TASK DEFINITION: In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write unambiguous answers to the questions and your answer must refer a specific phrase from the paragraph. If multiple answers seem to exist, write the answer that is the most plausible.
PROBLEM: [ * ] = 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 10.11      COLLABORATION AGREEMENT

BY AND BETWEEN

ASTELLAS PHARMA INC.

AND

FIBROGEN, INC.      June 1, 2005





CONFIDENTIAL   EXECUTION COPY   TABLE OF CONTENTS   ARTICLE 1 DEFINITIONS     1

1.1   Actions     1  1.2   Affiliate     1  1.3   Astellas Indemnitees     1  1.4   Astellas Territory     1  1.5   Authorized Designee     1  1.6   Bridging Strategy     1  1.7   Bulk Product     2  1.8   Commercialize     2  1.9   Completion     2  1.10   Confidential Information     2  1.11   Control or Controlled     2  1.12   Controlling Party     2  1.13   Data     2  1.14   Delivery or Delivered     2  1.15   Development Plan     2  1.16   Development Program     2  1.17   Enforcement Action     2  1.18   Event     2  1.19   Expanded Field     2  1.20   Expenses     2  1.21   FDA     2  1.22   FG Acquired Patents     3  1.23   FG Development Program     3  1.24   FG Indemnitees     3  1.25   FG Technology     3  1.26   FG Patents     3  1.27   FG Technical Information     3  1.28   FG Territory     3  1.29   Field     4  1.30   First Commercial Sale     4  1.31   Force Majeure Event     4  1.32   Fully Burdened Costs     4  1.33   Future Third Party Intellectual Property     4  1.34   GMP Guidelines     4  1.35   [ * ]     4  1.36   [ * ] Percentage     5  1.37   HIF     5    -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.





TABLE OF CONTENTS (continued)           Page   1.38   IND     5  1.39   Indemnitee     5  1.40   Indemnitor     5  1.41   Indications     5  1.42   Initial Development Plan     5  1.43   Initiate or Initiation     5  1.44   Inspected Party and Inspecting Party     5  1.45   Joint Development Committee or JDC     5  1.46   Lead Compound     5  1.47   Listed Price     5  1.48   Litigation Agreement     5  1.49   Major Indication     6  1.50   Marketing Approval     6  1.51   Marketing Approval Application or MAA     6  1.52   Net Sales     6  1.53   Phase I     6  1.54   Phase II     6  1.55   Phase III     6  1.56   Product Specification     7  1.57   Preexisting Third Party Intellectual Property     7  1.58   Proof of Concept     7  1.59   Prosecution and Interference Activities     7  1.60   Protected Field     7  1.61   Reference Materials     7  1.62   Relevant Standards     7  1.63   Sales Price     7  1.64   Standard Materials     7  1.65   Sublicensee     8  1.66   Technical Product Failure     8  1.67   Third Party Agreements     8  1.68   Third Party Licensor     8

ARTICLE 2 JOINT DEVELOPMENT COMMITTEE     8

2.1   Joint Development Committee     8  2.2   Membership     8  2.3   JDC Meetings     8  2.4   Decisions     9

ARTICLE 3 DEVELOPMENT PLANS     9

3.1   General     9  3.2   Annual Review     9  3.3   Periodic Reviews     9

ARTICLE 4 DEVELOPMENT PROGRAM     10

4.1   Development Program for the Astellas Territory     10    -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.





TABLE OF CONTENTS (continued)           Page  4.2   Global Harmonization     10  4.3   Selection of Lead Compounds     10  4.4   Regulatory Matters     11

ARTICLE 5 RECORDKEEPING; PUBLICATION     13

5.1   Reports and Records     13  5.2   Review of Publications     14

ARTICLE 6 DEVELOPMENT PROGRAM FUNDING     15

6.1   Payments for Reimbursement; Net Payments     15

ARTICLE 7 USE OF PRECLINICAL AND CLINICAL DATA     17

7.1   Exchange     17  7.2   Disclosure     18  7.3   Regulatory Requirements     18  7.4   Review of Protocols     18

ARTICLE 8 MARKETING RIGHTS     19

8.1   Astellas     19  8.2   FibroGen     19  8.3   Covenants     19

ARTICLE 9 TRANSFER PRICING     20

9.1   Transfer for Non-Commercial Purpose     20  9.2   Transfer for Commercial Purpose     21  9.3   Payment     22  9.4   Reference Materials; Standard Materials     22

ARTICLE 10 ADDITIONAL PAYMENTS; BOOKS AND RECORDS     22

10.1   Quarterly Reports     22  10.2   Payment Method     22  10.3   Currency Conversion     23  10.4   Taxes     23  10.5   Records; Inspections     24

ARTICLE 11 DUE DILIGENCE     24

11.1   Astellas' Due Diligence     24  11.2   FG's Due Diligence     24  11.3   Development Diligence     25

ARTICLE 12 MANUFACTURING RIGHTS     26

12.1   Procedures     26  12.2   FG Right     27  12.3   Manufacture and Supply     27  12.4   Product Specifications     27  12.5   Orders Forecast     27    -iii-

[ * ] = 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.





TABLE OF CONTENTS (continued)           Page   12.6   Shipment     28  12.7   Inspection of Shipment/Right to Reject     28  12.8   Inspection of Facilities     28  12.9   Recall     29  12.10   Warranty     29  12.11   Interruption in Supply     29  12.12   Reference and Standard Materials     29

ARTICLE 13 LICENSE GRANTS     29

13.1   Grant to Astellas     29  13.2   Sublicenses     29  13.3   No Rights Beyond Lead Compounds     30  13.4   Expanded Field Negotiation     30

ARTICLE 14 INTELLECTUAL PROPERTY     30

14.1   Ownership of Inventions     30  14.2   Patent Prosecution     31  14.3   Defense of Third Party Infringement Claims     31  14.4   Enforcement     32  14.5   Third Party Agreements     33

ARTICLE 15 REPRESENTATIONS AND WARRANTIES     34

15.1   FG Warranties     34  15.2   Astellas Warranties     34  15.3   Disclaimer of Warranties     34

ARTICLE 16 CONFIDENTIALITY     35

16.1   Confidential Information     35  16.2   Permitted Disclosures     35  16.3   Clinical Data     36  16.4   Press Releases     36

ARTICLE 17 INSURANCE; INDEMNIFICATION     36

17.1   Insurance     36  17.2   Indemnification of FG     36  17.3   Indemnification of Astellas     37  17.4   Procedure     37

ARTICLE 18 TERM AND TERMINATION     37

18.1   Term     37  18.2   Termination for Cause or Technical Product Failure     37  18.3   Termination in case of Generic Competition     38  18.4   Negative Advice from Authorities     39  18.5   Admission of Invalidity or Unenforceability of FG Patent     39  18.6   Termination upon Notice     39    -iv-

[ * ] = 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.





TABLE OF CONTENTS (continued)           Page   18.7   Effect of Termination     39

ARTICLE 19 DISPUTE RESOLUTION     40

19.1   Disputes     40  19.2   Full Arbitration     40

ARTICLE 20 MISCELLANEOUS     41

20.1   Confidential Terms     41  20.2   Governing Law     41  20.3   Force Majeure     41  20.4   No Implied Waivers; Rights Cumulative     42  20.5   Independent Contractors     42  20.6   Notices     42  20.7   Assignment     43  20.8   Modification     43  20.9   Severability     43  20.10   Counterparts     43  20.11   Headings     43  20.12   Export Laws     43  20.13   Language     43  20.14   Entire Agreement     43

EXHIBIT A LIST OF PATENTS     45

EXHIBIT B INDICATIONS     46

EXHIBIT C INITIAL DEVELOPMENT PLAN     47    -v-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   COLLABORATION AGREEMENT

This COLLABORATION AGREEMENT (Agreement), effective as of June 1, 2005 (the Effective Date), is made by and between FibroGen, Inc., a Delaware corporation having offices at 225 Gateway Boulevard, South San Francisco, California 94080 (FG or FibroGen), and Astellas Pharma Inc., a Japanese corporation having offices at 3-11 Nihonbashi-Honcho, 2-Chome, Chuo-ku, Tokyo, 103-8411 Japan (Astellas).

BACKGROUND

A. FG has a research and development program focused on the development of small molecule prolyl hydroxylase inhibitors which stabilize hypoxia inducible factor (HIF), for the treatment of anemia.

B. Astellas desires to collaborate with FG on the development and commercialization of, and license the rights to use as therapeutics, certain small molecule prolyl hydroxylase inhibitors on the terms and conditions set forth below for use in the Astellas Territory (as defined below).

NOW THEREFORE, for and in consideration of the covenants, conditions, and undertakings hereinafter set forth, it is agreed by and between the parties as follows:

ARTICLE 1 DEFINITIONS

1.1 Actions shall have the meaning as set forth in Section 14.3 below.

1.2 Affiliate shall mean any entity which controls, is controlled by or is under common control with Astellas or FG. For purposes of this definition only, control shall mean beneficial ownership (direct or indirect) of at least fifty percent (50%) of the shares of the subject entity entitled to vote in the election of directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority).

1.3 Astellas Indemnitees shall have the meaning as set forth in Section 17.3 below.

1.4 Astellas Territory shall mean the country of Japan.

1.5 Authorized Designee shall mean an officer of FG or Astellas, as the case may be, designated by the Chief Executive Officer of the respective corporation, that has been granted full authority to resolve a dispute arising between FG and Astellas as required under Section 2.4 or Section 19.1 hereof.

1.6 Bridging Strategy shall mean the decision by Astellas to file an MAA in the Astellas Territory by submitting the data from the Phase III clinical trial of FG or its Affiliate or Sublicensee.   -1-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   1.7 Bulk Product shall mean a Lead Compound supplied by FG to Astellas as a bulk formulated drug (such as in a form, including, but not limited, to a capsule, tablet or caplet formulation) without packaging.

1.8 Commercialize shall mean directly or indirectly develop, manufacture, sell, market or distribute.

1.9 Completion shall be deemed to occur, with respect to a particular clinical trial for a Lead Compound, upon clinical database lock for such trial.

1.10 Confidential Information shall have the meaning as set forth in Section 16.1 below.

1.11 Control or Controlled shall mean possession of the ability to grant a license or sublicense as provided for herein without violating the terms of an agreement with a third party.

1.12 Controlling Party shall have the meaning as set forth in Section 14.3 below.

1.13 Data shall have the meaning as set forth in Section 7.1 below.

1.14 Delivery or Delivered shall mean when Lead Compound is made available by FG to Astellas at the Ex Works location.

1.15 Development Plan shall mean the plan for the Development Program in effect from time to time, as established in accordance with Article 3 below.

1.16 Development Program shall mean all Astellas activities with respect to the development and commercialization of Lead Compounds for applications within the Field in the Astellas Territory, in accordance with the Development Plan in effect at that time.

1.17 Enforcement Action shall have the meaning as set forth in Section 14.4 below.

1.18 Event shall have the meaning as set forth in Article 6 below.

1.19 Expanded Field shall mean the treatment of any indications in which therapeutic utility is derived from [ * ], including, without limitation, [ * ]. The Expanded Field shall not include the Field.

1.20 Expenses shall have the meaning as set forth in Section 14.3 below.

1.21 FDA shall mean the U.S. Food and Drug Administration, or any successor agency.   -2-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   1.22 FG Acquired Patents shall mean those FG Patents that are in-licensed or otherwise acquired by FG.

1.23 FG Development Program shall mean those activities by or on behalf of FG directly related to the development and commercialization of Lead Compounds for applications within the Field in the FG Territory that are directly useful or necessary for Commercialization in the Astellas Territory.

1.24 FG Indemnitees shall have the meaning as set forth in Section 17.2 below.

1.25 FG Technology shall mean FG Patents and FG Technical Information.

1.26 FG Patents shall mean all patents including all reissues, renewals, re-examinations and extensions thereof, and any patent applications therefor, including all divisionals or continuations, in whole or in part, thereof, which claim or otherwise cover the composition, manufacture, sale or use of a Lead Compound and that are Controlled by FG or its Affiliates during the term of this Agreement, subject to Section 14.5.1. For purposes of this definition, a patent or patent application shall be deemed to cover a Lead Compound if the manufacture, use or sale of such Lead Compound would, but for the license granted herein, infringe, contributorily infringe or constitute inducement to infringement of such patent or patent application, if issued or granted as pending. All patents and patent applications listed on Exhibit A, as revised from time to time to remove patents and/or patent applications by mutual agreement or to add patents and/or patent applications by FG, shall be within the scope of definition of the FG Patents, provided, however, that in the event FG designates any additional Lead Compounds, FG shall add to the list on Exhibit A patents and patent applications which claim or otherwise cover the composition, or manufacture, sale or use of the additional Lead Compounds within the Field and the Astellas Territory, and upon the cessation of the designation as any compound as Lead Compound and Astellas' cessation of development of such Lead Compound, FG shall remove at its sole discretion the related patent or patent application from Exhibit A.

1.27 FG Technical Information shall mean confidential information, tangible and intangible, and materials, including, but not limited to: trade secrets and know how, pharmaceutical, chemical, biological and biochemical compositions; and technical and non-technical data and information, and/or the results of tests, assays, methods and processes; and plans, specifications and/or other documents containing said information and data; in each case that is possessed by FG as of the Effective Date or discovered, developed or Controlled by FG or its Affiliates during the term of this Agreement, to the extent such relates to the development, manufacture, sale or use of a Lead Compound subject to Section 14.5.1, and such information related to a candidate for use as a Lead Compound provided by FG to Astellas in connection with the Lead Compound selection decision consultation process described in Section 4.3.

1.28 FG Territory shall mean all areas of the world outside of the Astellas Territory.   -3-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   1.29 Field shall mean the treatment of anemia solely in the Indications, by means of the stabilization of HIF causing the stimulation of erythropoiesis (including an increase in endogenous erythropoietin production) and/or a subsequent increase in hematocrit through modulation of prolyl hydroxylase and/or asparaginyl hydroxylase. For purposes of clarity, FG and Astellas agree and acknowledge that the Field and the Indications exclude [ * ].

1.30 First Commercial Sale shall mean, with respect to each Lead Compound, the first bona fide commercial sale of such Lead Compound to a non-Affiliate third party by or under authority of Astellas or FG, or their Affiliates or Sublicensees, as the case may be, in the FG Territory or the Astellas Territory, respectively.

1.31 Force Majeure Event shall mean the occurrence of any event causing a failure to perform where failure to perform is beyond the reasonable control of the non-performing party, as described in Section 20.3.

1.32 Fully Burdened Costs with respect to a Lead Compound shall mean all costs to produce, package and distribute the product to Astellas or its carrier at the Ex Works location (in compliance with Section 12.6) and any royalties or other consideration (not reimbursed by Astellas) paid to third parties related to the acquisition or sale of product, with costs to produce and package the product to include the direct material, labor and indirect costs that are incurred by FG or its Affiliate(s) associated with the manufacture, filling, packaging, labeling, preparation of product for shipment and/or other preparation of such Lead Compound, as applicable, including, but not limited to taxes, fees, and customs incurred, as applicable. Costs will be determined in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP) and will include but not be limited to the costs of facilities, labor, purchasing, depreciation of equipment, materials, payments to third parties for any necessary contract work related to the manufacture or testing of the product, the validation studies, quality assurance, quality control and other testing, storage, shipping (if requested by Astellas), costs related to distribution and a reasonable allocation of general and administrative overhead. Costs related to distribution include the labor, materials and overhead necessary to prepare and package the final product for shipment to the Ex Works location.

1.33 Future Third Party Intellectual Property shall mean any intellectual property rights, including without limitation all patents, trademarks, or copyrights, and any applications therefor, including any applications for registration, issuance, or grant thereof, owned or Controlled by a third party that are necessary for the practice of the license granted hereunder that were not owned or Controlled by FG as of the Effective Date and that do not qualify as Pre-existing Third Party Intellectual Property under Section 1.56.

1.34 GMP Guidelines shall mean then-current applicable Good Manufacturing Practices guidelines and regulations of the FDA.

1.35 [ * ] shall have the meaning as set forth in Section 1.36 below.   -4-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   1.36 [ * ] Percentage shall be determined, for any Lead Compound, (i) by dividing (a) the [ * ], which shall be defined as the difference between (x) the [ * ], and (y) the [ * ], by (b) the [ * ]; and (ii) multiplying the result of (i) above by 100.

1.37 HIF shall mean hypoxia inducible factor.

1.38 IND shall mean an Investigational New Drug application, as defined in the U.S. Federal Food, Drug and Cosmetic Act and the regulations promulgated thereunder, or comparable filing in a foreign jurisdiction, in each case with respect to a Lead Compound for use within the Field.

1.39 Indemnitee shall have the meaning as set forth in Section 17.4 below.

1.40 Indemnitor shall have the meaning as set forth in Section 17.4 below.

1.41 Indications shall mean those indications listed on Exhibit B and any other indications to be agreed upon hereafter between FG and Astellas, each of which shall be referred to as an Indication.

1.42 Initial Development Plan shall mean the Initial Development Plan as described in Section 3.2.1 hereof.

1.43 Initiate or Initiation shall mean with respect to a particular clinical trial for a Lead Compound, the initial dosing of the first patient in such trial in accordance with the protocol therefor.

1.44 Inspected Party and Inspecting Party shall have the meanings as set forth in Section 10.5 below.

1.45 Joint Development Committee or JDC shall have the meaning as set forth in Section 2.1 below.

1.46 Lead Compound shall mean any compound Controlled by FG that is designated by FG as a lead compound for clinical development in an Indication in accordance with Section 4.3 for the duration of such designation. Any Lead Compound which receives a Marketing Approval in the Astellas Territory shall remain a Lead Compound for the duration of such Marketing Approval. As of the Effective Date, FG-2216 shall be deemed to be a Lead Compound.

1.47 Listed Price shall have the meaning as set forth in Section 9.2.

1.48 Litigation Agreement shall have the meaning as set forth in Section 14.4 below.   -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.





CONFIDENTIAL   EXECUTION COPY   1.49 Major Indication shall have the meaning set forth in Section 11.3.1 below.

1.50 Marketing Approval shall mean, with respect to each Lead Compound, approval in the Astellas Territory by the Japanese Ministry of Health, Labour and Welfare, or in the FG Territory by U.S. or European regulatory authorities, as the case may be, to market such Lead Compound for an indication within the Field. It is understood that pricing or reimbursement approval shall constitute a part of the Marketing Approval. In any event, Marketing Approval shall be deemed to have occurred with respect to a Lead Compound no later than the date of the First Commercial Sale of such Lead Compound in the FG Territory or the Astellas Territory as the case may be, by or under authority of FG or Astellas respectively, or their Affiliate or Sublicensee, as the case may be, whether or not formal approval by the relevant health regulatory authority is required for the First Commercial Sale of such Lead Compound.

1.51 Marketing Approval Application or MAA shall mean, within the FG Territory, a New Drug Application or similar application as required under the U.S. Federal Food, Drug and Cosmetics Act and the regulations promulgated thereunder, or such similar filing in Europe, or a comparable filing for Marketing Approval in the Astellas Territory, in each case with respect to a Lead Compound for use within the Field.

1.52 Net Sales shall mean the gross amount billed or invoiced by Astellas, its Affiliates and its Sublicensees to unaffiliated third parties for the Lead Compound(s) in bona fide arm's length transaction, less the following deductions:

  i) credits or allowances, if any, given or made on account of rejection or return of the Lead Compound(s);

  ii) trade and quantity discounts actually allowed and taken in such amounts as are customary in the trade;

  iii) duties, sales taxes, excise taxes, insurance and transportation charges actually paid; and

  iv) charge back payments or rebates actually paid to wholesalers.

1.53 Phase I shall mean human clinical trials, the principal purpose of which is preliminary determination of safety in healthy individuals or patients as required in 21 C.F.R. §312.21, or similar clinical study in a country other than the United States, and for which there are no primary endpoints relating to efficacy included in the protocol.

1.54 Phase II shall mean human clinical trials, for which the primary endpoints include a determination of dose ranges and/or a preliminary determination of efficacy in patients with the Indication being studied as required in 21 C.F.R. §312.21, or similar clinical study in a country other than the United States.

1.55 Phase III shall mean human clinical trials, the principal purpose of which is to establish safety and efficacy of one or more particular doses in patients with the Indication being studied as required in 21 C.F.R. §312.21, or similar clinical study in a country   -6-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   other than the United States. For purposes of this Section 1.55, and Sections 1.53 and 1.54 above, a particular trial that (i) is intended to overlap two phases of trials, (ii) combines the elements of two phases of trials, or (iii) is treated by the FDA or comparable foreign agency as two phases of trials, such as a Phase I/II trial or a Phase II/III trial, shall be deemed a trial of the later, as well as the earlier, phase (i.e., a Phase II and a Phase III, respectively).

1.56 Product Specification shall mean, with respect to a Bulk Product, the written document describing, the testing procedures and results required to determine compliance with release specifications, including, and quality control testing procedures to be determined, and be amended from time to time, by mutual agreement of both parties. The release specifications of such Product Specifications shall be determined taking into account and shall be designed to meet the shelf life requirements of the Japanese Ministry of Health, Labor and Welfare for the Lead Compound, provided, that the Product Specifications shall not require compliance with such shelf life requirements.

1.57 Preexisting Third Party Intellectual Property shall mean any intellectual property rights, including without limitation all patents, trademarks, copyrights, and any applications therefor, including any applications for registration, issuance, or grant thereof, owned or Controlled by a third party that are necessary for the practice of the license granted hereunder and that the existence of which was discoverable or otherwise could have been known on or prior to the Effective Date and were not owned or Controlled by FG as of the Effective Date.

1.58 Proof of Concept shall mean for any Indication, a demonstration of correction of anemia in relevant patients in a human clinical study.

1.59 Prosecution and Interference Activities shall mean the preparation, filing, prosecution and maintenance of patent applications and patents and any continuing applications thereof, and any re-examinations, reissues, renewals and requests for patent term extensions therefor, and any U.S., international or foreign counterparts of any of the foregoing, together with the conduct of any interference, opposition or other similar proceeding pertaining to patent applications or patents.

1.60 Protected Field shall have the meaning as set forth in Section 14.1.

1.61 Reference Materials shall have the meaning as set forth in Section 12.12 below.

1.62 Relevant Standards shall have the meaning as set forth in Section 12.8 below.

1.63 Sales Price shall mean the price per unit obtained by dividing the Net Sales during the relevant calendar quarter by the number of units sold during the same period.

1.64 Standard Materials shall have the meaning as set forth in Section 12.12 below.   -7-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   1.65 Sublicensee shall mean a third party to whom FG or Astellas has directly or indirectly granted the right in its respective territory to make, use and sell a Lead Compound or a third party to whom FG or Astellas has directly or indirectly granted the right to distribute a Lead Compound supplied by FG or Astellas (respectively). For purposes of this Agreement, FG and Astellas shall not be deemed Sublicensees of the other.

1.66 Technical Product Failure shall mean as a [ * ], which is not attributed to Astellas' failure to fulfill its obligations hereunder.

1.67 Third Party Agreements shall mean collectively those agreements between FG and a third party existing as of the Effective Date, pursuant to which FG obtained rights applicable to the development, manufacture, sale or use of Lead Compounds hereunder (but excluding options or similar agreements to acquire such rights). If, after the Effective Date, FG enters into an agreement to license or acquire rights from a third party with respect to subject matter to be utilized in connection with Lead Compounds in accordance with Section 14.5 below, such agreements shall also be deemed Third Party Agreements for purposes of this Agreement.

1.68 Third Party Licensor shall have the meaning as set forth in Section 14.5.1 below.

ARTICLE 2 JOINT DEVELOPMENT COMMITTEE

2.1 Joint Development Committee. Astellas and FG shall establish a joint development committee to oversee, review and coordinate the research and development of Lead Compounds for applications within the Field pursuant to the Development Program (Joint Development Committee or JDC). From time to time, the JDC may establish subcommittees or project teams to oversee particular projects or activities, and such subcommittees or project teams will be constituted as the JDC agrees (e.g., for oversight of the development or other day-to-day matters).

2.2 Membership. The JDC shall be comprised of an equal number of representatives from each of Astellas and FG, selected by such party. The exact number of such representatives shall be [ * ] for each of Astellas and FG, or such other number as the parties may agree. Subject to the foregoing provisions of this Section 2.2, FG and Astellas may replace its respective JDC representatives at any time, upon prior written notice to the other party.

2.3 JDC Meetings. The JDC shall meet no fewer than [ * ] times each calendar year, or as otherwise agreed by the parties, with the understanding that [ * ] meetings are to be held at mutually agreed locations alternating among Japan, California, Hawaii, or at such other locations as the parties agree, and the other [ * ] meetings are to be held by means of telecommunication, videoconference or correspondence as deemed appropriate. The parties shall conduct team meetings at the same time and location as the JDC meetings. At its meetings, the JDC will, as applicable, (i) formulate and review the Development Program objectives, including approval of all proposed pre-clinical and clinical studies to be performed, (ii) monitor the progress of the Development Program toward those objectives, (iii) review and approve the   -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.





CONFIDENTIAL   EXECUTION COPY   Development Plan, pursuant to Section 3.3 of this Agreement, including review, approve and monitor the progress of the clinical and regulatory plans, (iv) resolve issues surrounding the marketing of the Lead Compounds, (v) discuss the selection of Lead Compounds, (vi) coordinate manufacturing issues, including the development of standards, scheduling of batch production, and qualification with regulatory requirements for the Astellas Territory, (vii) resolve issues arising out of the Development Program or this Agreement, and (viii) undertake and/or approve such other matters as are specifically provided for the JDC under this Agreement. One meeting each year will be focused specifically on setting Development Program goals and strategy. Other representatives of FG or Astellas may attend JDC or subcommittee meetings as non-voting observers. Astellas' lead representative shall chair the meetings and shall be responsible for preparing the agenda and minutes for such meetings, and shall provide such minutes to FG in English. Such minutes as approved by the JDC shall constitute the official record of the actions of the JDC. The JDC may also convene or be polled or consulted from time to time by means of telecommunications, videoconferences or correspondence, as deemed necessary or appropriate. Each party shall bear its own personnel, travel and lodging expenses relating to JDC meetings.

2.4 Decisions. Decisions of the JDC shall be made by unanimous agreement of the members present in person or by other means (e.g., teleconference) at any meeting; provided that at least two (2) representatives of each party is present at such meeting. In the event that the JDC is unable to reach unanimous agreement on an issue, the issue shall be referred for resolution in accordance with Article 19 hereof.

ARTICLE 3 DEVELOPMENT PLANS

3.1 General. Subject to Section 3.2 below, Astellas shall prepare and propose to the JDC a detailed Development Plan pursuant to which the Development Program will be performed. The Development Plan shall specify the objectives and work plan activities by Astellas with respect to the Development Program.

3.2 Annual Review

3.2.1 Initial Development Plan. The initial Development Plan is attached hereto as Exhibit C (the Initial Development Plan), and shall be fixed for the period from the Effective Date through March 31, 2006, unless otherwise agreed by the JDC.

3.2.2 Other. Beginning upon the date of signing of this Agreement and by December 31 of each year thereafter until expiration or termination of this Agreement, Astellas shall submit to the JDC the proposed plan required under Section 3.1 above for the following fiscal year, including for regulatory activities within the Astellas Territory. The JDC shall review such proposals as soon as possible and shall approve the Development Plan for such following fiscal year, with such changes as the JDC may agree to the plan proposed by Astellas, no later than March 15 of the current fiscal year.

3.3 Periodic Reviews. The JDC shall review the Development Plan on an ongoing basis and may make changes thereto including variances to the Development Plan in effect.   -9-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   ARTICLE 4 DEVELOPMENT PROGRAM

4.1 Development Program for the Astellas Territory. Astellas shall follow FG's development activities for the Lead Compounds, (i.e., Astellas shall develop, and shall have the right and obligation to develop, only those compounds that FG has designated as Lead Compounds, for the duration of such designation and for which FG or its Sublicensee is pursuing clinical development in the FG Territory), for those Indications being developed by FG or its sublicensee, and such Astellas development shall comply with, without limitation the procedures set forth in Section 11.3.1. In fulfillment thereof, Astellas shall conduct, directly or through third parties, the Development Program for the Astellas Territory, all in accordance with the Development Plan then in effect, and shall be responsible for all costs related to the Astellas Territory. Astellas agrees to keep the JDC informed as to the progress of its activities under the Development Program for Lead Compounds hereunder. FG shall, subject to Section 4.2.2, provide reasonable assistance to Astellas regarding Astellas' performance of its development activities within the scope of the Development Program hereunder and provide updates to Astellas as to the FG Development Program. It is understood and agreed that the Development Program for the Astellas Territory shall include all clinical trials and other development activities necessary to obtain Marketing Approvals for Lead Compounds for the Astellas Territory.

4.2 Global Harmonization

4.2.1 Reporting; Redundant Activities. FG shall provide to Astellas regular reports with respect to the FG Development Program with respect to the Lead Compounds. Such reports may be provided at the JDC meetings provided for in Section 2.3. Recognizing that the Lead Compounds may be developed on a global basis and that regulatory and budget efficiencies can be achieved through the worldwide use of appropriate data and files, the parties will seek to design pre-clinical and clinical development activities included in the Development Plan in a manner to maximize global clinical and regulatory harmonization.

4.2.2 Additional Activities. Without limiting the obligations set forth in 4.2.1, the costs of any non-clinical or clinical developmental work, whether performed by Astellas or FG, to support needs specific to the Astellas Territory and not required to be performed for the FG Territory, or at the request of Astellas, shall be borne by Astellas.

4.3 Selection of Lead Compounds. FG shall consult with Astellas with respect to Lead Compound selection, and shall provide to Astellas information as reasonably necessary to evaluate Lead Compound candidates in connection with the Lead Compound selection process, including without limitation the information relating to patent situations in the Astellas Territory. For the avoidance of doubt, such Lead Compound candidates shall potentially include any and all compounds Controlled by FG during the term hereof for use in the Field. Notwithstanding anything contained in this Agreement, FG shall designate, at its sole discretion but in line with the basic policy that the same Lead Compound shall be Commercialized both in Astellas Territory and FG Territory for the same Indication(s), Lead Compound(s) in accordance with the terms of this Section 4.3, and shall notify the JDC of such designations. At any one time, FG may designate up to two (2) Lead Compounds for Commercialization in any Indication; provided, that in the event that FG designates two (2) Lead   -10-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   Compounds for Commercialization in an Indication, it shall designate one (1) as the primary Lead Compound and one (1) as the secondary Lead Compound. In the event FG determines to cease development of a primary Lead Compound in an Indication, FG may designate the secondary Lead Compound as the primary Lead Compound for such Indication. In the event, prior to Marketing Approval in the Astellas Territory, FG determines to stop development of a Lead Compound, FG shall notify the JDC, and upon such notification, such compound shall no longer be considered a Lead Compound; provided, however, that Astellas may complete those development activities on-going at the time of such notification for such Lead Compound for a reasonable period of time, unless such notification is based on safety concerns. In the event FG determines to [ * ], FG shall [ * ] within [ * ] days of such [ * ]. In the event that FG [ * ], Astellas may, subject to the [ * ], [ * ], provided, however, that the [ * ] shall apply upon the [ * ] set forth in such Sections, rather than the [ * ].

4.4 Regulatory Matters

4.4.1 Regulatory Filing. FG shall be responsible, directly or through third parties, for the preparation, filing and maintenance of all regulatory documents in the FG Territory with respect to the Lead Compound(s), which shall be filed in the name of FG or its designee. Astellas shall be responsible for all preparation, filing and maintenance of all regulatory documents in the Astellas Territory with respect to the Lead Compound(s), which shall be filed in the name of Astellas. Astellas shall select and own the trademark(s) to be used to identify any Lead Compound in the Astellas Territory.

4.4.2 Reporting Adverse Experiences

(a) With respect to adverse drug experiences relating to any Lead Compound, the parties shall promptly report such experiences to the appropriate regulatory authorities in the countries in which such Lead Compound is being developed or commercialized, in accordance with the appropriate laws and regulations of the relevant countries and authorities, and each party shall ensure that its Affiliates and Sublicensees comply with such reporting obligations. In addition, in order that each party may be fully informed of these experiences, each party shall report to the other party all adverse events involving such Lead Compound. Serious adverse events for all fatal and life-threatening adverse events shall be reported to the designated safety contact person of the other party by e-mail within five (5) calendar days of a party's and/or its agent's becoming aware of such an event (a reporting party), and all other serious adverse events shall be forwarded to the other party within seven (7) calendar days of the reporting party's and/or its agent's becoming aware of such an event. To the extent legally possible, FG and Astellas shall report to the other all serious adverse events with respect to a Lead Compound in the Field at least twenty-four (24) hours prior to reporting the same to a regulatory authority, and shall report adverse events which may constitute a dose limiting toxicity in a reasonably prompt time after the occurrence of such event. The reporting party shall report all non-serious adverse events on a monthly basis; provided that, non- serious adverse event data arising from a clinical trial will be included in the clinical trial report which   -11-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   shall be prepared and sent to the other party as soon as practicable following completion of the final clinical report.

(b) An adverse event is any negative symptom experienced at the time of or after the taking of a medicinal (investigational) product, whether or not considered a medicinal (investigational) product related, including any side effects, injury, toxicity or sensitivity reaction, or significant failure of expected pharmacological action. Also included are instances of symptomatic overdose, abuse or withdrawal reactions.

(c) A serious adverse event includes any of the following outcomes: death, a life-threatening event; that is, an adverse event that puts the patient at risk of dying, requires hospitalization, prolongs existing hospitalization or results in persistent or significant incapacity or disability, congenital anomaly/birth defect. Other important medical events that may otherwise jeopardize a patient or may require intervention to prevent one of the statuses of patients listed in the preceding sentence shall also be considered serious.

(d) The parties also agree to develop and implement such other procedures as may be necessary or appropriate to ensure that each party remains in compliance with all reporting requirements imposed by any regulatory authority in the Astellas Territory, and in the FG Territory. Upon the Initiation of Phase III, FG shall implement and be responsible for the maintenance of a complete global safety database. FG will be responsible for preparing, with Astellas' cooperation set forth below in this Section 4.4.2(d), Periodic Safety Reports for clinical studies requested by European and U.S. authorities, and Periodic Safety Update Reports (PSURs). FG shall send a draft PSUR for review to Astellas in the beginning of week 5 after database lock point. Astellas has one week for review. FG shall provide copies of the final PSURs to Astellas in the same timing as they are submitted to the authorities. Astellas will provide FG with the data needed for making the PSURs. Maintenance of Company Core Safety Information (CCSI) is under the responsibility of FG who will communicate all revisions to Astellas. FG shall prepare the periodic safety reports for clinical studies requested by European and U.S. authorities and provide Astellas with the copy of such reports at the time of submission to the regulatory authorities in the FG Territory. Astellas will provide FG with the data needed for making such periodic safety reports.

(e) Each party shall immediately inform the other party of measures taken in order not to jeopardize public health or hygiene including but not limited to, discontinuation of manufacture, import and marketing, clinical trial suspension, recall and disposal of the Lead Compound or the product or the prescription product, irrespective of whether it is due to regulatory actions or voluntary actions.   -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.





CONFIDENTIAL   EXECUTION COPY   (f) Both parties hereby nominate the safety contact persons as follows:

Medical Affairs Department FibroGen, Inc. 225 Gateway Boulevard San Francisco, California 94080 Attn: Vice President, Medical Affairs Tel: 1-650-866-7875 Fax: 1-650-866-7360 E-mail:dyeowell@fibrogen.com

With a copy to: Chief Executive Officer FibroGen, Inc. 225 Gateway Boulevard San Francisco, California 94080 Tel: 1-650-866-7200 Fax: 1-650-866-7201 E-mail:tneff@fibrogen.com Pharmacovigilance Department, QA, RA, and Pharmacovigilance Division Astellas Pharma Inc. [ * ]

The safety contact persons for each party hereto may be updated from time to time as necessary upon notice to the other party.

ARTICLE 5 RECORDKEEPING; PUBLICATION

5.1 Reports and Records. Each of Astellas and FG shall use best efforts to maintain (or cause such records to be maintained) records of the Development Program and FG Development Program, respectively, in sufficient detail and in good scientific manner as will properly reflect all work done and results achieved in the performance of the Development Program or FG Development Program, as the case may be. Upon [ * ] days advance notice or such shorter time period as may be required in order to meet any regulatory requirements, each party shall allow the other party to have access to all records, materials and data generated by or on behalf of such party with respect to each Lead Compound for applications within the Field at reasonable times, in a reasonable manner and, upon request, to the extent required under Article 7 hereof.   -13-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   5.1.1 Retention. Each of Astellas and FG shall retain its records for the minimum period of time required by applicable law in all cases, and for not less than [ * ] following the expiration or termination of this Agreement.

5.1.2 Reports. Not less than [ * ] prior to each JDC meeting under Section 2.3 above, each of Astellas and FG shall provide the JDC with a written report in English; Astellas' report summarizing the progress of the Development Program, including the developmental, clinical and other activities performed by Astellas, its Affiliates and/or Sublicensees with respect to each Lead Compound during the preceding period; and FG's report summarizing the progress of the FG Development Program.

5.1.3 Activities Outside the Field. The parties understand and acknowledge that FG is engaged in other research and development activities directed to prolyl hydroxylase inhibition and/or the stabilization of HIF, and that the focus of this collaboration and the Development Program is directed to the Field. Accordingly, it is understood that, notwithstanding any other provision of this Agreement, the obligations of FG specified herein to make available and disclose to Astellas data, technical information, scientific results and findings and other subject matter is limited in each case to subject matter directed to Lead Compounds within the Field.

5.2 Review of Publications. As soon as is practicable prior to the oral public disclosure, and prior to the submission to any outside person for publication of scientific data resulting from the Development Program, in each case to the extent the contents of the oral disclosure or publication have not been previously disclosed pursuant to this Section 5.2 before such proposed disclosure, FG or Astellas, as the case may be, shall provide to the other party a copy of the publication, or a written summary of any oral disclosure, to be made or submitted, and shall allow the other party at least [ * ], to determine whether such disclosure or publication contains subject matter for which patent protection should be sought prior to publication or which either party believes should be modified to avoid disclosure of Confidential Information or regulatory or other issues. With respect to publications by investigators or other third parties of scientific data resulting from the Development Program, such disclosures and publications shall also be subject to review by the reviewing party under this Section 5.2.

5.2.1 Publication Rights. Subject to the provisions of Articles 7 and 16, after the expiration of [ * ] from the date of receipt of such disclosure or publication, unless the authoring party has received the written notice specified below, the authoring party shall be free to submit such publication or to orally disclose or publish the disclosed research results in any manner consistent with academic standards.

5.2.2 Disapproval of Publication. Prior to the expiration of the [ * ] period specified in Section 5.2.1 above, the reviewing party may notify in writing the submitting party of its determination that such oral presentation or publication contains Confidential Information of the reviewing party or objectionable material or material that consists of patentable subject matter of the reviewing party for which patent protection should be sought. In such event, and unless otherwise mutually agreed, the submitting party shall withhold publication of its disclosure.   -14-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   ARTICLE 6 DEVELOPMENT PROGRAM FUNDING

6.1 Payments for Reimbursement; Net Payments. FG hereby acknowledges receipt of U.S. $[ * ] on February 13, 2004, U.S. $[ * ] on January 28, 2005, and U.S. $[ * ] on March 22, 2005 as initial payments for reimbursement of historical research and development expenditures for the Lead Compounds. Astellas agrees to pay to FG the amounts set forth in Section 6.1.1 below. The parties hereto acknowledge that the Development Program hereunder involves a high degree of risk and uncertainty; accordingly, both parties hereto expressly disclaim any implied warranty as to the results of the Development Program.

6.1.1 Reimbursement Payments. As reimbursement and payment for FG's historical research and development expenditures with respect to pre-clinical and clinical development of Lead Compounds, Astellas agrees to make the following non-refundable, non-creditable (except as set forth in Section 14.3 below) reimbursement payments to FG upon the first occurrence of each event specified below (each, an Event):       EVENT   AMOUNT 1.   Upon [ * ], provided, that U.S. $[ * ] million of such amount shall be paid no later than [ * ] irrespective of whether the [ * ] has occurred.   U.S. $[ * ]

2.  Upon each of [ * ], for a total of U.S. $[ * ]   U.S. $[ * ]

3.   Upon [ * ] or in the event that Astellas chooses to utilize the Bridging Strategy, the payment shall be made concurrent with the payment required in paragraph 4 of this Section 6.1.1 below.   U.S. $[ * ]

4.  Upon the first [ * ].   U.S. $[ * ]

6.1.2 Product Approval Payments. As reimbursement and payment for FG's historical and ongoing research and development expenditures with respect to pre-clinical and clinical development of Lead Compounds and as payment for the successful marketing and sales of Lead Compound(s), Astellas agrees to make the following non-refundable, non-creditable (except as set forth in Section 14.3 below) reimbursement payments to FG upon the first occurrence of each Event (other than paragraph 5 of this Section 6.1.2 below) specified below. Notwithstanding the foregoing, in the event that Astellas decides not to pursue Commercialization in [ * ] set forth in paragraph 3 or 4 of this Section 6.1.2, the milestone payment associated with the [ * ] set forth in paragraph 3   -15-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   shall be due and payable upon the first [ * ] of either [ * ], and the milestone payment associated with the [ * ] set forth in paragraph 4 shall be due and payable upon the second [ * ] for a [ * ]; and in the event Astellas decides to pursue only [ * ] set forth in paragraph 3 or 4 of this Section 6.1.2, and pursues Commercialization of either of the [ * ], the milestone payment for associated with the [ * ] for the [ * ] shall be due and payable upon the first [ * ] for a [ * ]; and in the event that Astellas decides to pursue [ * ] set forth in paragraphs 3 and 4 of this Section 6.1.2 and also does not pursue [ * ], the parties shall a [ * ] for which the milestone payments associated with the [ * ] set forth in paragraph(s) 3 and/or 4 of this Section 6.1.2, as the case may be, shall be due, as negotiated in good faith by the parties hereto.       EVENT   AMOUNT 1.   Upon the first [ * ] for the [ * ]; provided, that in the event Astellas chooses the Bridging Strategy, such payment shall be increased by an additional U.S. $[ * ] for a total of U.S. $[ * ]   U.S. $[ * ]

2.   Upon the first [ * ] in the Astellas Territory for the [ * ]; provided, that in the event Astellas chooses the Bridging Strategy, such payment shall be increased by an additional U.S. $[ * ] for a total of U.S. $[ * ].   U.S. $[ * ]

3.   Upon the first [ * ] in the Astellas Territory for the [ * ]; provided, that in the event Astellas chooses the Bridging Strategy, such payment shall be increased by an additional U.S. $[ * ] for a total of U.S. $[ * ].   U.S. $[ * ]

4.



Upon the first [ * ] in the Astellas Territory for the first indication within [ * ] (see Exhibit B); provided, that in the event Astellas chooses the Bridging Strategy, such payment shall be increased by an additional U.S. $[ * ] for a total of U.S. $[ * ].

U.S. $[ * ]

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[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY

5.   Upon [ * ] in the Astellas Territory for each of up to [ * ] indications listed on Exhibit B, including separate indications within [ * ] up to a total of U.S. $[ * ].   U.S. $[ * ]

6.1.3 Sales Success Payments. As reimbursement and payment for FG's historical and ongoing research and development expenditures with respect to pre-clinical and clinical development of Lead Compounds and as payment for the successful marketing and sales of the Lead Compound(s), Astellas agrees to make the following non-refundable, non-creditable (except as set forth in Section 14.3 below) reimbursement payments to FG upon the first occurrence of the Event specified below.   EVENT   AMOUNT Upon receipt of [ * ] aggregate annual Net Sales achieved for the first time in the Astellas Territory for all indications and Lead Compounds by Astellas and its Affiliates and Sublicensees.   U.S. [ * ]

If at the occurrence of an Event (except for Event 2) as set forth in Section 6.1.1 above with respect to a particular Lead Compound the payment corresponding to the occurrence of any preceding Event (except for Event 2) (i.e., previous as contemplated by the Event number sequence specified above) has not been made, then the corresponding payment(s) for such preceding Event (except for Event 2) shall then be due.

The payments set forth in Sections 6.1.1, 6.1.2 and 6.1.3 hereof shall each be due and payable within [ * ] after occurrence of the corresponding Event. Astellas agrees to promptly notify FG in writing of its achievement of any Event under Sections 6.1.1, 6.1.2 and 6.1.3.

ARTICLE 7 USE OF PRECLINICAL AND CLINICAL DATA

7.1 Exchange. Subject to the provisions of this Article 7 and Article 16 below, the parties shall have access to the underlying preclinical and clinical data (including raw data thereof), analysis, reports, protocols and correspondence (collectively with such filings, Data), at reasonable times, upon fifteen (15) days advance notice or such shorter notice as may be required in order to meet any regulatory requirements and (upon request) in English, (it being understood and agreed that Astellas shall provide in English without cost to FG summaries of all final reports and all documents necessary to comply with regulatory and legal requirements, and   -17-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   shall provide all other documents in English with reasonable costs shared equally between the parties) of the other party in accordance with the following:

(a) FG shall have access to and the right to use for any purpose, any Data developed by or on behalf of Astellas or its Affiliates or Sublicensees in the course of the Development Program with respect to indications within the Field for Lead Compounds. Astellas shall obtain from such Sublicensees access to all Data prepared by or for such Sublicensee with respect to a Lead Compound, with the right to provide such Data and/or access to FG and its Sublicensees, and any sublicense failing to provide such obligation on the part of the Sublicensee shall be voidable at the option of FG.

(b) Astellas shall have access to and the right to use solely for the purpose of this Agreement, any Data developed by or on behalf of FG or its Affiliates or Sublicensees with respect to Lead Compounds in connection with the Field (i) to the extent necessary to support the application to the regulatory authority in the Astellas Territory or to fulfill other Japanese Ministry of Health, Labor and Welfare regulatory requirements, or (ii) if not necessary to support such application or to fulfill such Japanese Ministry of Health, Labor and Welfare regulatory requirements, to the extent FG is permitted subject to FG's third party obligations; provided that FG shall [ * ] negotiate the availability of such Data to Astellas from such Sublicensee, and provided, further, that Astellas agrees not to use or disclose to third parties any such data for purposes outside the Field except as authorized under this Agreement.

7.2 Disclosure. Subject to the provisions of this Section 7.2, FG and Astellas may each provide copies or summaries of Data to its Affiliates and/or its permitted Sublicensees to the extent reasonably necessary for the development and commercialization of Lead Compounds in accordance with this Agreement, or in the case of FG of products other than Lead Compounds. It is understood that the foregoing shall include the right to disclose Data to third parties with whom Astellas or FG are discussing entering into agreements for such permitted purposes, subject to reasonable conditions of confidentiality, provided, that Astellas may not disclose any Data to any third party competitor of FG within the Field worldwide without the prior written consent of FG.

7.3 Regulatory Requirements. Notwithstanding the provisions of Section 7.2, in all agreements with third parties or Affiliates involving the development of Data, FG and Astellas, respectively, shall require that such third parties and Affiliates provide the other party with all such Data, to the extent such Data is required in order for each party to meet its obligations to the other party under Section 4.4.2 above.

7.4 Review of Protocols. Astellas agrees that all final protocol summaries for all clinical trials and GLP toxicology studies to be conducted by or under authority of Astellas will be subject to the review and approval of the JDC, in accordance with the following procedures set forth in this Section 7.4. Astellas shall submit to FG and the JDC the original draft protocol summary in English for any clinical trial or GLP toxicology study it proposes to conduct, and such protocol summary shall be reviewed and approved by the JDC. The protocol summary shall contain all information as may be requested by the JDC. Upon Astellas' completion of the final protocol for the proposed clinical trial or GLP toxicology study, in the   -18-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   event that such protocol deviates from the original protocol summary, Astellas shall resubmit to FG and the JDC for review and approval a revised, final protocol summary that indicates all changes from the original protocol summary. Notwithstanding the foregoing, FG reserves the right to request and Astellas shall provide any portion of full text of the protocols in English for review by the JDC, which portion is at issue. In the event FG requests such a full text protocol, it shall review and provide comments to the JDC as soon as practicable, and within five (5) business days of receipt.

ARTICLE 8 MARKETING RIGHTS

8.1 Astellas. Astellas shall have the exclusive right to market, sell and distribute the Lead Compounds supplied by FG for use in the Astellas Territory within the Field under the license granted in Article 13. Astellas may exercise its rights under this Section 8.1 through one or more Sublicensees; provided, that any such Sublicensee agrees to terms identical in all material respects to those contained in this Agreement, and, provided, further, that any arrangement between Astellas and an Astellas Sublicensee with respect to a Lead Compound shall be subject to the requirements of Section 13.2.

8.2 FibroGen. FG shall have the exclusive right, including the right to authorize others, to market, sell and distribute the Lead Compounds for any use in the FG Territory. Subject to the restrictions contained in Section 8.3.4 hereof, FG retains the exclusive right, including the right to authorize others, to market, sell and distribute worldwide the Lead Compounds for use outside the Field.

8.3 Covenants

8.3.1 General. It is understood that, with respect to any particular Lead Compound, whether or not the use and sale of such Lead Compound by FG and/or Astellas in any country requires a license under intellectual property rights of the other, neither FG nor Astellas shall market, sell or distribute a Lead Compound anywhere in the world except in accordance with this Agreement, including this Article 8.

8.3.2 Independent Activities by Astellas. During the term of this Agreement, in the event Astellas seeks to Commercialize any molecules for the Field or the Expanded Field, except for actions taken within the Field in the course of the exercise of the license granted under Section 13.1 hereof and expressly authorized under this Agreement, Astellas shall notify FG immediately upon the commencement of any such activities, and provided that [ * ] such activities are and will be in the future conducted completely independently of any of FG Technology and/or any other FG materials, confidential information, intellectual property or other related information provided by or on behalf of FG to Astellas under this Agreement or any other agreement between FG and Astellas relating to the subject matter hereof, Astellas may proceed with such Commercialization, subject at all times to the obligations contained in this Agreement with respect to any intellectual property in connection with or related to such activities and FG's right to terminate this Agreement pursuant to Section 18.2.1 hereof.   -19-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   8.3.3 Use of FG Technology by Astellas. Astellas shall use the FG Technology only to exercise the rights granted under Section 13.1 of this Agreement and as expressly authorized under the Development Program, and shall not under any circumstances use or apply any FG Technology, including without limitation any FG know-how and/or any other FG materials, confidential information, intellectual property or other related information provided by FG to Astellas under this Agreement or any other agreement between FG and Astellas relating to the subject matter hereof, for any use outside the Field at any time or within the Field after the expiration or termination of this Agreement.

8.3.4 Activities Outside Field by Astellas. Without limiting the foregoing, Astellas agrees that during the term of this Agreement it will not (and will not authorize any third party, including, without limitation, any Affiliates or Sublicensees, to) (i) Commercialize any Lead Compound within the Field in the Astellas Territory, except a Lead Compound that has been designated a Lead Compound by the JDC and that has received Marketing Approval in the Astellas Territory for use in the Field, (ii) Commercialize any Lead Compound for use outside the Field or outside the Astellas Territory, (iii) provide any supplies of any Lead Compound to any third party, including, without limitation, any Affiliates or Sublicensees, which Astellas knows or has reason to know is being marketed, sold or distributed for use outside the Field or outside the Astellas Territory, (iv) conduct or sponsor, or provide any supplies of any Lead Compound for use in, any clinical trial designed to demonstrate that a Lead Compound can be used outside the Field, or (v) seek regulatory approval of, or use labeling for a Lead Compound stating that such Lead Compound is for use outside the Field.

8.3.5 Activities in Astellas Territory by FG During the term of this Agreement, FG shall not Commercialize by itself or through its Sublicensee any Lead Compound or other compound, whether or not designated as a Lead Compound, within the Field in the Astellas Territory, or any Lead Compound outside the Field in the Astellas Territory, provided, however, that FG may develop a Lead Compound or other compound in the Astellas Territory in those Indications for which Astellas has determined not to pursue Commercialization or for which Astellas has lost the right to pursue Commercialization due to failure to meet diligence obligations hereunder; and provided, further, that FG may Commercialize compounds other than Lead Compounds outside the Field in the Astellas Territory, irrespective of whether such compound has the effect of stabilizing HIF causing the stimulation of erythropoiesis (including an increase in endogenous erythropoietin production) and/or a subsequent increase in hematocrit through modulation of prolyl hydroxylase and/or asparaginyl hydroxylase.

ARTICLE 9 TRANSFER PRICING

9.1 Transfer for Non-Commercial Purpose. In exchange for the transfer of any Lead Compound to Astellas for a non-commercial purpose, Astellas shall pay FG the total amount of the Fully Burdened Costs for such Lead Compound as reasonably determined by FG. Lead Compound transferred to Astellas for a non-commercial purpose shall not be used for a commercial purpose.   -20-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   9.2 Transfer for Commercial Purpose. For any Lead Compound transferred to Astellas to be used for any commercial purpose, in exchange for the transfer of such Lead Compound to Astellas, Astellas shall pay FG the amounts set forth in this Section 9.2. All transfers of Lead Compound for use following Marketing Approval shall be deemed transfers for a commercial purpose, except transfers under Section 9.2(c), and transfers for the purpose of conducting clinical trials, which shall be considered transfers for a non-commercial purpose.

(a) For any quantities of Lead Compound shipped by FG to Astellas prior to the issuance of the national health insurance price as determined by the Japanese Ministry of Health, Labour and Welfare (the Listed Price), Astellas shall pay for such quantities at a price equal to [ * ] of the estimate of the Listed Price as determined in good faith by FG and Astellas, subject to adjustment upon the issuance of the actual Listed Price. Upon the issuance of such Listed Price by the Japanese Ministry of Health, Labour and Welfare, Astellas shall pay to FG, or FG shall reimburse Astellas, as the case may be, the amount of any difference between the payment made for such Lead Compound at the estimated Listed Price and the payment required based upon the actual Listed Price.

(b) For all other transfers of Lead Compound, except as set forth in subparagraphs (c) or (d) below, Astellas shall pay for such quantities at a price equal to [ * ] of the Listed Price. In the event that a new Listed Price has been notified to Astellas by the Japanese Ministry of Health, Labour and Welfare before implementation of the new Listed Price, then such new Listed Price shall be used for calculation of the price of Lead Compound to be shipped on and after the later to occur of (i) [ * ] before implementation of the new Listed Price, and (ii) the date upon which Astellas has amended the price of Lead Compound to wholesalers in response to such notification by the Japanese Ministry of Health, Labour and Welfare, even before implementation of the new Listed Price.

(c) With respect to Lead Compound to be distributed as samples to medical providers and for which Astellas shall not receive any payment or other consideration, Astellas shall pay to FG the sum of its Fully Burdened Costs for amounts of Lead Compound shipped to Astellas; provided, however, that the parties shall mutually agree upon the amount of such samples for distribution without consideration in the Astellas Territory.

(d) Upon the later of (i) the initial retail sale of a generic equivalent (as defined by the Japanese Ministry of Health, Labour and Welfare) of such Lead Compound in the Territory, and (ii) and the expiration of the last to expire of the FG Patents with respect to such Lead Compound effectively precluding third parties from selling said generic equivalent, for any quantities shipped by FG to Astellas, Astellas shall pay FG for such quantities [ * ] of the Sales Price; provided, however, that in the event that the payment of the [ * ] of the Sales Price would result in FG's [ * ] Percentage falling below [ * ], FG shall have the option to initiate a renegotiation of the transfer price upon notice to Astellas, in which case the parties shall use best efforts in good faith to renegotiate reasonable terms for the transfer price; provided, further, that in the event the transfer price is not renegotiated to FG's satisfaction or FG elects not to initiate a renegotiation, FG may elect to terminate its manufacturing obligations by written notice to Astellas, and FG and Astellas shall negotiate reasonable terms for transfer of manufacturing. During such period of renegotiation, FG shall transfer the Lead Compound to Astellas at a price   -21-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   equal to the greater of [ * ] of the Sales Price and the price resulting if FG's [ * ] Percentage for such Lead Compound is equal to [ * ].

9.3 Payment. Any payments to be made with respect to the transfer of any Lead Compound in accordance with Section 9.1 or 9.2 above shall be immediately due to FG upon shipment, which shall be paid by Astellas to FG no later than [ * ] of the date of invoice, which invoice FG shall deliver to Astellas upon Delivery of Lead Compound to Astellas pursuant to Section 9.2(a), (b) or (c), and shall be made in U.S. dollars. For transfer of any Lead Compound in accordance with Section 9.1 or 9.2(c) above, FG shall deliver to Astellas, within ten (10) days of receipt of a firm commitment order from Astellas, an invoice for the estimated Fully Burdened Costs of the Lead Compound to be transferred to Astellas. Within [ * ] after the transfer of the Lead Compound to Astellas, FG shall provide a revised final invoice to Astellas that shall indicate the actual Fully Burdened Costs of the Lead Compound. If the actual Fully Burdened Costs are less than the estimated Fully Burdened Costs, FG shall include a reimbursement payment to Astellas for the difference between the initial estimated Fully Burdened Costs and the actual Fully Burdened Costs. If the actual Fully Burdened Costs are greater than the estimated Fully Burdened Costs, Astellas shall pay such difference within [ * ] of receipt of an invoice from FG for such amounts. For payments for the transfer of Lead Compound under Section 9.2(d) hereof, FG's invoice to Astellas shall be calculated based on the current Listed Price as set by the Japanese Ministry of Health, Labour and Welfare. Upon calculation of the Sales Price, Astellas shall submit, for any amounts actually sold, the Sales Price to FG, and FG shall credit Astellas for the difference between the invoice cost, cost calculated based on the Listed Price and the cost calculated based on the Sales Price.

9.4 Reference Materials; Standard Materials. In exchange for the transfer by FG of any Reference Materials or Standard Materials for the purposes of conducting analytical, release, stability and other studies authorized under the Development Program, Astellas shall pay to FG, FG's Fully Burdened Costs of such materials as reasonably determined by FG.

ARTICLE 10 ADDITIONAL PAYMENTS; BOOKS AND RECORDS

10.1 Quarterly Reports. Astellas shall make quarterly reports to FG within sixty (60) days after the end of each calendar quarter (April 1 though June 30, July 1 through September 30, October 1 though December 31, January 1 through March 31), which reports shall include, (a) the Net Sales, unit shipments and other distributions, including samples, by Astellas, and its Affiliates and Sublicensees, in such calendar quarter and (b) such other information as may be reasonably requested by FG to ensure either proper payment by Astellas of amounts required under this Agreement or to calculate payments with respect to FG's Third Party Agreements. Concurrently with making such report, Astellas shall remit payment to FG for any payments due under this Agreement.

10.2 Payment Method. All payments under this Agreement shall be made by bank wire transfer in immediately available funds to an account designated by the payee. All   -22-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   such payments made by or on behalf of Astellas hereunder shall be made by a Japanese entity. All dollar amounts specified in this Agreement, and, except as specifically authorized under Section 10.3 hereof, all payments made hereunder, are and shall be made in U.S. dollars. Any payments due under this Agreement which are not paid by the date such payments are due under this Agreement shall bear interest to the extent permitted by applicable law at the U.S. prime rate per annum quoted in the Money Rates column of The Wall Street Journal (U.S., Western Edition) on the first business day after such payment is due, plus an additional [ * ], calculated on the number of days such payment is delinquent. This Section 10.2 shall in no way limit any other remedies available to either party.

10.3 Currency Conversion. In the event that the amount of an Astellas payment obligation in U.S. dollars must be determined by the calculation of an underlying amount received by Astellas in Japanese Yen utilizing the U.S. dollar-Japanese Yen exchange rate (i.e., a transfer payment under Section 9.2(a), (b) or (d) hereof), currency conversion from Japanese Yen to U.S. dollars shall be made using the closing exchange rate reported in the Wall Street Journal (U.S. Western Edition) for the date on which the Lead Compound is Delivered to Astellas. If any such payment is not made by the due date, the exchange rate utilized for determination of such payment obligation shall be the exchange rate [ * ] reported in the Wall Street Journal (U.S. Western Edition) during the period from the date of invoice through the due date, not including any additional amounts owed under Section 10.2 hereof.

10.4 Taxes

10.4.1 Generally. Each party shall bear and, except as otherwise expressly provided in this Section 10.4, pay any and all taxes, duties, levies, and other similar charges (and any related interest and penalties), however designated, imposed on that party as a result of the existence or operation of this Agreement. If laws or regulations require that taxes be withheld, the paying party will (i) timely pay the taxes to the proper taxing authority, and (ii) send proof of payment to the other party within [ * ] following that payment.

10.4.2 Certain Payments. Notwithstanding Section 10.4.1, all payments by Astellas required under this Agreement above, including under Section 6.1.1 are expressed as net amounts and shall be made free and clear of, and without reduction for, any withholding taxes, provided, however, that in the event that any withholding taxes are due on the payments Astellas shall make to FG under Sections 6.1.2 and 6.1.3, Astellas shall make such payments directly to the Japanese Tax Authority and shall be entitled to reduce the amount paid to FG by [ * ] of the amount of the withholding taxes paid to Japanese Tax Authority in respect of such payment, unless the amount of such withholding taxes is reduced by a decision of the Japanese tax authority, or is subsequently adjusted downward as result of appeal, in which event the next payment due hereunder, including, without limitation, a transfer payment or a payment upon termination, shall be increased by such amount. Any such taxes which are otherwise imposed on payments to FG shall be the sole responsibility of Astellas. Astellas shall provide FG with official receipts issued by the appropriate taxing authority or such other evidence as is reasonably requested by FG to establish that such taxes have been paid. Astellas and FG shall cooperate to minimize the withholding taxes due on the amounts payable by Astellas to FG hereunder to the extent permissible under law, including, but not limited to,   -23-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   making appropriate application(s) to the tax authorities within the Astellas Territory. If possible, FG shall use its reasonable efforts to apply for the tax refund from U.S. tax authorities for the withholding taxes paid to the Japanese Tax Authority on the payment U.S. $[ * ] payment made by Astellas to FG on January 13, 2004 as set forth in Section 6.1 when such application for the tax refund becomes possible, and if FG has received any such tax refund, FG shall reimburse to Astellas for the amounts corresponding to the withholding taxes paid in Astellas' accounts as set forth above.

10.5 Records; Inspections. Astellas shall keep, and require its Affiliates and Sublicensees to keep, complete, true and accurate books of accounts and records for the purpose of determining payments due pursuant to this Agreement. Such books and records shall be kept for at least [ * ] following the end of the calendar quarter to which they pertain. FG shall keep, and require its Sublicensee(s) to keep, complete, true and accurate books of accounts and records for the purpose of verifying the accuracy of the [ * ] Percentage and Fully Burdened Costs. Such records will be open for inspection at the principal place of business of each party (the Inspected Party) during such [ * ] period by an independent auditor chosen by the other party (the Inspecting Party) and reasonably acceptable to the Inspected Party for the purpose of verifying the amounts payable by Astellas to FG hereunder or the accuracy of the [ * ] Percentage and/or Fully Burdened Costs. Such inspections may be made no more than once each calendar year, at reasonable times and on reasonable notice. Any books of accounts or records shall not be inspected more than once. The independent auditor retained by the Inspecting Party shall be obligated to execute a reasonable confidentiality agreement with the Inspected Party prior to commencing any such inspection, which, among other customary clauses, contains the provisions to the effect that such auditor shall not disclose to the Inspecting Party any information other than as necessary to accomplish the purpose of the inspection. Inspections conducted under this Section 10.5 shall be at the expense of the Inspecting Party. Any underpaid or overcharged amounts that are discovered will be paid by the Inspected Party, and with interest on such underpaid or overcharged amounts at the rate set forth in Section 10.2 above. The parties will endeavor to minimize disruption of the Inspected Party's normal business activities to the extent reasonably practicable.

ARTICLE 11 DUE DILIGENCE

11.1 Astellas' Due Diligence. Astellas shall use its commercially reasonable efforts (i) to conduct any development work undertaken under the Development Program, and any and all clinical trials (including without limitation Phase III) required to obtain, and thereafter to take such other actions as are necessary to obtain, Marketing Approvals for any Lead Compound in the Astellas Territory as soon as practicable, and (ii) to launch each such Lead Compound in the Astellas Territory as soon as practicable after receiving Marketing Approval in the Astellas Territory for such Lead Compound.

11.2 FG's Due Diligence. FG shall use its commercially reasonable efforts to conduct, and to the extent possible taking into account safety and other applicable issues, complete a Phase II clinical trial with FG-2216 or another Lead Compound in the FG Territory.   -24-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   11.3 Development Diligence

11.3.1 Astellas shall pursue development of Indications according to the following terms: (i) Astellas shall pursue Commercialization in Treatment of anemia in patients with chronic kidney disease undergoing dialysis and Treatment of anemia in patients with chronic kidney disease not undergoing dialysis; (ii) Astellas shall notify FG within six (6) months of the execution of this Agreement whether it shall pursue Commercialization in [ * ]; (iii) Astellas shall notify FG within six (6) months of the date FG notifies Astellas that it has demonstrated Proof of Concept whether it will pursue Commercialization in [ * ]; (iv) Astellas shall notify FG within six (6) months of the date FG notifies Astellas that it has demonstrated Proof of Concept whether it will pursue Commercialization in [ * ]; and (v) Astellas shall notify FG, upon Marketing Approval for any Lead Compound in each of the following Indications, whether it will pursue Commercialization of such Indication: [ * ], and any other indications to be added hereafter to the definition of the Indication by mutual agreement; and (vi) if FG is pursuing Commercialization of [ * ], Astellas shall notify FG after Marketing Approval whether it shall pursue Commercialization of such Indication. Should Astellas inform FG that it does not wish to pursue Commercialization of any Indication, or should Astellas fail to meet the due diligence obligations under Section 11.3.2 for any Indication as set forth in Section 11.3.1(iv) or under Section 11.3.3 for any Indication as set forth in Section 11.3.1(v), such Indication shall no longer be considered an Indication for the purposes of this Agreement, and Astellas shall have no right or shall lose any right with respect to such Indication under this Agreement including, without limitation, the licenses granted under Sections 8.1 and 13.1 hereof. Each Indication for which Astellas is obligated to pursue Commercialization under Section 11.3.1(i) or for which it decides to pursue Commercialization under Sections 11.3.1(ii), (iii) or (iv) shall be a Major Indication.

11.3.2 In addition to the obligations set forth in Section 11.1 and 11.3, for each Major Indication, until such time as Astellas obtains Marketing Approval in the Astellas Territory for such Major Indication, with respect to each Lead Compound for each Major Indication, Astellas shall:

(a) If required for development of a Lead Compound in an Indication, Initiate Phase I clinical trials within [ * ] after the later of (i) the Effective Date, for Indications for which FG has commenced clinical trials prior to the execution of this Agreement, and (ii) FG's or its Sublicensees Initiation of a Phase I clinical trial for other such Indications.   -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.





CONFIDENTIAL   EXECUTION COPY   (b) Initiate Phase II clinical trials within the later of (i) [ * ] after FG's, or its Sublicensee's, Initiation of Phase II, (ii) [ * ] after Astellas' Completion of its Phase I clinical trial(s), (iii) if Astellas' obligations under this Subsection 11.3.2(b) are triggered upon FG's notification of demonstration of Proof of Concept in an Indication, [ * ] after the date Astellas notifies FG that it will pursue Commercialization in such Indication, and (iv) in the event Astellas' obligations under this Section 11.3.2(b) are triggered by the designation of a secondary Lead Compound as a primary Lead Compound, [ * ] after such designation.

(c) Either notify FG of its intent to employ the Bridging Strategy, if applicable, or Initiate Phase III clinical trials within [ * ] of the later of (i) FG's, or its Sublicensee's Initiation of a Phase III clinical trial and (ii) Astellas' Completion of its Phase II clinical trial(s).

11.3.3 For each of the Indications set forth in Section 11.3.1(v), Astellas shall Initiate Phase II clinical studies within [ * ] of its notification to FG that it will pursue Commercialization in such Indication.

11.3.4 Astellas' diligence obligations set forth in Section 11.3.2 shall apply to all Lead Compounds designated by FG, provided, that for each Indication for which such diligence obligations apply, the diligence obligations shall only apply to the primary Lead Compound designated by FG, and for the secondary Lead Compound, Astellas' diligence obligations shall be limited to those set forth in Section 11.3.2(a) until the designation of the secondary Lead Compound as the primary Lead Compound, provided, further, upon such designation, that such diligence obligation shall be expanded to include the requirement that Astellas complete the Phase I clinical studies required to Initiate Phase II clinical studies in the Indication with such secondary Lead Compound.

ARTICLE 12 MANUFACTURING RIGHTS

12.1 Procedures. FG shall have the exclusive right to determine the methods and procedures for the manufacture of all Lead Compounds. If FG intends to make any change in the methods or procedures, including, without limitation, manufacturing process, analyzing process and/or site change for manufacture of the Lead Compounds, FG shall notify Astellas in writing of such intended change; provided, that if in Astellas' reasonable opinion, such change may lead to any amendment to the relevant Marketing Approval or Marketing Approval Application, Astellas shall use best efforts to (i) as soon as possible petition the Japanese Ministry of Health, Labor and Welfare to make the change without an amendment to the Marketing Approval or MAA and shall concurrently prepare an application for amendment to the Marketing Approval or MAA, and (ii) if the Japanese Ministry of Health, Labor and Welfare determines such an amendment is required, shall notify FG and submit the application for amendment immediately following notice of such requirement, and FG shall not make the intended change without a prior written consent from Astellas, such consent not to be unreasonably withheld or delayed, provided, further, that consent shall be deemed granted upon notice that an amendment is not required or approval of an amendment from the Japanese   -26-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   Ministry of Health, Labor and Welfare. FG shall provide Astellas with all the data and information necessary for Astellas to amend the Marketing Approval or MAA in Astellas Territory and shall continue to supply Astellas with the Lead Compound as manufactured with the manufacturing methods and procedures or at the manufacturing site described in Astellas' (or its Affiliate's or Sublicensee's) then current Marketing Approval or MAA until Astellas will have finished the necessary amendment to the relevant Marketing Approval or MAA or received notice that an amendment is not required.

12.2 FG Right. FG shall have the worldwide exclusive right (itself or through third party vendors) to manufacture (or have manufactured) Lead Compounds. Astellas and its Affiliates and Sublicensees shall not directly or indirectly make, produce or manufacture any Lead Compounds.

12.3 Manufacture and Supply. FG shall have the exclusive right and obligation to supply the Lead Compounds to Astellas and its Affiliates and Sublicensees for all development and commercial purposes, and Astellas and its Affiliates and Sublicensees shall purchase such Lead Compounds exclusively from FG. It is understood that FG may engage subcontractors with respect to the manufacture of such Lead Compounds to fulfill its supply obligations to Astellas hereunder. In all cases, supply by FG of Lead Compounds hereunder shall be Ex Works (Incoterms 2000) the manufacturing facility. Subject to Section 8.3.5 hereof, nothing herein is intended to preclude FG from granting rights to supply or supplying (a) any Lead Compound outside of the Astellas Territory to any third party for use within or outside the Field, or (b) any compound Controlled by FG within the Astellas Territory except for a Lead Compound for the duration of its designation in compliance with the terms and conditions of this Agreement.

12.4 Product Specifications. The Lead Compounds to be supplied by FG hereunder shall meet the Product Specifications. In addition to, but not in limitation of, the foregoing, FG and Astellas agree that upon Marketing Approval for any Lead Compound, FG's obligation to supply Astellas with Lead Compound shall be limited to, and all payment obligations set forth in Section 9.2 shall be based on, the supply of Bulk Product, unless otherwise agreed by the parties. The packaging for the Lead Compound to be distributed commercially by Astellas shall contain a clearly visible acknowledgment that the Lead Compound was manufactured by FG, and shall contain a registered trademark of the FG logo or other trademark approved by FG.

12.5 Orders Forecast

12.5.1 Orders for Non-Commercial Use. In connection with the supply of any Lead Compound for non-commercial use in the Territory, Astellas shall provide FG with a firm purchase order as early as possible prior to its requirements, and in no event less than [ * ] prior to the shipment or other release date(s) requested by Astellas for such Lead Compound. FG shall provide such Lead Compound to Astellas as soon as practicable within such time period, subject, prior to Marketing Approval, to the reasonable lead time requirements of third party contract manufacturers. All forecasts shall be prepared in good faith in order to facilitate FG's manufacture and shipment of the Lead Compound in compliance with this Agreement.   -27-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   12.5.2 Forecast and Order for Commercial Use. In connection with the supply of any Lead Compound for commercial use in the Astellas Territory upon FG's request, Astellas and FG shall negotiate in good faith appropriate forecasting and firm purchase order lead times, taking into consideration the reasonable notice requirements of FG and its third party manufacturers. All forecasts shall be prepared in good faith in order to facilitate FG's manufacture and shipment of the Lead Compound in compliance with this Agreement.

12.6 Shipment. Astellas, or FG at Astellas' request if specified in a purchase order by Astellas, shall arrange for shipment of the Lead Compound as specified in each purchase order by Astellas, Ex Works (Incoterms 2000) the manufacturing facility. For purposes of this Agreement, and notwithstanding anything to the contrary contained within the term Ex Works, it is hereby acknowledged and agreed that title and risk of loss shall transfer to Astellas from receipt by Astellas at the manufacturing facility. Astellas shall bear the costs of such carrier, including the costs of insurance of the shipment, and all customs, duties, sales taxes and other governmental charges related to the importation and sales of the Lead Compound.

12.7 Inspection of Shipment/Right to Reject. Each shipment of Lead Compound from FG to Astellas shall contain such laboratory and quality control certificate as are necessary to show that the Lead Compound is in conformity with the Product Specifications. Astellas shall promptly inspect each shipment. In the event that any portion of the shipment fails to conform to the Product Specifications, Astellas shall notify FG within [ * ] of Astellas' receipt of such shipment. Such notice shall specify the manner in which the Lead Compound fails to meet the Product Specifications. In the absence of such notification, Astellas shall be deemed to have accepted the shipment. FG and Astellas agree to consult with each other to resolve any discrepancy between each other's determinations regarding any possible nonconformity of the Lead Compound. If such consultation does not resolve the discrepancy, the parties agree to nominate a reputable independent laboratory or other independent third party, in each case acceptable to both parties, to carry out tests on representative samples taken from such shipment, and the results of such tests shall be binding on both parties. If the results of such tests demonstrate that the Lead Compound does not meet the Product Specifications, then FG shall pay the costs of such tests; otherwise, Astellas shall pay for the costs of such tests. FG shall, at its expense, promptly replace any Lead Compound to the extent that, in accordance with this Section 12.7, it is determined that it does not conform to the Product Specifications. Unless otherwise instructed by FG, all non-conforming Lead Compound shall be returned to FG at the place of manufacture at FG's direction and at FG's expense. If Astellas detects at any time any defect in the Lead Compound which has not been found through Astellas' inspection, it shall notify FG to that effect within [ * ] of the discovery of such defect, and the procedures set forth above in this Section 12.7 shall be applied to such defective Lead Compound, provided, that FG shall only be responsible to pay for costs of defects that are the result of FG's gross negligence or willful misconduct.

12.8 Inspection of Facilities. Astellas shall have the right, upon reasonable advance notice and during regular business hours, to inspect and audit, either by itself or through its Affiliates or consultants, the facilities (including any facilities of sub-contractors) being used by FG for production of the Lead Compound to assure compliance with applicable laws, rules and regulations, including, without limitation, Japanese regulatory standards and FG quality control procedures (Relevant Standards). FG shall also reasonably comply with inspection   -28-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   requests of the Japanese Ministry of Health, Labor & Welfare. Such inspection and audit shall be conducted at Astellas' sole cost and expense in a manner so as to minimize disruption of FG's, or its subcontractor's or Sublicensee's, business operations. FG shall, within [ * ] after FG's receipt of written notice from Astellas detailing any deficiencies which may be noted in any such audit which relate to the Relevant Standards use good faith efforts to remedy such deficiencies, and submit a plan to the Astellas outlining steps proposed to be taken.

12.9 Recall. In the event that Astellas deems it necessary to recall any Lead Compound from the market, it may do so in its sole discretion, after notification to the FG. The costs and expenses for such recall shall be borne by Astellas unless caused by a failure for which FG is required to indemnify Astellas pursuant to Section 17.3, or by FG's gross negligence or willful misconduct, in which event it shall be borne by FG.

12.10 Warranty. FG represents and warrants that the Lead Compounds to be supplied to Astellas under this Agreement shall conform to the Product Specifications and shall, as appropriate, be manufactured in compliance with GMP Guidelines. Subject to Sections 12.9 and 17.3 hereof, FG's sole obligation and Astellas' sole remedy with respect to Lead Compound which does not meet the warranty contained herein is limited to replacement of such Lead Compound and reimbursement of Astellas' out of pocket expenses for shipping to FG at the address designated by FG.

12.11 Interruption in Supply. For any particular Lead Compound, in order to minimize any interruptions in supply hereunder, FG and Astellas agree that within [ * ], FG shall maintain two separate, validated manufacturing sites (which may either be its own manufacturing facilities or facilities of a contract manufacturer) for such Lead Compound.

12.12 Reference and Standard Materials. For any Lead Compound provided to Astellas hereunder, upon Astellas' request and pursuant to Section 9.4 hereof, FG shall provide to Astellas reasonable quantities of reference materials, including analogs, metabolites, impurities, degradates and radio-labeled compounds (Reference Materials) and standard materials, i.e. defined, highly purified Lead Compound (Standard Materials) for such Lead Compound for the purposes of conducting analytical, release, stability and other studies as may be authorized by the JDC under the Development Program.

ARTICLE 13 LICENSE GRANTS

13.1 Grant to Astellas. Subject to the terms and conditions of this Agreement including Article 12 above, FG hereby grants to Astellas an exclusive license under the FG Technology to: use, package, sell, have sold, import, market and otherwise distribute the Lead Compounds for use solely in the Field in the Astellas Territory

13.2 Sublicenses. The licenses granted under Section 13.1 above include the right to grant and authorize sublicenses, subject to the requirements of this Agreement and Section 7.2. Notwithstanding the foregoing, Astellas shall not have the right to authorize a Sublicensee to market, sell or distribute Lead Compounds without FG's prior written consent   -29-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   (which consent shall not be unreasonably withheld). For the purposes of the foregoing, and without limitation, it shall be deemed reasonable for FG to withhold consent for competitive concerns.

13.3 No Rights Beyond Lead Compounds. Except as expressly provided herein, nothing in this Agreement shall be deemed to grant to Astellas rights in FG Technology other than the rights granted hereunder to the Lead Compounds, or for applications outside the Field or outside the Astellas Territory, or to manufacture Lead Compounds; nor shall any provision of this Agreement be deemed to restrict FG's right to exploit any FG Technology and/or the Lead Compounds outside the Astellas Territory.

13.4 Expanded Field Negotiation. Following the signing of this Agreement, FG agrees to negotiate in good faith with Astellas for a license to develop compounds for the Expanded Field in the Astellas Territory, exclusively for a period of [ * ] following such date, and non- exclusively thereafter until the execution of a license agreement with a third party to develop compounds for the Expanded Field. FG and Astellas hereby agree that FG's obligation to negotiate non-exclusively for the Expanded Field shall not constitute a right of first offer, right of first refusal, right of first negotiation or any obligation to enter into any agreement with Astellas at any time, and the failure of such negotiations to result in an agreement between FG and Astellas with respect to the Expanded Field shall not constitute a breach of this Agreement.

ARTICLE 14 INTELLECTUAL PROPERTY

14.1 Ownership of Inventions. Subject to Section 14.1.1, title to all inventions and other intellectual property made related to (i) the Development Program, (ii) the Lead Compounds, (iii) FG Technology or FG Confidential Information, (iv) the Field, or (v) the Expanded Field (subsections 14.1(i)-(v), collectively, the Protected Field) shall be owned by or is hereby assigned to FG; provided, however that Astellas shall own inventions of general applicability relating solely to drug delivery systems created exclusively by Astellas under subsection 14.1(i), excluding inventions related to or based on subsections 14.1(ii), (iii), (iv), or (v), and provided, further, that Astellas hereby grants to FG a worldwide, fully paid non-exclusive license with the right to sublicense to practice such inventions with respect to the FG Technology. Astellas agrees to execute any and all assignments and other documents necessary to effectuate the foregoing.

14.1.1 Notwithstanding Section 14.1, in the event that Astellas develops, completely independently from any FG Technology and/or any other FG materials, confidential information, intellectual property or other related information provided by or on behalf of FG to Astellas under this Agreement or any other agreement between FG and Astellas relating to the subject matter hereof, any inventions or intellectual property rights related to the Field or the Expanded Field, [ * ], Astellas shall own such intellectual property and hereby grants to FG and its Sublicensees a non-exclusive, royalty-free, irrevocable license to such intellectual property for the FG Territory. Astellas agrees to execute any and all assignments and other documents necessary to effectuate the foregoing.   -30-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   14.2 Patent Prosecution

14.2.1 FG Inventions. FG shall control all Prosecution and Interference Activities pertaining to FG Patents and patent applications and patents related to its, its Affiliate's or its Sublicensee's inventions in the Protected Field worldwide using counsel of its choice and shall bear the costs of such Prosecution and Interference Activities, provided, however, that; and Astellas shall reimburse to FG, within [ * ] of receipt by Astellas of invoice therefor, any such costs to the extent incurred in connection with or reasonably allocable to the FG Patents registered and/or to be registered in the Astellas Territory and related to the Field and the Lead Compounds, provided, further, that, with respect to patents or patent applications excluding those covering composition of matter claims and all patents listed on Exhibit A hereto as of the Effective Date, Astellas may postpone such reimbursement until the respective FG Patent will have been registered in the Astellas Territory if [ * ], on condition that once the respective FG Patent has been registered in the Astellas Territory, Astellas shall pay to FG such costs, plus interest to the extent permitted by applicable law at the U.S. prime rate per annum quoted in the Money Rates column of The Wall Street Journal (U.S., Western Edition), calculated in each case from the date such costs were incurred, plus an additional [ * ] thereof.

14.2.2 Astellas Inventions. Astellas shall not file for or otherwise seek to obtain (directly or indirectly) patent or other intellectual property protection for inventions that are related to the Protected Field, without the prior written consent of FG, which may be withheld at FG's sole discretion, subject to Section 14.1.1, and provided also that Astellas may file for or otherwise seek to obtain patent protection for inventions related to drug delivery systems as described in Section 14.1. To the extent that FG consents to the filing of any patent application or other intellectual property protection related to the foregoing, such patent application or other intellectual property protection shall be subject to Section 14.1, unless otherwise agreed in writing.

14.2.3 Cooperation. Astellas shall cooperate with and assist FG in connection with Prosecution and Interference Activities and shall use best efforts to consult with FG regarding the prosecution and maintenance of the FG Patents for the FG Territory and the Astellas Territory for those FG Patents for which Astellas or its Affiliates, Sublicensees or investigators are inventors, except solely for inventions (i) of general applicability relating solely to drug delivery systems created by Astellas under subsection 14.1(i), or (ii) created in compliance with Section 14.1.1 as determined solely by FG in good faith.

14.3 Defense of Third Party Infringement Claims. If the development, manufacture, sale or use of any Lead Compound pursuant to this Agreement results in a claim, suit or proceeding (collectively, Actions) alleging patent infringement against FG or Astellas (or their respective Affiliates or Sublicensees), such party shall promptly notify the other party hereto in writing. The party subject to such Action (for purposes of this Section 14.3, the Controlling Party) shall have the exclusive right to defend and control the defense of any such Action using counsel of its own choice; provided, however, that if such Action is directed to the subject matter of a patent of the other party (i.e., for Astellas, a FG Patent), such other party may participate in the defense and/or settlement thereof at its own expense with counsel of its choice.   -31-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   Except as agreed in writing by Astellas and FG, Astellas shall not enter into any settlement relating to a Lead Compound, if such settlement admits the invalidity or unenforceability, or limits any claim, of any patent within the FG Technology. The Controlling Party agrees to keep the other party hereto reasonably informed of all material developments in connection with any such Action. Any cost, liability or expense associated with such action (including amounts paid in settlement) (together, Expenses) shall be borne by the Controlling Party; provided, that if Astellas is the Controlling Party, and the Action is related to Future Third Party Intellectual Property, with respect to Expenses related solely to such Future Third Party Intellectual Property, it shall be entitled to deduct up to [ * ] of the Expenses incurred on an annual basis from [ * ] in such year under this Agreement, provided, however, that (i) the total amount deducted shall not exceed [ * ] thereunder, and (ii) notwithstanding (i) above, Astellas' right to deduct Expenses incurred shall be further limited such that in no event shall the sum of (a) the Expenses deducted by Astellas under this Section 14.3, and (b) the consideration FG contributes for the acquisition of intellectual property from Third Party Licensors for the Astellas Territory as set forth in Section 14.5, exceed [ * ] hereunder, and, provided further, that if FG is the Controlling Party, it shall be entitled to reimbursement by Astellas of [ * ] of such Expenses, as incurred. Notwithstanding the foregoing, Astellas shall be solely responsible (without right of deduction) for all Expenses related to any Action relating to Preexisting Third Party Intellectual Property.

14.4 Enforcement. Subject to the provisions of this Section 14.4, in the event that FG or Astellas reasonably believes that any FG Technology necessary for the development, manufacture, use or sale of a Lead Compound is infringed or misappropriated by a third party or is subject to a declaratory judgment action arising from such infringement, in each case with respect to the development, manufacture, sale or use of a product within the Field and within the Astellas Territory, Astellas or FG (respectively) shall promptly notify the other party hereto. Promptly after such notice the parties shall meet to discuss the course of action to be taken with respect to an Enforcement Action (as defined below) with respect to such infringement or misappropriation, including the control thereof and sharing of costs and expenses related thereto, for the purposes of entering into a litigation agreement setting forth the same (Litigation Agreement). If the parties do not enter such Litigation Agreement, FG shall have the initial right (but not the obligation) to enforce the intellectual property rights with respect to the FG Technology, or defend any declaratory judgment action with respect thereto (such action, for purposes of this Section 14.4, an Enforcement Action).

14.4.1 Information. Absent a Litigation Agreement, the party initiating or defending any such Enforcement Action within the Field shall keep the other party hereto reasonably informed of the progress of any such Enforcement Action, and such other party shall have the right to participate with counsel of its own choice at its own expense.

14.4.2 Enforcement Costs; Recoveries. Absent a Litigation Agreement, FG shall have the initial right to initiate such an Enforcement Action, and shall notify Astellas within a reasonable time whether it elects to exercise such right. In the event that FG elects to initiate or defend such Enforcement Action, FG shall be responsible for [ * ] of the costs and expenses while Astellas shall be responsible for [ * ] of the costs and expenses, and all amounts recovered shall first be applied to reimbursement of each   -32-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   party's costs and expenses with the remainder to be allocated to FG and Astellas at the ratio of [ * ] and [ * ]. In the event that FG elects not to initiate or defend such Enforcement Action, Astellas shall have the right to initiate or defend such Enforcement Action in its own name, and to the extent permitted under Third Party Agreements, in the name of FG or in the names of both FG and Astellas, in which case, Astellas shall be responsible for [ * ] of the costs and expenses while FG shall be responsible for [ * ] of the costs and expenses, and all amounts recovered shall first be applied to reimbursement of each party's costs and expenses with the remainder to be allocated to Astellas and FG at the ratio of [ * ] and [ * ].

14.4.3 Cooperation in Enforcement Action. Absent a Litigation Agreement, at the request of the party which has the right to initiate or defend an Enforcement Action, the other party shall reasonably cooperate in the Enforcement Action, such cooperation to include, without limitation, furnishing records, information and testimony, and attending conferences, discovery proceedings, hearings, trials and appeals; provided, that the requesting party shall reimburse to the cooperating party for the out-of-pocket expenses incurred for such cooperation pursuant to the reimbursement regime set forth in Section 14.4.2.

14.5 Third Party Agreements

14.5.1 Future Agreements. It is understood that FG may find it necessary to utilize in connection with a Lead Compound intellectual property that is controlled by a non-Affiliate third party (such party, a Third Party Licensor), in addition to or in lieu of the FG Technology existing as of the Effective Date. FG shall have the right to obtain (by purchase, license, or otherwise) rights to such intellectual property with the right to sublicense to Astellas. In the event that FG determines that it must obtain such rights, it shall provide notice and submit a description of such rights to Astellas, and shall discuss with Astellas the need to obtain such rights. Astellas shall inform FG within [ * ] of receipt of such notice whether it believes it is necessary to obtain such rights for the Astellas Territory and wishes to obtain such rights. In the event Astellas determines to obtain such rights, FG shall obtain a worldwide license for the rights under such terms and conditions as are [ * ], and such intellectual property of the Third Party Licensor shall be deemed to be the part of FG Technology, provided, however, that, notwithstanding anything contained in this Agreement (i) for Preexisting Third Party Intellectual Property, [ * ] shall pay [ * ] of all consideration due in connection with the acquisition of such rights for the Astellas Territory, and (ii) for Future Third Party Intellectual Property, [ * ] shall [ * ] pay [ * ] of all consideration due in connection with the acquisition of such rights for the Astellas Territory, provided, however, notwithstanding FG's obligation to contribute to the consideration due for Future Third Party Intellectual Property under (ii) above, FG's obligation to contribute shall be limited such that in no event shall the sum of (a) the consideration FG contributes for the acquisition of intellectual property from Third Party Licensors for the Astellas Territory, and (b) the Expenses for which Astellas has the right to deduct under Section 14.3 exceed [ * ] hereunder, and Astellas shall be responsible for all consideration related to the acquisition of rights from Third Party Licensors in excess of such amount. In the event Astellas determines not to obtain such rights for the Astellas Territory, FG shall obtain a license for the FG Territory but not the Astellas Territory, and Astellas shall be solely responsible for the defense of any infringement   -33-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   Action, for all Expenses related to any such Action, and any right of Astellas to deduct Expenses under this Agreement against payments required to be made to FG hereunder shall not apply to any action brought with respect to such rights.

14.5.2 Payment; Reports. If FG is obligated to pay amounts to a Third Party Licensor, FG shall notify Astellas [ * ] in advance of the due date of such payment obligation (or such later date as FG may determine), and Astellas shall reimburse its share of such payments within [ * ] after receipt of notice therefor.

14.5.3 Limitation. To the extent that FG Patents includes any intellectual property licensed under FG's License Agreement with Imigen, Inc. relating to HIF stabilization technology dated as of October 30, 2003, and amended as from time to time of which a redacted copy shall have been provided to Astellas prior to the Effective Date, Astellas shall be considered a sublicensee and be subject to the applicable requirements thereunder.

14.5.4 Compliance with Third Party Agreements. Notwithstanding anything to the contrary contained herein, Astellas agrees to comply with the requirements (upon sublicensees or otherwise) of FG's License Agreement with Imigen, Inc. relating to HIF stabilization technology dated as of October 30, 2003. In addition, Astellas agrees to comply with the requirements (upon sublicensees or otherwise) of any future Third Party Agreements for which Astellas obtains rights through an FG license pursuant to Section 14.5.1 hereof.

ARTICLE 15 REPRESENTATIONS AND WARRANTIES

15.1 FG Warranties. FG warrants and represents to Astellas, as of the execution of this Agreement, that (i) it is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; (ii) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of FG; (iii) there is no pending litigation which alleges or any communication alleging that Commercialization of any Lead Compound or any compound Controlled by FG for use in the Field has infringed or misappropriated the intellectual property rights of any Third Party or has been obtained by misappropriating any Third Party's intellectual property right; and (iv) subject to the terms and conditions of the agreements for the FG Acquired Patents, FG has complete title to and ownership of the FG Patents, free and clear from any mortgages, pledges, liens, security interests, conditional and installment sale agreements, encumbrances, charges or claims of any kind.

15.2 Astellas Warranties. Astellas warrants and represents to FG, as of the execution of this Agreement, that (i) it is a corporation duly organized, validly existing and in good standing under the laws of Japan; and (ii) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Astellas.

15.3 Disclaimer of Warranties. EXCEPT AS OTHERWISE SET FORTH HEREIN, FG AND ASTELLAS EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO   -34-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   THE DEVELOPMENT PROGRAM, OR THE FG TECHNOLOGY OR LEAD COMPOUNDS, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF FG TECHNOLOGY, PATENTED OR UNPATENTED, AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

ARTICLE 16 CONFIDENTIALITY

16.1 Confidential Information. Except as expressly provided herein, the parties agree that the receiving party shall not publish or otherwise disclose and shall not use for any purpose other than this Agreement any information furnished to it by the other party hereto pursuant to this Agreement which if disclosed in tangible form is marked Confidential or with other similar designation to indicate its confidential or proprietary nature or if disclosed orally is indicated orally to be confidential or proprietary by the party disclosing such information at the time of such disclosure and is confirmed in writing as confidential or proprietary by the disclosing party within a reasonable time after such disclosure (collectively, Confidential Information). Notwithstanding the foregoing, Confidential Information shall not include information that, in each case is demonstrated by written documentation:

(a) was already known to the receiving party, other than under an obligation of confidentiality directly or indirectly to the disclosing party at the time of disclosure hereunder;

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

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

(d) was subsequently lawfully disclosed to the receiving party by any third party without any confidentiality obligation directly or indirectly to the disclosing party or developed by the receiving party without reference to any information or materials disclosed by the disclosing party.

It is agreed and understood that all matters discussed and presented at the meetings of the JDC shall be considered Confidential Information hereunder, subject to the terms and conditions of this Agreement.

16.2 Permitted Disclosures. Notwithstanding the provisions of Section 16.1 above, each party hereto may disclose the other party's Confidential Information to the extent such disclosure is reasonably necessary to exercise the rights granted to it, or reserved by it, under this Agreement (including, without limitation, entering into and/or performing business or scientific relationships with respect to products outside the Field as permitted hereunder), in filing or prosecuting patent applications, prosecuting or defending litigation, complying with applicable governmental regulations, submitting information to tax or other governmental   -35-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   authorities (including regulatory authorities), or conducting clinical trials hereunder with respect to Lead Compounds, provided that if a party is required by law to make any such disclosure of the other party's Confidential Information, to the extent it may legally do so, it will give reasonable advance notice to the latter party of such disclosure and, save to the extent inappropriate in the case of patent applications or otherwise, will use its reasonable efforts to secure confidential treatment of such Confidential Information prior to its disclosure (whether through protective orders or otherwise).

16.3 Clinical Data. Except as expressly permitted under Sections 7.2 and 16.2, and for publications or disclosures in accordance with Section 5.2, neither party shall disclose to third parties pre-clinical data, clinical data or regulatory filings, comprising Confidential Information of the other party.

16.4 Press Releases. Except as may already be, or is agreed to be, publicly disclosed, in the event that either party proposes to release a press release with respect to this Agreement or the Development Program, such party shall obtain the prior written consent of the other party, which shall not be unreasonably withheld.

ARTICLE 17 INSURANCE; INDEMNIFICATION

17.1 Insurance. Each party shall secure and maintain in effect during the term of this Agreement and for a period of five (5) years thereafter insurance policy(ies) underwritten by a reputable insurance company and in a form and having limits standard and customary for entities in the biopharmaceutical industry for exposures related to the Lead Compounds. Such insurance shall include general liability, clinical trial liability and products liability coverage with respect to such party's performance of the Development Program and commercialization of Lead Compounds hereunder. Upon request by the other party hereto, certificates of insurance evidencing the coverage required above shall be provided to the other party.

17.2 Indemnification of FG. Astellas shall indemnify each of FG and its Affiliates and the directors, officers, and employees of FG and such Affiliates and the successors and assigns of any of the foregoing (the FG Indemnitees), and hold each FG Indemnitee harmless from and against any and all liabilities, damages, settlements, claims, actions, suits, penalties, fines, costs or expenses (including, without limitation, reasonable attorneys' fees and other expenses of litigation) incurred by any FG Indemnitee to the extent not otherwise covered by insurance, arising from or occurring as a result of any claim, action, suit, or other proceeding brought by third parties against a FG Indemnitee arising from or occurring as a result of any development, testing, manufacture, importation, use, offer for sale, sale or other distribution of any Lead Compound by or for the benefit of Astellas or its Affiliates or Sublicensees, distributors or agents (including, without limitation, product liability and infringement claims) except to the extent caused by failure of the Lead Compound supplied by FG to meet the Product Specifications in effect at the time of manufacture, or material deviation by FG or its sub-contractor from GMP Guidelines in manufacturing the Lead Compound, or FG's breach of this Agreement or willful misconduct.   -36-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   17.3 Indemnification of Astellas. FG shall indemnify each of Astellas and its Affiliates and the directors, officers, and employees of Astellas and such Affiliates and the successors and assigns of any of the foregoing (the Astellas Indemnitees), and hold each Astellas Indemnitee harmless from and against any and all liabilities, damages, settlements, claims, actions, suits, penalties, fines, costs or expenses (including, without limitation, reasonable attorneys' fees and other expenses of litigation) incurred by any Astellas Indemnitee to the extent not otherwise covered by insurance, arising from or occurring as a result of any claim, action, suit, or other proceeding brought by third parties against an Astellas Indemnitee to the extent caused by failure of the Lead Compound supplied by FG to meet the Product Specifications in effect at the time of manufacture, or material deviation by FG or its sub-contractor from GMP Guidelines in manufacturing the Lead Compound, except in each case in this Section 17.3 to the extent caused by Astellas' breach of this Agreement or willful misconduct.

17.4 Procedure. A party (for purposes of this Section 17.4, the Indemnitee) that intends to claim indemnification under any provision of this Agreement shall promptly notify the indemnifying party (the Indemnitor) in writing of any claim, action, suit, or other proceeding brought by third parties in respect of which the Indemnitee or any of its Affiliates, or their directors, officers, employees, successors or assigns intend to claim such indemnification hereunder. As between the parties hereto the Indemnitor shall have the right to control the defense and settlement of such claim, action, suit, or other proceeding; provided, that the Indemnitee shall have the right to participate in such defense or settlement with counsel of its own choosing at its expense. The Indemnitee shall not make any settlement of any loss, claim, damage, liability or action without the consent of the Indemnitor, to the extent such consent is not withheld unreasonably or delayed. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such Indemnitor of any liability to the Indemnitee under this Article 17 but the omission so to deliver written notice to the Indemnitor shall not relieve the Indemnitor of any liability that it may have to any Indemnitee otherwise than under this Article 17. Without limiting the foregoing, the Indemnitee shall keep the Indemnitor fully informed of the progress of any claim, action, suit, or other proceeding for which it intends to claim indemnification under this Article 17.

ARTICLE 18 TERM AND TERMINATION

18.1 Term. This Agreement shall become effective as of the Effective Date and, shall continue in full force and effect until terminated pursuant to this Article 18.

18.2 Termination for Cause or Technical Product Failure

18.2.1 Material Breaches. FG may forthwith terminate this Agreement in the event Astellas fails to make any payment due under Articles 6, 9 or 14, within [ * ] following receipt of written notice of such default, or materially breaches its obligations under Articles 8 or 14, and fails to cure such breach within [ * ] following receipt of written notice of such default. Astellas may forthwith terminate this Agreement in the   -37-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   event FG materially breaches its obligations under Article 7 or Article 12, and fails to cure such breach within [ * ] following receipt of written notice of such default. Any termination shall become effective at the end of such [ * ] or [ * ] period unless the defaulting or breaching party (or any other party on its behalf) has cured any such default prior to the expiration of the [ * ] or [ * ] period, as the case may be.

18.2.2 Independent Activities. Notwithstanding anything contained in Section 8.3.2 or Section 14.1.1, in the event that Astellas Commercializes any molecules for the Field or the Expanded Field, except for actions taken within the Field in the course of the exercise of the licenses granted under Sections 8.1 and 13.1 hereof and expressly authorized under this Agreement, even if FG determines that Astellas' activities are completely independent of any FG Technology and/or any other FG materials, confidential information, intellectual property or other related information provided by FG to Astellas under this Agreement or any other agreement between FG and Astellas relating to the subject matter hereof, FG shall have the right at its sole discretion to terminate this Agreement upon [ * ] notice to Astellas.

18.2.3 Technical Product Failure. Astellas may terminate this Agreement upon [ * ] notice to FG upon Technical Product Failure.

18.2.4 Development Diligence Failure. FG may terminate this Agreement upon thirty (30) days notice to Astellas in the event Astellas fails to meet any of its development diligence requirements as set forth in Article 11 hereof, provided, however, that with respect to the development diligence obligations set forth in Section 11.3.2, such termination right on behalf of FG shall be triggered only upon Astellas' failure to meet such development diligence obligations for a Major Indication (except those Major Indications set forth in Section 11.3.1(iv)), and Astellas may terminate this Agreement upon thirty (30) days notice to FG in the event FG fails to meet the development diligence requirement as set forth in Section 11.2 hereof.

18.2.5 Other Material Non-Performance/Misrepresentation. Other than a breach giving rise to a termination right as set forth in Sections 18.2.1 or 18.2.4, or a termination pursuant to a Technical Product Failure as set forth in Section 18.2.3 in the event of (i) a party's breach or default in any other material respect in the performance or observance of any other material term, covenant or provision of this Agreement, or (ii) if any representation by a party contained in this Agreement shall prove to have been incorrect in any material respect when made, resulting in material adverse consequences for the other party, (any such default or material incorrect representation a Material Non-Performance), such Material Non-Performance shall be remedied only as provided in Section 18.7.4 below.

18.3 Termination in case of Generic Competition. In the event generic equivalents has captured the [ * ] of the quantity of Lead Compound sold by Astellas during the [ * ] preceding such termination calculated on a annual basis; or in the event, after the entry into the market of generic equivalents, that Astellas' annual sales fall below $[ * ] for all Lead Compounds, Astellas may terminate this Agreement upon [ * ] written notice to FG; provided, that Astellas does not Commercialize any Lead Compound after such termination until the expiration of the last to expire FG Patents applicable to such Lead Compound.   -38-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   18.4 Negative Advice from Authorities. Astellas may terminate this Agreement upon [ * ] notice to FG in the event Astellas has commenced Phase III clinical studies in those of the following Indications that FG is developing: Treatment of anemia in patients with chronic kidney disease undergoing dialysis, Treatment of anemia in patients with chronic kidney disease not undergoing dialysis and [ * ], and the Japanese Ministry of Health, Labor & Welfare has provided written notification that it will not approve the Lead Compounds in such Indications or the JDC determines, after the submission by Astellas of Marketing Approval Applications for such Indications, and the receipt of a response or request of the Japanese Ministry of Health, Labor & Welfare that contains development demands that are so onerous that it is not reasonable to continue with Development of the Lead Compounds in such Indications.

18.5 Admission of Invalidity or Unenforceability of FG Patent. Astellas may terminate this Agreement upon [ * ] notice to FG in the event that FG enters into a settlement under Section 14.3 that admits the invalidity or unenforceability of all patents within the FG Technology, including patents covering Lead Compounds.

18.6 Termination upon Notice. Subject to Section 18.7.2, Astellas may terminate this Agreement upon six (6) months notice to FG for any reason or no reason.

18.7 Effect of Termination

18.7.1 Accrued Obligations. Termination of this Agreement for any reason shall not release either party hereto from any liability which, at the time of such termination, has already accrued to the other party or which is attributable to a period prior to such termination nor preclude either party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this Agreement.

18.7.2 Termination. In the event of (a) a termination by Astellas under Section 18.6 during the period from the execution of this Agreement until the last to expire of the FG Patents, or (b) by FG under Section 18.2.1, 18.2.2, 18.2.4 or 18.2.5 hereof, Astellas shall, upon the effective date of such termination, pay to FG (i) a termination fee of $[ * ] U.S. dollars and (ii) any payments to which FG is otherwise entitled to receive hereunder in the period from the date of such termination notice until the [ * ].

18.7.3 Survival. Articles 1, 5, 14, 16, 17, 18, 19 and 20, and Sections 8.3.3 and 10.5, shall survive any termination of this Agreement, along with FG's rights and Astellas' obligations (but not Astellas' rights or FG's obligations, except to the extent required by the Japanese Ministry of Health, Labor and Welfare) under Section 5.1.1 and Article 7. In addition, the following provisions shall survive termination of this Agreement for any reason: Astellas shall assign or cause to be assigned to FG (or if not so assignable, Astellas shall take all reasonable actions to make available to FG) all regulatory filings and registrations (including MAAs and Marketing Approvals) with respect to the Lead Compounds that have been filed or made by or under authority of Astellas, and the rights in trademark with respect to each Lead Compound as provided for in Section 4.4.1, in each case such assignment (or availability)   -39-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   shall be made within [ * ] after the notice of termination. From and after the date of a notice of termination, FG shall have no further obligations under this Agreement beyond those obligations that survive termination in such events as specified in this Section 18.7.3.

18.7.4 Material Non-Performance. In the event of any Material Non-Performance by a party, the other party shall, without reasonable delay following discovery of such Material Non-Performance notify the defaulting party in writing, and the parties shall consult with each other in good faith to endeavor to agree upon the most effective means to cure such Material Non-Performance and, if necessary, to effect a remedy in favor of the non-defaulting party for the consequences of such Material Non-Performance by the defaulting party (collectively, the Resolution). In the event (i) the parties are unable to agree upon Resolution, or (ii) the defaulting party, in the exercise of reasonable diligence shall have been unable to remedy such Material Non-Performance, then in either such event the remedy of the non-defaulting party with respect to the Material Non-Performance by the defaulting party shall be determined by arbitration pursuant to Section 19.2 hereof, and the arbitrators shall be authorized to fashion such remedy, including equitable relief, which may include termination of this Agreement in whole or in part, as the arbitrators shall determine appropriate, except that termination of this Agreement in whole shall only be the remedy of last resort.

18.7.5 License Upon Termination. In the event of a termination of this Agreement, FG shall have an irrevocable, exclusive, license, with the right to grant and authorize sublicenses, to any trademarks used by Astellas in association with the Lead Compounds hereunder to make, use, sell, import and otherwise exploit products within the Field in the Astellas Territory. Such license shall be royalty-free, provided, however, if such trademark is not a global trademark (i.e. materially different from the trademark used in the FG Territory) and either (i) if Astellas terminates this Agreement under Section 18.2.1 or 18.2.4, or (ii) if this Agreement is terminated in accordance with the procedure as provided for in Section 18.2.5 as a result of FG's Material Non-Performance, in which event FG and Astellas shall negotiate in good faith a reasonable fee for such license.

ARTICLE 19 DISPUTE RESOLUTION

19.1 Disputes. If the parties are unable to resolve any dispute between them regarding the breach, interpretation or enforcement of this Agreement, either party may, by written notice to the other, have such dispute referred to their Authorized Designees, provided that such individuals are not directly involved in the dispute (i.e., the dispute occurs at the JDC, such individuals shall not be members of the JDC), for good faith negotiations. If after [ * ] such executives are unable to resolve the issue, each of Astellas and FG shall have the right to refer the matter to mediation upon notice to the other party, and the parties shall choose a mediator within [ * ] of the receipt of such notice, and shall negotiate in good faith to resolve such matter through the mediator within [ * ] thereafter.

19.2 Full Arbitration. Any dispute, controversy or claim arising out of or relating to the breach, interpretation or enforcement of this Agreement, including disputes relating to termination of this Agreement, shall be settled by binding arbitration in the manner   -40-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   described in this Section 19.2. The arbitration shall be conducted pursuant to the rules of Arbitration of the International Chamber of Commerce then in effect. Notwithstanding those rules, the following provisions shall apply to the arbitration hereunder:

19.2.1 Arbitrators. The arbitration shall be conducted by a panel of three (3) arbitrators, with one (1) arbitrator chosen by each of FG and Astellas and the third appointed by the other two (2) arbitrators. If the parties are unable to agree upon a single arbitrator, or the third arbitrator in case of a panel of three (3), such third arbitrator (as the case may be) shall be appointed in accordance with the rules of the Arbitration of the International Chamber of Commerce.

19.2.2 Proceedings. Except as otherwise provided herein, the parties shall use their best efforts to complete the arbitration within [ * ] after the appointment of the Panel under Section 19.2.1 above, unless a party can demonstrate to the Panel that the complexity of the issues or other reasons warrant the extension of one or more of the time tables. In such case, the Panel may extend such time table as reasonably required. The Panel shall, in rendering its decision, apply the substantive law of the State of California, without regard to its conflicts of laws provisions, except that the interpretation of and enforcement of this Article 19 shall be governed by the U.S. Federal Arbitration Act. The proceeding shall be conducted in English and shall take place in the city of Vancouver, British Columbia, Canada. The judgment of the Panel shall be binding upon the parties and enforceable in any court of competent jurisdiction.

19.2.3 Interim Relief. Notwithstanding anything in this Article 19 to the contrary, FG and Astellas shall each have the right to apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction, or other similar interim or conservatory relief, as necessary, pending resolution under the above described arbitration procedures. Nothing in the preceding sentence shall be interpreted as limiting the powers of the arbitrators with respect to any dispute subject to arbitration under this Agreement.

ARTICLE 20 MISCELLANEOUS

20.1 Confidential Terms. Except as expressly provided herein, each party agrees not to disclose any terms of this Agreement to any third party without the consent of the other party, except (i) as required by securities or other applicable laws or (ii) to prospective and other investors and such party's accountants, attorneys and other professional advisors, or (iii) to others under reasonable conditions of confidentiality.

20.2 Governing Law. This Agreement and any dispute arising from the performance or breach hereof shall be governed by and construed and enforced in accordance with, the laws of the State of California, without reference to conflicts of laws principles.

20.3 Force Majeure. Nonperformance of any party (except for payment of amounts due hereunder) shall be excused to the extent that performance is rendered impossible by strike, fire, earthquake, flood, governmental acts or orders or restrictions, failure of suppliers, or any other reason where failure to perform is beyond the reasonable control of the non-   -41-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   performing party. In such event FG or Astellas, as the case may be, shall promptly notify the other party of such inability and of the period for which such inability is anticipated to continue. Without limiting the foregoing, the party subject to such inability shall use reasonable efforts to minimize the duration of any force majeure event.

20.4 No Implied Waivers; Rights Cumulative. No failure on the part of FG or Astellas to exercise and no delay in exercising any right under this Agreement, or provided by statute or at law or in equity or otherwise, shall impair, prejudice or constitute a waiver of any such right, nor shall any partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.

20.5 Independent Contractors. Nothing contained in this Agreement is intended implicitly, or is to be construed, to constitute FG or Astellas as partners in the legal sense. No party hereto shall have any express or implied right or authority to assume or create any obligations on behalf of or in the name of any other party or to bind any other party to any contract, agreement or undertaking with any third party.

20.6 Notices. All notices, requests and other communications hereunder shall be in writing and shall be personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid; facsimile transmission (receipt verified); or express courier service (signature required), in each case to the respective address specified below, or such other address or fax number as may be specified in writing to the other party hereto:   Astellas:   Astellas Pharma Inc.   Attn: Director of Legal Department   [ * ]

with copy to:   Astellas Pharma Inc.   Attn: Licensing, Corporate Strategy   [ * ]

FG:   FibroGen, Inc.   Attn: Chief Executive Officer   225 Gateway Boulevard   San Francisco, California 94080   Fax: 1-650-866-7202

with a copy to:   FibroGen, Inc.

  Attn: Legal Department   225 Gateway Boulevard   San Francisco, California 94080   Fax: 1-650-866-7343   -42-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   20.7 Assignment. This Agreement shall not be assignable by either party to any third party without the written consent of the other party hereto; except that either party may assign this Agreement without the other party's consent to an entity that acquires substantially all of the business or assets of the assigning party within the Field, in each case whether by merger, transfer of assets, or otherwise. Upon a permitted assignment of this Agreement, all references herein to the assigning party shall be deemed references to the party to whom the Agreement is so assigned.

20.8 Modification. No amendment or modification of any provision of this Agreement shall be effective unless in writing signed by all parties hereto. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by all parties.

20.9 Severability. If any provision hereof should be held invalid, illegal or unenforceable in any jurisdiction, the parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction.

20.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together, shall constitute one and the same instrument.

20.11 Headings. Headings used herein are for convenience only and shall not in any way affect the construction of or be taken into consideration in interpreting this Agreement.

20.12 Export Laws. Notwithstanding anything to the contrary contained herein, all obligations of FG and Astellas are subject to prior compliance with United States and foreign export regulations and such other United States and foreign laws and regulations as may be applicable, and to obtaining all necessary approvals required by the applicable agencies of the governments of the United States and foreign jurisdictions. FG and Astellas shall cooperate with each other and shall provide assistance to the other as reasonably necessary to obtain any required approvals.

20.13 Language. This Agreement is in the English language only, which language shall be controlling in all respects, and all versions hereof in any other language shall not be binding on the parties hereto. All communications and notices to be made or given pursuant to this Agreement shall be in the English language.

20.14 Entire Agreement. This Agreement (including the Exhibits hereto) constitutes the entire agreement, both written or oral, with respect to the subject matter hereof, and supersedes all prior or contemporaneous understandings or agreements, including the Binding Term Sheet, dated as of February 9, 2004 by and between FG and Astellas, as amended   -43-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   on January 25, 2005, whether written or oral, between FG and Astellas with respect to such subject matter.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered in duplicate originals as of the date first above written.   ASTELLAS PHARMA INC.   FIBROGEN, INC.

By:   /s/ Toichi Takenaka   By:   /s/ Thomas B. Neff

  Toichi Takenaka President and Chief Executive Officer     Thomas Neff President and Chief Executive Officer

Date:   1.September.05   Date:   23 August 05   -44-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   EXHIBIT A  LIST OF PATENTS

[ * ]   -45-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   EXHIBIT B  INDICATIONS

Included indications:

  •   Treatment of anemia in patients with chronic kidney disease undergoing dialysis

  •   Treatment of anemia in patients with chronic kidney disease not undergoing dialysis

  •   [ * ]    -46-

[ * ] = 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.





CONFIDENTIAL   EXECUTION COPY   EXHIBIT C  INITIAL DEVELOPMENT PLAN

[ * ]    -47-

[ * ] = 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. 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?

SOLUTION: Each party shall secure and maintain in effect during the term of this Agreement and for a period of five (5) years thereafter insurance policy(ies) underwritten by a reputable insurance company and in a form and having limits standard and customary for entities in the biopharmaceutical industry for exposures related to the Lead Compounds. Such insurance shall include general liability, clinical trial liability and products liability coverage with respect to such party's performance of the Development Program and commercialization of Lead Compounds hereunder. Upon request by the other party hereto, certificates of insurance evidencing the coverage required above shall be provided to the other party.

PROBLEM: Exhibit 16.1

                               AUTOMOTIVE REFINISH                               DISTRIBUTOR AGREEMENT                                    (P.R.China)

THIS AGREEMENT, made as of the 1st day of December, (the Effective Date) by and between:

PPG Paints Trading (Shanghai) Co Ltd hereinafter referred to as (PPG Shanghai)

Address                    :        Suite 2512, 5th Floor                                     No. 2 Xin Kang Building, 28 Jia Feng Road                                     Wai Gao Qiao Free Trade Zone                                     Shanghai, P. R. China

Tel.                       :        (86-21) 6291 3500

Fax                        :        (86-21) 6291 2100

Business liscence no.      :        0537762

Legal representative       :        Viktoras R. Sekmakas and

NeoMedia Micro Paint Repair hereinafter referred to as (DISTRIBUTOR)

Address                    :        2201 Second Street, Suite 600                                     Ft. Myers, Florida, 33901

Tel.                       :        239-337-3434

Fax                        :        239-337-3668

Business licence no.       :        2648151

Legal representative       :        Charles T. Jensen

WITNESSETH:

WHEREAS:

A.       PPG SHANGHAI desires DISTRIBUTOR to market and sell PPG's Deltron and          ACS brand products, as hereinafter defined in Section 2 (the          Products), to the repair chain shops in P.R.China as listed on          Appendix 4 (the Territory);

B.       DISTRIBUTOR has the means to market Products in the Territory. As soon          as Distributor's China subsidary, NeoMeida Micro Paint Repair China, a          Wholley Foreign Owned Enterprise (WFOE) registered under the Chinese          laws and regulations, will be established, this title of Distributor          will be automatically switched to the WFOE.

C.       PPG SHANGHAI desires to appoint DISTRIBUTOR as a PPG SHANGHAI          distributor in the Territory and DISTRIBUTOR desires to be such          distributor; and

D.       Accordingly, PPG SHANGHAI and DISTRIBUTOR have reached an agreement as          hereinafter set forth.

In consideration of the mutual covenants and agreements herein contained, the parties hereto, intending to be legally bound hereby, covenant and agree as follows:

1.       APPOINTMENT

1.1      PPG SHANGHAI does hereby appoint DISTRIBUTOR to distribute in the          Territory the Products (as defined in paragraph 2, below) upon the          terms and conditions hereinafter set forth. DISTRIBUTOR does hereby          accept such appointment.

1.2      It is agreed that such appointment is nonexclusive and PPG SHANGHAI          may, without obligation to pay DISTRIBUTOR any commission or other          compensation, make direct sales of Products to other customers in the          Territory and/or appoint additional distributors of Products in the          Territory. During the term of this Agreement, DISTRIBUTOR shall have          the exclusive right for selling the Products to Beijing Sino-US Jinche          Yingang Auto Technological Services Limited (the Auto Center). PPG          Shanghai or any of its direct or indirect affiliates shall not sell any          of its products directly to the Auto Center or to any of the Auto          Center's affiliates in China or throughout the world, unless PPG          Shanghai obtains Distributor's written approval. It is understood and          agreed that as used herein the term PPG shall mean PPG Industries          Inc. and/or one or more affiliated companies of PPG Industries Inc. as          the context may require.

1.3      Notwithstanding anything to the contrary in this Section 1, PPG          SHANGHAI may also sell Products to any person or entity located outside          the Territory without being obligated to consider whether such Products          may be resold in the Territory. DISTRIBUTOR shall not be entitled to          any commission or other compensation in such event.





1.4      Deleted.

1.5      DISTRIBUTOR warrants that it will not handle any counterfeit,          passing-off products or products other than those purchased directly          from PPG SHANGHAI.

1.6      DISTRIBUTOR warrants and represents that it is a corporation duly          organized, validly existing, and in good standing under the applicable          laws, that it has full legal right, power, and authority to enter into          this Agreement and to consummate or cause to be consummated all of the          transactions contemplated hereby, and that the execution, delivery,          and/or performance of this Agreement do not or will not conflict with          or result in a breach of any provision of any articles of incorporation          or by-laws, or any written undertaking to which it is a party or by          which it, or any of its assets, may be bound or affected, or result in          a violation of any law, regulation, order, or award of any authority or          body having jurisdiction over the assets and operations of it.

2.       PRODUCTS

2.1 The Products and subject matter of this Agreement shall be the products listed below manufactured and sold by PPG SHANGHAI or affiliated companies of PPG SHANGHAI. Additional Products may be added to or deleted from the list at the sole discretion of PPG SHANGHAI:

(a)      Global Deltron Refinish Products.

(b)      ACS Products.

(c)      Ancilliaries confirmed in writing for distribution by PPG SHANGHAI.

(d)      Mixing equipment and related accessories as approved and supplied by          PPG SHANGHAI.

(e)      Any other products as PPG SHANGHAI may launch from time to time, at its          absolute discretion.

2.2      Specific product codes for above category a, b, c, d, and e shall          reference PPG SHANGHAI Price List in effect as of January 1, 2005 on          Appendix 5.

3.       REPRESENTATIONS AND WARRANTIES BY DISTRIBUTOR

DISTRIBUTOR represents and warrants to PPG SHANGHAI that(pound)(0)

(a)      it is a business entity duly incorporated and registered and validly          existing under the relevant PRC laws and regulations;

(b)      it has been issued a valid business licence in its name by the relevant          local branch of the State Administration of Industry and Commerce, and          that business licence shall be valid within the duration of this          Agreement;

(c)      it is permitted to distribute chemical products pursuant to this          Agreement under its approved business scope;

(d)      it has a Dangerous Goods Business Permit Licence issued by the          appropriate local government;

(e)      it has the qualification of a general taxpayer and is able to issue          value added tax invoices;

(f)      it shall comply with all the relevant laws, regulations and permits,          which have jurisdiction over its business, in relation to the sale of          Products,

4.       DISTRIBUTOR'S RESPONSIBILITY

4.1      DISTRIBUTOR shall promote the sale of the Products in the Territory.          DISTRIBUTOR will conduct its operations in the Territory through          offices or agencies to be maintained by DISTRIBUTOR at its sole cost          and expense.

4.2      If DISTRIBUTOR sells or distributes the Products outside the Territory,          whether directly or indirectly through DISTRIBUTOR's cooperation or in          conjunction with other third parties, or to customers outside the          Territory without the prior knowledge and consent of PPG SHANGHAI, PPG          SHANGHAI shall have the right to terminate with immediate effect this          Agreement and any existing incentive arrangements between PPG SHANGHAI          and DISTRIBUTOR, whether entered into before or after the commencement          of the Agreement.

4.3      DISTRIBUTOR agrees to satisfy the annual and quarterly sale targets for          the Products set forth in Appendix 3 herein as mutually agreed to by          the parties hereof.

4.4      DISTRIBUTOR and PPG Shanghai shall be responsible for providing          technical support and after sale services to the Territory. PPG          Shanghai's responsibility under this Section 4.4 is defined in Section          8.

5.       PRICES AND TERMS





5.1      PPG SHANGHAI agrees that PPG SHANGHAI will sell and DISTRIBUTOR agrees          to buy the Products at the prices agreed to by the parties from time to          time and subject to the terms and conditions stated herein. The prices          in effect as of the Effective Date of the Agreement are set forth on          Appendix 5. The prices for the Products must be agreed upon by PPG          SHANGHAI at the time of PPG SHANGHAI's written acceptance of an order          hereunder. Unless otherwise agreed by PPG SHANGHAI in writing,          DISTRIBUTOR shall prepay all the invoiced amount in the currency and          manner as indicated by PPG Shanghai. DISTRIBUTOR shall be deemed to          complete its payment obligation upon full payment of the invoiced sum,          and such amount has been allocated into the account as directed by PPG          SHANGHAI. PPG SHANGHAI shall only have the obligation to deliver the          Products upon full and due payment.

5.2      PPG SHANGHAI reserves the right to adjust its selling prices based on          local market situation.

5.3      PPG SHANGHAI shall bear the cost of transportation from overseas to its          own warehouse, insurance and export / import duty for any Products to          be sold to Distributor hereunder. DISTRIBUTOR shall pick up the ordered          Products from PPG SHANGHAI by its own transport agency to its own          places at its own expenses.

6.       INTENT

It is the intent of this Agreement, and PPG SHANGHAI and DISTRIBUTOR agree, that:

(a)      no consignment shipments shall be made to DISTRIBUTOR;

(b)      DISTRIBUTOR is not authorized to sell the Products in any area outside          the Territory or to establish or operate a permanent establishment in          any country on behalf of PPG SHANGHAI;

(c)      DISTRIBUTOR shall take no action which would cause PPG SHANGHAI to be          classified or to be considered as doing business in any country under          the laws of any country, or which would cause PPG SHANGHAI to become          subject to the income tax, excess profits tax, corporation receipts          tax, or any other tax of any country;

(d)      DISTRIBUTOR has no authority to conclude contracts on behalf of or in          the name of PPG SHANGHAI;

(e)      DISTRIBUTOR shall hold PPG SHANGHAI harmless from any taxes or other          liability of any type, kind or nature, assessed against PPG SHANGHAI          because of DISTRIBUTOR taking any action prohibited by subparagraphs          (b), (c) and (d) above;

(f)      DISTRIBUTOR distributes the Products solely as an independent          contractor and is not a franchisee, employee, partner or agent of PPG          SHANGHAI and agrees not to represent the relationship as otherwise;

(g)      No fee or other mandatory consideration has been paid by DISTRIBUTOR to          PPG SHANGHAI for issuance of this Agreement.

8.       PPG SHANGHAI'S RESPONSIBILITIES

(a)      PPG SHANGHAI shall use reasonable commercial efforts to support          DISTRIBUTOR in its sale and marketing. PPG SHANGHAI shall provide its          assistance in sale by providing DISTRIBUTOR with its usual and newly          developed sale materials, samples and sale items from time to time          through its sale/technical representatives.

(b)      Upon request by DISTRIBUTOR, PPG SHANGHAI shall provide DISTRIBUTOR          with extra support by generally providing the relevant technique and          other manner of consultation in relation to sale and use of Products.

(c)      In pursuance to the reasonable request of DISTRIBUTOR, PPG SHANGHAI          shall arrange training for DISTRIBUTOR in accordance with the product          training generally provided by PPG SHANGHAI at its Training Centers or          other pre-agreed venues.

(d)      PPG SHANGHAI shall use reasonable commercial efforts to provide          forthwith DISTRIBUTOR with the quantity of Products ordered by it and          accepted by PPG SHANGHAI. The supplying responsibility of PPG SHANGHAI          shall be subject to the stock of the ordered products at the time when          DISTRIBUTOR's order is made with PPG SHANGHAI.

(e)      PPG SHANGHAI shall provide DISTRIBUTOR Quarterly and Annual Rebate as          listed in Appendix 3 if agreed targets are achieved on time.

9.       DISTRIBUTOR'S RESPONSIBILITIES

DISTRIBUTOR agrees that DISTRIBUTOR shall, use all reasonable efforts , do the following:

(a)      provide its customers with services regarding the Products, including          the safety and toxicological aspects of Products handling and ensure          that delivery to customers is made of technical information provided by          PPG SHANGHAI regarding Products, including the safety precautions and          toxicological aspects of Products handling;





(b)      maintain an adequate supply of Products to expedite customer deliveries          and give prompt and efficient service to its customers in the          Territory;

(c)      maintain knowledge of the market in the Territory and regularly          communicate such knowledge to PPG SHANGHAI;

(d)      be responsible that the labels for the Products meet all governmental          and all applicable laws of the Territory regulatory requirements and          comply with all applicable laws of the Territory;

(e)      provide to its customers, Product technical support and training and          ensure its customers maintain technical support and training to          end-users.

(f)      plan and develop promotional and advertising strategies to enhance PPG          SHANGHAI's image and sales value in the region.

(g)      Achieve agreed and signed sales target (Appendix 3).

10.      PPG SHANGHAI TRADEMARKS

10.1     PPG SHANGHAI represents that it has rights and interests in the          trademarks used on the Products, including, without limitation, the PPG          logo listed on Appendix 2 hereto which shall herein be collectively          referred to as the PPG Trademarks. PPG SHANGHAI hereby grants to          DISTRIBUTOR during the Term, subject to the terms and conditions          hereinafter specified, a limited, nonexclusive, nonassignable and          nontransferable right to use the PPG Trademarks in the Territory for or          in connection with its advertisement, promotion, sale and distribution          of Products. In connection with any use of the PPG Trademarks,          DISTRIBUTOR shall prominently indicate that DISTRIBUTOR is an          independent distributor for PPG SHANGHAI. DISTRIBUTOR's use shall be          subject to PPG SHANGHAI's approval and shall be limited to labels and          advertisements of the Products in the Territory and shall be at the          expense of DISTRIBUTOR. DISTRIBUTOR agrees to submit proposed uses of          the PPG Trademarks on labels to the Director of Automotive Refinish          (Asia Pacific region), or such other person as PPG SHANGHAI may          designate from time to time, for review and approval. DISTRIBUTOR          agrees that if it uses the PPG Trademarks on its labels and in its          advertisements, it shall only be in the form approved in writing by PPG          SHANGHAI. PPG SHANGHAI agrees that it will not unreasonably withhold          approval of any labels or advertising material submitted to it by          DISTRIBUTOR for approval and use pursuant to the provisions hereof.          DISTRIBUTOR will not seek to obtain any registration of any of the PPG          Trademarks. Upon termination of this Agreement, DISTRIBUTOR shall          forthwith cease all further use of the PPG Trademarks and shall destroy          all unused labels and advertisements containing the PPG Trademarks.          Thereafter, DISTRIBUTOR shall not use any PPG Trademarks or trade or          corporate names similar thereto.

10.2     DISTRIBUTOR acknowledges PPG SHANGHAI's exclusive right and interests          in relation to the PPG Trademarks and further acknowledges that all          copyrights, patent, utility model rights and all other industrial          property rights of whatever kind used in or in connection with the          Products are the sole and exclusive property of PPG SHANGHAI or PPG and          that DISTRIBUTOR will not, whether during the Term of this appointment          or after its expiry or termination, knowingly do or cause to be done          any act or thing directly or indirectly, contest or in any way impair          or attempting to impair PPG SHANGHAI or PPG's rights, titles or          interests in the PPG Trademarks.

10.3     DISTRIBUTOR shall not apply for registration of the PPG Trademarks in          the People's Republic of China or in any other countries.

11.      WARRANTY AND LIMITATION

11.1     PPG SHANGHAI warrants only its title to the Products and that the        &bbsp; Products will be as set forth in the warranty statement, if any, on the          Products' labeling or in the absence of any such warranty statement          that the Products will conform to PPG SHANGHAI's standard warranty when          they are taken from PPG SHANGHAI's warehouse by DISTRIUTOR or its          transport agent. DISTRIBUTOR is not authorized to make warranties or          representations on behalf of PPG SHANGHAI and shall make no such          warranties or representations. THESE ARE THE ONLY REPRESENTATIONS OR          WARRANTIES THAT PPG SHANGHAI MAKES, AND ALL OTHER EXPRESS OR IMPLIED          WARRANTIES UNDER STATUTE OR ARISING OTHERWISE IN LAW FROM A COURSE OF          DEALING OR USAGE OF TRADE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY          OF MERCHANTIBILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, ARE          DISCLAIMED BY PPG SHANGHAI. In the event that the Product fails to          conform to the warranties herein given, DISTRIBUTOR's exclusive remedy          and PPG SHANGHAI's sole responsibility is, at PPG SHANGHAI's option,          limited to the replacement of such nonconforming Product at PPG          SHANGHAI's expense or the refund of the purchase price attributable to          a specific delivery as to which a claim is made. For the avoidance of          doubt, PPG SHANGHAI hereby declares and represents that PPG SHANGHAI is          not responsible for any damage to the Products after they have been          taken away from PPG SHANGHAI's warehouse and caused by DISTRIBUTOR or          its transport agent.

11.2     It is PPG SHANGHAI's responsibility to ensure that mis-delivery of          Product is kept to the minimum. DISTRIBUTOR shall inspect the Products          within 48 hours upon delivery. In case of discrepancy found in Products





         delivered, DISTRIBUTOR shall report to PPG SHANGHAI in writing,          detailing all the discrepancies within 48 hours after delivery. PPG          SHANGHAI will not accept any claims for discrepancy in delivery beyond          the 48 hours period. If Products are found damaged upon delivery,          DISTRIBUTOR or its customers who directly receive the delivery shall          report to PPG SHANGHAI in writing within 48 hours. The necessary and          sufficient evidence (and photos) required for insurance claim must be          submitted altogether. None of the damaged Products shall be disposed of          until the claim is settled by the insurance company or PPG SHANGHAI.

11.3     DISTRIBUTOR assumes all responsibility, risk and liability arising from          (i) the unloading, discharge, storage, handling and use of the          Products, including use thereof alone or in combination with other          substances; (ii) the improper functioning or failure of unloading,          discharge, transportation or storage systems equipment used by          DISTRIBUTOR, whether furnished or recommended by PPG SHANGHAI or not;          and (iii) the failure to comply with laws, rules and regulations          governing unloading, discharge, storage, handling and use of the          Products.

12.      FORCE MAJEURE

PPG SHANGHAI's failure or inability to make, or DISTRIBUTOR's failure or inability to take, any delivery or deliveries when due, or the failure or inability of either party to effect timely performance of any other obligation required of it hereunder, if caused by force majeure as hereinafter defined, shall not constitute a default hereunder or subject the party affected by force majeure to any liability to the other; provided, however, that the party so affected shall promptly notify the other of the existence thereof and of its expected duration and the estimated effect thereof upon its ability to perform its obligations hereunder. Such party shall promptly notify the other party when such force majeure circumstance has ceased to affect its ability to perform its obligations hereunder. The quantity to be delivered hereunder shall be reduced to the extent of the deliveries omitted for such cause or causes, unless both parties agree that the total quantity to be delivered hereunder shall remain unchanged. For so long as its ability to perform hereunder is affected by such force majeure circumstance, PPG SHANGHAI may, at its option, elect to allocate its total production of Product among its various requirements therefor (e.g., manufacturing and sales) in such manner as PPG SHANGHAI deems practicable and which, in the opinion of PPG SHANGHAI, is fair and reasonable. During the time that PPG SHANGHAI is unable to make deliveries or otherwise perform, it shall not be obligated to procure, or to use its best efforts to procure, any quantity of Product sold hereunder from any alternate producer or supplier. As used herein, the term force majeure shall mean and include any act of God, nature or the public enemy, accident, explosion, operation malfunction or interruption, fire, storm, earthquake, flood, drought, perils of the sea, strikes, lockouts, labor disputes, riots, sabotage, embargo, war (whether or not declared and whether or not the United States of America is a participant), federal, state or municipal legal restriction or limitation or compliance therewith, inability to obtain export licenses, failure or delay of transportation, shortage of, or inability to obtain, raw materials, supplies, equipment, fuel, power, labor, or other operational necessity, interruption, or curtailment of power supply, or any other circumstance of a similar or different nature beyond the reasonable control of the party affected thereby. In this connection, a party shall not be required to resolve labor disputes or disputes with suppliers of raw materials, supplies, equipment, fuel or power, except in accordance with such party's business judgment as to its best interest.

13.      PRODUCT HANDLING

DISTRIBUTOR acknowledges that it has experience and expertise in handling and storing the Products, and that DISTRIBUTOR has the obligation to handle, store and distribute the Products safely and properly.

14.      PRODUCT SAFETY

PPG SHANGHAI and DISTRIBUTOR recognize the importance of product safety considerations and the need to protect persons and property against unsafe conditions that could occur from the improper use, transportation, storage, handling, distribution or disposal of the Products sold hereunder. PPG SHANGHAI and DISTRIBUTOR will follow PPG's Responsible Care(R) Distributor Guidelines as set forth in the attached Appendix I (Responsible Care(R) is a registered trademark in the United States of the American Chemistry Council ). Accordingly, PPG SHANGHAI will furnish certain information to DISTRIBUTOR regarding product safety and handling aspects of the Products, and DISTRIBUTOR, in addition to its independent responsibility to obtain and implement a product safety program regarding the Products, will implement and conform to PPG SHANGHAI's product safety recommendations and Responsible Care(R) Distributor Guidelines, DISTRIBUTOR will also provide its customers, employees and other third parties foreseeably exposed to the Products with appropriate warnings, advice and other material regarding the Products, including all product safety and handling material provided by PPG SHANGHAI, and will ensure that the Products are used, stored, handled, distributed, transported and disposed of in a manner consistent with all of the above recommendations.

15.      PRODUCT DISCONTINUANCE

DISTRIBUTOR acknowledges that it has express notice that PPG or PPG SHANGHAI may at any time discontinue the production and/or sale of any of the Products. If PPG or PPG SHANGHAI does discontinue the production and/or sale of any of the Products, this Agreement shall automatically terminate with respect to such discontinued Product, and DISTRIBUTOR shall not be entitled to claim or receive





from PPG or PPG SHANGHAI any compensation, reimbursement or damages of any nature as a result (direct or indirect) of PPG or PPG SHANGHAI's discontinuance of the production and/or sale of the affected Product.

16.      LIMITATION OF DAMAGES

Notwithstanding the provisions of any law, rule, or regulation to the contrary, on the termination of this Agreement for any cause whatsoever, DISTRIBUTOR shall not be entitled to claim or receive from PPG SHANGHAI any compensation, reimbursement, or damages on account of any expenditure or commitment of any kind in connection with its business or on account of goodwill or on account of loss of prospective profits or otherwise. In no event shall PPG SHANGHAI be liable for consequential damages.

17.      BUSINESS CONDUCT

17.1     In the performance of its responsibilities pursuant to this Agreement,          DISTRIBUTOR agrees to make every effort to operate as a good,          responsible and ethical corporate entity in the Territory and will          comply with the laws of the Territory, the applicable laws of the          United States of America and the countries of origin of the Products.          DISTRIBUTOR further agrees that it will not, in connection with this          Agreement or its performance hereunder, directly or indirectly offer,          pay, promise to pay or authorize the payment of any money or thing of          value to any employee of a customer or to any government official or to          any person,

         (a)      to improperly or unlawfully influence any act or decision of                   such customer employee or governmental official, including a                   decision to fail to perform his/her official functions, or

         (b)      to induce such customer employee or government official to use                   his/her influence with the customer or the government (or                   instrumentality thereof), respectively, to affect or influence                   any act or decision of such customer or government (or                   instrumentality), in order to assist PPG SHANGHAI or                   DISTRIBUTOR in obtaining or retaining business or directing                   business to any other party. As used in this Section, the term                   government official means any officer or employee of any                   government or any department, agency, instrumentality or                   wholly-owned corporation thereof, or any person acting in an                   official capacity for or on behalf of any such government or                   department, agency, instrumentality or wholly-owned                   corporation thereof, or any candidate for political office.

17.2     DISTRIBUTOR agrees to notify PPG SHANGHAI immediately of any          solicitation, demand or other request for anything of value, by or on          behalf of any employee of a customer, government official or employee          of any government which is directed to itself or to PPG SHANGHAI          related to the sale and/or service of the Products.

17.3     DISTRIBUTOR agrees to require any sub-distributor or other person which          it hires or engages to assist in the performance of this Agreement to          comply with the provisions of this Section 17.

18.      TERM OF AGREEMENT

18.1     The term of this Agreement (the Term) shall commence on the date          first above written and shall terminate on 31 December 2006, unless          sooner terminated in accordance with the provisions hereof.

18.2     The parties hereof intend to form a long-term relationship. To this          end, if both parties wish to renew this Agreement, the parties shall          agree on such intention in writing at least thirty(30) days before the          expiry of the current Term of the Agreement. The parties shall agree on          the terms and conditions of the renewal, and enter into a new agreement          within sixty(60) days from the expiry of this Agreement. During this          sixty(60) days period, both parties shall continue to perform their          respective obligation under the same terms and conditions of this          Agreement.

18.3     In the event that there is no written notice issued by either party to          show the intention to renew this Agreement in the said thirty(30) days          before the expiry of the current Term of the Agreement, the Agreement          shall terminate at the end of the said thirty(30) days. In the event          that such a notice of intention to renew is issued, but the parties are          not able to enter into a new agreement within that sixty(60) days from          the expiry of this Agreement, this Agreement shall terminate at the end          of the said sixty(60) days.

19.      DEFAULT AND TERMINATION

19.1     If either party be in default with respect to any of the terms or          conditions of this Agreement, including, without limitation,          DISTRIBUTOR's failure to pay any invoice of PPG SHANGHAI in accordance          with its terms, and if it fails to correct such default or failure          within ten (10) business days following written notice thereof from the          other, the party serving such notice may, without prejudice to any          other right or remedy, defer further performance hereunder until such          default be remedied or terminate this Agreement by written notice to          the other, and the same shall terminate immediately upon the giving of          such notice.





19.2     PPG SHANGHAI shall have the right to terminate this Agreement and/or          suspend its performance hereunder immediately upon giving notice to          DISTRIBUTOR, which termination shall be effective upon receipt of          notice, if any one of the following occurs: (i) DISTRIBUTOR engages in          fraudulent conduct in its dealings with PPG SHANGHAI or the Products;          (ii) DISTRIBUTOR, or any principal owner of DISTRIBUTOR, is convicted          of a crime which, in PPG SHANGHAI's reasonable judgment, may adversely          affect the goodwill or interest of DISTRIBUTOR or of PPG SHANGHAI;          (iii) DISTRIBUTOR becomes insolvent, assigns or attempts to assign its          business assets for the benefit of creditors, institutes or has          instituted against it proceedings in bankruptcy, or dissolves or          liquidates the business of DISTRIBUTOR; or (iv) the business licence of          DISTRIBUTOR is cancelled by the State Administration of Industry and          Commerce.

20.      DISPUTE RESOLUTION

20.1     All disputes, controversies and claims arising from or incidental to          this Agreement shall be resolved by both parties through friendly          consultation. If no resolution can be reached within thirty (30) days          following the date on which one party informed the other party his          intention to refer the disputes, controversies and claims for          arbitration, such disputes, controversies and claims shall be referred          to the China International Economic and Trade Arbitration Committee          (Arbitration Committee) for a final and binding arbitration in          pursuance to the arbitration rules which is effective on the date          hereof.

20.2     The venue of arbitration shall be in Shanghai or Beijing, China (to be          decided by PPG SHANGHAI).

20.3     The arbitration shall be conducted in English and Chinese.

20.4     There shall be three arbitrators. Each of PPG SHANGHAI and DISTRIBUTOR          shall select one; the chief arbitrator shall be selected by the first          two arbitrators, provided that where the first two arbitrators are not          able to agree on the appointment of the chief arbitrator within ten          (10) days of the later of their appointments, the chief arbitrator          shall be selected by the chairman of the Arbitration Committee.

20.5     The chief arbitrator shall not be a PRC national or a national of the          United States.

20.6     The arbitration award shall be final and binding on both parties. Each          party agree to be bound by the arbitration award. The arbitration fees          and enforcement costs (including witness fees and reasonable legal          fees) shall be borne by the losing party unless provided otherwise in          the arbitration award.

20.7     During the occurrence of the dispute and the arbitration, other than          the issues in dispute, each party shall continuously exercise its          undisturbed rights and discharge its undisturbed obligations under this          agreement.

21.      GOVERNING LAW

The validity, construction, and performance of this Agreement shall be governed by and interpreted in accordance with the laws of the People's Republic of China.

22.      LANGUAGE AND COUNTERPART

         This Agreement shall be executed in two (2) counterparts of the Chinese          language text.

23.      ENTIRE AGREEMENT

This writing, including all documents attached to and/or referenced herein, constitutes the entire agreement between PPG SHANGHAI and DISTRIBUTOR regarding the subject matter hereof, terminating and superseding any prior agreements relating to the subject matter hereof, and there are no understandings, representations, or warranties of any kind except as expressly set forth herein. No modification, amendment or change in this Agreement or addition hereto shall be effective or binding on either of the parties hereto unless set forth in a writing which specifically references this Agreement and is executed by the respective duly authorized representatives of PPG SHANGHAI and DISTRIBUTOR and, if required, upon approval by competent governmental authorities, and no modifications shall be effected by any DISTRIBUTOR purchase order forms or other documents containing terms or conditions at variance with or in addition to those in this Agreement.

IN WITNESS WHEREOF, PPG SHANGHAI and DISTRIBUTOR have executed this Distributor Agreement effective the day, month, and year first above written.

Witness:                                 PPG Paints Trading (Shanghai) Co., Ltd.





/s/ Ju dian                              By: /s/ Yuen Kit Yeg, Pauline ----------------------------                 ------------------------------                                          Name: Yuen Kit Yeg, Pauline                                                ----------------------------                                          Title: General Manager                                                 ---------------------------

Witness:                                 [DISTRIBUTOR]

/s/ Paul Grzebielucha                    By /s/ Charles T. Jensen ----------------------------                -------------------------------                                          Name: Charles T. Jensen                                                ----------------------------                                          Title: CEO                                                 --------------------------- 
Question: Highlight the parts (if any) of this contract related to Covenant Not To Sue that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?

SOLUTION: DISTRIBUTOR acknowledges PPG SHANGHAI's exclusive right and interests          in relation to the PPG Trademarks and further acknowledges that all          copyrights, patent, utility model rights and all other industrial          property rights of whatever kind used in or in connection with the          Products are the sole and exclusive property of PPG SHANGHAI or PPG and          that DISTRIBUTOR will not, whether during the Term of this appointment          or after its expiry or termination, knowingly do or cause to be done          any act or thing directly or indirectly, contest or in any way impair          or attempting to impair PPG SHANGHAI or PPG's rights, titles or          interests in the PPG Trademarks.

PROBLEM: Exhibit 10.B.01 EXECUTION COPY

VIDEO-ON-DEMAND CONTENT LICENSE AGREEMENT between Rogers Cable Communications Inc. (Rogers) and EuroMedia Holdings Corp. (Licensor) offering EurocinemaSM Video-on-Demand service made as of July 11 , 2006 (the Effective Date) (the Agreement)

  1. RIGHTS GRANTED   Licensor grants to Rogers the non-exclusive license and right to distribute and exhibit in Canada (the Territory) all entertainment programming to which Licensor owns or controls the VOD distribution and exhibition rights in the Territory (collectively, Licensed Programs) to residential subscribers of Rogers' digital cable television service on a Video-on-Demand (VOD) basis. For clarity, the VOD service that Rogers provides to such subscribers shall hereinafter be referred to as the ROD Service.     2. LICENSED PROGRAMS.     (a) Subject to Section 3, Licensor shall forthwith provide to Rogers a comprehensive list (including title, length of program, license period and availability date) of all currently available Licensed Programs. During the Term, Licensor shall use best efforts to add newly available Licensed Programs to such list, and may periodically delete Licensed Programs from such list; provided, however, that: (i) Licensor shall provide to Rogers at least ninety (90) days prior notice of the availability date of any Licensed Program added to such list during the Term; (ii) Licensor shall provide to Rogers at least sixty (60) days prior notice of the deletion of any Licensed Program from such list; and (iii) Licensor shall be responsible for any and all reasonable costs and/or losses incurred by Rogers as a result of any deletions from such list during the Term.     (b) Rogers reserves the right, in its sole discretion, to determine which Licensed Programs to distribute and exhibit on the ROD Service and, without limiting the generality of the foregoing, may decline to distribute or exhibit any Licensed Program that it determines, in its sole discretion, is unsuitable for distribution or exhibition on the ROD Service.     (c) Licensor shall use commercial reasonable efforts to provide Rogers with Licensed Programs with closed captioning.     3. AVAILABILITY DATE.     (a) Subject to Section 3(b), the availability date for any Licensed Program that is a feature-length motion picture or direct-to-video product shall be no later than ninety (90) days following the date on which such Licensed Program is made available for home video distribution within the U.S or the Territory.

Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007





      (b) In the event that Licensor grants to another VOD or Pay-Per-View (PPV) service provider in the U.S. or the Territory the right to distribute or exhibit any Licensed Program on an earlier availability date, then Licensor shall also grant to Rogers the right to distribute and exhibit such Licensed Program on such earlier availability date, on the terms provided herein.     (c) Licensor shall not authorize the distribution or exhibition of any Licensed Program by any other means, including, without limitation, television (other than PPV) and internet, for a period of ninety (90) consecutive days following such Licensed Program's VOD availability date.     4. LICENSE PERIOD.   During the Term, Rogers shall have the non-exclusive right to distribute and exhibit each Licensed Program on a VOD basis for a period of ninety (90) consecutive days, or such longer period as may be agreed to by Rogers and Licensor (the License Period).     5. VIEWING PERIOD.   The viewing period for each Licensed Program shall be at least twenty-four (24) consecutive hours, or such longer period as may be agreed to by Rogers and Licensor from time to time (the Viewing Period). Multiple viewings of the Licensed Program shall be permitted during the Viewing Period for no additional fee and all such viewings shall be considered a single exhibition of the Licensed Program for the purposes of calculating License Fees hereunder.     6. LICENSE FEES.     (a) Rogers shall pay to Licensor a fee (the License Fee), which shall be equal to fifty (50)% of Retail Revenues.   For the purposes of this Agreement, Retail Revenues means the retail revenues actually received by Rogers for each authorized exhibition of a Licensed Program on the ROD Service, less GST and applicable sales tax. For greater certainty, Retail Revenues shall not include any fees payable to Rogers for: (i) the purchase, rental or installation of a digital terminal; (ii) any basic or premium television services; or (iii) digital cable access.     (b) Notwithstanding Section 6(a) above,      (i) Prior to calculating License Fees, Rogers shall be entitled to deduct from Retail Revenues on a rolling monthly basis during the Term (Rogers Costs):     (A) the value of programming credits, rebates or other retail price discounts provided to ROD Service subscribers in conjunction with a public marketing or promotional initiative;   -2-

Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007





      (B) the value of refunds provided by Rogers to ROD Service subscribers for technical or other errors during such month;     (C) the percentage equal to Rogers' average year-to-end bad debt exposure (including credit collection costs) for the then current calendar year in respect of all Rogers' cable television subscribers (expressed as a percentage)     (D) encoding costs incurred by Rogers, if applicable, pursuant to Section 8 (a) ; and     (E) closed captioning costs incurred by Rogers to comply with Applicable Law.     (ii) Rogers shall be entitled to deduct from License Fees on a rolling monthly basis during the Term:     (A) the marketing allowance pursuant to Section 12;     (B) the Production Fund Commitment pursuant to Section 13; and     (C) copyright royalty payments pursuant to Section 17.     (c) Payment of License Fees shall be made in Canadian funds in arrears within thirty (30) days following each calendar month during the Term in which Licensed Programs were exhibited hereunder and shall be accompanied by a statement of account showing the calculation of the License Fees.     (d) In the event that Retail Revenues in a particular month are not sufficient to fully reimburse Rogers for the Rogers Costs incurred in such month, Rogers shall be entitled to recover such amounts against Retail Revenues generated by other Licensed Programs in subsequent months.     (e) There shall be no minimum License Fee or retail viewing fee with respect to any Licensed Program. Additionally, Rogers shall not be required to pay any License Fees for VOD exhibitions of any Licensed Program occurring on or off premises that are made for the purposes of quality assurance or testing.     (f) Rogers shall be entitled to withhold from License Fees applicable withholding taxes and to remit same to the responsible taxing authorities, as required by Applicable Law.     7. TERM.     The term of this Agreement (the Initial Term) shall commence as of the Effective Date and, unless earlier terminated in accordance with this Agreement, shall terminate on June 30, 2010. At Rogers' option, this Agreement shall renew for a subsequent term of two (2) years on the terms and conditions herein (the Renewal Term). Notwithstanding the foregoing, if, at the expiry of this Agreement following the Initial Term or the Renewal Term (if any), as applicable, Licensor and Rogers have not executed a new agreement governing the VOD distribution and exhibition of Licensed Programs and Rogers (or its permitted assigns) continues to distribute and exhibit Licensed Programs on the ROD Service following such expiry, such continued distribution and exhibition shall be governed by the terms of this Agreement in effect at the time of expiry, except that each of Licensor and Rogers shall have the right, on sixty (60) days' prior written notice, to terminate this Agreement, as so extended. For greater certainty, all references to Term in this Agreement shall include the Initial Term, the Renewal Term (if any) and any period during which this Agreement continues following its expiry in accordance with this Section.   -3-

Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007





      8. ENCODING AND DELIVERY OF LICENSED PROGRAMS.     (a) Licensor shall, at its sole expense, encode each Licensed Program selected for distribution and exhibition by Rogers hereunder and shall deliver such fully encoded Licensed Program to Rogers on a DLT master tape, DVD-R disc or other master pre-recorded format acceptable to Rogers (each, a Master) at least thirty (30) days prior to the availability date for such Licensed Program. Such Masters shall at all times remain the sole property of Licensor and, within fifteen (15) days following the termination or expiration of this Agreement, Rogers shall either return to Licensor all such Masters then in its possession, or issue a certificate of erasure.     (b) To the extent any Master delivered by Licensor hereunder is determined by Rogers, in its sole discretion, acting reasonably, to be defective: (i) Licensor shall forthwith provide Rogers with a replacement Master; and (ii) if Rogers is unable to distribute and/or exhibit the Licensed Program on the availability date as a result of the defectiveness of any such Master, the License Fee payable in respect of such Licensed Program shall be reduced by 10% for the balance of the License Period.     9. TECHNICAL STANDARDS.   In carrying out its obligations hereunder, Licensor agrees to comply with Rogers' technical standards for materials, as specified by Rogers from time to time. Licensor hereby acknowledges receipt of a copy of or website link to CableLabs technical specifications.     10. MARKETING AND PROMOTION.     (a) Licensor shall provide, at its sole expense and on a timely basis, promotional materials and trailers for each Licensed Program selected for distribution and exhibition by Rogers hereunder, for use by Rogers to advertise and promote the availability of such Licensed Program on the ROD Service. Such promotional materials shall include, but not be limited to: (i) a promotional poster image or related film content in an electronic format; (ii) relevant metadata; (iii) trailer of Licensed Program in an encoded format; and (iv) title and related data.   -4-

Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007





      (b) Licensor shall make available to Rogers, on a free trial basis and at no cost to Rogers, not less than ten (10) Licensed Programs at all times during the Term (each, a Promotional Program) for distribution and exhibition on the ROD Service to promote the Licensed Programs and the ROD Service. Licensor shall refresh the Promotional Programs at a frequency rate to be mutually agreed upon in writing by Rogers and Licensor.     (c) Licensor acknowledges and agrees that Rogers shall be entitled to insert a minimum of four (4) minutes of promotional materials per thirty (30) minutes of Promotional Programs. Rogers shall ensure that at least 75% of such promotional materials directly or indirectly promotes the Licensed Programs.     (d) Licensor shall use commercially reasonable efforts to promote the ROD Service through Licensor's consumer-facing advertising and promotional mediums within the Territory. Such mediums shall include, but not be limited to: (i) television; (ii) radio; (iii) print; (iv) Internet; and (v) event-based marketing. Licensor will deliver accurate, representative samples of all such advertising and promotions to Rogers at least five (5) business days in advance for Rogers' prior review and approval.     11. GUI/EPG.   Licensor, at its sole expense and on a timely basis, shall provide complete, accurate and informative listing and descriptive information in respect of each Licensed Program selected for distribution and exhibition by Rogers hereunder (including, without limitation, synopsis, theme, rating, closed captioning and such other information as may be appropriate or otherwise required by Rogers) to Rogers' graphic user interface (GUI) or electronic programming guide provider (EPG), as the case may be, as designated by Rogers from time to time.     12. MARKETING ALLOWANCE.   In consideration for various services and activities that Rogers performs for the benefit of Licensor during the Term, Licensor agrees to pay to Rogers an amount which shall be equal to ten (10)% of License Fees, calculated on a rolling basis during the Term and payable monthly.     13. PRODUCTION FUND.   For so long as Rogers is required by Applicable Law to contribute a percentage of its gross annual revenues from the ROD Service to an independently-administered Canadian program production fund, Licensor shall reimburse Rogers for 50% of the amount required to be remitted to such production fund by Rogers in respect of the exhibition of Licensed Programs (the Production Fund Commitment). The Production Fund Commitment shall be calculated monthly during the Term and shall be deducted as set out in Section 6 (b).   -5-

Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007





      14. REPRESENTATIONS AND WARRANTIES.     (a) Each of Rogers and Licensor represents and warrants to the other that it has the necessary power and authority to enter into this Agreement and to fully perform its obligations hereunder.     (b) Licensor represents, warrants and covenants to Rogers that:     (i) it is validly incorporated under the laws of The State of Florida, USA     (ii) it has obtained, and shall maintain throughout the Term, all necessary rights, clearances and authorizations to enter into this Agreement and fully perform its obligations hereunder in compliance with Applicable Law and, in particular, to permit Rogers to distribute and exhibit the Licensed Programs on a VOD basis in the Territory;     (iii) it has obtained, and shall maintain throughout the Term, all approvals and/or ratings from provincial authorities necessary to distribute and exhibit each Licensed Program, trailer and other promotional materials provided to Rogers hereunder;     (iv) it unilaterally owns or controls the VOD distribution and exhibition rights to all Licensed Programs within the Territory; and     (v) it has obtained, and shall maintain throughout the Term, all necessary rights to any equipment and/or technology used to provide the encoding services hereunder and its use of such services shall not violate the rights of any third party.     15. INDEMNIFICATION.     (a) Licensor shall indemnify Rogers and its affiliates from and against any and all claims, damages, liabilities, costs and expenses (including, without limitation, reasonable legal fees) arising out of or caused by:     (i) any breach by Licensor of any material term of this Agreement;     (ii) the content of any Licensed Program, trailer and/or other promotional materials provided by Licensor to Rogers hereunder (including, without limitation, any libelous, slanderous or obscene material, violations of copyright, trade- mark rights or other intellectual property rights, personality right, right of privacy or literary or dramatic right); and     (iii) any encoding or other services provided by Licensor hereunder.   -6-

Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007





      (b) Rogers shall indemnify Licensor and its affiliates from and against any and all claims, damages, liabilities, costs and expenses (including, without limitation, reasonable legal fees) arising out of or caused by:     (i) any breach by Rogers of any material term of this Agreement; and     (ii) any claim by a Rogers customer, except a claim related to the content of any Licensed Program, trailer and/or other promotional materials provided by Licensor to Rogers hereunder.     (c) This Section shall survive the termination or expiration of this Agreement.     16. LIMITATION OF LIABILITY.   Except with respect to any claim or liability arising from an infringement of any third party intellectual property right, in no event shall either party be liable for any special, indirect, consequential, punitive or incidental damages of any kind. This Section shall survive the termination or expiration of this Agreement.     17. COPYRIGHT ROYALTY PAYMENTS.   For so long as Rogers is required by Applicable Law to pay copyright royalties relating to Licensed Programs hereunder, Licensor shall reimburse Rogers for 50% of any such royalties actually paid by Rogers, calculated on a rolling basis during the Term and payable monthly. This Section shall survive the termination or expiration of this Agreement.     18. ROGERS' TERMINATION RIGHTS.   Notwithstanding any other provision of this Agreement, Rogers may terminate this Agreement, at any time, upon sixty (60) days' prior written notice to Licensor.     19. MUTUAL TERMINATION RIGHTS.   Either Rogers or Licensor may, at its option and without prejudice to any other remedies available to it, immediately terminate this Agreement by giving written notice thereof to the other party for any one or more of the following causes:     (a) the other party defaults in the performance or observance of any of the material terms of this Agreement and such default continues for a period of thirty (30) days after written notice thereof;     (b) if, at any time, an order is made or an effective resolution is passed for the winding-up, liquidation or dissolution of the other party that is not immediately stayed by appeal;     (c) if, at any time, the other party consents to or makes a general assignment for the benefit of creditors, or makes a proposal under, or takes advantage of, any insolvency, restructuring or reorganization legislation, or is declared bankrupt, or if a liquidator, trustee in bankruptcy, custodian or receiver and manager or other officer with similar powers is appointed of the other party or of all or substantially all of the other party's property which is not immediately stayed by appeal; or   -7-

Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007





      (d) Rogers, or any person to whom Rogers has assigned, sold or transferred this Agreement, ceases to offer the ROD Service.     20. EFFECT OF TERMINATION.   If either party terminates this Agreement prior to its expiration, Rogers shall be entitled to continue to distribute and exhibit all Licensed Programs then being distributed and exhibited on the ROD Service, in each case, for a period of sixty (60) days from the effective date of termination or the expiry of the relevant License Period, whichever is earlier, and, in such event, Rogers shall continue to be bound by its payment obligations set forth herein in respect of such Licensed Programs. This Section shall survive the termination of this Agreement for a period of sixty (60) days.     21. MOST FAVOURED NATIONS.   If Licensor enters, or has entered, into an agreement or series of agreements (including side letters, understandings or arrangements, whether oral or written, whether formal or informal, whether now or hereafter effective, or whether on a long-term basis or short-term basis) with a third party for the distribution and exhibition of Licensed Programs in the U.S. or the Territory on a VOD basis, or any other basis that permits the downloading of such Licensed Programs and the subsequent viewing of such Licensed Programs by a residential subscriber, on terms (including, without limitation, license fees, copyright royalty payments, encoding fees and obligations, and marketing support) that are more favourable than those contained in this Agreement, then Rogers has the right to incorporate, or substitute, as the case may be, such term or terms into this Agreement, effective as of the date on which such term or terms were accorded to the third party and for the balance of the period such term or terms are applicable to such third party. Licensor shall provide to Rogers, no later than February 28 in each year, a sworn statement of a senior officer of Licensor, or a certificate of the auditors of Licensor, confirming that, during the immediately preceding calendar year, Licensor did not enter into such an agreement or series of agreements or, if it did enter into such agreement(s), confirming the effective date thereof and identifying the terms contained therein that are more favourable than those contained in this Agreement. During the Term, and for a period of twelve (12) months thereafter, Rogers (and its representatives) shall have the right, upon reasonable prior written notice to Licensor, and during regular business hours, to inspect and/or audit Licensor's books and records to confirm compliance with Licensor's obligations under this Section. This Section shall survive the expiry or other termination of this Agreement for a period of twelve (12) months.   -8-

Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007





      22. CONFIDENTIALITY AND OWNERSHIP.     (a) Rogers and Licensor each agree to maintain the provisions of this Agreement in the strictest confidence, except that the parties may disclose such terms to their affiliates, their respective professional advisors and, in such event, to the extent necessary to: (i) enforce their respective rights hereunder; (ii) comply with the valid order of an administrative agency or court of competent jurisdiction, or with any Applicable Law; and (iii) comply with contractual obligations owed to third parties; provided, however, that, in the case of any disclosure pursuant to items (ii) or (iii) above, (A) the disclosing party shall notify the other party as soon as practicable (and if possible prior to disclosure) and (B) any information so disclosed shall be redacted to the greatest extent possible.     (b) Each party agrees to use the other party's confidential information solely for the purpose of fulfilling its obligations under this Agreement, to hold the other party's confidential information in confidence and to protect the confidentiality of such confidential information using the same degree of care as it uses to protect its own confidential information of a like nature, which shall, in any event, be no less than a degree of care consistent with industry standards. Notwithstanding the foregoing, the receiving party may disclose confidential information to the extent required to comply with the valid order of an administrative agency or court of competent jurisdiction, or with any Applicable Law (provided that the receiving party shall notify the other party as soon as practicable (and if possible prior to disclosure) and any information so disclosed shall be redacted to the greatest extent possible).     (c) Rogers shall own all data and information relating to Rogers' subscribers, including, without limitation, all personal and demographic information, all information relating to an individual subscriber's use of the ROD Service and all aggregate information relating to the use by Rogers' subscribers of the ROD Service (collectively, Rogers Subscriber Information). Licensor acknowledges that Rogers Subscriber Information constitutes valuable assets of Rogers and agrees to hold all Rogers Subscriber Information strictly confidential in accordance with the provisions set forth in Section 22(b) above.     (d) This Section shall survive the termination or expiration of this Agreement.     23. GOVERNING LAW.   This Agreement shall be governed by laws of the Province of Ontario and the federal laws of Canada applicable therein. The parties hereby attorn to the non-exclusive jurisdiction of the courts of the Province of Ontario. This Section shall survive the termination or expiration of this Agreement.     24. ASSIGNMENT.   This Agreement may not be assigned, sold or transferred without the prior written consent of the other party. Notwithstanding the foregoing, Rogers may, without consent, assign its rights and obligations under this Agreement in whole or in part to: (i) a person that directly or indirectly controls, is controlled by or is under common control with Rogers; or (ii) a purchaser of all or substantially all of the assets used in connection with the ROD Service. A change of control of Rogers shall not be considered an assignment of this Agreement. Any purported assignment, sale, or transfer in contravention of this Section shall be null and void.   -9-

Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007





      25. FORCE MAJEURE.   Neither party shall be liable to the other for temporary failure to perform hereunder, if such failure is caused by reason of an Act of God, tempest, satellite circuit failure, labour dispute, strike, temporary or permanent breakdown of facilities, fire, flood, Applicable Law, civil disturbance, or any other cause beyond the parties' respective control. In the event of any force majeure which continues for a period of thirty (30) days or more, the party not immediately affected by such force majeure event may, upon notice to the other party, terminate this Agreement.     26. NOTICES.   Any notice, request, demand, consent or other communication (collectively a Notice) provided or permitted hereunder shall be in writing and given by personal delivery (against receipt), or sent by registered mail (against receipt) postage prepaid, or transmitted by facsimile (provided that a hard copy is immediately sent by registered mail), addressed to the other party for which it is intended at its address below:   To Rogers:   Rogers Cable Communications Inc. 333 Bloor Street East Toronto, Ontario M4W 1G9 Attention: Vice-President, General Manager, Television FAX: (416) 935-4600   with a copy to:   Rogers Communications Inc. 333 Bloor Street East Toronto, Ontario M4W 1G9 Attention: Vice-President, General Counsel FAX: (416) 935-3548   To Licensor:   Sebastien Perioche   Eurocinema   1395 Brickell Ave.,   Suite 800,   Miami, FL 33131, 305-529-6220   FAX: 305-529-6201

-10-

Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007





    Any Notice given pursuant to this Agreement shall make specific reference to this Agreement. Any Notice so given shall be deemed to have been received on the date on which it was delivered in person, or transmitted, if delivered or transmitted on a day, other than a Saturday, on which the Toronto-Dominion Bank in Toronto is open for business (a Business Day) during normal business hours of the recipient and, if not so delivered or transmitted, on the next Business Day or, if sent by registered mail, on the fifth (5t h) Business Day thereafter; provided, however, that either party may change its address and/or facsimile number for purposes of receipt of any such communication by giving ten (10) days prior written notice of such change to the other party in the manner prescribed above.     27. APPLICABLE LAW.   This Agreement is subject to all laws, regulations, license conditions and decisions of the Canadian Radio-television and Telecommunications Commission (CRTC) municipal, provincial and federal governments or other authorities which are applicable to Rogers and/or Licensor, and which are now in force or hereafter adopted (Applicable Law). In the event that any such law, regulation or decision comes into force during the Term concerning the subject matter of this Agreement, such that it prevents or diminishes either party's ability to perform under this Agreement, the parties agree to enter into good faith negotiations to amend this Agreement, where required, in order to remedy such diminution of or inability to perform.     28. SET-OFF.   Rogers shall be entitled to set off any sums owing to Licensor against any sums owing by Licensor to Rogers hereunder.     29. LEGAL EFFECT.     (a) Nothing herein contained shall be deemed to create and the parties do not intend to create any relationships of partner, agent or joint venture as between Rogers and Licensor.     (b) Subject to Section 29(d) below, this Agreement constitutes a binding agreement with respect to the matters set out herein and supersedes all prior agreements, negotiations, representations and proposals, whether written or oral. There are no conditions, covenants, representations or warranties, express or implied, statutory or otherwise relating to the subject matter hereof except as herein expressly provided.   -11-

Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007





      (c) No amendment, waiver or modification of any provision of this Agreement shall be binding on a party unless consented to in writing by such party. No waiver of any provision of this Agreement shall constitute a waiver of any other provision, nor shall any waiver constitute a continuing waiver unless otherwise expressly provided in writing.     (d) This Agreement shall not become a valid and binding contract unless and until each party has duly executed two (2) copies of this Agreement and one fully executed copy of the Agreement has been delivered to, or received by, each party. For greater certainty, there shall be no agreement between the parties with respect to the subject matter of this Agreement, whether written or oral, express, implied or otherwise, until the parties have complied with the execution and delivery requirements set forth in this Section 29(d), notwithstanding any performance between the parties concerning the subject matter of this document.   To indicate your agreement to the foregoing, please sign and date the Agreement and return it by fax, with an original by courier, to Rogers Cable Communications Inc., 333 Bloor Street East, Toronto, Ontario, M4W 1G9, Attention: Vice-President, Strategy & Development.         ROGERS CABLE COMMUNICATIONS INC.

      Per:

Name: Edward Rogers Title: President and CEO

Per:

Name: David Purdy Title: Vice-President, General Manager, Television     ACCEPTED and AGREED TO this ______ day of ____________, 2006.           Per:

Name: Sebastien Perioche Title: Chairman/CEO



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Source: EUROMEDIA HOLDINGS CORP, 10SB12G, 2/15/2007 
Question: Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.

SOLUTION:
Except with respect to any claim or liability arising from an infringement of any third party intellectual property right, in no event shall either party be liable for any special, indirect, consequential, punitive or incidental damages of any kind