology Indications;


 


(iii)         Affymax,
in consultation with Takeda, shall be primarily responsible for preparing and
submitting to Regulatory Authorities INDs, CTAs and all associated submissions
(e.g., IMPDs, safety alerts,
protocol submissions, etc.) for the Renal 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


29

















 


Indications for the
Product and for carrying out clinical protocols in support of Regulatory
Approval in the U.S. and contained in the U.S. Development Plan under said INDs
and CTAs in both the U.S. and in the Royalty Territory in accordance with such
regulatory strategy.  Takeda, in
consultation with Affymax, shall be primarily responsible for carrying out
clinical protocols not contained in the U.S. Development Plan but specifically
required by relevant Regulatory Authorities in the Royalty Territory, to
support Regulatory Approval for the Renal Indications for the Product in the
Royalty Territory, in which case, Takeda may decide whether to newly prepare
and submit CTAs for carrying out such clinical protocols by itself or to use
Affymax’s existing CTAs, if any, for carrying out such protocol in the Royalty
Territory, and, Affymax shall, if requested by Takeda, fully cooperate with
Takeda in Takeda’s carrying out such protocols;


 


(iv)          Takeda,
in consultation with Affymax, shall be primarily responsible for preparing and
submitting to Regulatory Authorities INDs and CTAs and all associated
submissions (e.g., IMPDs, safety
alerts, protocol submissions, etc.) for the Oncology Indications for the
Product and for carrying out clinical protocols under said INDs and CTAs, in
both the U.S. and in the Royalty Territory in accordance with such regulatory
strategy.  Affymax shall, as soon as
possible after the Effective Date, free of charge arrange for transfer to Takeda
ownership of all the INDs and CTAs for the Oncology Indications for the Product
in the EU and in the U.S. made by Affymax on or before the Effective Date.


 


(b)           Costs and Expenses.  Any
Development Expenses to the extent required for the Parties to prepare, submit
and maintain all Regulatory Materials in the U.S. (including any materials that
are intended for submission to Regulatory Authorities in both the U.S. and
Royalty Territory) shall be treated as U.S. Development Expenses.  Unless otherwise provided for in this
Agreement, any efforts, costs and expenses for the ROW Development shall be
borne solely by Takeda and not treated as U.S. Development Expenses.


 


(c)           Rights of Reference to Regulatory Materials.   Each Party hereby grants to the other Party a right of
reference to all Regulatory Materials filed by such Party for Product as
follows:  The right of reference granted
to Affymax herein shall be solely for the purpose of Affymax obtaining
Regulatory Approval for the Product in the U.S. 
The right of reference granted to Takeda herein shall be solely for the
purpose of obtaining Regulatory Approval for the Product in the Field in the
Royalty Territory, and/or, if necessary or applicable, for the purpose of
fulfilling its responsibility in relation to the Regulatory Approval for the
Product for the Oncology Indications in U.S. 
Each Party shall refer the Regulatory Materials filed by the other Party
for Product as feasible (e.g.,
for avoiding redundancy of work as far as possible).  Takeda also shall
have a right to use, without any additional consideration, any and all data and
information generated or obtained from either Party hereunder, for the purpose
of Takeda’s Development and Commercialization of the Product in Japan under the
Japan Agreement.


 


4.3          Affymax’s Rights and
Obligations.


 


(a)           Preparation. Affymax shall prepare and author all Renal
Indication documents and build, submit and maintain any Regulatory Materials
for Regulatory Approval of the Product in the U.S., in accordance with the
regulatory strategy approved as a component of the U.S. Development Plan by the
JSC.


 






[ * ] = Certain confidential information contained in this
document, marked by brackets, has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of
1933, as amended.


 


30
















 


(b)           Compliance. Affymax shall comply with applicable Laws and other
regulatory obligations related to the submission and maintenance of any
Regulatory Materials for Regulatory Approval of the Product in the U.S.
(including the submission of Marketing Materials to the Regulatory
Authorities).


 


(c)           Meetings.  Affymax shall
request the FDA or other applicable Regulatory Authority in the U.S. to allow a
reasonable number of Takeda representatives to attend and, to the extent
permitted under applicable law, participate in all meetings between Affymax and
such Regulatory Authority in respect of any Regulatory Materials pertaining to
each of the Renal Indications before and following NDA approval and to each of
the Oncology Indications following NDA approval, on an Regulatory Approval by
Regulatory Approval basis (it being understood that Affymax shall be the
official sponsoring company with respect to such meetings).  Notwithstanding the foregoing, the Parties
agree that, to the extent permitted under applicable law, Affymax shall be the
primary presenter and responder regarding the Renal Indications and Takeda
shall be the primary presenter and responder with regard to Oncology
Indications, unless otherwise agreed upon by the Parties beforehand.  Affymax shall timely inform Takeda of any
such meetings scheduled with such Regulatory Authority in respect of any
Regulatory Materials as soon as practically possible.


 


(d)           Ownership. Except as otherwise expressly agreed by the Parties,
for so long as Affymax owns Regulatory Materials under this Section 4.3(d), any Regulatory Materials for
Regulatory Approval of the Product in the U.S. (except for the INDs for
Oncology Indications, which shall be owned by Takeda pursuant to Section 4.4(c))
shall be held in Affymax’s name and shall be owned solely by Affymax, subject
to Takeda’s rights under Section 4.2(c) of this Agreement.


 


4.4          Takeda
Rights and Obligations.


 


(a)           Preparation. Takeda shall prepare and author all Oncology
Indications documents for Regulatory Approval of the Product in the U.S.  Takeda shall prepare and author all
MAA-related documents for all indications and build, submit and maintain
Regulatory Materials in countries of the Royalty Territory wherein Takeda
Develops and Commercializes the Product and seek Regulatory Approval for the
Product in such countries of the Royalty Territory, in consultation with
Affymax if necessary, for the purpose of coordinating U.S. and Royalty
Territory filing content including any activities relating to country-specific
clinical trials; provided, that Affymax shall have a right of consent (subject
to final resolution in accordance with Exhibit M in the case of an
unresolved disagreement between the Parties) with respect to the content of any
Regulatory Materials in the Royalty Territory that are reasonably expected to
create a serious material adverse effect on the U.S. Development, Regulatory
Approval, or Commercialization of the Product in the U.S.  As part of the foregoing, Takeda shall be
responsible for seeking any necessary approvals of Regulatory Authorities in
such countries of the Royalty Territory for Product Labeling and Promotional
Materials to be used in the applicable jurisdiction(s) in connection with
Commercializing the Product.  Upon the
request of Affymax, where permitted, Takeda shall request the Regulatory
Authority in a particular country or territory of the Royalty Territory to
allow at least one Affymax representative to attend, and, upon the request of
Takeda and where permitted, Affymax shall make at least one Affymax
representative to attend, as a silent observer (unless otherwise agreed in
advance by the 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


31

















 


Parties), all meetings between Takeda and such Regulatory Authority in
the Royalty Territory, and Takeda shall timely inform Affymax of any such
meetings scheduled with the Regulatory Authority in the Royalty Territory as
soon as practically possible.


 


(b)           Compliance. Takeda shall comply with applicable Laws and other
regulatory obligations related to Product Development and Regulatory Approval
submission made by it in the Licensed Territory (including the submission of
Marketing Materials to the Regulatory Authorities).


 


(c)           Ownership.  Any Regulatory Materials in the Royalty
Territory and INDs for the Oncology Indication is the U.S. (including those
transferred to Takeda from Affymax pursuant to Section 4.2.(a)(iv)) shall be held in Takeda’s name and
shall be owned solely by Takeda, subject to Affymax’s rights under Section 4.2(c) of
this Agreement.


 


(d)           Meetings. Takeda shall request the FDA or other applicable
Regulatory Authority in the U.S. to allow a reasonable number of Affymax
representatives to attend and, to the extent permitted under applicable law,
participate in all meetings between Takeda and such Regulatory Authority in
respect of any Regulatory Materials pertaining to the Oncology Indications
before NDA approval (it being understood that Takeda shall be the official
sponsoring company with respect to such meetings).  It is understood and agreed that, to the
extent permitted under applicable law, Takeda shall be the primary presenter
and responder with regard to Oncology Indications, unless otherwise agreed upon
by the Parties beforehand. Takeda shall timely inform Affymax of any such
meetings scheduled with such Regulatory Authority in respect of any Regulatory
Materials as soon as practically possible.


 


4.5          Consultation,
Reporting and Review.


 


(a)           Each Party shall keep the other Party reasonably and regularly informed
of, the status of the preparation of all Regulatory Materials, Regulatory
Authority review of Regulatory Materials, and Regulatory Approvals made by it
for the Product in the U.S. and EU and will give reasonable consideration to
any comments received from such other Party with respect to such Regulatory
Materials.


 


(b)           Each Party shall provide the other Party, in a timely manner, with
copies of all Regulatory Approvals it receives for the Product.


 


(c)           Each Party shall provide the other Party, in a timely manner, with
copies of, and all information received by it pertaining to, notices,
questions, actions and requests from or by Regulatory Authorities in the
Licensed Territory with respect to the Product, the Peptide, [ * ] or Hematide, or the testing, manufacture, distribution
or facilities in relation thereto, including without limitation any notices of
non-compliance with Laws in connection with the Product (e.g., warning letters or other notices of
alleged non-compliance), audit notices, notices of initiation by Regulatory
Authorities of investigations, inspections, detentions, seizures or injunctions
concerning the Product (or its manufacture, distribution, or facilities
connected thereto), notice of violation letters (i.e., an untitled letter), warning letters, service of
process or other inquiries.


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


32

















 


4.6          Communications. 
Except as may be required by Laws, only the Party that holds the IND,
CTA, NDA, MAA, etc. in a particular country or territory shall communicate
regarding the Product with any Regulatory Authority having jurisdiction in such
country or territory.  However, responses
to a regulatory request or inquiry of a substantial nature, such as would
impact regulatory or development strategy, requires consultation with the other
Party prior to the communication and, whenever possible, include participation
by the other Party.  If the Party not
holding the IND, CTA, NDA, MAA, etc. is required to make such a communication
by a Regulatory Authority in the Licensed Territory, then such Party shall
provide immediately to the other Party notice of such order.


 


4.7          Adverse Event Reporting
and Safety Data Exchange.  The Parties agree that Takeda shall be
responsible for the establishment of the global safety database for the Product
in the Licensed Territory and the monitoring of all clinical experiences and
submission of all required reports throughout clinical Development and
Commercialization of the Product in the Royalty Territory, and that Affymax
shall have primary responsibility for the monitoring of all clinical
experiences and submission of all required reports concerning the Product in
the U.S., provided, however, that Takeda shall have primary responsibility for
monitoring all clinical experiences for the Oncology Indications.  Specific details regarding the exchange and
management of information relating to adverse events related to the use of the
Product shall be delineated in a separate agreement that shall be agreed to by
the Parties within ninety (90) days after the Effective Date.  The pharmacovigilance and product labeling
personnel of each Party shall work in good faith together during such time to
negotiate an agreement, consistent with each Party’s current standard operating
procedures and, to the extent practical, with the then-current agreements between
the Parties, that:


 


(a)           identifies which safety information shall be exchanged;


 


(b)           identifies when such information shall be exchanged;


 


(c)           provides that Takeda shall have regulatory reporting responsibilities
concerning the Product in the Royalty Territory, and that Affymax shall have
such responsibilities concerning the Product in the U.S. (in each case, either
itself or through a clinical research organization with which it has
contracted);


 


(d)           provides that Takeda  shall
manage the global safety database;


 


(e)           identifies which Party shall be obligated to obtain follow-up
information on incomplete safety reports;


 


(f)            identifies which Party shall review the literature for safety report
information;


 


(g)           sets forth the roles and responsibilities of the Parties related to
review and approval of safety information for inclusion in the Product Labeling
in the Licensed Territory;


 


(h)           sets forth standard operating procedures to be implemented by the
Parties in their reporting of safety and other pharmacovigilance information;


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


33

















 


(i)            sets forth provisions governing access to safety information and
coordination with regard to information reporting to the applicable Regulatory
Authorities;


 


(j)            identifies which Party shall prepare required periodic safety updates;
and


 


(k)           identifies any other details required to appropriately manage safety
information for the Product, the Peptide, [ * ] or
Hematide.


 


4.8          Regulatory Authority
Communications Received by a Party.  Each Party shall keep the other
Party informed, in a timely manner and in any event in compliance with the
reporting requirements of Regulatory Authorities in the Licensed Territory, of
notification of any action by, or notification or other information which the
first Party receives (directly or indirectly) from any such Regulatory
Authority which: (a) raises any [ * ] of the
Product; (b) indicates or suggests [ * ] in
connection with the Product; (c) is reasonably likely to lead to [ * ] of the Product; or (d) relates to [ * ] with respect to the Product, or [ * ],
and which may have [ * ] the
Product, the Peptide, [ * ] or
Hematide.  The Party identified in 4.2(a) as
being responsible for preparing and authoring the content of documents and
components of regulatory submissions shall be responsible for preparing the
response to the communication, and the Party identified as being responsible
for building, submitting and maintaining submission components will submit the
response.  However, before submitting
such response to a Regulatory Authority regarding the communication, the
submitting Party shall have an opportunity to comment on the response.  In the event the Parties disagree concerning
the form or content of a response to a Regulatory Authority in a particular country
of the Licensed Territory, the Party who has responsibility for content
preparation shall decide the appropriate form and content of such response,
without recourse to arbitration under Section 2.4(c).  The other Party shall fully cooperate with
and assist such Party in complying with such regulatory obligations and
communications, including by providing to such Party, within two (2) Business
Days after a request or as quickly as practicable thereafter, such information
and documentation in the other Party’s possession as may be necessary or
helpful for the Party to prepare a response to an inquiry from a Regulatory
Authority.  For clarity, each Party’s
obligations under this Section 4.8 shall apply to any such communications regarding the
matters referred to above received by such Party’s Affiliate(s), contractors,
partners, or other collaborators as if such communications had been received by
such Party directly.


 


4.9          Regulatory Inspection or Audit.


 


(a)           Audit of Takeda.


 


(i)            If a Regulatory Authority in the U.S. desires to conduct an inspection
or audit with regard to the Product of Takeda’s facility or a facility under
contract with Takeda in or for the U.S., Affymax shall promptly notify
Takeda.  In such case, Takeda shall
permit and cooperate with such inspection or audit, and shall cause the
contract facility to permit and cooperate with such Regulatory Authority and
Affymax during such inspection or audit. 
Affymax shall have the right to have a representative observe such
inspection or audit and Affymax shall, if requested by Takeda, assist Takeda in
preparing for, facilitating or enabling such inspection or audit.  Following receipt of the inspection or audit
observations of such Regulatory Authority (a copy of which Affymax shall
immediately provide to Takeda), Takeda 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


34

















 


shall prepare a draft response to any such observations in English, in
consultation with Affymax, and Affymax shall prepare and file the final
response with such Regulatory Authority in the U.S.


 


(ii)           If a Regulatory Authority in the Royalty Territory desires to conduct
an inspection or audit with regard to the Product of Takeda’s facility or a
facility under contract with Takeda in or for the Royalty Territory, Takeda
shall promptly notify Affymax.  In such
case, Takeda shall permit and cooperate with such inspection or audit, and
shall cause the contract facility to permit and cooperate with such Regulatory
Authority during such inspection or audit. 
Affymax shall have the right to have a representative observe such
inspection or audit and Affymax shall, if requested by Takeda, assist Takeda in
preparing for, facilitating or enabling such inspection or audit.  Following receipt of the inspection or audit
observations of such Regulatory Authority (a copy of which Takeda shall
immediately provide to Affymax), Takeda shall prepare and file the final
response with such Regulatory Authority, and shall provide a copy of such
response to Affymax.


 


(b)           Audit of Affymax.


 


(i)            If a Regulatory Authority in the U.S. desires to conduct an inspection
or audit of Affymax’s facility, or a facility under contract with Affymax, with
regard to the Product or the Bulk API in or for the U.S., Affymax shall
promptly notify Takeda and permit and cooperate with such inspection or audit,
and shall cause the contract facility to permit and cooperate with such
Regulatory Authority during such inspection or audit.  Takeda shall have the right to have a
representative observe such inspection or audit and Takeda shall, if requested
by Affymax, assist Affymax in preparing for, facilitating or enabling such
inspection or audit.  Following receipt
of the inspection or audit observations of such Regulatory Authority (a copy of
which Affymax shall immediately provide to Takeda), Affymax shall prepare a
draft response to any such observations in English, in consultation with
Takeda, and Affymax shall prepare and file the final response with such
Regulatory Authority, and shall provide a copy of such response to Takeda.


 


(ii)           If a Regulatory Authority in the Royalty Territory desires to conduct
an inspection or audit of Affymax’s facility, or a facility under contract with
Affymax, with regard to the Product or the Bulk API in or for the Royalty
Territory, Takeda shall promptly notify Affymax.  In such a case, Affymax shall permit and
cooperate with such inspection or audit, and shall cause the contract facility
to permit and cooperate with such Regulatory Authority and Takeda during such
inspection or audit.  Takeda shall have
the right to have a representative observe such inspection or audit and Takeda
shall, if requested by Affymax, assist Affymax in preparing for, facilitating
or enabling such inspection or audit. 
Following receipt of the inspection or audit observations of such
Regulatory Authority (a copy of which Takeda shall immediately provide to
Affymax), Affymax shall prepare a draft response to any such observations in
English, in consultation with Takeda, and Takeda shall prepare and file the
final response with such Regulatory Authority, and shall provide a copy of such
response to Affymax.


 


(c)           Audit Procedures. 
In any
event, each Party shall notify the other Party within forty-eight (48) hours of
receipt of notification from a Regulatory Authority of the intention of such
Regulatory Authority to audit or inspect facilities being used to conduct
manufacture of Bulk API or Finished Manufacture of the Finished Product.  Each Party shall also 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


35

















 


provide the other Party with copies of any written communications
received from Regulatory Authorities with respect to such facilities within
seventy-two (72) hours of receipt.


 


4.10        Recalls and Voluntary
Withdrawals.  The Parties shall exchange and provide timely
updates to their internal standard operating procedures (“SOPs”) for conducting product recalls
reasonably in advance of the First Commercial Sale of any Product in the
Licensed Territory, and shall discuss and resolve any conflicts between such
SOPs and issues relating thereto promptly after such exchange.  If either Party becomes aware of information
relating to any Product that indicates that a unit or batch of Finished Product
or Bulk API may not conform to the specifications therefor, or that potential
adulteration, misbranding, or other issues have arisen that relate to the
safety or efficacy of the Product, it shall promptly so notify the other
Party.  The JSC shall meet to discuss
such circumstances and to consider and decide appropriate courses of action,
which shall be consistent with the internal SOP of Takeda.  The Party that holds the applicable
Regulatory Approval shall have the right and responsibility to control any
product recall, field correction, or withdrawal of any Product in the Licensed
Territory that is required by Regulatory Authorities in the Licensed Territory,
and the allocation of expenses incurred in connection with such recall between
the Parties shall be made as follows: (i) if the recall is due to
manufacturing defect (in accordance with then prevailing U.S. product liability
Laws, unless otherwise agreed upon by the Parties in the Supply Agreement) of
Bulk API, then Affymax shall bear all such expenses, (ii) if the recall is
due to manufacturing defect (in accordance with then prevailing U.S. product
liability Laws, unless otherwise agreed upon by the Parties in the Supply
Agreement) of Finished Product (other than due to manufacturing defect of Bulk
API), then Takeda shall bear all such expenses, (iii) if the recall is due
to both of (i) and (ii), then the Parties shall share all such expenses
proportionately and (iv) otherwise, as follows: (1) 100% to Takeda to
the extent attributable to a recall in any country in the Royalty Territory; (2) treated
as Commercial Expenses to the extent attributable to a recall in the U.S., or (3) or
as otherwise may be agreed for one or more territories in the Supply Agreement
as described in Section 7.3.  In
addition, Takeda shall have the right, at its discretion, to conduct any
product recall, field correction or withdrawal of any Product in the Licensed
Territory that is not so required by such Regulatory Authorities but that
Takeda deems to be appropriate, and the allocation of expenses incurred in
connection with such recall between the Parties shall be as set forth in the
immediately preceding sentence.  Takeda
shall maintain complete and accurate records of any recall in the Licensed
Territory for such periods as may be required by applicable Laws, but no event
for less than three (3) years.


 


ARTICLE 5



COMMERCIALIZATION


 


5.1          Commercialization in the Licensed
Territory.


 


(a)           U.S. Territory. 
Takeda and Affymax shall have the rights and responsibilities for
Commercializing the Product in the U.S. in the Field in accordance with the
U.S. Commercialization Plan for the Product, as provided in this Article 5;
provided, however, that, during the Co-Promotion Term, the terms of the
Co-Promotion Agreement (as defined in Section 5.7) shall apply to the
Parties’ co-promotion of the Product in the U.S.  Takeda shall book all sales of the Product in
the U.S.  The Parties shall share equally
all Commercial 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


36

















 


Expenses incurred by the Parties in connection with such
Commercialization in the U.S. in accordance with the procedures described in Section 8.4.


 


(b)           Royalty Territory.  Takeda shall
have sole right and responsibility for Commercializing the Product in the
Royalty Territory in the Field, as provided in this Article 5.  Takeda shall book all sales of the Product in
the Royalty Territory and shall bear all of the costs and expenses incurred in
connection with such Commercialization in the Royalty Territory except as
expressly provided for herein.  Takeda
may use sublicensees to Commercialize the Product in the Royalty Territory in
the Field, subject to Affymax’s approval right described in Section 6.1.  Subject to Takeda’s diligence obligations in Section 3.5,
Takeda is entitled to decide, at its discretion, on whether and in which
countries of the Royalty Territory other than the Level 1 Markets it would
pursue Development and Commercialization of the Product.


 


5.2          Commercialization Plans.


 


(a)           For the U.S.  The strategy
for the commercial launch of the Product in the U.S. shall be described in a
comprehensive plan that describes the pre-launch, launch and subsequent
Commercialization activities and budget for the Product (including, if
available, advertising, education, planning, marketing, sales force training
and allocation, distribution, pricing, and reimbursement) (the “U.S.  Commercialization
Plan”).  The JSC shall
establish appropriate subcommittee(s) at least thirty-six (36) months
prior to the then-current date of expected Regulatory Approval for such Product
in the U.S. in the Field as determined in accordance with then-current U.S.
Development Plan (such date, the “U.S.
Approval Date”).  The JSC and
its subcommittees shall develop and approve an initial U.S. Commercialization
Plan at least twenty-four (24)  months  prior to the U.S. Approval Date.  The initial U.S. Commercialization Plan and
subsequent revisions thereto, which revisions shall be approved by the JSC from
time to time, shall contain such information as the JSC believes necessary for
the successful commercial launch of such Product in the U.S. in the Field in
each of the Initial Indications and shall generally conform to the level of
detail utilized by the Parties in preparation of their own product
commercialization plans.  The U.S.
Commercialization Plan shall be deemed Confidential Information of both Parties,
and each Party shall use such U.S. Commercialization Plan only to the extent
necessary to carry out its Commercialization activities for the Product.  From time to time as reasonably necessary
during the term of Commercialization of a Product in the U.S., the JSC shall
update the U.S. Commercialization Plan (it being understood that Affymax shall
be responsible for generating draft updates relating to the Renal Indications
and Takeda shall be responsible for generating draft updates relating to the
Oncology Indications, for review and approval by the JSC).


 


(b)           For the Royalty Territory.  With respect to Level 1 Markets, the Level 2 Markets
selected pursuant to Section 3.5(d) and such other countries in the
Royalty Territory wherein Takeda Commercializes the Product, Takeda shall
provide to the JSC a summary plan that describes the launch and subsequent
Commercialization activities for the Product (including, if available,
advertising, education, planning, marketing, sales force allocation,
distribution, pricing, and reimbursement) (the “ROW Commercialization Plan”), to the extent customarily
generated by or available to Takeda from its Affiliates or sublicensees for its
internal purposes, and any significant amendments or updates thereto, without
undue delay following creation thereof. 
The ROW Commercialization Plan shall be created by Takeda in good faith
and in 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


37

















 


accordance with the overall strategy of Commercialization of the
Product reviewed at the JSC.  Each such
plan shall include such additional information as Affymax may reasonably
request and Takeda may reasonably accept from time to time.


 


5.3          Product Labeling;
Promotional Materials.


 


(a)           The JSC shall determine which Party shall be responsible for designing
and supplying the Product Labeling and Promotional Materials for the Product
for the U.S.  Such responsible Party
shall provide samples of such labeling and materials to the JSC for review and
consultation prior to finalizing such materials for use by the Parties’ Sales
Representatives.  The Parties shall
describe in the applicable Commercialization Plan how and the manner in which
the Parties shall be presented and described to the medical community in any
Promotional Materials and the placement of the names and logos of the Parties
therein, in each case as permitted by applicable law and with the labeling for
the Product approved by the applicable Regulatory Authority.


 


(b)           Takeda shall be responsible for designing and supplying all Product
Labeling and Promotional Materials for the Product for the Royalty
Territory.  Takeda shall provide samples
of such labeling and materials to the JSC for information and review.


 


5.4          Pricing Approvals; Pricing.


 


(a)           U.S.  Takeda shall have the sole right to determine all pricing of the Product
in the U.S., subject to this Section 5.4(a) and Section 5.5.   Takeda shall keep Affymax reasonably
informed on an ongoing basis of current Product pricing for the U.S. by regular
reports to the JSC no less frequently than such committee is required to meet
pursuant to Section 2.5(a).  Takeda
shall provide Affymax with an opportunity, not to exceed one hundred and twenty
(120) days (in case of initial price determination at the time of launch of
each Product)  or forty-five (45) days (in case
of subsequent price modification(s)) following notice by Takeda, to review and
comment upon Takeda’s proposed price of the Product or any material
modification thereof and shall consider Affymax’s comments in good faith.


 


(b)           Royalty Territory. 
Takeda
shall be responsible, at its own expense, for seeking applicable Pricing
Approval in the Royalty Territory and for setting the price of the Product in
each applicable country.  Takeda shall
keep Affymax informed on an ongoing basis of current Product pricing in the
countries of Royalty Territory wherein Takeda has launched the Product via
regular reports to the JSC no less frequently than such committee is required
to meet pursuant to Section 2.4(a). 
Notwithstanding anything in this Agreement express or implied to the
contrary, Affymax shall not have any right to direct, control, or approve
Takeda’s pricing of the Product for the Royalty Territory.  The provision to Affymax of any pricing data
is for informational purposes only.


 


5.5          Sales and Distribution. 
Takeda shall be solely responsible for handling all returns, order
processing, invoicing and collection, distribution, and inventory and
receivables for the Product throughout the Licensed Territory.  Affymax may not accept orders for the Product
or make sales for its own account or for Takeda’s account.  If Affymax receives any order for the
Product, it shall refer such orders to Takeda for acceptance or rejection.  Takeda 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


38

















 


shall have the right and
responsibility for establishing and modifying the terms and conditions with
respect to the sale of the Product throughout the Licensed Territory, including
any terms and conditions relating to or affecting the price at which the
Product shall be sold, discounts available to any third party payers
(including, without limitation, managed care providers, indemnity plans,
unions, self insured entities, and government payer, insurance or contracting
programs such as Medicare, Medicaid, or the U.S. Dept. of Veterans Affairs),
any discount attributable to payments on receivables, distribution of the
Product, and credits, price adjustments, or other discounts and allowances to
be granted or refused; provided, however, that Takeda shall establish the terms
and conditions applicable to the sale of the Product (including, without
limitation, any discounts applicable to the Product) in a reasonable and
non-discriminatory manner relative to other products sold by Takeda.


 


5.6          Takeda Performance; Diligence.


 


(a)           Level of Efforts in the U.S. and Level 1 Markets. 
Takeda shall devote Diligent Efforts to obtaining Regulatory Approval
and thereafter Commercializing the Product in the U.S. and the Level 1
Markets.  Without limiting the generality
of the foregoing, Takeda shall devote Diligent Efforts to Commercialize the
Product in the U.S. in the Field in accordance with the U.S. Commercialization
Plan, and in the Level 1 Markets in accordance with the ROW Commercialization
Plan.


 


(b)           Time to Launch Product.  In addition
to the requirements under Section 5.6(a), Takeda shall achieve First
Commercial Sale of each Product: (a) in [ * ],
within a reasonable time after, but in no event more than [ * ]
after, the date on which Pricing Approval is granted for such Product in such
country, and (b) in any Level 1 Market other than those described in the
preceding clause (a) (or in [ * ], if
Pricing Approval is not required in such country), within a reasonable time
after, but in no event more than [ * ] after,
the date on which Regulatory Approval is granted for such Product in such
country.  If, however, it becomes
difficult for Takeda to comply with the above-mentioned time limitations (i.e.,
[ * ] in clause (a), and, [ * ] in clause (b)), then Takeda shall without delay inform
Affymax of the fact and explain the cause of such delay, and, such time
limitations shall be extended to a reasonable extent if both Parties so agree.


 


(c)           Royalty Territory Reports.  Takeda shall present a written report to Affymax at
least semi-annually (and no later than June 30th and December 31st of each Fiscal
Year) summarizing Takeda’s overall Commercialization activities undertaken with
respect to the Product in or for the Royalty Territory pursuant to this
Agreement, covering subject matter at a level of detail reasonably sufficient
to enable Affymax to determine Takeda’s compliance with its Diligent Efforts
obligation pursuant to this Section 5.6.


 


5.7          Co-Promotion in the U.S. 
Affymax shall co-promote the Product in the Renal Indications in the
U.S. jointly with Takeda pursuant to a co-promotion agreement describing the
co-promotion activities of the Parties for the Product in such indications (the
“Co-Promotion Agreement”).  The Co-Promotion Agreement shall have the
terms set forth in the term sheet attached to this Agreement as Exhibit L,
as well as such other terms as the Parties may agree and as are customary in an
agreement of that type.  The Parties
shall execute the Co-Promotion Agreement by such time as the JSC approves to be
sufficiently prior to the then-current U.S. 


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


39

















 


Approval Date in any
Renal Indication.  The “Co-Promotion Term” shall be set forth in
the Co-Promotion Agreement and shall commence upon execution of the
Co-Promotion Agreement and shall continue as long as the Co-Promotion Agreement
remains effective.  Unless terminated
earlier in accordance with its terms, the Co-Promotion Agreement shall become
effective as from the execution thereof and shall remain effective until the
Generic Competition Date (as defined in Section 8.5(b)) in the U.S., and,
thereafter, shall be extended automatically by periods of one (1) year
unless either Party informs the other Party of its intention not to extend the
Co-Promotion Agreement, with written notice to that effect given to the other
Party no later than six (6) months prior to the then-current expiration
date.  If, in accordance with the
previous sentence of this Section 5.7, a Party exercises its right not to
extend the Co-Promotion Agreement, then the Co-Promotion Agreement shall expire
on the then-current expiration date and this Agreement shall expire with regard
to the U.S. in accordance with Sections 8.4 and 13.1 on the same date,
provided, however, that, if in such case of expiration, if Affymax is the Party
that exercised such right not to extend the Co-Promotion Agreement, then
notwithstanding anything to the contrary contained in Article 13, Takeda
shall be entitled to continue to use the Product Trademark in the U.S. for the
Product on an exclusive basis (even as to Affymax) by paying Affymax a
trademark royalty at the rate of [ * ] of the
Net Sales of the Product in the U.S.


 


5.8          Sales Force Training for
Commercialization in U.S.


 


(a)           All Affymax Sales Representatives shall be recruited
by Affymax at Affymax’s sole expense. All Takeda Sales Representatives shall be
recruited by Takeda at Takeda’s sole expense. 
For such recruitment, Takeda and Affymax shall jointly establish skill
and experience criteria for Sales Representatives who will Detail the Product
to target prescribers. At the request of Affymax, Takeda shall, to the extent
Takeda deems reasonable, provide Affymax with Takeda’s know-how and information
which may be useful in the Affymax’s recruitment of its Sales Representatives.
Appropriate number of Affymax Sales Representatives and Takeda Sales Representatives
shall be made available by each Party for training so that both Parties’ Sales
Representatives will be given the training simultaneously in accordance with
the then-current U.S. Approval Date of the Product for Renal Indication.


 


(b)           Each Party shall be responsible for the training of its Sales
Representatives who will Detail the Product; provided, however, that Takeda
shall allow, upon request of Affymax, and only for the period until the [ * ]
for an Oncology Indication or until the [ * ], whichever is earlier, Affymax’s
Sales Representatives to participate in the training held by Takeda for its own
Sales Representatives for the Renal Indication. 
The expenses incurred by either Party for the training of its own Sales
Representatives, including but not limited to travel, lodging, meals during
such training period, the costs of trainers providing such training, the
training facility and training materials, but excluding salary and benefits
given by each Party to its Sales Representatives, shall be included in the
Commercial Expenses.


 


5.9          Compliance. Each Party shall comply with all
applicable Laws relating to activities performed or to be performed by such
Party (or its Affiliates, contractor(s) or sublicensee(s)) under or in
relation to the Commercialization of the Product pursuant to this
Agreement.  Each Party represents,
warrants and covenants to the other Party that, as of the Effective Date and
during the Term, such Party and its Affiliates have adequate procedures in
place: (i) to ensure their compliance with such Laws; (ii) to bring
any noncompliance therewith


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


40
















 


by any of the foregoing entities to its attention; and
(iii) to promptly remedy any such noncompliance


 


5.10        [ * ].  The Parties acknowledge that [ * ] of Product
[ * ] in the [ * ] could [ * ] the Product [ * ].  Accordingly, [ * ]:  (i) [ * ]
commercialize the Product [ * ]; or (ii) except
as set forth in the preceding clause (i), [ * ] Affiliate
or Third Party [ * ] for the Product [ * ], in each case without [ * ]
regarding Takeda’s or [ * ] the
Product [ * ]. 
[ * ] [ * ] shall be required, which [ * ] only if [ * ] that [ * ]
of the Product ([ * ]) [ * ]
for that purpose.  [ * ] any and all such
[ * ], and to use Diligent Efforts to [
* ] with [ * ].


 


5.11        Trademarks.


 


(a)           Use.  Takeda shall use
the Product Trademarks in connection with the Commercialization of the Product
throughout the Licensed Territory; provided, that if the Product Trademarks in
existence as of the Effective Date are not eligible for trademark protection in
connection with the Product in one or more countries in the Licensed Territory,
then the JSC shall identify alternative trademarks owned, registered or to be
registered by Affymax and to be used for the Product in such countries only,
for Takeda’s final selection from among such trademarks identified by the JSC,
and the Parties shall amend this Agreement to identify such marks and include
them as Product Trademarks for the applicable countries.  To the extent allowable by applicable Law in
each country within the Licensed Territory, Product packaging, Promotional
Materials and Product Labeling for use in the Licensed Territory shall carry,
in a conspicuous location, the Affymax House Marks, subject to Takeda’s
reasonable approval of the size, position and location thereof.


 


(b)           Filing; Maintenance.  Affymax
shall solely be responsible for and shall solely bear all costs of trademark
searches, prosecution of applications to register and to record licenses (if
applicable) for, and maintenance of, each Product Trademark and Affymax House
Mark in the Licensed Territory; provided, however, that with respect to the
U.S., such costs incurred by Affymax on or after the Effective Date shall be
included in the Commercial Expenses. 
Affymax shall provide Takeda reasonable opportunity to review and comment
on such prosecution efforts regarding the Product Trademarks in the Licensed
Territory.  Affymax shall provide Takeda
with a copy of material communications from any trademark office in the
Licensed Territory regarding such Product Trademarks, and shall provide Takeda
with drafts of any material filings or responses to be made to such trademark
office a reasonable amount of time in advance of submitting such filings or
responses.


 


(c)           Ownership.  Affymax
shall continue to own, throughout the world, any Product Trademarks and Affymax
House Marks.  All goodwill attributable
to a Product Trademark or Affymax House Mark generated by the Commercialization
of a Product bearing such marks shall inure to the benefit of Affymax.


 


(d)           Registration of Exclusive License. 
Upon request of Takeda and as far as legally permissible,
Affymax shall register before the relevant Governmental Authority that Takeda
is the exclusive licensee under the Product Trademarks pursuant to this
Agreement.


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


41

















 


(e)           Compliance with Guidelines.  Takeda shall provide Affymax with exemplars or
representative samples of primary (as reasonably agreed by the Parties)
Promotional Materials and Product Labeling containing any Product Trademarks
and Affymax House Mark which are intended to be broadly distributed or
direct-to-consumer prior to using or disseminating such materials, if and to
the extent such materials are used in the Royalty Territory and are
substantially different from the form and presentation already approved by the
JSC to be used in the U.S.  Affymax
shall have the right to make reasonable objections to any such
materials within five (5) Business Days of Affymax’s receipt of such
exemplars or samples on the grounds that Affymax believes in good faith that
the use of such materials will damage the reputation for quality associated
with the Product Trademarks or Affymax House Marks.  Takeda agrees to modify such Promotional
Materials and Product Labeling in accordance with such objections of Affymax as
far as it is reasonable.  Takeda acknowledges
Affymax’s sole ownership of the Product Trademarks and Affymax House Marks and
agrees not to take any action inconsistent with such ownership.  Takeda covenants that it shall not use any
trademark confusingly similar to any Product Trademarks or Affymax House Marks
in connection with any products (including the Product).  Takeda shall comply with reasonable policies
provided by Affymax from time to time to maintain the goodwill and value of the
Product Trademarks and Affymax House Marks, subject that such policies are not
detrimental to the Commercialization of the Product and are in line with the
relevant Laws.  In any Takeda materials
in which the Product Trademarks or Affymax House Marks appear, Takeda shall
display a trademark legend in substantially the following form (tailored to
reflect which trademark is being used):  “{trademark}TM”
is a trademark owned by Affymax” Affymax grants no rights in the Product
Trademarks or Affymax House Marks other than those expressly granted in Section 6.2.


 


ARTICLE 6


 


LICENSES
AND PARALLEL PROGRAMS


 


6.1          Licenses to Takeda under Affymax Technology.  Subject to the terms and
conditions of this Agreement, Affymax hereby grants Takeda an exclusive (even
as to Affymax, subject to the rights and obligations of Affymax under this
Agreement), royalty-bearing (as provided in Article 8) license under the
Affymax Technology to use and import Hematide in the Field in the Licensed
Territory, to Develop (as and to the extent permitted in this Agreement), use,
sell, offer for sale, and import the Bulk API and/or the Product in the Field
in the Licensed Territory, and to make and have made the Finished Product
anywhere in the world for such Development or sale (subject to Article 7)
in the Field in the Licensed Territory. 
The license granted in this Section 6.1 may be sublicensed by
Takeda to any Affiliate of Takeda without any need to obtain any further
consent from Affymax, whether oral or in writing, subject to Section 5.10.  Further, the license granted in this Section 6.1
may be sublicensed by Takeda to Third Parties only in the Royalty Territory and
only with the prior written consent of Affymax, not to be unreasonably withheld
and subject to Section 5.10.  For
clarity, the foregoing license does not permit Takeda to Develop using the
Affymax Technology any  Replacement
Product Candidate, Backup Compound,
Additional Product or any other derivative or analogue of the Peptide[ * ] or Hematide, except to the extent it obtains such
right pursuant to Sections 3.8, 3.9
and 3.12.


 


6.2          Limited License for Product Trademarks and
Affymax House Marks.  Affymax
hereby grants to Takeda, during the Term, an exclusive, royalty-bearing license
(as 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


42

















 


provided in Section 8.5) within the Licensed
Territory to use and display the Product Trademarks and Affymax House Marks
solely in the Promotional Materials and the Product Labeling in connection with
the Commercialization of the Product within the Licensed Territory, as provided
under and in accordance with Section 5.11 of this Agreement; provided that
such license shall be co-exclusive with Affymax in the U.S. and further that
Affymax may use such co-exclusive right solely for the Commercialization of the
Product within the U.S. with Takeda hereunder. 
The foregoing license may be sublicensed by Takeda to its Affiliates and
Third Parties sublicensees under the license granted in accordance with Section 6.1.


 


6.3          License to Affymax under Takeda Technology.  Subject to the terms and conditions of this
Agreement, Takeda hereby grants to Affymax a non-exclusive, royalty-free
license under the Takeda Technology to develop, use, and promote the Product in
the U.S., and to make and have made the Peptide, [ * ]
or Bulk API anywhere in the world for the Development or the Commercialization
by the Parties in the Licensed Territory under this Agreement during the
Term.  Such license shall be
sublicenseable by Affymax to any Affiliate of Affymax.  Such license shall also be sublicenseable to
any Third Party contract manufacturers of the Peptide, [ * ]
or Bulk API, only with the prior written consent of Takeda, such consent not to
be unreasonably withheld.


 


6.4          Negative Covenant.  Each Party covenants that it shall
not use or practice any of the other Party’s intellectual property rights
licensed to it under this Article 6 except for the purposes expressly permitted
in the applicable license grant under this Agreement.


 


6.5          No Implied Licenses.  Except as explicitly set forth in this
Agreement, neither Party grants any license, express or implied, under its
intellectual property rights to the other Party.


 


6.6          Parallel Programs.


 


(a)           If, during the
Term, Takeda or its Affiliates, either
on their own or in collaboration with a Third Party, market, promote or sell,
directly or indirectly, in the Licensed Territory for the prevention, treatment
or amelioration of [ * ] any therapeutic agent, other than the Product, that
includes or is comprised of an ESA, without Affymax’s prior written consent (a “Restricted Product”), then Affymax may, as
its sole remedy therefor, upon written notice to Takeda, in Affymax’s sole discretion
elect one of the following: (i) [ * ] [ * ] [ * ], or (ii) [ * ], [ * ]
ninety (90) days’ [ * ].  For avoidance
of doubt, this Section 6.6 does not restrict Takeda’s or its Affiliates’
research and development activities with regard to ESAs, provided that Takeda
acknowledges that it is not granted a license under the Affymax Technology to
conduct such activities.


 


(b)           Affymax, or its
Affiliates, either on their own or in collaboration with a Third Party, hereby
covenants and agrees, during the Term, not to market, promote or sell, directly
or indirectly, in the Licensed Territory a product for the prevention,
treatment or amelioration [ * ]  that
includes or is comprised of an [ * ], a Backup Compound or an ESA (other than
the Product in accordance with this Agreement). 
For the avoidance of doubt, the foregoing covenant shall not in any way
limit Affymax’s ability (i) to perform research and development of ESAs
for [ * ], and (ii) to develop and commercialize [ * ],
Backup Compound or any other 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


43

















 


product in the field of [ * ] or any indication other than the
prevention, treatment or amelioration of [ * ], provided that Affymax
acknowledges that, except for the purpose of the Backup Research Agreement, it
is not granted a license under the Takeda Technology to conduct such
activities.


 


6.7          Third Party Licenses.


 


(a)           Takeda understands
and acknowledges that certain rights contained within the Affymax Technology
have been licensed to Affymax from certain Third Parties pursuant to those
license agreements entered into as of the Effective Date and set forth in Exhibit I
(the “Existing Third Party License Agreements”)
and that Takeda’s rights under such Affymax Technology are subject to the
following terms and conditions set forth in such agreements:  (i) [ * ] Nektar
Agreement, which provides that [ * ]
(including without limitation [ * ] granted
to Takeda under this Agreement) shall [ * ], and (ii) [ * ] Nektar Agreement, which provides that the terms [ * ] the terms and conditions [ * ]   Promptly after the Effective Date, Affymax
shall use commercially reasonable efforts to request [ * ]
that, in the event that [ * ] (other
than [ * ] this Agreement), Affymax shall be
entitled to receive [ * ] for [ * ] contemplated hereunder, provided that in no event
shall the failure [ * ]
commercially reasonable efforts [ * ].  Affymax shall allow and fully cooperate with
Takeda in connection with [ * ]; if
Affymax fails to [ * ] within a reasonable time,
then Takeda upon reasonable advance written notice to Affymax, may [ * ].  The foregoing
provision of this Section 6.7(a) shall apply mutatis mutandis to the situation where
the [ * ] is actually terminated for any
reason and both Parties need a license under the [ * ] for the purpose of this Agreement. 
Affymax shall, during the Term, maintain the Third Party License
Agreements in full force and effect and shall not amend or modify such Third
Party License Agreements in a manner that would reasonably be expected to have
an adverse affect on Takeda’s rights and obligations hereunder and Takeda’s
efforts to Develop and Commercialize the Product in the Field and in the
Licensed Territory.


 


(b)           In the event that a
Party believes that a license under certain Third Party technology would be necessary
or useful with respect to the Development and Commercialization of the Product
in the Licensed Territory, then such Party shall notify the JSC.  The Parties, working through the JSC, shall
cooperate to obtain any such licenses under such terms and conditions as may be
authorized by the JSC.  Any acquisition
or license agreement entered into by the Parties in accordance with this Section 6.7(b) shall
be hereinafter called a “Future Third Party
License Agreement.”  The
effects of payments made under Future Third Party License Agreements on
royalties payable hereunder are described in Section 8.6(b).


 


6.8          Amendment to Japan Agreement.  The Parties agree to use good faith and
reasonable efforts to amend the Japan Agreement, within ninety (90) days after
the Effective Date, to reflect that Takeda is the licensee of Product both for
the Licensed Territory and for Japan (including, without limitation, by
deleting portions of the Japan Agreement that are no longer applicable).


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


44

















 


ARTICLE 7


 


MANUFACTURE
AND SUPPLY


 


7.1          Roles of the Parties.  Affymax shall supply, or cause to be supplied
through its Third Party contract manufacturers, in a timely manner, Takeda’s
entire requirements of Bulk API for the Development and Commercialization of
the Product by the Parties in or for the Licensed Territory, in accordance with
this Article 7 and the Supply Agreement. 
Takeda shall be responsible for the formulation of Bulk API supplied to
it by Affymax into the Finished Product and the manufacture of Finished Product
(including stability testing) for the Development and Commercialization of the
Product by the Parties in or for the Licensed Territory.


 


7.2          Preclinical and Clinical Supply.  Affymax shall, by itself or through its Third
Party contract manufacturers, supply to Takeda all quantities of Bulk API
reasonably required by Takeda to Develop the Product in the Licensed Territory
pursuant to the U.S. Development Plan and a plan for the ROW Development.  Takeda shall, by itself or through its Third
Party contract manufacturers and by using the Bulk API thus supplied by
Affymax, supply to both Parties all quantities of Finished Product reasonably
required to Develop the Product in the Licensed Territory pursuant to the U.S.
Development Plan and a plan for the ROW Development.  Such quantities of Bulk API and Finished
Product, and the schedule for such supply, shall be confirmed and if necessary
updated by the JSC in a manner consistent with the U.S. Development Plan and a
plan for the ROW Development.  Such
supply shall be governed by clinical supply and Bulk API manufacturing
agreements that the Parties shall negotiate in good faith promptly within
ninety (90) days following the Effective Date. 
The clinical supply agreement shall, in addition to other terms and
conditions agreed upon by the Parties, 
provide for the following:


 


(a)           Affymax shall,
before entering into negotiation for an agreement with a Third Party contract
manufacturer of Bulk API for supply to Takeda hereunder, notify Takeda of the
fact.  Thereafter, Takeda shall have the
right to provide input regarding the terms of such agreement (as well as any
amendments thereof), review and comment on agreement drafts and forms, consult
with Affymax regarding the negotiation of such agreement, and participate in
person in the negotiation of such agreement, as the Parties may agree, it being
understood that Affymax shall retain the final authority over the terms and
conditions of any such agreement with such Third Party contractor.    The Parties agree that [ * ]
should be qualified to manufacture Bulk API.


 


(b)           From time to time,
Takeda shall submit to Affymax purchase orders for quantities of Bulk API for
such use consistent, as far as reasonably practicable, with such confirmed, or,
if applicable, updated quantity and schedule which confirmation or update shall
be consistent, as much as reasonably possible, with the then-current U.S.
Development Plan and a plan for the ROW Development, and Affymax shall supply
or have supplied to Takeda such quantities of Bulk API.  All shipments to Takeda of Bulk API shall be
made [ * ].


 


(c)           Affymax shall
invoice Takeda for such Bulk API with each shipment, and Takeda shall pay such
invoices within thirty (30) days of its receipt of such invoice.  The price for supplies from Affymax to Takeda
of Bulk API for (non-clinical and clinical) Development of 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.


 


45

















 


the Product shall be [ * ]
for such Bulk API.  The price of Bulk API
used for the U.S. Development  as well as
the freight, postage, shipping, transportation, insurance, warehousing and
handling charges actually allowed or paid by Takeda with regard to such Bulk
API shall be included in the Development Expenses.


 


(d)           All Bulk API
supplied by Affymax to Takeda shall, when delivered, have been manufactured,
handled and stored by Affymax or its Third Party contract manufacturer(s) in
compliance with all agreed-upon specifications and applicable Laws, including
without limitation then-current GMP requirements.


 


(e)           Subject to the
following Section 7.2(f), the terms described in Sections 7.2(a), (b) and
(d) above shall apply, mutatis mutandis,
to Takeda’s provision of Finished Product to Affymax, it being understood that
Affymax shall provide Finished Product to both Parties during such time as
Takeda is establishing a source of Finished Product, not to exceed twelve (12)
months after the Effective Date,
unless mutually agreed upon otherwise by the Parties, and the terms described
in Section 7.2(c) above shall apply, mutatis
mutandis, to Affymax’s provision of Finished Product to Takeda.


 


(f)            With regard to the
Finished Product manufactured by or on behalf of Takeda and provided to
Affymax, Takeda shall not invoice Affymax. 
The Manufacturing Cost incurred by Takeda for the Finished Manufacture
of the Finished Product thus provided to Affymax or used by Takeda for the U.S.
Development, as well as the freight, postage, shipping, transportation,
insurance, warehousing and handling charges actually allowed or paid by Takeda
with regard to such Finished Product supplied to Affymax or used by Takeda,
shall be included in the Development Expenses. 
Likewise, the freight, postage, shipping, transportation, insurance,
warehousing and handling charges actually allowed or paid by Affymax with regard
to such Finished Product supplied to Affymax by Takeda, shall be included in
the Development Expenses.


 


(g)           Within ninety (90)
days after the Effective Date, the Parties shall discuss and agree upon the
terms pursuant to which Affymax shall provide to Takeda reasonable quantities
of: (i) reference standard compounds to the extent same are required to
exercise methods in Product specifications; and (ii) related substances,
both (i) and (ii) to the extent reasonably necessary for Takeda to
Develop the Product.  Provision of other
non-Product synthetic peptides (i.e.,
placebo) by Affymax to Takeda for Product development purposes shall be
discussed by the JSC and Affymax shall supply these at [ * ]
cost of preparation to Takeda as soon as reasonably practicable after approval
by the JSC.


 


For the purpose of this Section 7.2, both Parties shall abide by
the above-mentioned (a) to (g) prior to the conclusion of a clinical
supply agreement.


 


7.3          Commercial Supply Agreement.  The Parties shall timely negotiate
in good faith and enter into a manufacturing and supply agreement (the “Supply Agreement”) governing the supply of
Bulk API, by or on behalf of Affymax, to Takeda for the manufacture of Finished
Product for the Commercialization of the Product by the Parties hereunder, to
execute such Supply Agreement [ * ] for the
Product in the Licensed Territory, or [ * ],
whichever is earlier.  


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


46

















 


Such Supply Agreement shall contain customary terms
governing such manufacturing and supply relationships, and shall provide as
follows:


 


(a)           Bulk API meeting
the agreed specification and manufactured in accordance with the applicable
laws including then current GMP shall be supplied by or on behalf of Affymax to
Takeda in a timely manner consistent with established and agreed manufacturing
and delivery schedules at a cost equal to [ * ] the
manufacture of such Bulk API (which [ * ], with
such supply to be [ * ].


 


(b)           Affymax shall
establish [ * ] commercial Bulk API manufacture
in a timely manner to ensure that Affymax meets its obligation to supply
quantities of Bulk API ordered by Takeda under the Supply Agreement.  Upon the material and uncured breach by
Affymax of its defined supply obligations as set forth in the Supply Agreement,
Takeda shall have the right to obtain transfer and Affymax shall have the
obligation to give transfer free of charge to Takeda, without undue delay, of
any and all manufacturing technology necessary to enable it to manufacture or
have manufactured Bulk API to meet its requirements.  If such transfer occurs, Affymax would grant,
without prejudice to any other remedies that are available to Takeda, to Takeda
any additional licenses necessary to enable Takeda to exercise the foregoing
manufacturing right without requiring Takeda to pay any additional
consideration for such licenses.


 


(c)           Takeda shall be
responsible for the Finished Manufacture, testing (including stability testing)
and final release of the Finished Product for Commercialization in the Licensed
Territory.  With regard to the Finished
Product manufactured by or on behalf of Takeda and used or sold for
Commercialization in the U.S., the Manufacturing Cost incurred by Takeda for
the Finished Manufacture of the Finished Product thus used or sold in the U.S.
hereunder, as well as the freight, postage, shipping, transportation,
insurance, warehousing and handling charges actually allowed or paid by Takeda
with regard to such Finished Product shall be included in the Cost of Goods
Sold in the calculation of the U.S. Product Profit.


 


7.4          Cost Audit.  Each Party shall use Diligent Efforts to
minimize the Manufacturing Cost while assuring the quality and availability of
Bulk API or Finished Product, as applicable, and shall consider in good faith
all reasonable input from the other Party for such purpose. Each Party shall
maintain complete and accurate records in sufficient detail to permit the other
Party to confirm the accuracy of the calculation of Manufacturing Cost and
resulting supply price payments due under this Agreement or the Supply
Agreement.  Upon reasonable prior notice,
such records shall be available during regular business hours for a period of
three (3) years from the creation of individual records for examination at
the auditing Party’s expense, and not more often than once each Fiscal Year, by
an independent certified public accountant selected by the auditing Party and
reasonably acceptable to the audited Party, for the sole purpose of verifying
the accuracy of the calculation of the supply price pursuant to this
Agreement.  Any such accountant shall not disclose the
audited Party’s Confidential Information, except to the extent such disclosure
is necessary to verify the accuracy of amount of supply price due by the
auditing Party under this Agreement.  Any
amounts determined by such accountant
to be overpaid, if any, shall be reimbursed to the auditing Party within thirty
(30) days from issuance of the accountant’s
report, plus interest (as set forth in Section 8.7) from the original due
date.  Any amounts determined to be
underpaid shall be paid within thirty (30) days from the accountant’s 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


47

















 


report.  The
auditing Party shall bear the full cost of such audit unless such audit
discloses an overpayment of the amount actually owed during the applicable
Fiscal Year of more than [ * ], in which
case the audited Party shall bear the full cost of such audit.


 


7.5          Facility Audits. Each Party shall
be permitted to conduct an inspection or audit of the other Party’s facility or
a facility of any Third Party contract manufacturer under contract with such
other Party for the manufacture and supply of the Bulk API or Finished Product,
as applicable, in or for the Licensed Territory.  The audited Party shall allow the auditing
Party to make such inspection or audit of any such the audited Party facility,
and shall exercise its rights under any agreement between the audited Party and
any such Third Party contract manufacturer to enable the auditing Party to make
such inspection or audit of such Third Party contract manufacturer’s facility,
in each case to the extent relevant to the Bulk API or Finished Product
supplied in or for the Licensed Territory and during normal business hours. The
audited Party shall reasonably cooperate with the auditing Party to facilitate
such inspection or audit. Any such inspection or audit by the auditing Party
pursuant to this Section 7.5 shall be conducted no more frequently than
once every year at a given facility, and shall occur as promptly as possible
following written notice by the auditing Party of its desire for such
inspection or audit, but in no event later than three (3) months
thereafter (unless such audit is triggered by a material safety issue, in which
case the maximum notice period shall be one (1) week).  Notwithstanding the foregoing, if any notice
or observation is made by a Regulatory Authority of noncompliance of such
facility with applicable Law in connection with Bulk API, the auditing Party
may conduct an inspection or audit of such manufacturing facility more
frequently than provided in the prior sentence to the extent necessary to
confirm that the relevant matters in such notice or observation are adequately
addressed. The Supply Agreement shall include additional rights of audit and
inspection of facilities used to manufacture Bulk API to be supplied to Takeda
in circumstances other than those described in this Section 7.5, to the
extent and on such terms as the Parties may reasonably agree. Costs associated
with auditing shall be solely borne by the auditing Party.


 


7.6          Quality Agreement.   The Parties shall negotiate in
good faith and enter into a quality agreement governing the quality control,
quality assurance and validation of the commercial and clinical supply of the
Bulk API to Takeda by or on behalf of Affymax and the commercial and clinical
supply of Finished Product by or on behalf of Takeda.  The Parties acknowledge and understand that,
in order for the Product to be Commercialized in the Licensed Territory, Bulk
API supplied to Takeda by Affymax hereunder must be manufactured, handled and
stored in compliance with the GMP required by various Regulatory Authorities in
the Licensed Territory.  Accordingly, the
quality agreement shall incorporate a provision stating that, should GMP as
required by a particular Regulatory Authority impose additional or different
obligations than are imposed under GMP as required by the FDA, then each Party
shall, itself or through a Third Party contract manufacturer acting on behalf
of that Party, comply with such GMP requirements with respect to Bulk API
supplied to Takeda pursuant to this Agreement for use in the applicable country
or territory; provided that (i) Takeda has previously notified Affymax in
writing of such additional or different obligations, (ii) Affymax shall
have a reasonable time after receiving such notice to comply with such
additional or different obligations, and (iii) that Takeda shall cooperate
to a reasonable extent with Affymax to enable Affymax to comply with such obligations.


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


48

















 


7.7          [ * ]
Source.  The Parties
shall establish [ * ] of Bulk API manufacturing
and [ * ] of Finished Manufacture as
follows:  (i) Affymax shall be
responsible for screening potential manufacturers, negotiating the applicable
supply agreement, and effecting the technology transfer as necessary to
establish and qualify [ * ] Bulk API
manufacturers, whether those are Affymax, its Affiliates, or Third Parties;
provided, that, Takeda shall have the right to provide input regarding the
terms of such agreements (as well as any amendments thereof), review and
comment on agreement drafts and forms, consult with Affymax regarding the
negotiation of such agreements between Affymax and Third Party contract
manufacturers, and [ * ], as the
Parties may agree, it being understood that Affymax shall retain the final
authority over the terms and conditions of any such agreements with such Third
Party contractors; (ii) Takeda shall be responsible for screening
potential Finished Product manufacturers, negotiating the applicable supply
agreements, and effecting the technology transfer as necessary to establish and
qualify [ * ] Finished Product manufacturers,
whether those are Takeda, its Affiliates or Third Parties; and (iii) in
any event, Affymax shall have the right, upon written notice to Takeda and at
Affymax’s cost, to establish additional sources of Finished Manufacture, other
than Takeda or its Affiliates, at Affymax’s cost and discretion.  In case the manufacturing sources are not the
Parties or their Affiliates but rather are Third Party contractors, then the
costs incurred by the Parties in connection with the establishment of such
manufacturing sources pursuant to the above subsection (i) or (ii), shall
be treated as Commercial Expenses.


 


ARTICLE 8


 


COMPENSATION


 


8.1          License Fee. No later than five (5) Business
Days after the Effective Date, Takeda shall pay to Affymax a license fee of One
Hundred Five Million Dollars ($105,000,000) by wire transfer of immediately
available funds into an account designated by Affymax in writing; provided,
that if Affymax has not provided Takeda with two copies, properly completed by
and with original signatures of Affymax, of document(s) necessary to claim
the benefit of an income tax treaty (i.e., Form 3, “Application Form for
Income Tax Convention”, because Takeda already has Form 17, “Attachment Form For
Limitation On Benefits Article” which was given by Affymax under the Japan
Agreement), for submission to the Japanese tax authorities on or before the
Effective Date, then such due date shall be extended to be no later than five (5) Business
Days after the day such form is received by Takeda.  Such license fee shall be non-refundable and
non-creditable against any other payments due hereunder.


 


8.2          Development Milestone Payments.  Takeda shall make milestone
payments to Affymax based on the first achievement of each milestone event in
the Licensed Territory for the Product as set forth in this Section 8.2.  Takeda shall pay to Affymax the amounts set
forth below within thirty (30) days after the first achievement of the
corresponding milestone event with respect to the Product.  Each such payment shall be made by wire
transfer of immediately available funds into an account designated by Affymax.  Each milestone payment by Takeda to Affymax
hereunder shall be payable only once, regardless of the number of times
achieved by one or more Products.  Each
such payment is non-refundable and non-creditable against any other payments
due hereunder.


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


49
















 


	
  Milestone Event

  	
   

  	
  Milestone Payment

  	
   

  
	
  [ * ]

  	
   

  	
   

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  Completion(2) of the
  first  pivotal Phase III Clinical
  Trial for the Product for the Regulatory Approval in the U.S. by either Party
  anywhere in the Licensed Territory  for
  treatment of:

  	
   

  	
   

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  Pre-Dialysis CKD Anemia

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
  Dialysis CKD Anemia

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
  Acceptance by FDA of
  the first NDA submission in the United States for the Product for treatment
  of:

  	
   

  	
   

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  Pre-Dialysis CKD Anemia

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
  Dialysis CKD Anemia

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
  [ * ]

  	
   

  	
   

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  Receipt of Regulatory
  Approval of the Product in either Renal Indication (i.e., Pre-Dialysis CKD
  Anemia or Dialysis CKD Anemia) whichever is earlier in the following
  territories:

  	
   

  	
   

  	
   

  
	
  United States

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  Receipt of Regulatory
  Approval of the Product, in the following territories, in the other Renal
  Indication (the indication other than that for which the preceding milestone
  was paid):

  	
   

  	
   

  	
   

  
	
  United States

  	
   

  	
  $

  	
  45,000,000

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  Total Milestone Payments

  	
   

  	
  $

  	
  280,000,000

  	
   

  



 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


50

















 






(1)     For clarity, [
*]


(2)     For purposes of
this section, “completion” means locking of the database for analysis of the
study.


(3)     For clarity, the
[ *] milestone for [ *] shall be payable upon the [ *]


(4)     For clarity, the
milestones for [ *] shall be payable upon [ *]


(5)     For clarity, if
[ *] milestones will be payable [ *]


 


8.3          Sales Milestone Payments. 
Takeda shall make milestone payments to Affymax based on the first
achievement of each milestone event in the Licensed Territory as set forth in
this Section 8.3.  Takeda shall pay
to Affymax the amounts set forth below as soon as reasonably possible after
Takeda recognizes and confirms the first achievement of the corresponding
milestone event with respect to the Product but in no event later than within
ninety (90) days after the end of a calendar quarter in which the corresponding
milestone event is achieved; provided, however, that if Affymax reasonably
believes that a milestone has been achieved, then Affymax shall notify the
Finance Subcommittee, which shall promptly assess the situation and send a
recommendation to the JSC and the JSC shall determine whether such milestone
has been met.  If the JSC confirms that
such milestone has been met, then Takeda shall make the corresponding milestone
payment within ten (10) Business Days from such confirmation.  Each such payment shall be made by wire
transfer of immediately available funds into an account designated by Affymax
in writing.  Each milestone payment by
Takeda to Affymax hereunder shall be payable only once, regardless of the
number of times achieved by one or more Products.  Each such payment is non-refundable and
non-creditable against any other payments due hereunder.


 


	
  Milestone Event

  	
   

  	
  Milestone Payment

  	
   

  
	
  [ * ]

  	
   

  	
   

  	
   

  
	
  $[ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  $[ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  $[ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  $[ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  
	
  $[ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  



 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


51

















 


8.4          Sharing of U.S. Expenses
and U.S. Product Profit.  During the Co-Promotion Term,
Affymax and Takeda shall share equally in the U.S. Product Profit for each
Finished Product.  Within twenty (20) Business Days
of the end of each calendar quarter following the First Commercial Sale of the
Finished Product in the U.S., each Party shall report to the Finance
Subcommittee its revenues and individual Commercial Expense items (with
appropriate supporting information) involved in the computation of U.S. Product
Profit and accrued during such quarter with respect to each such Finished
Product.  Such reports shall be in such
form as the Parties may agree from time to time.  The JSC and the Finance Subcommittee shall
create and maintain procedures for the reporting and implementation of Profit
Equalization Payments with respect to each Collaboration Product.  In addition, Takeda shall provide Affymax
with a monthly statement of the amount of gross sales of Product in the
U.S.  Notwithstanding the foregoing, with
regard to the Commercial Expenses incurred by either Party before the First
Commercial Sale in the U.S., the Parties shall calculate and equally share them
on a calendar quarterly basis and shall make reconciliation, if necessary for
this purpose of equal sharing, within twenty (20) Business Days after each calendar quarter.


 


8.5          Royalties.


 


(a)           Royalty Rate.  Takeda shall pay to Affymax royalties based on the
aggregate annual Net Sales of the Finished Product sold in the Royalty
Territory at the rates set forth below:


 


(i)            [ * ] aggregate Net Sales of such Product in
the Royalty Territory during a Fiscal Year that is equal to or less than $[ * ];


 


(ii)           [ * ] aggregate Net Sales of such Product in
the Royalty Territory during a Fiscal Year that is greater than $[ * ] but equal to or less than $[ * ];
and


 


(iii)         [ * ]
aggregate Net Sales of such Product in the Royalty Territory during a Fiscal
Year that exceeds $[ * ].


 


For the purpose of calculation of “the aggregate annual Net Sales of
the Finished Product sold in the Royalty Territory” mentioned above, the Net
Sales of the Product sold in a country of the Royalty Territory on and after
the Generic Competition Date (as defined in Section 8.5(b)) in such
country shall be excluded.


 


(b)           Royalty Rate Step Down.  Takeda acknowledges that it shall continue to enjoy
substantial benefit from its license under, and the transfer to Takeda of
certain elements of, the Affymax Technology pursuant to this Agreement
(including without limitation the Affymax Know-How licensed to Takeda, and the
regulatory data to be provided to Takeda, pursuant to this Agreement) as well
as from Takeda’s own development of Takeda Technology derived from the practice
of such license and Takeda’s use of such Affymax Technology, even after
expiration of all Valid Claims of the Affymax Patents and Joint Patents
covering the composition of matter of the Product in a country in the Licensed
Territory, determined on a country-by-country basis (and Product-by-Product
basis if applicable) (the date upon which the last to expire of such Valid
Claims occurs for the Product in a particular country, the “Expiration Date”).  Accordingly, Takeda shall, on a
country-by-country (and Product-by-Product basis if applicable), continue to 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


52

















 


pay royalties on Net Sales of Product by Takeda, its
Affiliates and sublicensees after the Expiration Date in the applicable
country, in consideration for the foregoing non-patent benefits, at rates equal
to [ * ] of the rates set forth in Section 8.5(a) above
(resulting in royalty rates of [ * ], which
shall also apply to the royalties to be paid from First Commercial Sale for the
Net Sales in countries of the Royalty Territory wherein there is no Affymax
Patents covering the composition of matter of the Product).  Such reduced royalty rates shall continue in
effect, on a Product-by-Product and country-by-country basis, until the end of
the second consecutive quarterly period during which one or more Third Parties  have [ * ] of such
Product in such country equal to or greater than [ * ]
such Product [ * ] taken together in the
aggregate (such date, the [ * ]).  After
the [ * ], Takeda shall continue to pay
royalties equal to [ * ] of Net
Sales of Product by Takeda, its Affiliates and sublicensees in the applicable
country of the Royalty Territory, in consideration for the use of the Product
Trademark. Such royalty of [ * ] shall be
payable for so long as Takeda is selling the Product in such country using the
Product Trademark.  As used in this Section 8.5(b),
“[ * ]” means [ * ] Product and that has [ * ] through [ * ] under [ * ] the foregoing that [ * ]
the Product.


 


(c)           Royalty Payments and Reports. 
All amounts payable to Affymax pursuant to this Section 8.5 shall
be paid in Dollars on a calendar quarter basis, subject to semi-annual
reconciliation, in accordance with this Section 8.5(c).  Takeda shall, within twenty (20) Business
Days of the end of each calendar quarter, deliver Affymax a non-binding
estimate of the amounts payable to Affymax pursuant to this Section 8.5
based on the estimated Net Sales of the Product in the Royalty Territory during
such calendar quarter (the “Estimated Royalty”)
and shall provisionally pay to Affymax the Estimated Royalty for the calendar
quarter.  It is understood that the exact
amount of the Net Sales in the Royalty Territory for such calendar quarter as
well as the IMS or other data necessary to determine whether the [ * ] has come
or not in a certain country or countries of the Royalty Territory may not be
available for the purpose of calculation of the Estimated Royalty, and Takeda
may calculate the Estimated Royalty from the flash report then available to
Takeda (for gross sales) and deduction therefrom at the rate of [ * ] during the first [ * ] following the First Commercial
Sale in the Royalty Territory; and, within a reasonable time after such [ * ]
period, the appropriateness of the rate of such deductions shall be reviewed by
the Parties based on the actual deductions for the Product since the First
Commercial Sale thereof and, the rate of deduction applied thereafter, upon
mutual agreement between the Parties, shall be modified or adjusted based on
such actual deductions, and, if necessary, be further reviewed, modified or
adjusted from time to time upon mutual agreement.  Takeda shall, within ninety (90) days after
the end of each half of the Fiscal Year, deliver Affymax a fixed report of the
amount which should have actually been paid to Affymax, pursuant to this Section 8.5,  for the Net Sales in such half of the Fiscal
Year as well as the report with respect to the amount to be paid from one Party
to the other Party for reconciliation of the difference between the Estimated
Royalties paid by Takeda to Affymax and the actual amount to have been paid by
Takeda to Affymax, pursuant to this Section 8.5, for the actual Net Sales
during the same half of the Fiscal Year. 
Within twenty (20) Business Days after Affymax’s receipt of such
reports, both Parties shall make reconciliation accordingly (i.e., by Affymax’s
paying the amount owed to Takeda (in the case of excess payment by Takeda) or
by Takeda’s paying the amount owed to Affymax (in the case of short payment by
Takeda)) for the same half Fiscal Year, without one Party being required to pay
the other Party any interest thereon. 
Takeda shall provide Affymax with a monthly flash statement of the
amount of gross sales of Product in 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


53

















 


the Royalty Territory during the applicable
month.  Each fixed report delivered by
Takeda to Affymax once every half of the Fiscal Year mentioned above shall
include a monthly statement of the amount of gross sales of Product in the
Royalty Territory during the applicable half of the Fiscal Year, an amount of
Net Sales in the Royalty Territory during such half of the Fiscal Year with
quarterly breakdown, and a calculation of the amount of royalty payment due on
such sales for such half of the Fiscal Year with quarterly breakdown.  Takeda shall require its sublicensees to
account for their Net Sales and to provide such reports with respect thereto so
that Takeda can fulfill the above-mentioned obligation in this Section 8.5(c).


 


8.6          Third Party Payments.


 


(a)           Existing Agreements. 
In addition to the royalties owed pursuant to Section 8.5, Takeda
shall reimburse Affymax for those royalties set forth on Exhibit I due to
Third Parties pursuant to the Existing Third Party License Agreements (as
listed on Exhibit I) with respect to the Commercialization of the Product
in the Royalty Territory by Takeda, its Affiliates or sublicensees.  All royalties set forth on Exhibit I due
to Third Parties pursuant to the Existing Third Party License Agreements with
respect to the Commercialization of the Product in the U.S. shall be included
in the Commercial Expenses.


 


(b)           Future Agreements.  Except as provided in Section 9.13, both Parties,
through their involvement in the JSC, shall participate in the negotiation of
Future Third Party License Agreements pursuant to Section 6.7(b).  The royalties, milestones, and other payments
due to Third Parties in respect of the license or acquisition of any Third
Party technology pursuant to a Future Third Party License Agreement, if
concluded by Affymax and/or Takeda with a Third Party with respect to the
Development and Commercialization of the Product in the Royalty Territory under
this Agreement shall be borne by Takeda; provided, that Takeda shall have the
right to deduct up to [ * ] of any such royalties, milestones, and other
payments borne by Takeda from the amounts otherwise due to Affymax under Section 8.5
of this Agreement; provided, that in no event shall such deduction reduce the
effective royalty rate payable to Affymax [ * ].  By way of example, [ * ]
in [ * ] [ * ] in [ * ]: (i) if the [ * ] Affymax [ * ] at that
time is [ * ] then there shall be [ * ] and Takeda shall [ * ] for [ *
]; and, (ii) if the [ * ] Affymax [ * ] at that time is [ * ], then
Takeda shall [ * ] such [ * ]
and [ * ]. 
All royalties, milestones, and other payments due to Third Parties
pursuant to the Future Third Party License Agreements with respect to the
Development and Commercialization of the Product in the U.S. shall be included
in the Commercial Expenses.


 


(c)           Reimbursement Procedures. In the event that a Future Third Party
License Agreement provides for payments that are not directly associated with
the Development and/or Commercialization of the Product in a particular
geographic territory, then such payments shall be allocated as follows for
purposes of this Section 8.6: seventy percent (70%) to the U.S. and thirty
percent (30%) to the Royalty Territory. 
On a quarterly basis, Affymax shall invoice Takeda for payments which
Affymax actually made during such quarter to Third Parties to whom such
payments are due under a Future Third Party License Agreement, and Takeda shall
pay to Affymax such invoiced amount within thirty (30) days.


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


54

















 


8.7          Taxes.


 


(a)           Cooperation and Coordination.  The Parties acknowledge and agree that it is their
mutual objective and intent to minimize, to the extent feasible and legal,
taxes payable with respect to their collaborative efforts under this Agreement
and that they shall use all commercially reasonable efforts to cooperate and
coordinate with each other to achieve such objective.


 


(b)           Payment of Tax.  A Party receiving a payment pursuant to this Article 8
shall pay any and all taxes levied on such payment.  If applicable Law requires that taxes be
deducted and withheld from a payment made pursuant to this Article 8, the
remitting Party shall promptly notify the other Party and provide all relevant
information available to it and (i) deduct those taxes from the payment; (ii) pay
the taxes to the proper taxing authority; and (iii) send evidence of the
obligation together with proof of payment to the other Party within sixty (60)
days following that payment.


 


(c)           Tax Residence Certificate.  A Party (including any entity to which this Agreement
may be assigned, as permitted under Section 15.5) receiving a payment
pursuant to this Article 8 shall provide the remitting Party appropriate
certification from relevant revenue authorities that such Party is a tax
resident of that jurisdiction (a “Tax
Residence Certificate”), if such receiving Party wishes to claim the
benefits of an income tax treaty to which that jurisdiction is a party.  Upon the receipt thereof, any deduction and
withholding of taxes shall be made at the appropriate treaty tax rate.


 


(d)           Assessment.  Either Party may, at its own expense,
protest any assessment, proposed assessment, or other claim by any Governmental
Authority for any additional amount of taxes, interest or penalties or seek a
refund of such amounts paid if permitted to do so by applicable Law.  The Parties shall cooperate with each other in
any protest by providing records and such additional information as may
reasonably be necessary for a Party to pursue such protest.


 


8.8          Blocked Currency.  In each country where the local currency is blocked and
cannot be removed from the country, royalties accrued in that country shall be
paid to Affymax in Dollars and Takeda shall retain any amounts received in such
restricted local currency, unless the Parties otherwise agree.


 


8.9          Foreign Exchange. 
The rate of exchange to be used in computing the amount of currency
equivalent in Dollars owed to a Party under this Agreement shall be made at the
period-end rate of exchange quoted on the last day of the applicable calendar
quarter by Citibank in New York City.


 


8.10        Late Payments. 
If a Party does not receive payment of any sum due to it on or before
the due date, simple interest shall thereafter accrue on the sum due to such
Party until the date of payment at the per annum rate of [ * ]
over the then-current prime rate quoted by Citibank in New York City, or the
maximum rate allowable by applicable Law, whichever is lower.


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


55

















 


8.11        Records; Audits.  Each Party shall maintain complete and
accurate records in sufficient detail to permit the other Party to confirm the
accuracy of the calculation of payments to the other Party under this
Agreement.  Upon reasonable prior notice,
such records shall be available during regular business hours of audited Party
for a period of three (3) years from the creation of individual records
for examination at auditing Party’s expense, and not more often than once each
Fiscal Year, by an independent certified public accountant selected by auditing
Party and reasonably acceptable to audited Party, for the sole purpose of
verifying the accuracy of the financial reports furnished pursuant to this
Agreement.  Any such auditor shall not
disclose audited Party’s Confidential Information, except to the extent such
disclosure is necessary to verify the accuracy of the financial reports
furnished by audited Party or the amount of payments due by audited Party under
this Agreement.  Any amounts shown to be
owed but unpaid shall be paid within thirty (30) days from the accountant’s
report, plus interest (as set forth in Section 8.6) from the original due
date.  Any amounts determined to be
overpaid shall be refunded within thirty (30) days from the accountant’s
report.  The auditing Party shall bear
the full cost of such audit unless such audit discloses an underpayment of the
amount actually owed during the applicable Fiscal Year of more than [ * ], in which case audited Party shall bear the full cost
of such audit.


 


ARTICLE
9



INTELLECTUAL PROPERTY MATTERS


 


9.1          Ownership of Inventions. 
Each Party shall own any inventions made solely by its employees,
agents, or independent contractors in the course of conducting its activities
under this Agreement, together with all intellectual property rights therein (“Sole Inventions”).  Any inventions that are made jointly by
employees, agents, or independent contractors of each Party in the course of
performing activities under this Agreement, together with all intellectual
property rights therein (“Joint Inventions”)
shall be owned jointly by the Parties in accordance with joint ownership
interests of co-inventors under U.S. patent Laws, with each Party having,
unless otherwise set forth in this Agreement, the unrestricted right to license
and grant rights to sublicense each such Joint Invention, and each Party hereby
agrees to consent, without payment of any further consideration or royalty, to
the joint Party’s licensing of said joint Party’s interest in such Joint
Invention to Third Parties.  Inventorship
shall be determined in accordance with U.S. patent Laws.  Sole Inventions owned by Takeda and Takeda’s
interest in all Joint Inventions shall be included in the Takeda
Technology.  Sole Inventions owned by
Affymax and Affymax’s interest in all Joint Inventions shall be included in the
Affymax Technology.


 


9.2          Disclosure of Inventions.  Each Party shall promptly disclose to the other any
invention disclosures, or other similar documents, submitted to it by its
employees, agents or independent contractors describing inventions that may be
either Sole Inventions or Joint Inventions, and all Information relating to
such inventions.


 


9.3          Prosecution of Patents.


 


(a)           Affymax Patents Other than Joint
Patents.  Except as otherwise provided in this Section 9.3(a),
Affymax shall have the sole right, authority and obligation to file, prosecute
and maintain the Affymax Patents (other than Joint Patents which shall be
prosecuted 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


56

















 


and maintained in
accordance with Section 9.3(c)) on a worldwide basis.  Affymax shall provide Takeda reasonable
opportunity to review and comment on such prosecution efforts regarding such
Affymax Patents in the Licensed Territory. 
Affymax shall provide Takeda with a copy of material communications from
any patent authority in the Licensed Territory regarding such Affymax Patents,
and shall provide Takeda with drafts of any material filings or responses to be
made to such patent authorities a reasonable amount of time in advance of
submitting such filings or responses. 
Notwithstanding the foregoing, if Affymax desires to abandon or not
maintain any Patent within such Affymax Patents in the Licensed Territory, then
Affymax shall provide Takeda with thirty (30) days prior written notice of such
desire (or such longer period of time as reasonably necessary to allow Takeda
to assume such responsibilities) and, if Takeda so requests, shall provide
Takeda with the opportunity to prosecute and maintain such Patent in the
Licensed Territory in place of Affymax, at Takeda’s sole expense, in which case
Affymax shall assign such Patent in the Licensed Territory to Takeda (and such
Patent shall thereafter be included in the Takeda Patents).  If Takeda desires Affymax to file, in the
Licensed Territory, a patent application that claims priority from a Patent
within the Affymax Patents, other than a Joint Patent, in the Licensed
Territory, Takeda shall provide written notice to Affymax requesting that
Affymax file such patent application in the Licensed Territory.  If Takeda provides such written notice to Affymax,
Affymax shall either (i) file and prosecute such patent application and
maintain any patent issuing thereon in the Licensed Territory, at Affymax’s
expense, or (ii) notify Takeda that Affymax does not desire to file such
patent application and provide Takeda with the opportunity to file and
prosecute such patent application and maintain any patent issuing thereon in
the Licensed Territory in place of Affymax, at Takeda’s sole expense, in which
case Affymax shall assign such patent application or a right to file such
patent application described in (ii) to Takeda in the Licensed Territory
(and in which case such Patent thus assigned to or filed by Takeda shall be
included in the Takeda Patents).


 


(b)           Takeda Patents Other Than Joint
Patents.  Except as otherwise provided in this Section 9.3(b),
Takeda shall have the sole right and authority, but not an obligation, to
prosecute and maintain the Takeda Patents other than Joint Patents on a
worldwide basis at its sole discretion (subject to this Section 9.3(b))
and at its own cost and responsibility. 
Takeda shall provide Affymax reasonable opportunity to review and
comment on such prosecution efforts regarding such Takeda Patents.  Takeda shall provide Affymax with a copy of
material communications from any patent authority regarding such Takeda
Patents, and shall provide Affymax with drafts of any material filings or
responses to be made to such patent authorities a reasonable amount of time in
advance of submitting such filings or responses.    If Takeda determines in its sole discretion
to abandon or not maintain any Patent within the Takeda Patents other than a
Joint Patent anywhere in the world, then Takeda shall provide Affymax with
thirty (30) days’ prior written notice of such determination (or such longer
period of time reasonably necessary to allow Affymax to assume such
responsibilities) and shall provide Affymax with the opportunity to prosecute
and maintain such Patent in the applicable jurisdiction in place of Takeda at
Affymax’s sole expense, and if Affymax so requests, Takeda shall assign such
Patent to Affymax (in which case such Patent shall be included in the Affymax
Patents).  If Affymax desires Takeda to
file, in a particular jurisdiction, a patent application that claims priority
from a Patent within the Takeda Patents, Affymax shall provide written notice
to Takeda requesting that Takeda file such patent application in such
jurisdiction.  If Affymax provides such
written notice to Takeda, Takeda shall either (i) file and prosecute such
patent 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


57

















 


application and maintain
any patent issuing thereon in such jurisdiction at Takeda’s expense, or (ii) notify
Affymax that Takeda does not desire to file such patent application and provide
Affymax with the opportunity to file and prosecute such patent application and
maintain any patent issuing thereon at Affymax’s sole expense in place of
Takeda, in which case Takeda shall assign such patent application or a right to
file such patent application described in (ii) to Affymax (and in which
case such Patent shall be included in the Affymax Patents).


 


(c)           Joint Patents.  With respect to any potentially
patentable Joint Invention, the Parties shall meet and agree upon which Party
shall prosecute and maintain patent applications covering such Joint Invention
(any such patent application and any patents issuing therefrom a “Joint Patent”) in particular countries and
jurisdictions throughout the world.  It
is the intention of the Parties that, unless otherwise agreed, Takeda would
prosecute and maintain any Joint Patents in the Licensed Territory other than
the U.S., and Affymax would prosecute and maintain the Joint Patents in the
U.S., subject to the Parties coordinating their efforts as appropriate to make
such prosecution activities as efficient, convenient and harmonious as
possible.  The external costs of such
prosecution of the Joint Patents shall be shared equally by the Parties and the
internal costs of such prosecution of the Joint Patents shall be borne by the
Party that prosecutes a patent application in the Joint Patents (the “Prosecuting Party”).  The Prosecuting Party shall provide the other
Party reasonable opportunity to review and comment on such prosecution efforts
regarding the applicable Joint Patents in the particular jurisdictions, and
such other Party shall provide the Prosecuting Party reasonable assistance in
such efforts.  The Prosecuting Party
shall provide the other Party with a copy of all material communications from
any patent authority in the applicable jurisdictions regarding the Joint Patent
being prosecuted by such Party, and shall provide the other Party with drafts
of any material filings or responses to be made to such patent authorities a
reasonable amount of time in advance of submitting such filings or responses.  In particular, each Party agrees to provide
the other Party with all information necessary or desirable to enable the other
Party to comply with the duty of candor/duty of disclosure requirements of any
patent authority.  Except to the extent a
particular Party is restricted by the licenses granted to the other Party or
the other covenants contained in and subject to the terms of the Agreement,
each Party shall be entitled to practice, and grant to Third Parties and its
Affiliates the right to practice, the Joint Patents and all Joint Inventions
without restriction or an obligation to account to the other Party, and the
other Party hereby consents, without additional consideration, to any and all
such licenses.  Either Party may determine
that it is no longer interested in supporting the continued prosecution or
maintenance of a particular Joint Patent in a country or jurisdiction, in which
case:  (i) such Party may elect to
cease its ownership interest in such Joint Patents and shall, if requested in
writing by the other Party, assign its ownership interest in such Joint Patent
in such country or jurisdiction to the other Party for no additional
consideration, and (ii) thereafter, the electing Party shall be released
from any obligations with regard to such Joint Patents and any such Joint
Patent would thereafter be deemed a Affymax Patent in the case of assignment to
Affymax, or a Takeda Patent in the case of assignment to Takeda.


 


(d)           Cooperation in Prosecution. 
Each Party shall provide the other Party all reasonable assistance and
cooperation in the Patent prosecution efforts provided above in this Section 9.3,
including providing any necessary powers of attorney and executing any other
required documents or instruments for such prosecution.


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


 


58

















 


9.4          Patent Term Extensions in the
Licensed Territory.  The internal patent counsel of each Party
shall discuss and recommend for which, if any, of the Affymax Patents, Takeda
Patents and Joint Patents in the Licensed Territory the Parties should seek
Patent Term Extensions in the Licensed Territory, and, Affymax, in the case of
the Affymax Patents, and Takeda in the case of the Takeda Patents and Joint
Patents, shall have the final decision-making authority with respect to
applying for any such Patent Term Extensions in the Licensed Territory, and
shall act with reasonable promptness in light of the development stage of the
Product to apply for any such Patent Term Extensions, where it so elects, provided, however, that if in the Licensed
Territory only one such Patent can obtain a Patent Term Extension, then the
Parties shall consult in good faith to determine which such Patent should be
the subject of efforts to obtain a Patent Term Extension, and (a) in case
of disagreement with respect to the U.S., the JSC shall determine which single
Patent should be extended and (b) in case of disagreement with respect to
the Royalty Territory, Takeda’s decision on which single Patent to be extended
shall control. The Party that does not apply for an extension hereunder shall
cooperate fully with the other Party in making such filings or actions, for
example and without limitation, making available all required regulatory data
and information and executing any required authorizations to apply for such
Patent Term Extension.  All activities of
the Parties pursuant to this Section 9.4 for the Licensed Territory shall
be at the expense of the Party who owns such extended Patents (in case of Joint
Patents, expenses shall be shared equally by the Parties).


 


9.5          Infringement of Patents by Third
Parties.


 


(a)           Notification.  Each Party shall promptly notify
the other Party in writing of any existing or threatened infringement of the
Affymax Patents, Joint Patents or Takeda Patents of which it becomes aware, and
shall provide evidence in such Party’s possession demonstrating such
infringement.


 


(b)           Infringement of Affymax or Joint
Patents in the Licensed Territory.


 


(i)            If a Party becomes aware that a Third Party infringes
any Affymax Patent or Joint Patent in the Licensed Territory by making, using,
importing, offering for sale or selling the Product, Hematide, [ * ] or any product containing the Peptide, [ * ] (such activities, 
“Product Infringement”),
then such Party shall so notify the other Party as provided in Section 9.5(a),
which such notice shall include all Information available to the notifying
Party regarding such alleged infringement. 
The process for bringing a suit or action shall be as follows:


 


(1)           In the U.S., Affymax shall have the first right, but
not the obligation, to bring an appropriate suit or other action against any
person or entity engaged in such Product Infringement, subject to Section 9.5(b)(ii) below,
with such external expenses shared equally by the Parties (except as otherwise
expressly provided in this Section 9.5(b)(i)(1)).  Affymax
shall have a period of one hundred twenty (120) days after notification by a
Party hereunder (or shorter period, if required by the nature of the possible
proceeding), to elect to so enforce such Patent.  In the event it does not so elect, it shall
so notify Takeda in writing during such one hundred twenty (120) day time
period (or above-mentioned shorter period), and Takeda shall have the right,
but not the obligation, to commence a suit or take action to enforce the
applicable Patent against such Third Party perpetrating such Product
Infringement, with such external expenses shared equally by the Parties (except
as otherwise expressly provided in this


 






[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


59
















 


Section 9.5(b)(i)(1)).  Each Party
shall provide to the Party enforcing any such rights under this Section 9.5(b)(i)(1) reasonable
assistance in such enforcement, at such enforcing Party’s request, including
joining such action as a party plaintiff if required by applicable Law to
pursue such action.  The enforcing Party
shall keep the other Party regularly informed of the status and progress of
such enforcement efforts, and shall reasonably consider the other Party’s
comments on any such efforts.  Each Party
shall bear all of its own internal costs incurred in connection with its
activities under this Section 9.5(b)(i)(1).  Any recoveries under this Section 9.5(b)(i)(1) shall
first be applied to the recovery of external expenses incurred by both Parties
in bringing the suit or action; and the remaining amounts, if any, shall be [ * ].


 


(2)           In the Royalty Territory, Takeda shall have the first
right, but not the obligation, to bring an appropriate suit or other action
against any person or entity engaged in such Product Infringement, subject to Section 9.5(b)(ii) below,
at its sole cost and expense (except as otherwise expressly provided in this Section 9.5(b)(i)(2)). 
Takeda shall have a period of one hundred twenty (120) days (or shorter
period, if required by the nature of possible proceeding) after notification by
a Party hereunder, to elect to so enforce such Patent.  In the event Takeda does not so elect, it
shall so notify Affymax in writing during such one hundred twenty (120) day
time period (or above-mentioned shorter period), and Affymax shall have the
right, but not the obligation, to commence a suit or take action to enforce the
applicable Patent against such Third Party perpetrating such Product
Infringement at its sole cost and expense (except as otherwise expressly
provided in this Section 9.5(b)(i)(2)).  Each Party
shall provide to the Party enforcing any such rights under this Section 9.5(b)(i)(2) reasonable
assistance in such enforcement, at such enforcing Party’s request, including
joining such action as a party plaintiff if required by applicable Law to
pursue such action.  The enforcing Party
shall keep the other Party regularly informed of the status and progress of
such enforcement efforts, and shall reasonably consider the other Party’s comments
on any such efforts.  Any recoveries
obtained from a suit or an action commenced by Takeda hereunder shall first be
applied to the recovery of expenses incurred by Takeda in bringing the suit or
action; and the remaining amounts, if any, shall be [ * ].  Any recoveries obtained from a suit or an
action commenced by Affymax shall be [ * ].


 


(3)           Notwithstanding anything to the contrary in this Section 9.5,
Takeda acknowledges and agrees that, pursuant to Section 2.3(e) of
the Nektar Agreement, neither Affymax nor Takeda shall have any enforcement
rights with respect to the Enzon Patents.


 


(ii)           The Party notified but not bringing an action with
respect to Product Infringement in the Licensed Territory under Section 9.5(b) shall
be entitled to separate representation in such matter by counsel of its own
choice and at its own expense, but such Party shall at all times cooperate
fully with the Party bringing such action. Additionally, the Party not bringing
an action under this Section 9.5(b) may have an opportunity to
participate in such action to the extent that the Parties may mutually agree at
the time the other Party elects to bring an action hereunder.


 


(c)           Infringement of Takeda Patents (Other
than Joint Patents) in the Licensed Territory.  For all infringement
of any Takeda Patents (other than Joint Patents) in the Licensed Territory,
Takeda shall have the exclusive right, but not the obligation, to bring, at
Takeda’s expense and in its sole control, an appropriate suit or other action
against any person or 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


60

















 


entity engaged in such infringement of such Takeda
Patent.  Takeda shall have a period of
one hundred twenty (120) days (or shorter period, if required by the nature of
possible proceeding) after notification by a Party under Section 9.5(a),
to elect to so enforce such Patent.  In
the event Takeda does not elect to bring a suit or action, it shall so notify
Affymax in writing during such one hundred twenty (120) day time period (or
above-mentioned shorter period), then Affymax shall have the right, but not the
obligation, to commence a suit or take action to enforce the applicable Takeda
Patent against such Third Party perpetrating such infringement at its sole cost
and expense.  Each Party shall provide to
the Party enforcing any such rights under this Section 9.5(c) reasonable
assistance in such enforcement, at such enforcing Party’s request, including
joining such action as a party plaintiff if required by applicable Law to
pursue such action.  The enforcing Party
shall keep the other Party regularly informed of the status and progress of
such enforcement efforts, and shall reasonably consider the other Party’s
comments on any such efforts.  Any
recoveries by a Party proceeding hereunder shall be [ * ].


 


(d)           Settlement.  Takeda shall not settle any claim,
suit or action that it brings under this Section 9.5 involving Affymax
Patents (excluding Joint Patents) in any manner that would negatively impact
Affymax Patents anywhere in the world, or that would limit or restrict the
ability of either Party to manufacture, use, sell, offer for sale or import the
Product anywhere in the world, without the prior written consent of
Affymax.  Affymax shall not settle any
claim, suit or action that it brings under this Section 9.5 involving
Takeda Patents (excluding Joint Patents) in any manner that would negatively
impact the Takeda Patents or that would limit or restrict the ability of either
Party to manufacture, use, sell, offer for sale or import the Product anywhere
in the world, without the prior written consent of Takeda.  Neither Party shall settle any claim, suit or
action that it brings under this Section 9.5 involving Joint Patents in
any manner that would negatively impact the Joint Patents or that would limit
or restrict the ability of either Party to manufacture, use, sell, offer for
sale or import the Product anywhere in the world, without the prior written
consent of such other Party.


 


9.6          Infringement of Third Party Rights in
the Licensed Territory.


 


(a)           Notice.  If any
Product manufactured, used or sold by either Party, its Affiliates, licensees
or sublicensees becomes the subject of a Third Party’s claim or assertion of
infringement of a Patent granted by a jurisdiction within the Licensed
Territory relating to the manufacture, use, sale, offer for sale or importation
of Hematide, Peptide[ * ] or the
Product, the Party first having notice of the claim or assertion shall promptly
notify the JSC, and the Parties shall promptly meet to consider the claim or
assertion and the appropriate course of action for an approval by the JSC.


 


(b)           Defense. 
The Parties, working through the JSC, shall cooperate to defend any such
claims under the strategy, terms and conditions as may be authorized by the
JSC.  The JSC shall designate one Party
as the leading Party for such defense. 
The Parties shall make decisions with regard to such actions covered by
this Section 9.6 jointly through the JSC in accordance with the provisions
of Sections 2.5(b) and 2.5(c), provided that any unresolved disputes shall
not be subject to settlement by expedited arbitration and, in the case of any
unresolved dispute, each Party named as a defendant in such action shall be
entitled upon written notice to defend itself in such matter independently by counsel
of its own choice and at its own expense; provided, that each Party shall
inform the other Party of the progress of such defense 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


61

















 


and, if reasonably
requested by the other Party, shall reasonably cooperate with the other
Party.  For so long as the Parties
continue to pursue such matter jointly through the JSC, all costs and expenses
of any defense actions under this Section 9.6(b) shall be [ * ].  In any action pursued jointly by the Parties
through the JSC, the non-leading Party shall reasonably cooperate with the
leading Party, including if required to conduct such defense, furnishing a
power of attorney.   The non-leading
Party shall have the right to confer, through the JSC, with the leading Party
in any such defense and the leading Party shall consider in good faith such
input from the non-leading Party.  If
either Party desires to be released from the cost-sharing obligation described
above, then such Party (a “Removed Party”)
shall be entitled, upon thirty (30) days prior written notice to the JSC, to be
released from sharing such costs and the matter shall thereafter be handled and
pursued at the discretion of the continuing Party (a “Continuing Party”).  Following the end of such thirty (30) day
notice period, the Continuing Party shall bear all costs and expenses for the
continuation of the matter.  The Removed
Party shall promptly and reasonably cooperate to support the defense efforts of
the Continuing Party.  In any event, the
Removed Party shall forego its rights to separate representation in any matter
from which it has withdrawn.


 


(c)           Settlement. 
Neither Party shall enter into any settlement of any claim described in
this Section 9.6 that affects the other Party’s rights or interests
without such other Party’s written consent, which consent shall not be
unreasonably withheld or delayed.


 


(d)           Settlement Payment. 
Any amounts that either Party becomes obligated to pay as a result of
any settlement of or decision rendered in any defense pursuant to this Section 9.6
with respect to the manufacture, use, sale, offer for sale or import of the
Product in or for the Licensed Territory shall be [ * ]
and [ * ] as provided in Section [ * ].


 


9.7          Patent Marking. 
Takeda (or its Affiliate, sublicensee or distributor) shall mark Product
marketed and sold by Takeda (or its Affiliate, sublicensee or distributor)
hereunder with appropriate patent numbers or indicia at Affymax’s request to
the extent permitted by applicable Law, if such markings or such notices impact
recoveries of damages or equitable remedies available with respect to
infringements of patents in the Licensed Territory.


 


9.8          Infringement of Trademarks by Third
Parties.  Affymax shall take all reasonable and
appropriate steps to protect, defend and maintain each Product Trademark for
use in connection with a Product, and all registrations therefor.  Each Party shall notify the other Party
promptly upon learning of any actual, alleged or threatened infringement of  the Product Trademark.  Upon learning of such actual, alleged or
threatened infringement, Affymax shall have the obligation to, in consultation
with Takeda, institute and control an appropriate action or proceeding to halt
the infringement, unless the Parties otherwise mutually agree.  All recoveries in connection therewith shall
be allocated first to the costs and expenses of Affymax, and second, to the
costs and expenses (if any) of Takeda, with any remaining amounts (if any) to
be allocated as follows: (i) any recovery with respect to a country in the
Royalty Territory shall be shared equally, and (ii) any recovery with
respect to the U.S. shall be included in U.S. Product Profits for the
applicable Fiscal Year.  Takeda shall
have the right to participate in all such actions or proceedings.  For the purposes of the foregoing provisions
of this Section 9.8, Affymax shall also have the right to control
settlement of such claim; provided, however, that no settlement shall be
entered into without the written consent of Takeda, not to be unreasonably
withheld, conditioned 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


62

















 


or delayed if the
Commercialization of the Product is not adversely impacted by the
settlement.  With regard to any other
actual, alleged or threatened infringement by a Third Party of trade dress,
logo, slogan, or of any unfair trade practices, trade dress imitation, passing
off of counterfeit goods, or like offenses in relation to the Product, each
Party shall notify the other Party promptly upon learning of the same, and, the
JSC shall without delay consider and decide whether and what action should be
taken against thereto.


 


9.9          Patent Oppositions and Other
Proceedings.  If either Party desires to bring an
opposition, action for declaratory judgment, nullity action, interference,
declaration for non-infringement, reexamination or other attack upon the
validity, title or enforceability of a Patent owned or controlled by a Third
Party that covers, in the Licensed Territory, the Peptide, [ * ]
or the Product, or the manufacture, use, sale, offer for sale or importation of
the Peptide[ * ] or the Product (except
insofar as such action is a counterclaim to or defense of, or accompanies a
defense of, a Third Party’s claim or assertion of infringement under Section 9.6,
in which case the provisions of Section 9.6 shall govern), such Party
shall so notify the JSC and the Parties shall promptly confer to determine
whether to bring such action or the manner in which to settle such action for
the approval by the JSC.   The Parties
working jointly through the JSC shall cooperate to assert any such claims under
the strategy, terms and conditions as may be authorized by the JSC.  The JSC shall designate one Party as the
leading Party for such claims.  The
Parties shall make decisions jointly through the JSC in accordance with the
provisions of Sections 2.5(b) and 2.5(c), provided that any unresolved
disputes shall not be subject to settlement by expedited arbitration and, in
the case of any unresolved dispute, each Party shall be entitled to bring such
action or settlement thereof independently by counsel of its own choice and at
its own expense; provided, that each Party shall inform the other Party of the
progress of such action and, if reasonably requested by the other Party, shall
reasonably cooperate with the other Party.  
For so long as the Parties continue to pursue such matter jointly
through the JSC, all costs and expenses of any actions or settlement efforts
under this Section 9.9 shall be shared equally by the Parties.  In any action pursued jointly by the Parties
through the JSC, the non-leading Party shall cooperate fully with the leading
Party, including, if required, to conduct such defense, furnishing a power of
attorney.  The non-leading Party shall
have the right to confer with the leading Party, and the leading Party shall
consider in good faith input from the non-leading Party.  If either Party desires to be released from
the cost-sharing obligation described above, then such Party (a “Removed Party”) shall be entitled, upon
thirty (30) days prior written notice to the JSC, to be released from sharing
such costs and the matter shall thereafter be handled and pursued at the
discretion of the continuing Party (a “Continuing
Party”).  Following the end of
such thirty (30) day notice period, the Continuing Party shall bear all costs
and expenses for the continuation of the matter.  The Removed Party shall promptly and
reasonably cooperate to support the defense efforts of the Continuing Party.  In any event, the Removed Party shall forego
its rights to separate representation in any matter from which it has
withdrawn. Any awards or amounts received in bringing any such action, if any,
shall (a) if obtained through an action pursued jointly by the Parties
through completion, shall be first allocated to reimburse the Parties’
respective expenses in such action, and any remaining amounts shall be [ * ];
or (b) if obtained by a Continuing Party, shall be [ * ].


 


9.10        Parties’ Patent Rights. 
If an Affymax Patent, Joint Patent or Takeda Patent becomes the subject
of any proceeding commenced by a Third Party within the Licensed 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


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Territory in connection
with an opposition, reexamination request, action for declaratory judgment,
nullity action, interference or other attack upon the validity, title or
enforceability thereof (except insofar as such action is a counterclaim to or
defense of, or accompanies a defense of, an action for infringement against a
Third Party under Section 9.5, in which case the provisions of Section 9.5
shall govern), then the Party owning or otherwise Controlling such Patent shall
promptly notify the other Party of such effect and discuss with the other Party
how to defend such proceedings.  The
Party owning or otherwise Controlling such Patent shall, in close communication
and discussion with the other Party, control such defense and shall solely bear
the costs of such defense; provided that
if such action relates to a Joint Patent, the Parties shall confer and
determine which Party shall control such action and bear the associated
costs.  The controlling Party shall
permit the non-controlling Party to participate in the proceeding to the extent
permissible under applicable Law, and to be represented by its own counsel in
such proceeding, at the non-controlling Party’s expense.  Any awards or amounts received in defending
any such Third-Party action, if any, shall be first allocated to reimburse the
Parties’ respective expenses in such action, and any remaining amounts shall be
[ * ].


 


9.11        Orange Book Listing, Compendial
Listing.   Upon request of Takeda, Affymax shall
file appropriate information with the Regulatory Authority in the U.S. listing
any Affymax Patents in the Orange Book and shall allow Takeda to file
appropriate information with the Regulatory Authority in the Royalty Territory
listing any Affymax Patents in the Orange Book equivalent in such Royalty
Territory, if any, as a Patent related to the Product and the Parties shall use
Diligent Efforts to obtain and maintain such listing.


 


9.12        Registration of Exclusive
License.  Within a reasonable period of time after the Effective
Date, Affymax shall register before the Governmental Authorities in the
Licensed Territory that Takeda is the exclusive licensee under the Affymax
Patents pursuant to this Agreement.


 


9.13        Certain Patent
Matters.  With regard to [ * ] set forth
in [ * ] including any matters derived
from or related thereto (collectively the [ * ]), Affymax shall keep [ * ], and shall [ * ] where
practicable and to the extent consistent with Affymax’s [ * ];
provided, however, that Affymax [ * ] [ * ] that
would [ * ] in Hematide, the Peptide, [ * ] and the Product. 
Notwithstanding anything to the contrary in this Agreement, Affymax
shall be [ * ] of the [ * ] at [ * ],
and the [ * ] associated with the [ * ] with respect to the Development and Commercialization
of the Product in the Licensed Territory hereunder shall be [ * ] in accordance
with [ * ]; provided, that any [ * ] Affymax
[ * ] shall [ * ],
and [ * ], shall be [ * ].


 


ARTICLE
10



REPRESENTATIONS AND WARRANTIES


 


10.1        Mutual Representations
and Warranties.  Each Party hereby represents, warrants, and
covenants (as applicable) to the other Party as follows:


 


(a)           Corporate Existence and Power. 
It is a company or corporation duly organized, validly existing, and in
good standing under the Laws of the jurisdiction in which it is incorporated,
and has full corporate power and authority and the legal right to own and
operate 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


64

















 


its property and assets and to carry on its business
as it is now being conducted and as contemplated in this Agreement, including,
without limitation, the right to grant the licenses granted by it hereunder.


 


(b)           Authority and Binding Agreement. 
As of the Effective Date, (i) it has the corporate power and
authority and the legal right to enter into this Agreement and perform its
obligations hereunder; (ii) it has taken all necessary corporate action on
its part required to authorize the execution and delivery of the Agreement and
the performance of its obligations hereunder; and (iii) the Agreement has
been duly executed and delivered on behalf of such Party, and constitutes a
legal, valid, and binding obligation of such Party that is enforceable against
it in accordance with its terms.


 


(c)           No Conflict. 
It is not a party to any agreement that would prevent it from granting
the rights granted to the other Party under this Agreement or performing its
obligations under this Agreement.  The
execution, delivery and performance of this Agreement shall not violate,
conflict with or constitute a default under any agreement (including its
corporate charter or other organizational documents) to which it is a party or
to which it may be bound, or to its best knowledge, any applicable Laws or
order of any court or other tribunal.


 


(d)           No Debarment. 
In the course of the Development and Commercialization of the Product,
each Party has not used and shall not use, during the term of this Agreement,
any employee or consultant who has been debarred by any Regulatory Authority,
or is the subject of debarment proceedings by a Regulatory Authority.


 


10.2        Additional
Representations, Warranties and Covenants of Affymax. 
Affymax represents, warrants and covenants (as applicable) to Takeda as
follows, as of the Effective Date:


 


(a)           Regulatory Materials and Studies. 
To the best of Affymax’s knowledge, all Regulatory Materials Controlled
by Affymax in existence as of the Effective Date and to which Takeda has rights
of use or reference hereunder (collectively, “Affymax
Regulatory Materials”), including the Regulatory Materials described
in Section 4.1(a), have been prepared, maintained and retained in
accordance with applicable Laws.  All
preclinical and clinical studies conducted with respect to Hematide and the
Product in connection with the preparation of the Affymax Regulatory Materials,
including such studies from which the data described in Section 4.1(a) are
derived, have been conducted substantially in accordance with applicable Laws
by persons with appropriate education, knowledge and experience.  Affymax has not been debarred and is not
subject to debarment, in each case pursuant to Section 306 of the FD&C
Act or any similar law or regulation in any jurisdiction outside the United
States.


 


(b)           Sufficiency of License Grants.


 


(i)            Except as set forth on Schedule 10.2(b)(i) hereto,
the Affymax Patents, Affymax House Marks and Product Trademark are not subject
to any encumbrance, lien or claim or ownership by any Third Party that is
inconsistent with the rights and (sub)licenses granted to Takeda hereunder;


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


65

















 


(ii)           Except as set forth on Schedule 10.2(b)(ii) hereto,
Affymax owns or possesses adequate right, title and interest in any Affymax
Patents, Affymax House Marks and Product Trademark to grant the license thereto
to Takeda as provided in Article 6;


 


(iii)         No claim or litigation has been brought or, to the
knowledge of Affymax, is threatened to be brought, by any person or entity
alleging that (A) any of the Affymax Patents, Affymax House Marks and
Product Trademark in the Licensed Territory is invalid or unenforceable, or (B) practice
of any of the Affymax Technology and the use of Affymax House Marks and the
Product Trademark in the Licensed Territory infringes or otherwise conflicts or
interferes with any intellectual property or proprietary right of any Third
Party;


 


(iv)          To the knowledge of Affymax, prior to the Effective
Date, no Third Party has infringed or misappropriated any Affymax Technology,
Affymax House Marks or the Product Trademark by making, using, importing,
offering for sale or selling the Product, Hematide[ * ]
or any product containing the Peptide or [ * ], and, as
of the Effective Date, there is no actual or threatened infringement or
misappropriation of the Affymax Technology, Affymax House Marks or the Product
Trademark by any Third Party by making, using, importing, offering for sale or
selling the Product, Hematide[ * ] or any
product containing the Peptide [ * ]


 


(v)            Except as set forth on Schedule 10.2(b)(v), to the
knowledge of Affymax, neither (A) Takeda’s exercise of its rights
hereunder with respect to the Affymax Technology, Affymax House Marks and
Product Trademark, nor (B) Affymax’s or Takeda’s Development or
Commercialization of the Product in the Field and the Licensed Territory, shall
infringe any Patent or other intellectual property right or other proprietary
right of any Third Party;


 


(vi)          This Agreement is consistent with all of the Third
Party License Agreements in all respects and does not conflict with, violate,
breach or otherwise give rise to a default by Affymax under, any term of each
of the Third Party License Agreement;


 


(vii)         Affymax has obtained any and all consents, if any,
required from Third Parties for Affymax to enter into this Agreement and to
grant to Takeda the licenses and other rights provided herein and has provided
a copy of such consents to Takeda;


 


(viii)        Affymax owns or possesses adequate right, title and
interest in the Affymax Know-How to grant the license thereto to Takeda as
provided in Article 6;


 


(ix)          Exhibit I sets forth all license agreements
existing as of the Effective Date to which Affymax is a party and under which
Affymax has obtained a license from certain Third Parties relating to
inventions necessary or useful for Development or Commercialization of the
Product, the Peptide, Hematide [ * ] in the
Field and the Licensed Territory; and


 


(x)           Exhibit I and Exhibit N set forth all
payment obligation relating to the Existing Third Party License Agreement for
which Takeda shall be obligated to bear.


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


66

















 


(c)           Patent/House Mark/Trademark Matters
in the Licensed Territory.  With respect
to the Licensed Territory, and as of the Effective Date: (i) All
registration, maintenance and renewal fees due in connection with each Affymax
Patent, Affymax House Marks and Product Trademark have been paid in a timely
manner, (ii) all documents required to be filed in order to maintain each
Affymax Patent, Affymax House Marks and Product Trademark have been filed in a
timely manner, (iii) no action has been taken that would constitute
waiver, abandonment or any similar relinquishment of rights with respect to any
Affymax Patent, Affymax House Marks and Product Trademark, and (iv) all
relevant prior art known to the entity filing any patent application for any
Affymax Patent, Affymax House Marks and Product Trademark has been presented to
the relevant patent authority.


 


(d)           Supply of Bulk API or Finished
Product by Affymax.  All Bulk API or the Finished Product supplied
by Affymax to Takeda pursuant to this Agreement shall be manufactured, handled,
stored by Affymax or its Third Party contract manufacture(s) in compliance
with applicable Laws, including without limitation the GMP requirements.


 


(e)           Listing of Backup
Compounds.   The list set forth on Schedule 1.9 includes all Backup Compounds as of the Effective Date.


 


(f)            Cross-License Agreement. 
In addition to the representation and 
warranty set forth in Section 10.1(c), to the knowledge of Affymax,
the requirement described in clause (ii) of Section 6.7(a) above
shall not have any negative impact on the Parties’ rights and obligations under
this Agreement, assuming that the Parties comply with the terms of this
Agreement, and, there is no fact or indication that the Cross-License is going
to or may be terminated.


 


10.3        Additional
Representation of Takeda.  Takeda hereby represents and
warrants to Affymax that, as of the Effective Date,


 


(a)           Neither Takeda nor its Affiliates, either on their own or in collaboration
with a Third Party, are marketing, promoting, or selling in the Licensed
Territory any product that includes or is comprised of an ESA for the
prevention, treatment or amelioration of anemia in humans, and


 


(b)           All Finished Product supplied by Takeda to Affymax for
the Development pursuant to this Agreement shall be Finished Manufactured,
handled, stored by Takeda or its Third Party contract manufacture(s) in
compliance with applicable Laws, including without limitation the GMP
requirements.


 


10.4        Disclaimer.   Takeda understands that the Product is the
subject of ongoing clinical research and development and that Affymax cannot
assure the safety or usefulness of the Product. 
In addition, Affymax makes no warranties except as set forth in this
Agreement concerning the Affymax Technology.


 


10.5        No Other Representations
or Warranties.  EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT,
NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED,
INCLUDING, WITHOUT 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


67

















 


LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY
INTELLECTUAL PROPERTY RIGHTS, ARE MADE OR GIVEN BY OR ON BEHALF OF A
PARTY.  ALL REPRESENTATIONS AND
WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY
EXPRESSLY EXCLUDED.


 


ARTICLE
11



INDEMNIFICATION


 


11.1        Indemnification by
Affymax.  Affymax shall defend, indemnify, and hold Takeda, its
Affiliates, its sublicensees under this Agreement and their officers,
directors, employees, and agents (the “Takeda
Indemnitees”) harmless from and against any and all Third Party
claims, suits, proceedings, damages, expenses (including court costs and
reasonable attorneys’ fees and expenses), and recoveries, including product
liability claims (collectively, “Claims”)  to the extent that such Claims arise out
of, are based on, or result from (a) the Development, manufacture,
storage, handling, use, promotion, sale, offer for sale, and importation of
Hematide and/or the Product by or on behalf of Affymax or the Development
activities conducted by or on behalf of Affymax, including without limitation
the Development activities prior to or ongoing as of the Effective Date,
subject to Section 11.3; (b) a breach of any of Affymax’s
representations, warranties, and obligations under the Agreement; or (c) the
willful misconduct or negligent acts of Affymax, its Affiliates, or the
officers, directors, employees, or agents of Affymax or its Affiliates.  The foregoing indemnity obligation shall not
apply if the Takeda Indemnitees fail to comply with the indemnification
procedures set forth in Section 11.4, or to the extent that any Claim
arises from, is based on, or results from (i) the Development,
manufacture, storage, handling, use, promotion, sale, offer for sale, and
importation of Hematide and/or Product by Takeda or its Affiliates,
sublicensees, or distributors; (ii) a breach of any of Takeda’s
representations, warranties, and obligations under the Agreement; or (iii) the
willful misconduct or negligent acts of Takeda or its Affiliates, or the
officers, directors, employees, or agents of Takeda or its Affiliates.


 


11.2        Indemnification by
Takeda.  Takeda shall defend, indemnify, and hold Affymax, its
Affiliates, its sublicensees under this Agreement and their officers,
directors, employees, and agents (the “Affymax
Indemnitees”) harmless from and against any and all Claims to the
extent that such Claims arise out of, are based on, or result from (a) the
Development, manufacture, storage, handling, use, promotion, sale, offer for
sale, and importation of Hematide and/or Product by Takeda or its Affiliates,
sublicensees, or distributors, subject to Section 11.3; (b) a breach
of any of Takeda’s representations, warranties, and obligations under the
Agreement; or (c) the willful misconduct or negligent acts of Takeda or
its Affiliates, or the officers, directors, employees, or agents of Takeda or
its Affiliates.  The foregoing indemnity
obligation shall not apply if the Affymax Indemnitees fail to comply with the
indemnification procedures set forth in Section 11.4, or to the extent
that any Claim arises from, is based on, or results from (i) the
Development, manufacture, storage, handling, use, promotion, sale, offer for
sale, and importation of Hematide and/or Product by or on behalf of Affymax or
the Development activities conducted by or on behalf of Affymax, including
without limitation the Development activities prior to or ongoing as of the
Effective Date; (ii) a breach of any of Affymax’s representations,
warranties, and obligations under the Agreement; or (iii) the 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


68

















 


willful misconduct or negligent acts of Affymax, its
Affiliates, or the officers, directors, employees, or agents of Affymax or its Affiliates.


 


11.3        Indemnification for the
Product in the U.S.  Each Party hereby agrees to defend,
indemnify, and hold the other Party and its officers, directors, employees, and
agents harmless from and against any and all Claims to the extent that such Claims
arise out of, are based on, or result from the Development, manufacture,
storage, handling, use, promotion, sale, offer for sale, and importation of the
Product in the U.S., by the indemnifying Party or its Affiliates, sublicensees,
or distributors, but only to the extent that such Claims (i) result from
the negligence or willful misconduct of the indemnifying Party or its
Affiliates, sublicensees, or distributors, (ii) do not result also from
the negligence or willful misconduct of the Party seeking indemnification (or
its Affiliates, sublicensees, or distributors); and (iii) are not Claims
for which a Party indemnifies the other Party pursuant to the Supply Agreement,
Co-Promotion Agreement or any other written agreement between the Parties in
respect of the Product.  The foregoing
indemnity obligation shall not apply if the applicable indemnitees fail to
comply with the indemnification procedures set forth in Section 11.4.  Expenses relating to any other Claims
resulting directly or indirectly from the manufacture, use, handling, storage,
sale or other disposition of the Product in the U.S. shall be shared equally by
the Parties at the time such expenses are required to be paid.


 


11.4        Indemnification
Procedures.  The Party claiming indemnity under this Article 11
(the “Indemnified Party”) shall
give written notice to the Party from whom indemnity is being sought (the “Indemnifying Party”) promptly after
learning of such Claim.  In the event of
a claim relating to the U.S., the Parties shall confer as to whether such claim
would result in indemnification under Section 11.3 and in any event how to
respond to the claim.  The Indemnified
Party shall provide the Indemnifying Party with reasonable assistance, at the
Indemnifying Party’s expense, in connection with the defense of the Claim for
which indemnity is being sought.  The
Indemnified Party may participate in and monitor such defense with counsel of
its own choosing at its sole expense; provided, however, the Indemnifying Party
shall have the right to assume and conduct the defense of the Claim with
counsel of its choice.  The Indemnifying
Party shall not settle any claim without the prior written consent of the
Indemnified Party, such consent not to be unreasonably withheld, unless the
settlement involves only the payment of money. 
So long as the Indemnifying Party is actively defending the Claim in
good faith, the Indemnified Party shall not settle any such Claim without the
prior written consent of the Indemnifying Party.  If the Indemnifying Party does not assume and
conduct the defense of the Claim as provided above, (a) the Indemnified
Party may defend against, and consent to the entry of any judgment or enter
into any settlement with respect to the claim in any manner the Indemnified
Party may deem reasonably appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, the Indemnifying Party in connection
therewith), and (b) the Indemnifying Party shall remain responsible to
indemnify the Indemnified Party as provided in this Article 11.


 


11.5        Limitation of
Liability.  NEITHER PARTY SHALL BE LIABLE TO THE
OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES
ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY
NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. 
NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 11.5


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


69
















 


IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE
INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER SECTION 11.1 OR
11.2 OR 11.3, OR DAMAGES AVAILABLE FOR A PARTY’S BREACH OF SECTION 6.4 OR
CONFIDENTIALITY OBLIGATIONS IN ARTICLE 12.


 


11.6        Insurance. Each Party shall procure and maintain
insurance, including product liability and other appropriate insurance,
adequate to cover its obligations hereunder and which are consistent with
normal business practices of prudent companies similarly situated at all times
during which any Product is being clinically tested in human subjects or
commercially distributed or sold.  It is
understood that such insurance shall not be construed to create a limit of
either Party’s liability with respect to its indemnification obligations under
this Article 11.  Each Party shall
provide the other with written evidence of such insurance upon request.  Each Party shall provide the other with
written notice at least thirty (30) days prior to the cancellation, non-renewal
or material change in such insurance or self-insurance which materially
adversely affects the rights of the other Party hereunder.


 


ARTICLE
12



CONFIDENTIALITY


 


12.1        Confidentiality.  Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing by the Parties, each Party agrees
that, for the Term and until the later of (i) the tenth (10th) anniversary
of the Effective Date, or (ii) five (5) years after the expiration or
termination of the Term, it shall keep confidential and shall not publish or
otherwise disclose and shall not use for any purpose other than as provided for
in this Agreement any Confidential Information furnished to it by the other
Party pursuant to this Agreement except for that portion of such information or
materials that the receiving Party can demonstrate by competent written proof:


 


(a)           was already known to the receiving Party or its Affiliate, other than
under an obligation of confidentiality, at the time of disclosure by the other
Party;


 


(b)           was generally available to the public or otherwise part of the public
domain at the time of its disclosure to the receiving Party;


 


(c)           became generally available to the public or otherwise part of the
public domain after it disclosure and other than through any act or omission of
the receiving Party in breach of this Agreement;


 


(d)           was disclosed to the receiving Party or its Affiliate by a Third Party
without obligations of confidentiality with respect thereto; or


 


(e)           was independently discovered or developed by the receiving Party or its
Affiliate without the aid, application, or use of Confidential Information of
the other Party; provided, however, that this exception shall not apply to
information or materials consisting of data and results generated or resulting
from Development activities with respect to the Peptide, [ * ]
Hematide or the Product, which information and materials shall be deemed
Confidential 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


70

















 


Information of the Party who has developed such
information or materials regardless of whether such information and materials
were independently discovered or developed by the receiving Party or its
Affiliate.


 


12.2        Authorized
Disclosure.  Each Party may disclose Confidential
Information belonging to the other Party to the extent such disclosure is
reasonably necessary in the following situations:


 


(a)           filing or prosecuting Patents as permitted in this Agreement;


 


(b)           regulatory submissions and other filings with Governmental Authorities,
including filings with the Securities and Exchange Commission;


 


(c)           prosecuting or defending litigation or other proceedings or regulatory
actions;


 


(d)           complying with applicable Laws;


 


(e)           disclosure to its employees, agents, and consultants, and any Third
Parties  (including licensees or
sublicensees with which a Party is Developing or Commercializing the Product)
only on a need-to-know basis and solely as necessary in connection with the
performance of this Agreement, provided that in each case the recipient of such
Confidential Information must agree to be bound by similar obligations of
confidentiality and non-use at least as equivalent in scope as those set forth
in this Article 12 prior to any such disclosure; and


 


(f)            disclosure of the material financial terms of this Agreement to any
bona fide potential investor, investment banker, acquiror, merger partner, or
other potential financial partner; provided that in connection with such
disclosure, the disclosing Party shall use all reasonable efforts to inform
each recipient of the confidential nature of such Confidential Information and
shall cause each recipient of such Confidential Information to treat such
Confidential Information as confidential.


 


Notwithstanding the
foregoing, in the event a Party is required to make a disclosure of the other Party’s
Confidential Information pursuant to clause (a) through (d) of this Section 12.2,
it shall, except where impracticable, give reasonable advance notice to the
other Party of such disclosure and use reasonable efforts to secure
confidential treatment of such information. 
In any event, the Parties agree to take all reasonable action to avoid
disclosure of Confidential Information hereunder.


 


12.3        Publicity; Terms of Agreement.


 


(a)           The Parties agree that the material terms of this Agreement are included
within the Confidential Information of both Parties, subject to the special
authorized disclosure provisions set forth below in this Section 12.3.  The Parties have agreed to make a joint
public announcement of the execution of this Agreement substantially in the
form of the press release attached as Exhibit K on or after the Effective
Date.


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


71

















 


(b)           After release of such press release, if either Party desires to make a
public announcement concerning the material terms of this Agreement, such Party
shall give reasonable prior advance notice of the proposed text of such
announcement to the other Party for its prior review and approval (except as
otherwise provided herein), such approval not to be unreasonably withheld.  A Party commenting on such a proposed press
release shall provide its comments, if any, within five (5) Business Days
after receiving the press release for review. 
Affymax shall have the right to make a press release announcing the
achievement of each milestone under this Agreement as it is achieved, and the
achievements of Regulatory Approvals in the Licensed Territory as they occur,
subject only to the review procedure set forth in the preceding sentence.  In relation to Takeda’s review of such an
announcement, Takeda may make specific, reasonable comments on such proposed
press release within the prescribed time for commentary, but shall not withhold
its consent to disclosure of the information that the relevant milestone has
been achieved and triggered a payment hereunder.  Neither Party shall be required to seek the
permission of the other Party to repeat any information regarding the terms of
this Agreement that has already been publicly disclosed or previously agreed to
by such Party, or by the other Party, in accordance with this Section 12.3.


 


(c)           The Parties acknowledge that Affymax may be obligated to file a copy of
this Agreement with the U.S. Securities and Exchange Commission (the “SEC”). 
Affymax shall be entitled to make such a required filing, provided that
it requests confidential treatment of certain commercial terms and sensitive
technical terms hereof to the extent such confidential treatment is reasonably
available to Affymax.  In the event of
any such filing, Affymax shall provide Takeda with a copy of the Agreement
marked to show provisions for which Affymax intends to seek confidential
treatment and shall reasonably consider and incorporate Takeda’s comments
thereon to the extent consistent with the legal requirements governing
redaction of information from material agreements that must be publicly
filed.  Takeda shall promptly provide any
such comments.  Takeda recognizes that
U.S. Laws and SEC policies and regulations to which Affymax is and may become
subject may require Affymax to publicly disclose certain terms of this
Agreement that Takeda may prefer not be disclosed, and that Affymax is, after
completing the above mentioned procedures, entitled hereunder to make such
required disclosures to the extent legally required.


 


12.4        Publications. 
Neither Party may publish peer reviewed manuscripts, or give other forms
of public disclosure such as abstracts and presentations, of results of studies
carried out under this Agreement with respect to the Licensed Territory,
without the opportunity for prior review by the other Party.  Each Party shall provide the other Party the
opportunity to review and comment on any proposed manuscripts or presentations
which relate to any Product at least thirty (30) days prior to their intended
submission for publication or presentation. 
Each Party shall consider the comments of the other Party and shall
remove any and all of the other Party’s Confidential Information at the request
of such other Party.  A Party seeking
publication shall also provide the other Party a copy of the manuscript at the
time of the submission.  Neither Party
shall have the right to publish or present the other Party’s Confidential
Information without the other Party’s prior written consent, except as
expressly permitted in this Agreement.


 


12.5        Injunction.  
Each Party shall be entitled, in addition to any other right or remedy
it may have, at Law or in equity, to seek an injunction in any court of
competent jurisdiction, 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


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enjoining or restraining the other Party or its
Affiliates from any violation or threatened violation of this Article 12.


 


ARTICLE
13



TERM AND TERMINATION


 


13.1        Term. 
This Agreement shall become effective on the Effective Date and, unless
earlier terminated pursuant to this Article 13, shall remain in effect in
the Licensed Territory until the expiration of all of Takeda’s payment
obligations, including without limitation the U.S. Product Profit sharing under
Article 8, on a country-by-country basis.


 


13.2        Early Termination.


 


(a)           Withdrawal by Takeda. 
Takeda
shall have the right to terminate this Agreement, in its entirety, upon written
notice to Affymax by at least six (6) months’ written notice prior to the
effective date of termination; provided, that in no event shall the effective
date of such termination precede the second anniversary of the Effective Date,
and further provided, that Takeda shall have the right to terminate this
Agreement even before the end of such two (2) year period if the
Development of the Product in the Licensed Territory hereunder are terminated
entirely for patient safety concerns or pursuant to a requirement imposed by
the Regulatory Authorities in the Licensed Territory or by the external
monitoring board.  If Takeda terminates
this Agreement pursuant to this Section 13.2(a), then:


 


(i)            Takeda shall not, during the applicable notice period, take any action
that could adversely affect or impair the further Development and
Commercialization of the Product.


 


(ii)           The JSC shall coordinate the wind-down of Takeda’s efforts under this
Agreement.


 


(iii)         Takeda
shall continue to be responsible for any payments that become due to Affymax
pursuant to this Agreement that were incurred or accrued during the applicable
notice period.


 


(iv)          Only
in case Takeda terminates this Agreement in its entirety pursuant to this Section 13.2(a) prior
to the First Commercial Sale of the Product in the U.S. for other reasons than
Technical Failure (as defined below), Takeda, within ninety (90) days of
delivery of such written termination notice, shall pay to Affymax a fee of [ * ] Dollars ($[ * ] by wire
transfer of immediately available funds into an account designated by Affymax
in writing. For the purpose of this Section, “Technical Failure” shall mean the
case in which:  (a) the Development
of the Product in the Licensed Territory is discontinued entirely for patient
safety concerns or pursuant to a requirement imposed by Regulatory Authorities
in the Licensed Territory or by an external monitoring board  or (b) the primary end point of the
first pivotal Phase III Clinical Trial for the Dialysis CKD Anemia or the
Pre-Dialysis CKD Anemia is not achieved. 
Such fee shall be non-refundable and non-creditable against any other
payments due hereunder.


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


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(b)           Termination for Breach.


 


(i)            Affymax shall have the right to terminate this Agreement upon written
notice to Takeda if Takeda, after receiving written notice identifying such
material breach by Takeda, fails to cure such material breach within ninety
(90) days from the date of such notice (or within ten (10) Business Days
notice in the event such material breach is solely based upon Takeda’s failure
to pay any amounts due Affymax hereunder); provided,
that if such breach cannot be remedied within such 90-day period and Takeda has
provided Affymax with a written plan, reasonably acceptable to Affymax, setting
forth the activities to be performed by Takeda to remedy such breach, then
Affymax may not terminate this Agreement during such time (not to exceed an additional
ninety (90) days) as Takeda is diligently pursuing the performance of the
activities described in the plan; and provided, further, that if such material
breach relates solely to a particular country in the Licensed Territory, then
Affymax may terminate this Agreement only with respect to the applicable
country but may not terminate this Agreement with respect to any other
countries.


 


(ii)           Takeda shall have the right to terminate this Agreement upon written
notice to Affymax if Affymax, after receiving written notice identifying a
material breach by Affymax of its obligations under this Agreement, fails to
cure such material breach within ninety (90) days from the date of such notice
(or within ten (10) Business Days notice in the event such material breach
is solely based upon Affymax’s failure to pay any amounts due Takeda
hereunder); provided, that if such breach cannot be remedied within such 90-day
period and Affymax has provided Takeda with a written plan, reasonably
acceptable to Takeda, setting forth the activities to be performed by Affymax
to remedy such breach, then Takeda may not terminate this Agreement during such
time (not to exceed an additional ninety (90) days) as Affymax is diligently
pursuing the performance of the activities described in the plan; and provided,
further, that if such material breach relates solely to a particular country in
the Licensed Territory, then Takeda may terminate this Agreement only with
respect to the applicable country but may not terminate this Agreement with
respect to any other countries.


 


(iii)         For
clarity, if a Party elects not to exercise its rights to terminate this
Agreement pursuant to this Section 13.2(b) for the other Party’s
uncured material breach, but instead elects to allow this Agreement to continue
in effect, then the breaching Party shall continue to be liable to the other
Party for any breach of representations, warranties, obligations or agreements
made in this Agreement by such breaching Party, and the non-breaching Party
shall be entitled to pursue legal and equitable remedies arising from such
breach that are available to it.


 


13.3        Other Remedies for
Affymax Breach.  In  addition
to  the termination remedy
described in Sections 13.2(b), Takeda shall have certain other remedies for the
material breaches of this Agreement by Affymax (which in all events shall be (i) in
addition to, and not in lieu of, any other remedies available to Takeda under
this Agreement or applicable law, and (ii) subject to the notice and cure
provisions of Section 13.2(b)), specified as follows:


 


(a)           Supply.  The Supply
Agreement shall provide Takeda with certain sufficient remedies (including, by
way of example only, the right to obtain materials from a 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


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second source or to initiate a technology transfer) if
Affymax materially breaches its obligation to deliver quantities of Bulk API
pursuant to the terms thereof.


 


(b)           Regulatory.  If Affymax
materially breaches its obligations to obtain or maintain Regulatory Materials
with respect to the Product in accordance with the terms of this Agreement,
then, upon request of Takeda, Affymax shall transfer and assign to Takeda or
its designee the applicable Regulatory Materials or the right to obtain the
applicable Regulatory Materials, as the case may be.


 


(c)           Continuing
Right to Additional Product.  If Takeda
otherwise has the right to terminate the entire Agreement pursuant to Section 13.2(b)(ii) due
to a material breach by Affymax, Takeda shall have, in addition to its other
remedies, the right to elect in writing to continue the Agreement pursuant to Section 13.2(b)(iii) only
in order to retain its rights to the Additional Product pursuant to the terms
of Section 3.12 until such time as Takeda determines whether to exercise
its right to the first Additional Product either selected by Takeda or has
achieved Proof of Concept but not been selected pursuant to Section 3.12.  If Takeda exercises such right, then the
Agreement shall be reinstated with respect to the Additional Product.  If Takeda does not exercise such right, then
the Agreement shall be deemed terminated.


 


13.4        Effect of Termination of
the Agreement.  Upon termination by Affymax of the
Agreement under Section 13.2(b), or upon termination by Takeda under Section 13.2(a),
the following shall apply (in addition to any other rights and obligations
under Section 13.5, 13.6 or 13.7 or otherwise under this Agreement with
respect to such termination) with respect to the affected territory or
territories:


 


(a)           Partial Termination.  In the event
of a termination by Affymax under Section 13.2(b) for a particular
country, such country shall be deemed excluded from the definition of Licensed
Territory.


 


(b)           Regulatory Materials.  To the extent
permitted by applicable Law, Takeda shall transfer and assign to Affymax all
Regulatory Materials and Regulatory Approvals for Product for the terminated
country(ies) of the Licensed Territory that are Controlled by Takeda, and shall
grant Affymax a right of reference to all Regulatory Materials filed by Takeda
in the Licensed Territory solely for the purpose of Affymax obtaining
Regulatory Approval for the Product in such terminated country(ies).


 


(c)           Takeda License. 
Takeda
hereby grants to Affymax, effective only in the event of termination described
in this Section 13.4 above and only to the extent such license is
practicable and available, a non-exclusive, worldwide, fully-paid, royalty-free
license, with the right to grant multiple tiers of sublicenses, under the
Licensed Takeda Technology (as defined below) existing as of the date of such
termination to develop, make, have made, use, sell, offer for sale, and import
Bulk API[ * ] and the Product in or for the
terminated country(ies) of the Licensed Territory; provided, that with respect
to any Takeda Patent that was assigned by Affymax to Takeda pursuant to the
terms of Section 9.3 (“Former Affymax
Patent”), such license may be used for any purpose whatsoever.  For clarity, this Section 13.4(c) shall
not oblige Takeda to maintain any of the Takeda Patents in any country, in
spite of the license granted to Affymax; provided, that after such
termination, if
Takeda is requested by Affymax to 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


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assign to Affymax any Patent included in the Licensed
Takeda Technology and if Takeda still maintains such Patent at that time and
decides in its reasonable discretion that it is able to assign such Patent to Affymax, then Takeda shall assign
such  Patent to Affymax, conditioned upon
the covenant not to sue set forth below (any Patent so assigned, an “Assigned Takeda Patent”).  Takeda hereby covenants not to sue Affymax
and its sublicensees under this Agreement, effective only in the event of
termination described in this Section 13.4 above, under any Takeda
Patent  (other than the Licensed Takeda
Technology for which a license or assignment has been made above) existing as
of the date of such termination, for activities to develop, make, have made,
use, sell, offer for sale, and import Bulk API[ * ],  Backup Compounds (as of the date of such termination) and
the Product in or for the terminated country(ies) of the Licensed
Territory.  Affymax hereby covenants not
to sue Takeda, its Affiliates, and their sublicensees, effective immediately after
the assignment to Affymax of an Assigned Takeda Patent, under any such Assigned Takeda Patent, for any activities and for any purposes
whatsoever.  As used in this provision, “Licensed Takeda Technology” means,
collectively, (i) any Former Affymax Patent, and (ii) any Takeda
Technology made by Takeda’s employees, agents, or independent contractors in
the course of conducting its activities under this Agreement.


 


(d)           Transition Assistance.  Takeda shall,
for a reasonable period of time, provide such assistance, at no cost to
Affymax, to transfer or transition to Affymax all other technology or know-how,
or then-existing commercial arrangements, that is, or are, reasonably necessary
or useful for Affymax to commence or continue Developing, conducting Finished
Manufacturing of or Commercializing the Product in or for the terminated
country(ies) of the Licensed Territory, to the extent Takeda is then performing
or having performed such activities, including without limitation transferring,
upon request of Affymax, any agreements or arrangements with Third Party
suppliers or vendors to supply or sell the Product in such country(ies) of the
Licensed Territory, to the extent practicable. If any such contract between
Takeda and a Third Party for the supply of Bulk API or Finished Product for
such terminated country(ies) of the Licensed Territory is not assignable to
Affymax, then Takeda shall reasonably cooperate with Affymax to arrange to
continue to obtain such supply from such entity, and Takeda shall supply such
Bulk API or Finished Product, as applicable, to Affymax, at a cost that equals [ * ] of Takeda’s cost (calculated in a manner consistent
with the definition of Affymax’s Manufacturing Cost) for a reasonable period.
In addition, to the extent that Takeda or its Affiliate is then manufacturing
Bulk API or Finished Product for the other country(ies) than such terminated
country(ies) of the Licensed Territory, Takeda shall continue to manufacture,
and shall supply to Affymax, at a cost that equals [ * ]
of Takeda’s costs (calculated in a manner consistent with the definition of
Affymax’s Manufacturing Cost), such Bulk API or Finished Product for Affymax’s
use in such terminated country(ies) of the Licensed Territory for a reasonable
period in order to permit Affymax to establish sufficient manufacturing capacity
for Bulk API or Finished Product for such terminated country(ies) of the
Licensed Territory.  Such period shall be
no more than twelve (12) months unless otherwise agreed by the Parties.


 


(e)           Remaining Inventories.  Affymax shall
have the right to purchase from Takeda all of the inventory of Bulk API or
Finished Product held by Takeda for such terminated country(ies) as of the
effective date of termination of this Agreement at a price equal to Takeda’s [ * ] to acquire or manufacture such inventory for such
terminated country(ies).  Affymax shall
notify Takeda within thirty (30) days after the date of termination of the
Agreement whether 


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


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Affymax elects to exercise such right.  If Affymax does not exercise such right, then
Takeda shall have the right to sell in such terminated country(ies) of the
Licensed Territory any such remaining inventory over a period of no greater
than six (6) months after the effective date of termination of this
Agreement.


 


(f)            Termination of Licenses.  For clarity,
upon any termination of this Agreement under Section 13.2, the licenses
granted to Takeda under this Agreement for such terminated country(ies) shall
terminate.


 


(g)           Restriction on Licensing of Compounds. 
If Takeda terminates this Agreement pursuant to Section 13.2(a) upon
the discontinuation of Development of the then-current Product and failure by
the Parties to agree on a Replacement Product Candidate to replace it under Section 3.9,
then, during the twelve (12)-month period following the effective date of such
termination, Affymax shall not license any Replacement Product Candidate to any
Third Party for development or commercialization for the prevention, treatment
or amelioration of anemia.  If Affymax
desires to license any such Replacement Product Candidate, then Affymax shall
provide Takeda with a right of first negotiation to such license under terms
and conditions corresponding to those set forth in Section 3.9.


 


13.5        Effects of Expiration. 
Following expiration of the Term pursuant to Section 13.1, Takeda
shall have a fully paid non-exclusive license under the Affymax Technology to
make, have made, use, sell and import the Product in the Licensed Territory,
under any trademark or trademarks other than the Product Trademark owned or
Controlled by Takeda.  In addition, in
the event Takeda desires to continue to purchase Bulk API from Affymax, it
shall so notify Affymax no later than six (6) months prior to the
expiration of this Agreement, and thereafter Affymax shall, in its sole
discretion, either (a) continue to supply Bulk API at a cost equal to the
Manufacturing Cost plus [ * ] for a period to be negotiated by the Parties, or (b) permit
Takeda to manufacture itself, or on its behalf through a contract supplier,
Bulk API, and in such event grant to Takeda a non-exclusive royalty-free
license, under Affymax Technology related to manufacture of Bulk API, and
otherwise assist Takeda to enable it to obtain continuous supply of Bulk API,
including without limitation, providing relevant documents and using Diligent
Efforts to encourage or cause Affymax’s then-current Third Party contract
manufacturers of Bulk API to manufacture and supply to Takeda such Bulk API
directly. Upon request of Takeda, Affymax shall provide to Takeda reasonable
access to Affymax’s manufacturing personnel to facilitate the foregoing efforts
on terms to be agreed upon by the Parties.


 


13.6        Other Remedies. 
Termination or expiration of this Agreement for any reason shall not
release any Party from any liability or obligation that already has accrued
prior to such expiration or termination, nor affect the survival of any
provision hereof to the extent it is expressly stated to survive such
termination.  Termination or expiration
of this Agreement for any reason shall not constitute a waiver or release of,
or otherwise be deemed to prejudice or adversely affect, any rights, remedies
or claims, whether for damages or otherwise, that a Party may have hereunder or
that may arise out of or in connection with such termination or expiration.


 






[
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brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.


 


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13.7        Rights in
Bankruptcy.  All rights and licenses granted under or
pursuant to this Agreement by Affymax are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses
of right to “intellectual property” as defined under Section 101 of the
U.S. Bankruptcy Code.  The Parties agree
that Takeda, as licensee of such rights under this Agreement, shall retain and
may fully exercise all of its rights and elections under the U.S. Bankruptcy
Code.  The Parties further agree that, in
the event of the commencement of a bankruptcy proceeding by or against Affymax
under the U.S. Bankruptcy Code, Takeda shall be entitled to a complete
duplicate of (or complete access to, as appropriate) any such intellectual
property and all embodiments of such intellectual property, which, if not
already in Takeda’s possession, shall be promptly delivered to it (a) upon
any such commencement of a bankruptcy proceeding upon Takeda’s written request
therefor, unless Affymax elects to continue to perform all of its obligations
under this Agreement or (b) if not delivered under clause (a), following
the rejection of this Agreement by Affymax upon written request therefor by
Takeda.


 


13.8        Survival. 
The following provisions shall survive any expiration or termination of
this Agreement for the period of time specified therein (or, if no such period
is specified, indefinitely): Articles
1, 11 (other than Section 11.6), 12, 14, and
15, and Sections 5.7 (but only the last sentence thereof), 5.11 (to the extent
that Takeda uses a Product Trademark after such expiration or termination),
7.4, 8.11, 9.1, 9.8 (to the extent
that Takeda uses a Product Trademark after such expiration or termination),
10.4, 10.5, 13.4, 13.5, 13.6, 13.7, and 13.8.


 


ARTICLE
14



DISPUTE RESOLUTION


 


14.1        English Language;
Governing Law.
This Agreement was prepared in the English language, which language shall
govern the interpretation of, and any dispute regarding, the terms of this
Agreement.  This Agreement and all
disputes arising out of or related to this Agreement or any breach hereof shall
be governed by and construed under the Laws of the State of New York, without
giving effect to any choice of law principles that would require the
application of the Laws of a different state.


 


14.2        Disputes.


 


(a)           The Parties recognize that disputes as to certain matters may from time
to time arise during the Term which relate to either Party’s rights or
obligations hereunder.  It is the
objective of the Parties to establish procedures to facilitate the resolution
of disputes arising under this Agreement in an expedient manner by mutual
cooperation and without resort to litigation. 
To accomplish this objective, the Parties agree to follow the procedures
set forth in this Section 14.2 to resolve any controversy or claim arising
out of, relating to or in connection with any provision of this Agreement, if
and when a dispute arises under this Agreement. 
With respect to all disputes arising between the Parties (other than
those matters delegated to the JSC, which shall be governed in accordance with Section 2.5(c)),
including, without limitation, any alleged failure to perform, or breach, of
this Agreement, or any issue relating to the interpretation or application of
this Agreement, if the Parties are unable to resolve such dispute within sixty
(60) days after such dispute is first identified by either Party in writing to
the other, the Parties shall refer such dispute to the senior executive
officers for each Party for attempted resolution by 


 






[
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brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


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good faith negotiations within thirty (30) days after
such notice is received.  If the senior
executive officers designated by the Parties are not able to resolve such
dispute within such thirty (30) day period, either Party may submit such
dispute in accordance with Section 14.2(b).


 


(b)           If a dispute is not resolved as provided in the preceding Section 14.2(a),
any claim or controversy of whatever nature arising out of or relating to this
Agreement or any breach hereof shall be brought exclusively in a court of
competent jurisdiction, federal or state, located in San Francisco, California,
and in no other jurisdiction.  Each Party
hereby consents to personal jurisdiction and venue in, and agrees to service of
process issued or authorized by, such court.


 


(c)           Notwithstanding anything to the contrary in this Article 14,
either Party may seek injunctive relief in any court in any jurisdiction where
appropriate.


 


ARTICLE
15



MISCELLANEOUS


 


15.1        Entire Agreement;
Amendment.  This Agreement, including the Exhibits
hereto, sets forth the complete, final and exclusive agreement and all the
covenants, promises, agreements, warranties, representations, conditions and
understandings between the Parties hereto with respect to the subject matter
hereof and supersedes, as of the Effective Date, all prior agreements and
understandings between the Parties with respect to the subject matter
hereof.  Notwithstanding anything to the
contrary herein, the Parties agree that nothing in this Agreement shall be
construed to terminate, modify, amend or supersede the Japan Collaboration
Agreement.  There are no covenants,
promises, agreements, warranties, representations, conditions or understandings,
either oral or written, between the Parties other than as are set forth herein
and therein.  No subsequent alteration,
amendment, change or addition to this Agreement shall be binding upon the
Parties unless reduced to writing and signed by an authorized officer of each
Party.


 


15.2        Force Majeure. 
Both Parties shall be excused from the performance of their obligations
under this Agreement to the extent that such performance is prevented by force
majeure and the nonperforming Party promptly provides notice of the prevention
to the other Party.  Such excuse shall be
continued so long as the condition constituting force majeure continues and the
nonperforming Party takes reasonable efforts to remove the condition.  For purposes of this Agreement, force majeure
shall include conditions beyond the control of the Parties, including without
limitation, an act of God, war, civil commotion, terrorist act, labor strike or
lock-out, epidemic, failure or default of public utilities or common carriers,
destruction of production facilities or materials by fire, earthquake, storm or
like catastrophe, and failure of plant or machinery (provided that such failure
could not have been prevented by the exercise of skill, diligence, and prudence
that would be reasonably and ordinarily expected from a skilled and experienced
person engaged in the same type of undertaking under the same or similar
circumstances).  Notwithstanding the
foregoing, a Party shall not be excused from making payments owed hereunder
because of a force majeure affecting such Party.


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


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15.3        Notices.  Any notice required or permitted to be given under
this Agreement shall be in writing, shall specifically refer to this Agreement,
and shall be addressed to the appropriate Party at the address specified below
or such other address as may be specified by such Party in writing in
accordance with this Section 15.3, and shall be deemed to have been given
for all purposes (a) when received, if hand-delivered sent by a reputable
overnight delivery service, or by facsimile (with electronic confirmation of
receipt), or (b) seven (7) days after mailing, if mailed by first
class certified or registered mail, postage prepaid, return receipt requested.


 


If to Affymax:          Affymax, Inc.

4001 Miranda Avenue

Palo Alto, California  94306

Attn:  Chief Executive Officer


 


With a copy to:          Barbara
A. Kosacz, Esq.

Cooley Godward LLP

5 Palo Alto Square

3000 El Camino Real

Palo Alto, CA  94306


 


If to Takeda:    Takeda Pharmaceutical Company
Limited

1-1, Doshomachi 4-chome, Chuo-ku,

Osaka, 540-8645, Japan

Attn: General Manager, Global Licensing and Business Development


 


15.4        No Strict Construction;
Headings.  This Agreement has been prepared jointly
and shall not be strictly construed against either Party.  Ambiguities, if any, in this Agreement shall
not be construed against any Party, irrespective of which Party may be deemed
to have authored the ambiguous provision. 
The headings of each Article and Section in this Agreement
have been inserted for convenience of reference only and are not intended to limit
or expand on the meaning of the language contained in the particular Article or
Section.


 


15.5        Assignment. 
Neither Party may assign or transfer this Agreement or any rights or
obligations hereunder without the prior written consent of the other, except
that a Party may make such an assignment without the other Party’s consent to
Affiliates or to a successor to substantially all of the business of such Party
in the field to which this Agreement relates, whether in a merger, sale of
stock, sale of assets or other transaction. 
Notwithstanding the definitions of Affymax Technology or Takeda
Technology in Article 1, in the event of such transaction, however,
intellectual property rights of the acquiring party to such transaction (if
other than one of the Parties to this Agreement) shall not be included in the
Affymax Technology or Takeda Technology, as the case may be, licensed to the
other Party hereunder to the extent held by such acquiror prior to such
transaction, or to the extent such technology is developed outside the scope of
activities conducted with respect to the Peptide[ * ]
Hematide, an ESA, Backup Compound  or
Product.  Any permitted successor or
assignee of rights or obligations hereunder shall, in writing to the other
Party, expressly assume performance of such rights or obligations.  Any permitted assignment shall be binding on
the successors of the assigning Party. 
Any assignment or attempted assignment by either Party in violation of
the terms of this Section 15.5 shall be null, void and of no legal effect.


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


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15.6        Performance by
Affiliates.  Each Party may discharge any obligations and
exercise any right hereunder through any of its Affiliates.  Each Party hereby guarantees the performance
by its Affiliates of such Party’s obligations under this Agreement, and shall
cause its Affiliates to comply with the provisions of this Agreement in
connection with such performance.  Any
breach by a Party’s Affiliate of any of such Party’s obligations under this
Agreement shall be deemed a breach by such Party, and the other Party may
proceed directly against such Party without any obligation to first proceed
against such Party’s Affiliate.


 


15.7        Further Actions.   Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.


 


15.8        Severability. 
If any one or more of the provisions of this Agreement is held to be
invalid or unenforceable by any court of competent jurisdiction from which no
appeal can be or is taken, the provision shall be considered severed from this
Agreement and shall not serve to invalidate any remaining provisions
hereof.  The Parties shall make a good faith
effort to replace any invalid or unenforceable provision with a valid and
enforceable one such that the objectives contemplated by the Parties when
entering this Agreement may be realized.


 


15.9        No Waiver. 
Any delay in enforcing a Party’s rights under this Agreement or any
waiver as to a particular default or other matter shall not constitute a waiver
of such Party’s rights to the future enforcement of its rights under this
Agreement, except with respect to an express written and signed waiver relating
to a particular matter for a particular period of time.


 


15.10      Independent
Contractors.  Each Party shall act solely as an
independent contractor, and nothing in this Agreement shall be construed to
give either Party the power or authority to act for, bind, or commit the other
Party in any way.  Nothing herein shall
be construed to create the relationship of partners, principal and agent, or
joint-venture partners between the Parties.


 


15.11      Counterparts. 
This Agreement may be executed in one (1) or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. 
This Agreement shall be binding upon the delivery by each Party of an
executed signature page to the other Party by facsimile transmission.  If signature pages are so delivered by
facsimile transmission, each Party shall also immediately deliver an executed
original counterpart of this Agreement to the other Party by courier delivery
service.


 


15.12      Construction. 
Except where the context otherwise requires, wherever used, the singular
shall include the plural, the plural the singular, the use of any gender shall
be applicable to all genders, and the word “or” is used in the inclusive sense
(and/or).  The captions of this Agreement
are for convenience of reference only and in no way define, describe, extend or
limit the scope or intent of this Agreement or the intent of any provision
contained in this Agreement.  The term “including”
as used herein means including, without limiting the generality of any
description preceding such term. 
References to “Article,” “Section” or “Exhibit” are references to the
numbered sections of this Agreement and the exhibits attached to this
Agreement, unless expressly stated otherwise.


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


81

















 


{Signature page follows.}


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


82

















 


IN
WITNESS WHEREOF, the
Parties have executed this Agreement in duplicate originals by their duly
authorized officers as of the Effective Date.


 


	
  TAKEDA
  PHARMACEUTICAL COMPANY LIMITED  

  	
   

  	
  AFFYMAX,
  INC.  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Yasuchika Hasegawa  

  	
   

  	
  By:

  	
  /s/ Arlene Morris 

  
	
   

  	
   

  	
   

  
	
  Name: Yasuchika Hasegawa 

  	
   

  	
  Name: Arlene Morris 

  
	
   

  	
   

  	
   

  
	
  Title: President & COO

  	
   

  	
  Title:  President & CEO

  
					



 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 

















 


EXHIBIT A


 


AFFYMAX
HOUSE MARKS


 


	
  AFFYMAX

  	
   

  	
  United

  States

  	
   

  	
  Registration

  No. 1,855,403

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (black/white)

   

  	
   

  	
  United

  States

  	
   

  	
  Serial No.

  76/468,006

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (color) 

  

  	
   

  	
  United

  States

  	
   

  	
  Serial No.

  76/468,005

  



 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


1

















 


EXHIBIT
B


 


AFFYMAX
PATENTS


 


To the extent the following table lists
patents and patent applications filed or issued in the United States, Affymax
Patents shall include any equivalent applications and patents that are or will
be filed with patent authorities in the Licensed Territory (i.e., those applications and patents that
claim priority to such United States applications or to the applications from
which such United States patents issued).


 


[ * ]


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


1

















 


EXHIBIT
C


 


[ * ] STRUCTURE


 


[ * ]


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


2

















 


EXHIBIT
D


 


PEPTIDE
STRUCTURE


 


[ * ]


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


1

















 


EXHIBIT
E


 


REAGENT


 


[
* ]


 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


1

















 


EXHIBIT
F


 


JSC
MEMBERS AND ALLIANCE REPRESENTATIVES


 


	
  For Affymax:

  
	
   

  
	
  JSC Members:

  
	
   

  
	
  Robert B. Naso

  
	
  Anne-Marie Duliege

  
	
  Douglas L. Cole

  
	
  Christopher
  Dammann

  
	
   

  
	
   

  
	
  Alliance
  Representative:

  
	
  Kerstin Leuther

  
	
   

  
	
   

  
	
  For
  Takeda:

  
	
   

  
	
  JSC
  Members:

  
	
   

  
	
  Andy Hull

  
	
  Toshifumi
  Watanabe

  
	
  Toshiro Heya

  
	
  Hisao Nakajima

  
	
   

  
	
   

  
	
  Alliance
  Representative:

  
	
  Daaron Dohler

  



 






[
* ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


1
















 


EXHIBIT G


 


[ * ]


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


1

















 


EXHIBIT H


 


U.S.
DEVELOPMENT PLAN


 


[ * ]


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


1

















 


EXHIBIT I


 


[ * ]


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


2
















 


EXHIBIT J


 


FINANCIAL DEFINITIONS


 


The following sets forth the
definitions of cost and expense categories included in Commercial Expenses in
amounts consistent with the Development Budget set forth in the U.S.
Commercialization Plan.


 


1.            COST OF GOODS SOLD


 


“Cost of Goods Sold”  means the cost of Finished Product
packaged in final therapeutic form and Commercialized in the U.S., calculated
as [ * ] percent ([ * ]) [ * ] of the sum of: (a) the supply price from
Affymax to Takeda of the Bulk API contained in such Finished Product (i.e., [ * ]) (which [ * ]); (b) the freight, postage,
shipping, transportation, insurance, warehousing and handling charges actually
allowed or paid by Takeda with regard to such Bulk API; (c) Manufacturing
Costs for the Finished Manufacture of the Finished Product; and (d) the
freight, postage, shipping, transportation and insurance, warehousing and
handling charges actually allowed or paid by Takeda with regard to such
Finished Product.


 


All amounts shall be
determined in accordance with generally accepted accounting principles,
consistently applied.  To the extent
practical, the Parties shall use conforming systems for determining Cost of
Goods Sold.


 


2.             MANUFACTURING COSTS


 


“Manufacturing
Costs” means::


 


(a)           With respect to Bulk API manufactured by the Third
Party contract manufacturer(s) of Affymax, the amount of all payments that
Affymax makes to such Third Party contract manufacturer(s) for supply and
delivery of such Bulk API, plus all payments made to Third Party contractors for
release and batch stability testing services for the Bulk API.


 


(b)           With respect to Bulk API manufactured by Affymax, if
any, Manufacturing Costs shall mean Direct Expenses and Indirect Expenses
incurred by Affymax in, and reasonably allocable to, the manufacture of such
Bulk.   As used herein:


 


(i)            “Direct
Expenses” are those material and labor and services expenses captured in time
sheets, invoices, and the like which are specifically attributable to
manufacture of the Bulk API, including costs of raw materials, manufacturing
supplies, solvents, containers, container components, packaging, labels and
other printed materials used in production. 
Direct labor expenses include allocated salaries and fringe benefits for
personnel directly involved in manufacturing Bulk API in accordance with cGMP
requirements such as production, quality control, quality assurance,
microbiology, and other similar departments as needed to the extent such
personnel participate directly in the production of Bulk API and components
thereof.  Direct services expenses
include reasonable out of pocket payments to Third Parties for services related
to the manufacture of Bulk API or components thereof.


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


1

















 


(ii)           “Indirect
Expenses” include production indirect costs such as a reasonable allocation of
expenses associated with Affymax personnel supporting directly the
manufacturing of Bulk API in accordance with cGMP requirements.  Indirect Expenses can include labor for and
indirect costs of quality control, quality assurance, raw material acquisition
and acceptance, microbiology, document control, calibration/validation, and
non-R&D expenses for process development and analytical methods
development, and shall not include any Direct Expenses.


 


For avoidance of doubt,
any given cost included in Manufacturing Costs of Bulk API shall not be
included more than once in any calculation described herein.


 


(c)           With respect to Finished Product Finished Manufactured
by the Third Party contract manufacturer(s) of Takeda, the amount of all
payments that Takeda makes to such Third Party contract manufacturer(s) for
such Finished Manufacture, plus all payments made to Third Party contractors
for release and batch stability testing services for such Finished Product.


 


(d)           With respect to Finished Product Finished Manufactured
by Takeda, if any, Manufacturing Costs shall mean Direct Expenses and Indirect
Expenses incurred by Takeda in, and reasonably allocable to, such Finished
Manufacture.   As used herein:


 


(i)            “Direct
Expenses” are those material and labor and services expenses captured in time
sheets, invoices, and the like which are specifically attributable to the
Finished Manufacture, including costs of raw materials (other than Bulk API),
manufacturing supplies, solvents, containers, container components, packaging,
labels and other printed materials used in production.  Direct labor expenses include allocated
salaries and fringe benefits for personnel directly involved in Finished
Manufacturing in accordance with cGMP requirements such as production, quality
control, quality assurance, microbiology, and other similar departments as
needed to the extent such personnel participate directly in the production of
Finished Product and components thereof (other than the Bulk API).  Direct services expenses include reasonable
out of pocket payments to Third Parties for services related to the Finished
Product or components thereof (other than the Bulk API).


 


(ii)           “Indirect
Expenses” include production indirect costs such as a reasonable allocation of
expenses associated with Takeda personnel supporting directly the Finished
Manufacturing in accordance with cGMP requirements.  Indirect Expenses can include labor for and
indirect costs of quality control, quality assurance, raw material acquisition
and acceptance, microbiology, document control, calibration/validation, and
non-R&D expenses for process development and analytical methods
development, and shall not include any Direct Expenses.


 


For avoidance of doubt,
any given cost included in Manufacturing Costs of Finished Product shall not be
included more than once in any calculation described herein.


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


2

















 


3.             PRE-MARKETING
AND MARKETING EXPENSES


 


“Pre-marketing
Expenses” shall
mean expenses incurred by a Party, whether paid to a Third Party or incurred
through internal resources, that are agreed to by the Parties through the JSC
and are attributable to the marketing of the Product prior to the approval of
the initial U.S. Commercialization Plan.


 


“Marketing Expenses” shall be the sum of
Marketing Management, Market and Consumer Research, Advertising, Trade
Promotion, Detailing Costs, Consumer Promotion, and Education Expenses (as each
is described below), and all other costs attributable to the sales, promotion
or marketing of a Finished Product in the U.S., all in accordance with the
then-current U.S. Commercialization Plan.


 


“Marketing Management” shall include product
management and sales promotion management compensation and related costs and
department expenses, including product related public relations, relationships
with opinion leaders and professional societies, health care economics studies,
contract pricing and administration, market information systems, governmental
affairs activities for reimbursement, formulary acceptance, sales meeting of
the Sales Representatives, and other activities directly related to the
marketing and/or promotion of the Finished Product for the Field in the U.S.,
management and administration of managed care and national accounts and other
activities associated with developing overall sales and marketing strategies
and planning for Finished Product in the U.S. 
In addition, payments to Third Parties in connection with the Product Trademark
selection, filing, prosecution and enforcement in the U.S. shall be included in
the Marketing Management.  Such costs may
be allocated among the Finished Product and other products of a Party on a
percent of sales or other basis consistently applied within and across such
Party’s operating units but such allocation is made no less favorable to the
Finished Product than to the internal allocation to the Party’s other products.


 


“Market and Consumer Research” shall include
compensation and departmental expenses for market and consumer research
personnel and payments to Third Parties related to conducting and monitoring
professional and consumer appraisals of Finished Product for the Field and for
the U.S. market, such as market share services (e.g., IMS data), pricing analysis, special research testing
and focus groups.  Expenditures not
directly related to a Finished Product or the Field or U.S. market may be
allocated among the Finished Product and other products of a Party on a percent
of sales or other basis consistently applied within and across such Party’s
operating units but such allocation is made no less favorable to the Finished
Product than to the internal allocation to the Party’s other products.


 


“Advertising” shall mean all costs incurred
for the advertising and promotion of Finished Product in the Field and in the
U.S. through any means, including, without limitation, (i) television and
radio advertisements; (ii) advertisements appearing in journals,
newspapers, magazines or other media; (iii) seminars, symposia and
conventions; (iv) packaging design; (v) programs for education of
professionals (e.g., physicians,
practitioners, nurses, pharmacists and other persons with prescription
authority); (vi) samples of the Finished Product, visual aids and 


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


3

















 


other selling materials; (vii) hospital
formulary committee presentations; (viii) presentations to state and other
governmental formulary committees, and (ix) all media costs associated
with Finished Product advertising as follows: 
production expense/artwork including set up; design and art work for an
advertisement; the cost of securing print space, air time, etc. in newspapers,
magazines, trade journals, television, radio, billboards, etc.


 


“Trade Promotion” shall include the
allowances given to wholesalers, retailers, brokers, distributors, hospital
buying groups, etc. for purchasing, promoting, and distribution of a Finished
Product in the Field and in the U.S. 
This shall include purchasing, advertising, new distribution, and
display allowances as well as free goods, wholesale allowances and reasonable
field sales samples.  To the extent
multiple products are involved and some of such products are not Finished
Product, then such allowances shall be allocated among the Finished Product and
other products of a Party on a percent of sales or other basis consistently
applied within and across such Party’s operating units but such allocation is
made no less favorable to the Finished Product than to the internal allocation
to the Party’s other products.


 


“Detailing Costs” shall include the expenses
associated with performing Details.  Such
expenses shall calculated on the basis of a fixed rate per PDE (as defined in Article 1)
determined by the Finance Subcommittee and approved by the JSC, irrespective of
which Party’s Sales Representatives perform the Details.


 


“Education” shall include expenses
associated with education of professionals (e.g.,
physicians, practitioners, etc.) with respect to a Finished Product in the
Field and in the U.S. through any means not covered in the definition of “Advertising”,
but including articles appearing in journals, newspapers, magazines or other
media; seminars, scientific exhibits, and conventions; and symposia, advisory
boards and opinion leader development activities; and education grant programs.


 


4.             DISTRIBUTION
EXPENSES


 


“Distribution Expenses”  shall be an amount equal to a percentage
of Net Sales to be determined after the characteristics and anticipated price
of the Finished Product have been determined. 
Such percentage shall be agreed upon by the Parties in good faith, and
shall be designed to approximate Takeda’s cost of distributing such Finished
Product in the U.S.


 


5.             CLINICAL
PHASE IV AND RELATED EXPENSES


 


“Clinical Phase IV and Related Expenses”
shall include certain costs incurred by a Party in relation to  (i) Phase IV Clinical Trials, (ii) product
support conducted after the First Commercial Sale of the Product in the U.S., (iii) medical
affairs conducted after the First Commercial Sale of the Product in the U.S.,
and (iv) fees and expenses of outside counsel in respect of regulatory
affairs unrelated to obtaining Regulatory Approvals conducted after the First
Commercial Sale of the Product in the U.S., all to the extent relating to the
Product and not covered by the definitions of the “Marketing Expenses”, “Distribution
Expenses” and “Regulatory Expenses”.


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


4

















 


6.             MEDICAL
SCIENCE LIAISON EXPENSES


 


“Medical
Science Liaison Expenses” shall include expenses associated with education of
medical science liaisons with respect to a Finished Product in the Field and in
the U.S., including seminars, scientific exhibits, and conventions; and
symposia, advisory boards and opinion leader development activities.


 


7.             REGULATORY
EXPENSES


 


“Regulatory Expenses” shall mean all costs
incurred after the First Commercial Sale of the Product in the U.S. to maintain
all Regulatory Approvals or otherwise incurred in order to comply with all
requirements by the Regulatory Authorities, including FDA user and other fees,
and costs for reporting, and other regulatory affairs activities, to the extent
not covered by the definitions of the “Development Expenses”, “Marketing
Expenses”, “Distribution Expenses” and “Clinical Phase IV and Related Expenses”.


 


8.             LAUNCH
EXPENSE ALLOWANCE


 


“Launch
Expenses” means
the Marketing Expenses incurred by either Party on or after the first NDA
submission in the U.S. for the Product for the Renal Indication pursuant to the
U.S. Commercialization Plan and shared by the Parties in accordance with the
last sentence of Section 8.4.


 


Notwithstanding
the foregoing sentence, Takeda shall pay the first $20,000,000 of Launch
Expenses, half of which shall be a loan to Affymax and shall be repaid by
Affymax to Takeda in accordance with the following sentence as far as the
Product is launched in the U.S.  For
purposes of repayment to Takeda of such loaned amount, in the calculation of
the U.S. Product Profit for each calendar quarter under Section 8.4,
Takeda shall be entitled to first deduct and receive 8%  of the total Net Sales of the Product in
the U.S. in an applicable calendar quarter 
until such time as Takeda has received $11,000,000.  By way of example, in case the Net Sales in a
certain calendar quarter is 100 million Dollars and Commercial Expenses for
such calendar quarter is 10 million Dollars (accordingly U.S. Product Profit is
90 million Dollars), then, Takeda is entitled to receive 53 million Dollars
among such U.S. Product Profit and Affymax is entitled to receive the remaining
37 million Dollars.


 


9.             ALLOCATION
OF COSTS OF FINISHED PRODUCT.


 


The following guidelines shall be used to allocate costs to the
Finished Product in order to calculate the Commercial Expenses:


 


(a)           If the expense is specifically and
exclusively used for the Commercialization of a Finished Product in the U.S.,
100% of such expense shall be an Commercial Expense.


 


(b)           If the expense is specifically and
exclusively used for the Commercialization of a Finished Product (i.e., not for
other products of such Party), but both in the U.S. and the Royalty Territory,
it shall be allocated 70% to the U.S. and 30% to the Royalty Territory.


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


5

















 


(c)           If the expense is not specifically and
exclusively used for the Commercialization of a Finished Product (i.e., for other products of such Party),
it shall be allocated based on objective means (such as hours spent or amounts
consumed) or, if such method cannot reasonably be used, based on a percentage
of the sales of each such product or other basis consistently applied within
and across such Party’s operating units but such allocation is made no less
favorable to the Finished Product than to the internal allocation to the Party’s
other products.


 


(d)           No item of cost shall be duplicated in
any of the categories comprising Allowance Expenses.


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


6
















 


EXHIBIT K


 


INITIAL PRESS RELEASE


 


	
  

  	
  

  



 


AFFYMAX AND
TAKEDA ANNOUNCE COMPREHENSIVE GLOBAL AGREEMENT FOR DEVELOPMENT AND COMMERCIALIZATION OF HEMATIDETM FOR ANEMIA


 


—Companies Will Co-Commercialize with Equal Profit Sharing in the U.S.
and Takeda Will Commercialize
Outside the U.S.—


—Affymax
to Receive $105 Million Upfront—


 


PALO ALTO, Calif. ,
and
OSAKA, Japan (June 27,
2006) — Affymax, Inc. (Affymax) and Takeda
Pharmaceutical Company Limited (Takeda) today announced that the companies have entered into an exclusive
global agreement to develop and commercialize Affymax’s lead product candidate,
HematideTM, for the treatment of anemia. The companies will collaborate on the
development of the product and
co-commercialize HematideTM in the United States while Takeda will hold an exclusive license to develop and commercialize outside
the United States, including the right for Japan under the previous agreement announced in February 2006.


 


Under the terms of the agreement, Affymax will receive
US$105 million in an upfront cash payment. 
In addition, Affymax is
eligible to receive development and regulatory milestone
payments of up to US$280 million, and commercial milestone payments upon
successful commercialization of Hematide of up to US$150 million, for total
potential milestone payments of US$430 million.   Takeda and Affymax will be jointly responsible for
Hematide U.S. development costs with the vast majority of these costs to be the
responsibility of Takeda. Outside
of the U.S., Takeda also will be responsible for all of the development costs
for regulatory approvals and will pay Affymax royalties on sales.  Affymax is responsible for the 


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


1

















 


manufacture and supply of drug
substance to Takeda, and Takeda is responsible for the final packaging and
distribution of Hematide globally.


 


Hematide,
a synthetic, peptide-based erythropoiesis-stimulating
agent (ESA), is designed to stimulate the production of red blood cells and is in Phase 2b clinical trials for
anemia in dialysis, pre-dialysis and cancer chemotherapy patients.  ESAs currently address a US$12 billion market
worldwide and have been used successfully to manage anemia in patients with
chronic kidney disease (CKD) and cancer-related anemia.  They reduce the need for blood transfusions
and the frequency and severity of anemia-associated morbidity, resulting in an
improved quality of life for patients.


 


“Takeda is an ideal global partner because they have the development
experience, global commercial capabilities, and financial resources to assist
us in our efforts to bring Hematide to market worldwide.  Moreover, they have significantly grown their
business in the U.S.,” said Arlene M. Morris, Affymax’s president and chief
executive officer.  “Takeda has already
shown their commitment to Hematide with the rapid filing of an investigational
new drug application in Japan and we believe will bring a similar dedication to
the development of Hematide globally.  We
are extremely pleased with this collaboration which we believe will facilitate
our efforts to build a fully integrated biopharmaceutical business.”


 


“The opportunity to fully-commercialize Hematide
is highly compatible with Takeda’s strategy to grow our core therapeutic
franchises in cardiovascular disease and diabetes, and oncology,” said Yasuchika Hasegawa, Takeda’s president. “Many patients with cardiovascular
diseases and diabetes suffer from CKD as their underlying disease progresses.  Also, Hematide helps address an important
need in patients with cancer where anemia is commonly seen in association with
chemotherapy or cancer itself.  We are
very pleased to be able to expand our collaboration with Affymax on such a
strategically important product to the worldwide market.  We believe that this single-partner collaboration will increase the efficiency of
development and accelerate Hematide’s commercialization globally.”


 


About Affymax


 


Affymax, Inc. is a privately-held, clinical-stage pharmaceutical
company that is developing a pipeline of synthetic peptide-based drugs against
clinically validated targets for the treatment of kidney diseases and
cancer.  HematideTM, the company’s first
product candidate to enter the 


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


2

















 


clinic, is a novel peptide-based drug designed to stimulate the
production of red blood cells.  It is in
Phase 2 trials for the treatment of anemia associated with chronic kidney
disease and cancer.  For more information
go to www.affymax.com.


 


About Takeda


 


Takeda, located in
Osaka, Japan, is a research-based global company with its main focus on
pharmaceuticals.  As the largest
pharmaceutical company in Japan and one of the global leaders of the industry,
Takeda is committed to striving toward better health for individuals and
progress in medicine by developing superior pharmaceutical products.  Additional information about Takeda is
available through its corporate website, www.takeda.com.


 


# # #


 


	
  For
  Further Information:

  
	
  Affymax

  
	
  Paul
  Cleveland

  
	
  Chief Financial Officer and

  
	
  Executive Vice President, Corporate Development

  
	
  Affymax, Inc.

  
	
  650-812-8717

  
	
  Paul_cleveland@affymax.com

  
	
   

  
	
  WeissComm Partners (for Affymax)

  
	
  Daryl
  Messinger

  
	
  415-999-2361

  
	
  daryl@weisscommpartners.com

  
	
   

  
	
  Takeda

  
	
  Seizo Masuda

  
	
  Coordinator, Corporate Communications

  
	
  +81-6-6204-2060

  
	
  Masuda_Seizo@takeda.co.jp

  



 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


3

















 


EXHIBIT L


 


[ * ]


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


1
















 


EXHIBIT
M


 


RESOLUTION
PROCEDURE FOR


DISPUTES
AT JSC


 


1.                                      The Parties shall resolve disputes stipulated
in Section 2.5.(c) by final and binding arbitration in accordance
with this Exhibit.  The Parties shall
select a mutually agreeable arbitrator who has significant relevant experience
in the subject matter of the disputed issue and no affiliation or pre-existing
relationship with either Party.  If the
Parties cannot agree on an arbitrator within thirty (30) days after the senior
executive officers have failed to resolve the disagreement, either Party may
request the office of the American Arbitration Association located in San
Francisco, California to appoint an arbitrator on behalf of the Parties.  The date on which such arbitrator is selected
shall be the “Arbitration Commencement Date.”


 


2.                                      Each Party shall prepare and, within ten (10) Business
Days after the Arbitration Commencement Date, deliver to both the arbitrator and the other Party
its proposed resolution and a memorandum in support thereof (the “Support Memorandum”).  The arbitrator shall also be provided with a
copy of this Agreement.


 


3.                                      Within ten (10) Business Days after
receipt of the other Party’s Support Memorandum, each Party may submit to the
arbitrator (with a copy to the other Party) a rebuttal to the other Party’s
Support Memorandum, which may include a revision, marked to show changes, of
either Party’s proposed resolution. 
Neither Party may have communications (either written or oral) with the
arbitrator other than for the sole purpose of engaging the arbitrator or as
expressly permitted in paragraphs 1 and 2.


 


4.                                      Within ten (10) Business Days after the
receipt of all proposed resolution, Support Memoranda, and rebuttals, if any,
the arbitrator shall select from the two proposals provided by the Parties the
proposal that the arbitrator believes more accurately reflects the intention of
the Parties to this Agreement and the industry customs regarding the
manufacture, development and commercialization of comparable pharmaceutical
products.  The arbitrator’s decision
shall be provided in writing.


 


5.                                      The arbitrator shall have reasonable discretion to request
additional information, hold a hearing, and extend the time frame for reaching
their decision regarding the dispute at issue.


 


6.                                      The arbitrator’s fees and expenses shall be
shared equally by the Parties.  Each
Party shall bear and pay its own expenses incurred in connection with any
dispute resolution under this Exhibit M.


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


2

















 


EXHIBIT
N


 


[
* ]


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


1

















 


EXHIBIT  O


 


ROYALTY RATES FOR
PRODUCTS [ * ]


 


Royalty
Rate.  With respect to any Product that is Developed and
Commercialized [ * ], Takeda shall pay to Affymax
royalties based on the aggregate annual Net Sales of the Finished Product sold
in the Royalty Territory (including U.S.) at the rate of
[ * ]


 


All other aspects of the
royalty payments (including term, step-downs, credits, etc.) shall be as set
forth in Article 8.


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


1

















 


SCHEDULE
1.9


 


BACKUP
COMPOUNDS


 


Affymax
Designation/Description


 


[ * ]


 


Note:  The above-described molecules Controlled by
Affymax as of the Effective Date have been [ * ]


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 


1

















 


SCHEDULE
10.2


 


Schedule 10.2(b)(i):


 


1.              [ * ]


 


2.             On June 9, 2004, Affymax filed a civil complaint
in the Regional Court Munich I in the Federal Republic of Germany against Ortho
Pharmaceutical Corporation and Ortho-McNeil Pharmaceutical, Inc. of
Raritan, New Jersey (collectively “Ortho”). 
Affymax’s complaint alleged that Affymax is an owner of European Patent
Application EP 0 892 812 which currently lists Ortho as the sole applicant, and
that Affymax should be named as the applicant, or in the alternative as
co-applicant, of that European application. [ * ].
The German case has been dismissed at the request of Affymax and the
determination of inventorship and ownership of European Patent Application EP 0
892 812 will be decided by a panel of arbitrators in a binding arbitration
under the rules and auspices of the American Arbitration Association; the
arbitration is pending with the International Centre for Dispute Resolution
captioned as Affymax v.
Ortho-McNeil - AAA Case No. 50 133 T 00165 06.


 


3.             On September 27,
2004, Affymax filed a civil complaint in the United States District Court for
the Northern District of Illinois against Johnson & Johnson,
Ortho-McNeil Pharmaceutical, Inc., Ortho Pharmaceutical Corporation, and
The R.W. Johnson Pharmaceutical Research Institute d/b/a Johnson &
Johnson Pharmaceutical Research and Development (collectively “J&J-Ortho”).
Affymax’s complaint alleged that J&J-Ortho have applied for and in some
cases been granted patents covering subject matter that was invented by Affymax’s
scientists in connection with a Research and Development Agreement between
Affymax and J&J-Ortho (“R&D Agreement”). Affymax alleged that, based on
the applicable patent Laws and the R&D Agreement, Affymax’s scientists
should have been identified as inventors on the patents and patent
applications, and Affymax should have been granted ownership rights to these
patents and patent applications. The complaint also alleged that J&J-Ortho
has breached the R&D Agreement and Affymax has suffered certain damages as
a result of said breach. Pursuant to the terms of the R&D Agreement,
Affymax entered into a period of good faith discussions with J&J-Ortho to
resolve, if possible, the dispute between the parties regarding the subject
matter of Affymax’s civil complaints in the U.S. and Europe. On October 13,
2004, Affymax and J&J-Ortho entered into a standstill agreement in order to
facilitate good faith discussions between the parties to resolve the dispute.
On March 8, 2005, Affymax and J&J-Ortho entered into an expanded
standstill agreement and Affymax filed a motion to voluntarily dismiss without
prejudice the civil complaint in the U.S. District Court in Illinois; the
motion was granted and the U.S. complaint was dismissed without prejudice and
with leave to refile the complaint with the court prior to September 8,
2005.  Affymax filed a Motion to
Reinstate the U.S. complaint in the U.S. District Court in Illinois on September 8,
2005, and the motion was granted by the court reinstating the case.  On October 10, 2005, Affymax filed an
Amended Complaint in the U.S. District Court in Illinois amending the names of
the Defendants to reflect the current business units of Ortho and deleting
certain claims regarding USSN 60/207,654, USSN 09/863,600 and
PCT/US01/16654.  On November 1,
2005, Ortho filed an Answer, Affirmative Defenses, and 


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.


 

















 


Counterclaims to the
Affymax complaint.  In their filing,
Ortho denies all material claims against them raised in the Affymax complaint
and pleads counterclaims which include, inter alia, that Ortho should be the
sole owner of U.S. Patent 5,986,047 and the joint owner of U.S. Patents
5,773,569 and 5,830,851, all of which are currently assigned to Affymax.  In the November 1, 2005 filing, Ortho
also stated that the case pending in the U.S. District Court for the Northern
District of Illinois should be dismissed and the case decided by binding
arbitration as specified in the 1992 agreement between the parties.  On November 11, 2005, Ortho filed a
motion with the Illinois court  to
dismiss or stay the U.S. and German litigations and compel the parties to
binding arbitration. On December 2, 2005, Affymax filed an Answer to
Defendants’ Counterclaims which denies all material allegations in defendants’
counterclaims. On December 14, 2005, Affymax filed a brief opposing the
Ortho motion to dismiss the U.S. and German litigations. On January 19,
2006, Ortho filed an Amended Answer and Counterclaims as well as a Reply
Memorandum with the Illinois court.  On February 3,
2006, Affymax filed a Sur-Reply responding to Ortho’s Reply Memorandum.  On February 28th,
2006 the Illinois court issued its Memorandum Opinion and Order on the Motion
to Compel Arbitration in which the Court ruled that Affymax and Ortho-J&J
must resolve the issue of inventorship/ownership and related claims based on
the same subject matter via binding arbitration under American Arbitration
Association rules.  The Illinois court
ordered Affymax to dismiss the German complaint, which has been withdrawn from
the German court pursuant to the order of the Illinois court. The Illinois
court also stated that it will retain jurisdiction over the subject matter
during the arbitration in Illinois.


 


[ * ]


 


[ * ]


 


[ * ]


 






[ * ] = Certain confidential information
contained in this document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended.