Document:

EXHIBIT 10.37

 

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CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS
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First Amendment to Collaboration
and License Agreement

This First Amendment to Collaboration and License
Agreement (the “Amendment”) is
entered into on April 1, 2007 (the
“Amendment Effective Date”) between AFFYMAX, INC., a
Delaware corporation, with its principal place of business at 4001 Miranda
Avenue, Palo Alto, CA  94304, U.S.A. (“Affymax”), and TAKEDA PHARMACEUTICAL COMPANY LIMITED, a company incorporated under the laws
of Japan, with its principal place
of business at 1-1, Doshomachi 4-chome, Chuo-ku, Osaka, 540-8645, Japan (“Takeda”).

RECITALS

WHEREAS, Affymax
and Takeda have entered into a certain Collaboration and License Agreement dated as of February 13, 2006, under which Affymax has granted Takeda a
certain right and license for the development and commercialization in Japan of Affymax’s proprietary pegylated [ * ] drug
candidate designated by Affymax as HematideTM (the “Japan Agreement”);

WHEREAS, Affymax
and Takeda have also entered into another Collaboration and License
Agreement dated as of June 27, 2006, under which Affymax has granted Takeda a
certain right and license for the development and commercialization of
the same drug candidate worldwide outside Japan (the “Global Agreement”);

WHEREAS, Affymax and Takeda have been discussing,
pursuant to Section 6.8 of the Global Agreement, the amendment of the Japan
Agreement to reflect the fact that
Takeda is now the exclusive collaborator of the drug candidate not only in Japan but also
all over the world;

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

1.             Amendments to Section 1.  The Parties hereby agree to amend each of the
following Sections of the Japan Agreement by replacing each such Section, in
its entirety, with the phrase “{SECTION INTENTIONALLY LEFT BLANK}”: Sections
1.70, 1.77, and 1.79.

2.             Addition
of Section 1.84.  The
Parties hereby agree to append, at the end of Section 1, new Section 1.84 as
follows:

1.84        “Global Agreement” means that certain Collaboration
and License Agreement between the Parties, dated as of June 27, 2006, pursuant to which Affymax has granted
Collaborator certain rights and licenses with respect to the development and
commercialization of Hematide and the Product worldwide outside Japan.

3.             Amendment
to Section 2.4(c)(iii). 
The Parties hereby agree to amend and restate Section 2.4(c)(iii) of the
Japan Agreement by replacing such Section, in its entirety, with the following:

(iii)  altering the [ * ] or otherwise proposing to conduct or conducting any
Development activities in a manner that would reasonably be expected to [ * ] development or commercialization efforts for Products [ * ] other than for
purposes of [ * ] or pursuant to a requirement
imposed by the Regulatory Authorities in the Licensed Territory or the external
monitoring board for such trial.

4.             Amendment
to Section 3.3(d).  The
Parties hereby agree to amend and restate Section 3.3(d) of the Japan Agreement
by replacing such Section, in its entirety, with the following:

(d)           using Diligent Efforts not to unreasonably adversely impact the
Development or Commercialization efforts for Products pursuant to the Global
Agreement, including without limitation, and where reasonably practicable, using and filing in the Licensed Territory
regulatory filings that are equivalent to all MAAs and related filings for
Products that are provided by Affymax and/or
Collaborator pursuant to the
Global Agreement, to ensure that all Collaborator’s filings and
specifications for Products in the Licensed Territory remain consistent, as far as reasonable, with those for
the relevant Products outside the Licensed Territory.

5.             Amendment to Section 3.6.  The Parties hereby agree to amend the first
sentence of Section 3.6 of the Japan Agreement by replacing such sentence, in
its entirety, with the following: “If, during
the ten (10) year period following the Effective Date, Affymax develops
a potential Backup Product(s) in
the Field, Collaborator shall have a right of first refusal to develop and commercialize such Backup Product(s) for the Licensed Territory as provided in this Section 3.6.”

6.             Amendment to Section 3.6.  The Parties hereby agree to amend the final
sentence of Section 3.6 of the Japan Agreement by replacing such sentence, in
its entirety, with the following: “For clarity, if and as far as a Backup Product is developed outside the Field by Affymax, then Collaborator shall have no rights under this Section 3.6 with
respect to such Backup Product.”

7.             Amendment to Section 4.1(a)(i).  The Parties hereby agree to amend the final sentence of Section 4.1(a)(i) of the Japan Agreement by
replacing such sentence, in its entirety, with the following: “Collaborator shall have the full
right, without any additional consideration, to use any and all such data and
reports supplied by Affymax under this Section 4.1(a)(i) in connection with the
Development and/or Commercialization of
the Product in the Licensed Territory, including the incorporation of such data
or reports in any MAA.”

[ * ] = CERTAIN
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FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

8.             Amendment
to Section 4.1(a)(ii). 
The Parties hereby agree to amend and restate Section 4.1(a)(ii) of the
Japan Agreement by replacing such Section, in its entirety, with the following:

(ii)           Within thirty (30) days after the Effective Date, Affymax shall provide
Collaborator with copies of all clinical data resulting from [ * ] completed or ongoing (where available) as of the
Effective Date and Controlled by Affymax. 
Thereafter, Affymax shall, in a timely manner and compliant with
requirements of the Regulatory Authority in the Licensed Territory, provide
Collaborator with copies of all preclinical, non-clinical, analytical,
manufacturing, and clinical data relating to the Product and generated by
Affymax or on behalf of Affymax by any Third Party, provided that information
regarding adverse events and serious adverse events shall be provided promptly
as set forth in Section 4.8.
Collaborator shall have the full right, without any additional consideration,
to use any and all such data supplied by Affymax pursuant to this Section
4.1(a)(ii) and any data generated by
Collaborator under the Global Agreement in connection with the
Development and/or Commercialization of
the Product pursuant to this Agreement and the Global Agreement, including the
incorporation of such data or reports in any MAA or other regulatory filings.

9.             Amendment
to Section 4.1(a)(iii). 
The Parties hereby agree to amend and restate Section 4.1(a)(iii) of the
Japan Agreement by replacing such Section, in its entirety, with the following:

(iii)         The terms of the Global Agreement, including
Section 4.1 of such agreement, will govern with respect to the Parties’ rights outside
of the Licensed Territory to access and use any clinical data generated by the
Parties pursuant to the Global Agreement. In addition, Collaborator
shall have the full right, without any additional consideration, to use any and
all such data generated by
Collaborator under this Agreement in
connection with the Development and/or
Commercialization of the Product pursuant to the Global Agreement,
including the incorporation of such data or reports in any MAA or other
regulatory filing.

10.          Deletion of Certain Sections.  The Parties hereby agree to delete the
following Sections of the Japan Agreement in their entirety: Sections
4.1(a)(iv), 4.1(a)(v), and 4.1(a)(vi).

11.          Amendment to Section 4.1(b).  The Parties hereby agree to amend Section
4.1(b) of the Japan Agreement by replacing such Section, in its entirety, with
the phrase “{SECTION INTENTIONALLY LEFT BLANK}”.

12.          Amendment
to Section 4.1(c).  The
Parties hereby agree to amend and restate Section 4.1(c) of the Japan Agreement
by replacing such Section, in its entirety, with the following:

(c)           Data Generated by or on Behalf of Collaborator.  Collaborator shall, in a timely manner and
compliant with requirements of the FDA and the EMEA, provide Affymax with
copies of all preclinical, non-clinical, analytical,

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manufacturing, and
clinical data relating to the Product and generated by Collaborator or on
behalf of Collaborator by any Third Party under this Agreement, provided that information regarding adverse events
and serious adverse events shall be provided promptly as set forth in Section
4.8.  If Affymax requests that copies of such data
be provided in compliance with requirements of other Regulatory Authorities pursuant to the Global Agreement,
Collaborator shall reasonably consider such request.  Affymax shall have the full right, without
any additional consideration, to use any and all such data supplied by
Collaborator pursuant to this Section 4.1(c) in connection with the Development
of the Product pursuant to this Agreement and the Global Agreement and/or in connection with the
Commercialization of the Product in U.S. pursuant to the Global Agreement,
including the incorporation of such data or reports in any MAA or other
regulatory filings.

13.          Amendment to Section 4.1(d).  The Parties hereby agree to amend and restate
Section 4.1(d) of the Japan Agreement by replacing such Section, in its
entirety, with the phrase “{SECTION INTENTIONALLY LEFT BLANK}”.

14.          Amendment
to Section 4.2(b).  The
Parties hereby agree to amend and restate Section 4.2(b) of the Japan Agreement
by replacing such Section, in its entirety, with the following:

(b)           Rights of Reference to Regulatory Materials.   Each Party hereby grants
to the other Party a right of reference to all Regulatory Materials filed by such Party pursuant to this Agreement and/or the Global Agreement for Product
as follows:  The right of reference
granted to Affymax herein shall be solely for the purpose of Affymax or its
Affiliates obtaining Regulatory Approval in U.S. for the Product pursuant to the Global Agreement.  The right of reference granted to
Collaborator herein shall be solely for the purpose of obtaining Regulatory
Approval for the Products in and outside the
Licensed Territory pursuant to this Agreement
and/or the Global Agreement. For
the avoidance of doubt, Collaborator shall have a right of reference, for the
purpose of obtaining the Regulatory Approval for the Products in the Licensed
Territory pursuant hereto, to all Regulatory Materials filed by Collaborator
pursuant to the Global Agreement, and vice versa.

15.          Amendment
to Section 4.2(c)(iv). 
The Parties hereby agree to amend and restate Section 4.2(c)(iv) of the
Japan Agreement by replacing such Section, in its entirety, with the following:

(iv)           The terms of the Global Agreement, including
Section 4.2(a) of such agreement, will govern the right to file Regulatory
Materials or Regulatory Approvals regarding the Product outside the Licensed
Territory.

16.          Amendment to Section 4.5.  The Parties hereby agree to amend and restate
the final sentence of Section 4.5 of the Japan Agreement by replacing such
sentence, in its entirety, with the following: “The terms of the Global Agreement, including Section 4.6 of such agreement,

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CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

will govern the right and
procedures for the communication regarding the Product with any Regulatory
Authorities outside the Licensed Territory.”

17.          Amendment to Section 4.6.  The Parties hereby agree to amend and restate
the final sentence of Section 4.6 of the Japan Agreement by replacing such
sentence, in its entirety, with the following: “The terms of the Global Agreement, including Section 4.2 of such agreement,
will govern the filing of any Regulatory Materials for Peptide, [ * ], Hematide and/or Product outside of the Licensed
Territory.”

18.          Amendment to Section 4.8.  The Parties hereby agree to amend and restate
the first sentence of Section 4.8 of the Japan Agreement by replacing such
sentence, in its entirety, with the following: “The Parties agree that
Collaborator shall be primarily responsible for the monitoring of all clinical
experiences and filing of all required reports throughout clinical Development
and Commercialization of the Product in the Licensed Territory, and that the primary
responsibility for the monitoring of all clinical experiences and filing of all
required reports concerning the Product in the Affymax Territory will be as set
forth in the Global Agreement.”

19.          Amendment
to Sections 4.8(c) and (d). 
The Parties hereby agree to amend and restate Sections 4.8(c) and (d) of
the Japan Agreement by replacing such Sections, in their entirety, with the
following:

(c)           provides that Collaborator shall have
regulatory reporting responsibilities in the Licensed Territory, and the Party who shall have regulatory
reporting responsibilities in the Affymax Territory shall be as set forth in the Global Agreement;

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

20.          Amendment to Section 4.9.  The Parties hereby agree to amend and
restate  Section 4.9 of the Japan
Agreement by replacing such Section,
in its entirety, with the following:

4.9          Regulatory
Authority Communications Received by a Party. 
Each Party shall keep the other Party informed, in a timely
manner and in any event in compliance with the reporting requirements of any Regulatory Authorities, of
notification of any action by, or notification or other information which the
first Party receives (directly or indirectly) from any such Regulatory
Authority which: (a) raises any [ * ] of the
Product; (b) indicates or suggests [ * ] in
connection with the Product; (c) is reasonably likely to lead to a [ * ] of the Product; or (d) relates to [ * ]
with respect to the Product, [ * ], and
which may have [ * ] the [ * ].
Preparation and submission of the
response to such communication outside the Licensed Territory shall be as set
forth in the Global Agreement. Collaborator shall be responsible for
preparing and submitting the
response to the communication to the
Regulatory Authorities in the Licensed Territory.  However, before submitting such response to a
Regulatory Authority regarding the communication, Affymax shall have an
opportunity to comment on the

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CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

response.  In the event the Parties disagree concerning
the form or content of a response to a Regulatory Authority in the Licensed
Territory, Collaborator shall
decide the appropriate form and content of such response. Affymax shall fully cooperate with and
assist the Collaborator in complying with such regulatory obligations and
communications, including by providing to the Collaborator, within two (2)
Business Days after a request or as quickly as practicable thereafter, such
information and documentation in Affymax’s possession as may be necessary or
helpful for the Collaborator to prepare a response to an inquiry from a
Regulatory Authority.  For clarity, each
Party’s obligations under this Section 4.8 shall apply to any such communications regarding the matters
referred to above received by such Party’s Affiliate(s), contractors, partners,
or other collaborators as if such communications had been received by such
Party directly.

21.          Amendment
to Section 4.11.  The
Parties hereby agree to amend and restate Section 4.11 of the Japan Agreement
by replacing such Section, in its entirety, with the following:

4.11        Recalls and Voluntary Withdrawals.  The Parties shall exchange their internal standard operating procedures (“SOPs”) for conducting product recalls
reasonably in advance of the First Commercial Sale of any Product in the
Licensed Territory, and shall discuss and resolve any conflicts between such
SOPs and issues relating thereto promptly after such exchange.  If either Party becomes aware of information
relating to any Product that indicates that a unit or batch of Finished Product
or Bulk Hematide may not conform to the specifications therefor, or that potential
adulteration, misbranding, and/or other issues have arisen that relate to the
safety or efficacy of Products, it shall promptly so notify the other
Party.  The Joint Committee shall meet to
discuss such circumstances and to consider appropriate courses of action, which
shall be consistent with the internal SOP of the Party having the right to
control such recall pursuant to this Section 4.11. Collaborator shall have the
right and responsibility to control any
product recall, field correction, or withdrawal of any Product in the Licensed
Territory that is required by Regulatory Authorities in the Licensed Territory,
and the allocation of expenses incurred in connection with such recall between
the Parties shall be made as follows: (i)
if the recall is due to a manufacturing defect in accordance with then
prevailing U.S. product liability Laws, unless otherwise agreed upon by the
Parties in the Supply Agreement (as
defined in Section 7.3 hereof) for Bulk Hematide, then Affymax shall
bear all such expenses, (ii) if the recall is due to a manufacturing defect in
accordance with then prevailing U.S. product liability Laws, unless otherwise
agreed upon by the Parties in the Supply Agreement of Finished Product (other
than due to manufacturing defect of Bulk Hematide), then Collaborator shall
bear all such expenses, (iii) if the recall is due to both of (i) and (ii),
then the Parties shall share all such expenses proportionately and (iv)
otherwise, 100% to Collaborator to the extent attributable to a recall in the Licensed Territory, unless otherwise
may be agreed in the Supply Agreement. In
addition, Collaborator shall have the right, at its discretion, to conduct any
product recall, field correction or withdrawal of any Product in the Licensed
Territory that is not so required by such Regulatory

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FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

Authorities but that
Collaborator deems to be appropriate, with the allocation of expenses incurred
in connection with such recall between the Parties to be as set forth in the immediately preceding sentence. Collaborator shall maintain complete and accurate records of any
recall in the Licensed Territory for such periods as may be required by
applicable Laws, but no event for less than three (3) years.

22.          Amendment
to Section 6.3.  The
Parties hereby agree to amend and restate Section 6.3 of the Japan Agreement by
replacing such Section, in its entirety, with the following:

6.3          License to Affymax under Collaborator
Technology.  Subject to
the terms and conditions of this Agreement and the Global Agreement, Collaborator hereby grants to Affymax a
non-exclusive, royalty-free license under the Collaborator Technology to
develop, use, sell, offer for sale, make, have made, and import the Product or
the Peptide or the Bulk Hematide or the Finished Product for the purpose of
Development and Commercialization of the Product anywhere in the world where Affymax has or comes to have a right to Develop
and Commercialize the Product pursuant to this Agreement or the Global
Agreement, as the case may be.  Such
license shall be sublicenseable by Affymax to any Affiliate of Affymax.  Such license shall also be sublicenseable by
Affymax to any Third Party with written notification to Collaborator promptly
following the grant of such sublicense.

23.          Amendment
to Section 7.4.  The
Parties hereby agree to amend and restate Section 7.4 of the Japan Agreement by
replacing such Section, in its entirety, with the following:

7.4          Finished Product.    Collaborator shall be responsible for, at its
own cost, the formulation, filling, finishing, testing and final release of the
Finished Products for Development and Commercialization in the Licensed
Territory.  Collaborator shall have the right
to pursue in its sole discretion the formulation for the Product, including a
formulation which is different from that utilized for the Product pursuant to the Global Agreement for use
in the Affymax Territory.  Collaborator shall be solely responsible
for obtaining, at its expense, any licenses deemed by it to be necessary or
desirable to such formulation and/or any aspect of the Finished Manufacture which is different from that utilized
for the Product pursuant to the Global
Agreement for use in the Affymax Territory.

24.          Amendment
to Section 8.2.  The
Parties hereby agree to amend and restate the second row of the table set forth
in Section 8.2 of the Japan Agreement by replacing such row, in its entirety,
with the following:

	
  [ * ]

  	
   

  	
  $

  	
  [ * ]

  	
   

  

 

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CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

25.          Amendment
to Section 8.2.  The
Parties hereby agree to amend and restate the final row of the table set forth
in Section 8.2 of the Japan Agreement by replacing such row, in its entirety,
with the following:

	
  * “Initiation”, as used
  in this milestone event chart, means the first dosing of
  the first human subject.

  
	
   

  
	
  **
  “Completion” means, with respect to a given
  clinical trial, and as used in the description of the milestone events, [ * ]

  
	
   

  
	
  *** As
  used in this milestone event chart, [ * ] shall include receipt of final written notice
  from the Regulatory Authority that, based on results obtained outside the
  Licensed Territory,  [
  * ] must be conducted within the Licensed Territory to obtain Regulatory
  Approval of the Product in the Licensed Territory.

  

 

26.          Amendment to Section 9.3(a).  The Parties hereby agree to amend the Section
9.3(a) of the Japan Agreement by deleting the final sentence of such Section in
its entirety.

27.          Amendment
to Section 9.3(c).  The
Parties hereby agree to amend and restate Section 9.3(c) of the Japan Agreement
by replacing such Section, in its entirety, with the following:

(c)           Joint Patents.  With
respect to any potentially patentable Joint Invention, the Parties shall meet
and agree upon which Party shall prosecute and maintain patent applications
covering such Joint Invention (any such patent application and any patents
issuing therefrom a “Joint Patent”) in particular
countries and jurisdictions throughout the world.  It is the intention of the Parties that,
unless otherwise agreed, Collaborator would prosecute and maintain any Joint
Patents anywhere in the world other than
the U.S., and Affymax would prosecute and maintain the Joint Patents in
the U.S., subject to the Parties
coordinating their efforts as appropriate to make such prosecution activities
as efficient, convenient and harmonious as possible.  The external costs of such prosecution of the Joint Patents shall be shared
equally by the Parties and the internal costs of such prosecution of the Joint
Patents shall be borne by the Party that prosecutes a patent application
in the Joint Patents (the “Prosecuting Party”); provided, however, in the Licensed Territory
only, Collaborator shall bear both internal and external costs and
expenses incurred with respect to
the prosecution of such patent application, except as otherwise provided
below.  The Prosecuting Party shall provide the other Party reasonable
opportunity to review and comment on such prosecution efforts regarding the
applicable Joint Patents in the particular jurisdictions, and such other Party
shall provide the Prosecuting Party reasonable

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assistance in such
efforts.  The Prosecuting Party shall
provide the other Party with a copy of all material communications from any
patent authority in the applicable jurisdictions regarding the Joint Patent
being prosecuted by such Party, and shall provide drafts of any material
filings or responses to be made to such patent authorities a reasonable amount
of time in advance of submitting such filings or responses.  In particular, each Party agrees to provide
the other Party with all information necessary or desirable to enable the other
Party to comply with the duty of candor/duty of disclosure requirements of any
patent authority.  Except to the extent a
particular Party is restricted by the licenses granted to the other Party
and/or the other covenants contained in the Agreement, each Party shall be
entitled to practice, and grant to Third Parties and its Affiliates the right
to practice, the Joint Patents and all Joint Inventions without restriction or
an obligation to account to the other Party, and the other Party shall consent,
without additional consideration, to any and all such licenses. Either Party
may determine that it is no longer interested in supporting the continued
prosecution or maintenance of a particular Joint Patent in a country or
jurisdiction, in which case: (i) such Party may elect to cease its ownership
interest in such Joint Patents and shall, if requested in writing by the other
Party, assign its ownership interest in such Joint Patent in such country or
jurisdiction to the other Party for no additional consideration, and (ii) thereafter,
the electing Party shall be released from any obligations with regard to such
Joint Patents and any such Joint Patent would thereafter be deemed a Affymax
Patent in the case of assignment to Affymax, or a Collaborator Patent in the
case of assignment to Collaborator.

28.          Amendment
to Section 9.5(b)(i). 
The Parties hereby agree to amend and restate Section 9.5(b)(i) of the
Japan Agreement by replacing such Section, in its entirety, with the following:

(i)            If a Third Party
infringes any Affymax Patent or Joint Patent in the Licensed Territory by
making, using, importing, offering for sale or selling the Product, Hematide, [ * ] or any product containing the Peptide, or [ * ] (such activities, “Product
Infringement”), each Party shall so notify the other Party as
provided in Section 9.5(a), which such notice shall include all Information
available to the other Party regarding such alleged infringement and Affymax
shall have the first right, but not the obligation, to bring an appropriate
suit or other action against any person or entity engaged in such Product
Infringement in the Licensed Territory, subject to Section 9.5(b)(ii) below, at
its expense.  Affymax shall have a period
of one hundred twenty (120) days after such notification to or by Affymax, to
elect to so enforce such Affymax Patent or Joint Patent.  In the event it does not so elect, it shall
so notify Collaborator in writing during such one hundred twenty (120) day time
period, and Collaborator shall have the right, but not the obligation, to
commence a suit or take action to enforce the applicable Affymax Patent or
Joint Patent against such Third Party perpetrating such Product Infringement at
its expense, unless Affymax
demonstrates to the Collaborator in writing a reasonable business basis for not
enforcing such Affymax Patents or Joint Patents against such Product Infringement during such time period,
in which case Collaborator shall not have

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the right to so commence
such suit or take such action to enforce the applicable Affymax Patent or Joint
Patent without Affymax’s prior written consent, provided that if such basis is
so demonstrated, that the Parties shall re-evaluate upon Collaborator’s
reasonable request, from time to time, whether such basis continues to apply or
whether at such time Collaborator may exercise such right.  Each Party shall provide to the Party
enforcing any such rights under this Section 9.5(b)(i) reasonable assistance in
such enforcement, at such enforcing Party’s request and expense, including
joining such action as a party plaintiff if required by applicable Law to
pursue such action.  The enforcing Party
shall keep the other Party regularly informed of the status and progress of
such enforcement efforts, and shall reasonably consider the other Party’s comments on
any such efforts.  Each Party shall bear
all of its own internal costs incurred in connection with its activities under
this Section 9.5(b)(i).

29.          Amendment
to Sections 9.5(c) and (d). 
The Parties hereby agree to amend and restate Sections 9.5(c) and (d) of
the Japan Agreement by replacing such Sections, in their entirety, with the
following:

(c)           Infringement of Affymax Patents or
Joint Patents in the Affymax Territory.  For
any and all infringement of Affymax Patents or Joint Patents anywhere in the
Affymax Territory, the rights and responsibilities of the Parties shall be
governed by Section 9.5(b) of the Global Agreement.

(d)           Product Infringement of Collaborator
Patents (other than Joint Patents) in the Affymax Territory.  For any and all infringement of Affymax
Patents other than Joint Patents anywhere in the Affymax Territory, the rights
and responsibilities of the Parties shall be governed by Section 9.5(c) of the
Global Agreement.

30.          Amendment
to Section 9.5(g)(ii). 
The Parties hereby agree to amend and restate Section 9.5(g)(ii) of the
Japan Agreement by replacing such Section, in its entirety, with the following:

(ii)           the portion of any
such remaining amounts that represents recovery for infringement in the Affymax
Territory shall be allocated according to the applicable terms of the Global
Agreement.

31.          Amendment to Section 11.1.  The Parties hereby agree to amend and restate
clause (a) of Section 11.1 of the Japan Agreement by replacing such Section, in
its entirety, with the following: “(a) the development, manufacture, storage,
handling, use, promotion, sale, offer for sale, and importation of Products by
Affymax or its sublicensees (other than Collaborator) or Affiliates in the
Affymax Territory and/or the Development
activities conducted by or on behalf of Affymax (or its sublicensees,
other than Collaborator, or Affiliates in the Affymax Territory, if any), including without limitation the
development activities prior to or ongoing as of the Effective Date”.

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OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

32.          Amendment to Section 11.2.  The Parties hereby agree to amend and restate
clause (i) of Section 11.2 of the Japan Agreement by replacing such Section, in
its entirety, with the following: “(i) the development, manufacture, storage,
handling, use, promotion, sale, offer for sale, and importation of Products by
Affymax or its sublicensees (other than Collaborator) or Affiliates in the
Affymax Territory and/or the Development
activities conducted by or on behalf of Affymax (or its sublicensees,
other than Collaborator, or Affiliates in the Affymax Territory, if any), including without limitation the
development activities prior to or ongoing as of the Effective Date”.

33.          Amendment to Section 12.4.  The Parties hereby agree to amend the Section
12.4 of the Japan Agreement by deleting the final sentence of such Section in
its entirety.

34.          Counterparts.  This Amendment may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

35.          Effectiveness.  This Amendment will become effective upon the
execution hereof by both Parties.

36.          Continuing Effect. Other than as set
forth in this Amendment, all of the terms and conditions of the Agreement will
continue in full force and effect.

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

	
  TAKEDA PHARMACEUTICAL COMPANY LIMITED

  	
   

  	
  AFFYMAX, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Yasuhiko
  Yamanaka

  	
   

  	
  By: 

  	
  /s/ Arlene Morris

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: 

  	
  Yasuhiko
  Yamanaka

  	
   

  	
  Name: 

  	
  Arlene Morris

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title: 

  	
  Corporate
  Officer, General Manager, Pharmaceutical Marketing Division

  	
   

  	
  Title:

  	
  President & CEO

  

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.Exhibit
10.1

EMPLOYMENT
AGREEMENT

This
Employment Agreement (the “Agreement”) is made and entered into
effective August 10, 2007 (the “Effective Date”), by and between Edward
A. Mueller (“Executive”), and Qwest Communications International Inc., a
Delaware corporation (together with Qwest Services Corporation, the “Company”).

WITNESSETH

WHEREAS,
the Company desires to obtain the benefit of the services of Executive as its
Chief Executive Officer and Chairman of its Board of Directors, and Executive
desires to provide service to the Company, under the terms and conditions
provided for in this Agreement; and

WHEREAS,
both Executive and the Company wish to enter into this Agreement and are each
legally capable of taking such action.

NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained Executive and the Company hereby agree as follows:

1.                                      Employment
Term

This
Agreement shall be in effect beginning on the Effective Date and terminating
upon the earlier of (i) three years (the “Initial Term”) or (ii) the
Date of Termination as defined in Paragraph 4.6(b).  If not terminated earlier, this Agreement
will automatically be renewed at the end of its Initial Term and on each
anniversary thereafter for a period of one year unless either party gives
written notice of cancellation to the other party at least 90 days prior to the
end of the Initial Term or anniversaries thereof.  The period of time from the Effective Date
through the date the Date of Termination is referred to as the “Employment
Term”.

2.                                      Employment

2.1                                 Engagement.  (a) 
During the Employment Term, Executive shall serve  as Chief Executive Officer of the Company,
shall report directly to the Company’s Board of Directors (the “Board”),
and shall be responsible for the duties normally and customarily attendant to
such office.  Such duties,
responsibilities, power and authority shall include, without limitation,
responsibility for the management, operation, strategic direction, and overall
conduct of the business of the Company. 
All other employees of the Company shall report to the Executive and not
directly to the Board.  Executive also
shall render such other services and duties of an executive nature consistent
with the duties of the most senior executive officer of the Company as may from
time to time be designated by the Board. 
Executive shall be an employee of Qwest Services Corporation.

(b)                               During
the Agreement Term, while Executive is employed by the Company, the Company
shall use its best efforts to cause Executive to be appointed to the Board as a
director and to be elected as Chairman and to include Executive in the Board’s
slate of nominees for election as a director at the applicable annual meeting
of the Company’s 

shareholders and
shall recommend to the shareholders that Executive be elected as a director of
the Company.

2.2                                 Place
of Employment.  Executive’s primary
workplace shall be the Company’s offices in Denver, Colorado, except for usual
and customary travel on the Company’s business. 
Executive will be required to maintain a residence in the Denver,
Colorado area during the Employment Term.

2.3                                 Exclusive
Employment.  During the Employment
Term, Executive shall devote his full business time to his duties and
responsibilities set forth in Paragraph 2.1. 
Without limiting the generality of the foregoing, Executive shall not,
without the prior written approval of the Board, during the Employment Term,
render services of a business, professional or commercial nature to any other
person, firm or corporation, whether for compensation or otherwise, except that
Executive may (i) engage in civic, philanthropic and community service
activities, (ii) make and maintain outside personal investments, and (iii)
serve on the boards of the companies listed on Exhibit A hereto and any other
company pre-approved by the Board or any appropriate committee of the Board so
long as the foregoing activities do not materially interfere with Executive’s
ability to comply with this Agreement and are not otherwise in conflict with
the policies or interest of the Company.

3.                                      Compensation
and General Benefits

3.1                                 Base
Salary.  During the Employment Term,
the Company shall pay Executive a base salary in an annualized amount equal to
$1,200,000.00 (“Base Salary”) payable pro rata according to the Company’s
regular management payroll processes, and subject to adjustment as hereinafter
provided.

3.2                                 Bonus.  During the Employment Term, Executive shall
be eligible to participate in and to earn incentive or bonus awards under the
Company’s annual Management Bonus Plan or such successor incentive or bonus
plans that the Company may adopt from time to time for the benefit of its
senior executives (collectively referred to as the “Annual Bonus Plan”),
in accordance with the terms of the Annual Bonus Plan as in effect from time to
time. The target level for each annual bonus shall not be less than 200% of
Executive’s Base Salary for the year, provided that the Company achieves the
applicable objectives established by the Board for the year.  Executive shall receive a guaranteed minimum
bonus for 2007 (to be paid in March 2008 if Executive is employed by the
Company on the date of such payment), equal to the target level of Executive’s
Base Salary specified above prorated to reflect the number of days Executive
was employed by the Company  in
2007.  Executive’s 2007 bonus may be
increased by the Compensation and Human Resources Committee of the Board (“Committee”)
in its sole discretion. The guaranteed minimum bonus under this Section 3.2
shall be considered eligible compensation for purposes of applicable Company
benefit plans.

 2
 

3.3                                 Equity
Incentive Compensation.  On the Grant
Date (as defined in the Equity Agreement between Executive and Company dated
August 10, 2007), the Company shall grant to Executive options and restricted
stock as set forth on Exhibit B hereto and may subsequently, in the Company’s
discretion, grant to Executive additional options, restricted stock, or other
equity-based compensation pursuant to the Company’s Equity Incentive Plan (the “EIP”).
The terms and conditions of the initial grants provided for in this Paragraph
3.3 and of any subsequent grants of options, restricted stock or other
equity-based compensation will be determined by the Committee at the time of
such grants in accordance with the EIP and will be set forth in grant
agreements provided to Executive by the Company from time to time.

3.4                                 Compensation
Reviews.  Executive’s compensation
shall be reviewed at least annually by the Committee for the purpose of
considering increases to Executive’s compensation.  In conducting this review, the Committee
shall consider appropriate factors, including, without limitation, Executive’s
individual performance, the Company’s financial condition and strategic
direction and compensation afforded to senior executives of comparable
corporations.  The Base Salary shall not
be decreased without the written consent of Executive.

3.5                                 Vacation.  Executive shall be entitled to 30 days paid
time off  annually subject to the terms
and conditions of the Company’s policy.

3.6                                 Employee
Benefits.  The Executive and his
eligible dependents shall be provided with health, retirement and other
employee benefits and perquisites on the same basis as such benefits and are
provided by the Company from time to time to the Company’s other senior
executives.

3.7                                 Reimbursement
of Expenses.  Upon submission of
appropriate documentation in accordance with Company policy, the Company will
promptly reimburse Executive for all reasonable expenses incurred by Executive
(i) in connection with the negotiation and preparation of this Agreement, which
reimbursement shall not exceed $40,000, and (ii) in the performance of his
duties in accordance with the Company’s policies applicable to senior
executives.

3.8                                 Relocation Expenses. 
Company shall pay Executive’s reasonable expenses related to the
relocation of his primary residence to the Denver, Colorado area, in accordance
with the Company’s relocation policy applicable to senior executives.  Company will also pay reasonable out of
pocket expenses of Executive’s travel between his current primary residence and
Denver, Colorado and will pay Executive such additional amount as is necessary
to provide Executive with an allowance of up to $5,000 per month for temporary
housing and living expenses through February 15, 2008.  Notwithstanding, Executive shall use his best
efforts to relocate his permanent residence to Denver, Colorado as soon as
possible after selling his principal residence, below.  The relocation payments shall also include
provision for the Company to purchase Executive’s current principal residence
as provided below.

 3
 

If any payment of relocation expenses and
any imputed income relating to Executive’s travel between his current primary
residence and Denver as described in the previous paragraph (other than
payments with respect to the purchase of Executive’s principal residence) is
subject to federal or state income tax, the Company shall pay to the Executive
an additional amount such that after receipt of the additional amount, and
payment of all applicable taxes on the additional amount, the Executive shall
effectively incur no federal or state income tax with respect to such
payment.  In the event Executive does not
sell his current principal residence, the Company shall purchase, or cause
Executive’s current principal residence to be purchased, at such time as
elected by Executive on or prior to March 31, 2008, at the then-prevailing
value as determined by taking the average of the values determined by
independent appraisers chosen by Executive and the Company, with a third
independent appraiser to be chosen by the prior two appraisers to value the
property between the two prior values if there is a more than 5% difference
between the values determined by the prior two appraisers.

3.9                                 Use
of Corporate Aircraft.  In order to
provide enhanced security for the Executive, the Company will require the use
of Company aircraft for all travel (business and personal) by the
Executive.  As a result of this requirement, the Company authorizes that
the Executive’s spouse may accompany the Executive on Company aircraft.  The Company will also make
available to Executive reasonable private ground transportation for all
business travel and for all travel to and from the airport.   All personal use of Company aircraft by the
Executive (and the Executive’s spouse if she is to accompany him) and related ground
transportation to and from the airport shall be reasonable and shall be
subject to annual review by the Committee.  All personal use of the
Company aircraft by Executive and all use of Company aircraft by the Executive’s
spouse (unless
determined to be business use and substantiated as such consistent with Qwest
policy) shall be imputed to the Executive as income in accordance with  applicable
Treasury regulations, except as otherwise agreed by the Company and the
Executive in writing. The Executive shall also agree to use a Timeshare
Agreement for all other personal use by the Executive’s family which will
require the reimbursement by the Executive to the Company for such use up to
the maximum amount permitted under FAR 91.501.

3.10                           Home
Security.  The Company shall require the Executive to obtain and
maintain an appropriate home security system to provide security for the
Executive at home in the Denver area and the Company shall reimburse the
Executive for reasonable costs associated with the installation and maintenance
of a home security system.

3.11                           Flex
Executive Benefits.  Executive will
receive an annual cash payment of $75,000 in lieu of executive perquisites such
as financial counseling, car allowance, physical examinations, club
memberships,  child care, and additional
life insurance.

4.                                      Termination of
Employment

4.1                                 Termination Upon Death or Disability.  If
Executive is unable to perform his duties as a result of death or Disability
prior to the expiration of the Employment Term, Executive’s employment as Chief
Executive Officer may be terminated and Executive  (or Executive’s estate, or other designated
beneficiary(s) as shown in the records of the Company in the case of death)
shall be entitled to receive (i) the Accrued Benefits (as defined in Paragraph

 4
 

4.2
below); and (ii) a pro-rata amount of the annual bonus that Executive would be
eligible to receive under the terms and conditions of the Company’s Annual
Bonus Plan for the year in which Executive’s termination occurs.  At its discretion, and only so long as
Executive satisfies the definition of “disability” contained in the Qwest
Disability Plan as amended from time to time (“the Plan”) Company may
designate Executive as an employee solely to preserve his eligibility for
disability benefits under the Plan. 
Except as required by law, after the Date of Termination, the Company
shall have no obligation to make any other payment, including severance or
other compensation, of any kind to Executive (or Executive’s estate, or other
designated beneficiary(s) as shown in the records of the Company in the case of
death) upon a termination of employment by death or Disability.

4.2                                 Voluntary Termination.  If Executive terminates employment with the Company without Good Reason,
Executive agrees to provide the Company with thirty days’ prior written
notice.  The Company, in its sole
discretion following its receipt of such written notice from Executive, may
accelerate the termination of Executive’s employment and the right to any
further compensation to a date prior to the 30th day after such written notice
is given.  In the event that Executive’s
employment is terminated under this Paragraph 4.2, Executive shall receive
payment for (i) any earned but unpaid Base Salary or bonus; (ii) any accrued
and unpaid vacation pay through the Date of Termination; (iii) any unreimbursed
business expenses; and (iv) any other benefits the Executive is entitled to
receive as of the Date of Termination under the employee benefit plans of the
Company, less required withholdings for applicable income and employment
taxes  (“Accrued Benefits”).  Except as required by law, after the Date of
Termination, the Company shall have no obligation to make any other payment,
including severance or other compensation of any kind to Executive on account
of Executive’s termination of employment.

4.3                                 Termination
for Cause.  The Company may terminate
Executive’s employment with the Company at any time for Cause in accordance
with Paragraph 4.6(a) below.  In the
event that Executive’s employment is terminated under this Paragraph 4.3,
Executive shall receive the Accrued Benefits. 
Except as required by law, after the Date of Termination, the Company
shall have no obligation to make any other payment, including severance or
other compensation of any kind on account of Executive’s termination of
employment or to make any payment in lieu of notice to Executive.  Except as required by law, all benefits
provided by the Company to Executive under this Agreement or otherwise shall
cease as of the Date of Termination.

4.4                                 Termination
Without Cause.  The Company may, at any time and without prior written
notice, terminate Executive without Cause.  In the event that Executive’s
employment with the Company is terminated without Cause, Executive shall
receive the Accrued Benefits.  In addition, if Executive’s employment with
the Company is terminated without Cause prior to the first anniversary of the
Effective Date, Executive shall be entitled to receive the following severance
payments:  (a) a pro-rata amount of the annual bonus that Executive would
be eligible to receive under the Company’s Annual Bonus Plan for the year in
which Executive’s termination occurs, to be paid to Executive on March 1 of the
year following the Date of Termination; (b) an amount equal to his annual Base
Salary, less required withholdings for applicable income and employment taxes,
to be paid to Executive according to the Company’s

 5
 

regular management
payroll schedule over 12 months; and (c) an amount equal to Executive’s Annual
Bonus at target  to be paid to Executive
on March 1 of the year following the Date of Termination.   If Executive’s employment is terminated
after the first anniversary of the Effective Date, Executive shall be entitled
to receive the following severance payments:  (x) a pro-rata amount of the
annual bonus that Executive would be eligible to receive under the Company’s
Annual Bonus Plan for the year in which Executive’s termination occurs, to be
paid to Executive on March 1 of the year following the Date of Termination; (y)
an amount equal to two times Executive’s annual Base Salary, less required
withholdings for applicable income and employment taxes, to be paid to
Executive according to the Company’s regular management payroll schedule over
24 months; and (z) (i) an amount equal to Executive’s Annual Bonus at target,
to be paid to Executive on March 1 of the year following the Date of Termination,
and (ii) a second payment in an amount equal to his Annual Bonus at target, to
be paid to Executive on March 1 of the second year following the Date of
Termination.   Upon a termination at any
time pursuant to this paragraph 4.4, Executive shall also be entitled to
receive eighteen  months of medical coverage for Executive and his
qualified beneficiaries under COBRA subsidized at active management employee
rates.  All payments under this paragraph 4.4 are subject to the
restrictions set forth in paragraphs 4.8 and may be withheld in order to
satisfy the requirements of Section 409A of the Internal Revenue Code. 
Executive’s entitlement to the severance payments in this paragraph is
conditioned on (i) Executive’s executing and delivering to the Company of a
release of claims against the Company, in the form attached as Exhibit C, 
and on such release becoming effective, and (ii) Executive’s compliance with
the restrictive covenants set forth in Articles 6 and 7.  Executive agrees
that the Company shall have a right of offset against all severance payments
for amounts owed to the Company by the Executive.  Except as specifically
provided in this Paragraph 4.4 and except as required by law, all benefits
provided by the Company to Executive under this Agreement or otherwise shall
cease as of the Date of Termination.

4.5                                 Termination for Good Reason. 
Notwithstanding anything in this Article 4 to the contrary, Executive
may voluntarily terminate his employment with the Company for Good Reason.  If Executive terminates his employment for
Good Reason, he shall receive the benefits detailed in Paragraph 4.4 (subject
to the same conditions set forth in Paragraph 4.4).

4.6                                 Certain Definitions.  For
purposes of this Agreement, the following terms shall have the meanings set
forth below.

(a)                                  “Cause” shall mean the occurrence of
any one or more of the following events:

(1)                                  Commission of an act deemed by the Company in
its reasonable discretion to be an act of dishonesty, fraud, misrepresentation
or other act of moral turpitude that would reflect negatively upon Qwest or
compromise the effective performance of Executive’s duties;

(2)                                  Unlawful conduct that would reflect
negatively upon Qwest or compromise the effective performance of Executive’s
duties, as determined by the Company in its reasonable discretion;

 6
 

(3)                                  Conviction of (or pleading nolo contendere
to) any felony or a misdemeanor involving moral turpitude;

(4)                                  Continued failure to substantially perform
Executive’s duties to the satisfaction of the Board (other than such failure
resulting from Executive’s incapacity due to physical or mental illness) after
the Company delivers written notice to Executive specifically identifying the
manner in which Executive has failed to substantially perform his or her duties
and Executive has been afforded a reasonable opportunity of at least 30 days to
substantially perform his duties; or

(5)                                  A willful violation of the Qwest Code of
Conduct or other Qwest policies that would reflect negatively upon Qwest or
compromise the effective performance of Executive’s duties as determined by the
Company in its reasonable discretion.

(b)                                 “Date
of Termination” shall mean (i) if Executive is terminated as Chief
Executive Officer by the Company for Disability, thirty  days after written notice of such termination
is given to Executive (provided that Executive shall not have returned to the
performance of his duties on a full-time basis during such 30-day period);  (ii) if Executive’s employment is
terminated by the Company for any other reason, the date on which a written
notice of termination is given, provided that, in the case of a termination for
Cause under Paragraph 4.6(a)(iv) above, Executive shall not have cured the
matter or matters stated in the notice of termination within the 30-day notice
period provided in Paragraph 4.6(a) above; 
(iii) if Executive terminates employment for Good Reason, the date of
Executive’s resignation;  provided that
the notice and cure provisions in Paragraph 4.6(d) have been complied
with;  (iv) if Executive terminates
employment for other than a Good Reason, the date specified in Executive’s
notice in compliance with Paragraph 4.2; or (v) in the event of Executive’s
death, the date of death.

(c)                                  “Disability”
shall mean that Executive either (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than twelve months or (ii) is, by reason of
any medically determinable physical or mental 
impairment that can be expected to result in death or can be expected to
last for a continuous  period of not less
than twelve  months, receiving income
replacement benefits for a period of not less 
than three months under the Company’s Disability Plan.

(d)                                 “Good
Reason” shall mean Executive’s resignation from employment within 180 days
after the occurrence of one of the events enumerated in this Paragraph 4.6(d),
provided, however, that Executive must provide written notice to the Company
within ninety days after the occurrence of the event allegedly constituting
Good Reason, and the Company shall have thirty days after such notice is given
to cure:

(i) a change of Executive’s
title as Chairman and Chief Executive Officer or a material reduction in
Executive’s responsibilities without Executive’s written consent;

 7
 

(ii) a reduction in Base
Salary or target Annual Bonus at any time during the Employment Term without
Executive’s written consent;

(iii) relocation of
Executive’s primary workplace to any place more than 35 miles from the Company’s
offices in Denver, Colorado as of the Effective Date, except for usual and
customary travel by the Executive on the Company’s business to an extent
substantially consistent with the Executive’s business travel obligations as of
the Effective Date; or

(iv) any material breach
by the Company of any provision of this Agreement.

4.7                                 Notice
of Termination.  Any termination of
Executive’s employment by the Company or by Executive under this Article 4
(other than in the case of death) shall be communicated by a written notice
(the “Notice of Termination”) to the other party hereto, indicating the
specific termination provision in this Agreement relied upon.  If the termination provisions relied upon
require notice and an opportunity to cure, then the Notice of Termination
should set forth in reasonable detail any facts and circumstances claimed to
provide a basis for termination of Executive’s employment under the provision
so indicated.  The Notice of Termination
should specify a Date of Termination and shall be delivered within the time
periods set forth in the various subparagraphs of this Article 4, as applicable
(the “Notice Period”);  provided, however, that the Company
may pay to Executive all Base Salary, benefits and other rights due to
Executive during the Notice Period instead of employing Executive during such
Notice Period.

4.8                                 Code
Section 409A.  Notwithstanding
anything herein to the contrary, to the extent that the Board reasonably
determines, in its sole discretion, that any payment or benefit to be provided
under Article 4 or Paragraph 5.1 to or for the benefit of Executive would be
subject to the additional tax imposed under Section 409A(a)(1)(B) of the
Internal Revenue Code of 1986, as amended (the “Code”) or a successor or
comparable provision, the commencement of such payments and/or benefits shall
be delayed until the earlier of (i) the date that is six months following
the Date of Termination or (ii) the date of Executive’s death (such date
is referred to herein as the “Distribution Date”), provided, if at such
time Executive is a “specified employee” of the Company (as defined in Treasury
Regulation Section 1.409A-1(i)) and if amounts payable under this Article 4 or
Paragraph 5.1 are on account of an “involuntary separation from service” (as
defined in Treasury Regulation Section 1.409A-1(m)), Executive shall receive
payments during the six-month period immediately following the Date of
Termination equal to the lesser of (x) the amount payable under this Article 4
or Paragraph 5.1, as the case may be, or (y) two times the compensation limit
in effect under Code Section 401(a)(17) for the calendar year in which the
Termination Date occurs (with any amounts that otherwise would have been
payable under this Article 4 or Paragraph 5.1 during such six-month period
being paid on the first regular payroll date following the six-month
anniversary of the Date of Termination).  
In the event that the Board determines that the commencement of any of
the employee benefits to be provided under Article 4 or Paragraph 5.1 are to be
delayed pursuant to the preceding sentence, the Company shall require Executive
to bear the full cost of such employee benefits until the Distribution Date at
which time the Company shall reimburse Executive for all such costs.

 8
 

5.                                      Change
in Control.

5.1                                 Severance
Benefits.  If Executive’s employment
is terminated by the Company without Cause or by the Executive for Good Reason,
within two years after the occurrence of a Change in Control, Executive shall
be entitled to receive the Accrued Benefits and, in lieu of the benefits set
forth in Paragraph 4.4 or 4.5, as applicable, the following severance payments,
less required withholdings for applicable income and employment taxes:  2.99 times his Base Salary, paid in a lump
sum; 2.99 times Executive’s most recent target annual bonus, paid in a lump
sum;  and eighteen  months of medical coverage for Executive and
his qualified beneficiaries under COBRA subsidized at active management
employee rates;  provided, however, that
Executive’s entitlement to the severance payments in the foregoing clause is
conditioned on (i) Executive’s executing and delivering to the Company of a
release of claims against the Company, in the form attached as Exhibit C, and
on such release becoming effective, and (ii) Executive’s compliance with the
restrictive covenants set forth in Articles 6 and 7.  Executive agrees that the Company shall have
a right of offset against all severance payments for amounts owed to the
Company by the Executive as of the Date of Termination.

5.2                                 Change
in Control. A Change in Control will be deemed to have occurred if either
(i) any individual, entity, or group (within the meaning of section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 (the “1934 Act”)),
acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the 1934 Act) of more than fifty percent (50%) of either (A) the
then-outstanding shares of Stock (“Outstanding Shares”) or (B) the
combined voting power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of directors (“Voting Power”)
or (ii) at any time during any 12-month period (not including any period prior
to the Effective Date), individuals who at the beginning of such period
constitute the Board (and any new director whose election by the Board or whose
nomination for election by the Company’s stockholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority thereof.

6.                                      Confidential
Information

During the term of this
Agreement and forever thereafter, Executive agrees to keep confidential all
information provided by the Company, including any trade secrets and any
information and material relating to any customer, vendor, licensor, licensee,
or other party transacting business with the Company (collectively, “Confidential
Information”), and not to release, use, or disclose the Confidential
Information, except in connection with performance of Executive’s duties under
this Agreement or with the prior written permission of the Company.  Confidential Information may be in any medium
or form, including, without limitation, physical documents, computer files or
disks, videotapes, audiotapes, and oral communications.  Executive further covenants and agrees that
every document, computer disk, computer software program, notation, record,
diary, memorandum, development, investigation, or the like, and any method or
manner of doing business, of the Company (or containing other secret or
Confidential Information of the Company) made or acquired by Executive during
Executive’s employment, is and shall be the sole and exclusive property of the
Company.  Confidential Information does
not

 9
 

include, however,
information which (i) is or becomes generally available to the public other
than as a result of an unauthorized disclosure by Executive, or (ii) the
Executive is required to disclose pursuant to court, administrative hearing
officer or other judicial or duly authorized governmental representative
request or demand for such disclosure, unless the Company has obtained an
appropriate protective order that prohibits such disclosure and the Company has
advised the Executive of such protective order prior to the Executive’s
fulfillment of such request or demand; provided, however, that no disclosure
may be made by Executive pursuant to this clause (ii) until Executive has
promptly notified the Company of such request or demand and the Company has had
a reasonable opportunity to secure a protective order prohibiting disclosure.  In the event that such protective order is not
obtained, Executive shall furnish only that portion of such Confidential
Information or take only such action as is legally required and shall exercise
Executive’s reasonable efforts to obtain reliable assurance that confidential
treatment shall be accorded any such Confidential Information.

7.                                      Covenants of
Executive.

7.1                                 Unfair
Competition.  Executive agrees that,
during the Employment Term and for a period of two years following a
termination of employment he will not, directly or indirectly, engage in any
business or activity which is in direct competition with the Company or of any
of its subsidiaries or affiliates in the telecommunications business.  The foregoing shall not apply to passive
investments by Executive of up to 2% of the voting stock of any publicly traded
company or 5% of the voting stock or other securities of any privately held
company, or to service by Executive on boards of directors of companies as
permitted under this Agreement, regardless of whether such company competes
with the Company.

7.2                                 Solicitation
of Employees.  During the Employment
Term and for a period of two years following a termination of employment,
Executive shall not, directly or indirectly, individually, or together with or
through any other person, firm, corporation or entity, (i) hire any member of
senior management of the Company (defined as an officer with a title of vice
president or higher) who is then in the employ of the Company, (ii) solicit for
hire any employee of the Company, provided, however, that general solicitations
not targeted to Company employees shall not be deemed to violate this clause
(ii), or (iii) interfere with the relationship between any of the foregoing
persons and the Company.   Subparagraph
(i) means, among other things, that Executive may not have any part in hiring a
member of Qwest’s senior management team even if Executive is contacted by the
Qwest employee first.

7.3                                 Solicitation
of Customers and Suppliers. 
Executive agrees that, during the Employment Term and for a period of
two years following a termination of employment other than following a Change
in Control, Executive shall not, directly or indirectly, individually, or
together through any other person, firm, corporation or entity (i) use the
Company’s Confidential Information to solicit the business of any material
customers of or suppliers to the Company, (ii) encourage any person or entity
which is a customer of the Company to cease, reduce, limit or otherwise alter
in a manner adverse to the Company its existing business or contractual
relationship with the Company, or (iii) otherwise interfere with the
relationship between any of the foregoing persons or entities and the Company.

 10
 

7.4                                 Compliance
with Company Policies.  Executive
agrees that, during the Employment Term, he shall comply with the Company’s
Code of Conduct and other policies and procedures reasonably established by the
Company from time to time, including but not limited to policies addressing
matters such as management, supervision, recruiting and diversity.

7.5                                 Cooperation.  For a period of two years
following termination of Executive’s employment under this Agreement, Executive
shall, upon Company’s reasonable request, cooperate and assist Company in any
dispute, controversy, or litigation in which Company may be involved and with
respect to which Executive obtained knowledge while employed by the Company or
any of its affiliates, successors, or assigns, including, but not limited to,
participation in any court or arbitration proceedings, giving of testimony,
signing of affidavits, or such other personal cooperation as counsel for the
Company shall request.  Any such
activities shall be scheduled, to the extent reasonably possible, to
accommodate Executive’s business and personal obligations at the time.

Recognizing that upon
Executive’s separation from the Company, participating in interviews or witness
preparation sessions may be a burden, the Company agrees to reimburse Executive
for the time Executive spends involved in interviews and witness preparation
sessions requested by Qwest at a rate equal to Executive’s final Base Salary,
computed on an hourly basis (assuming a 40 hour work week), for such time
actually spent in such interviews or witness preparation sessions.  In addition, Company will reimburse Executive
for reasonable expenses Executive incurs in connection with such interviews and
witness preparation sessions.  Company
will not be obligated to reimburse Executive for lost wages, lost
opportunities, or other financial consequences of such cooperation, or to make
any other payment to Executive other than the payments by the Company referred
to in the two previous sentences of this paragraph; provided, however, nothing
in this paragraph shall impair or limit any rights or entitlement Executive may
have to indemnification and director’s and officer’s liability insurance
coverage.  The parties further agree that
Company will not, and will not be obligated to, reimburse Executive for any
time spent testifying in any proceeding (including, but not limited to,
appearances at depositions, hearings and trials), although the Company will
reimburse reasonable expenses for such appearances, as provided above.  The Company also shall pay the reasonable
costs of an attorney Executive engages to advise him in connection with the
foregoing, but only if there is a conflict of interest that would prevent the
Company’s own outside or inside legal counsel from adequately representing
Executive’s interests as well as the Company’s interests and with the Company’s
prior approval.

Nothing in this Agreement shall limit, restrict,
preclude, require or influence Executive’s testimony in any Proceeding or cause
Executive not to provide truthful testimony or information in any matter or in
response to any inquiry by a government official or representative.  Company’s obligation to reimburse Executive
as described above is conditional upon Executive providing, at all times,
information that he objectively, reasonably and in good faith believes to be
truthful in connection with any Proceeding.

7.6                                 Return
of Business Records and Equipment. 
Upon termination of Executive’s employment hereunder, Executive shall
promptly return to the Company: (i) all documents, records, procedures, books,
notebooks, and any other documentation in any form

 11
 

whatsoever,
including but not limited to written, audio, video or electronic, containing
any information pertaining to the Company which includes Confidential
Information, including any and all copies of such documentation then in
Executive’s possession or control regardless of whether such documentation was
prepared or compiled by Executive, Company, other employees of the Company,
representatives, agents, or independent contractors, and (ii) all equipment or
tangible personal property entrusted to Executive by the Company.  Executive acknowledges that all such
documentation, copies of such documentation, equipment, and tangible personal
property are and shall at all times remain the sole and exclusive property of
the Company.

7.7                                 Restricted
Periods.  The periods restricting
Executive’s activities set forth in Article 6 and Paragraphs 7.1, 7.2 and 7.3
shall be extended by the length of any period during which Executive is in
breach of the terms and provisions of such Article or Paragraphs.

7.8                                 Specific
Performance and Remedies.  The
parties hereby agree that irreparable damage would occur in the event any
provision of Article 6 or Paragraphs 7.1, 7.2 and 7.3 of this Agreement were
not performed in accordance with its terms. 
Executive hereby agrees that should Executive breach any covenant under
Article 6 or Paragraphs 7.1, 7.2 and 7.3 of this Agreement or threaten to
breach any such covenant, Company shall be entitled (in addition to, and not in
lieu of any other right or remedy that may be available to it) to temporary and
permanent injunctive relief from an arbitrator or court of competent
jurisdiction, without posting any bond or other form of security and without
the necessity of proving actual damages. In view of the position of confidence
which Executive will enjoy with the Company and the anticipated relationship
with the clients, customers, and employees of the Company and its affiliates
pursuant to his employment hereunder, and recognizing both the access to
confidential financial and other information which Executive will have pursuant
to his employment, Executive expressly acknowledges that the restrictive
covenants set forth in Article 6 and Paragraphs 7.1, 7.2 and 7.3 are material
and essential conditions of Executive’s employment with the Company without
which the Company would not have entered into this Agreement and are reasonable
and necessary in order to protect and maintain the proprietary interests and
other legitimate business interests of the Company and its affiliates.  Executive further acknowledges that (i) it
would be difficult to calculate damages to the Company and its affiliates from
any breach of his obligations under any provision contained in Article 6 or
Paragraphs 7.1, 7.2 and 7.3, (ii) that injury to the Company and its affiliates
from any such breach would be irreparable and impossible to measure, and (iii)
that the remedy at law for any breach or threatened breach of any provision
contained in Article 6 or Paragraphs 7.1, 7.2 and 7.3 would therefore be an
inadequate remedy and, accordingly, the Company shall, in addition to all other
available remedies (including without limitation seeking such damages as it can
show it and its affiliates has sustained by reason of such breach and/or the
exercise of all other rights it has under this Agreement), be entitled to
injunctive and other similar equitable remedies.

7.9                                 Scope
and Duration of Restrictions.  The
parties hereby expressly agree that the duration and scope of restrictions set
forth in Article 6 and Paragraphs 7.1, 7.2 and 7.3 are reasonable.  In the event that any arbitrator or court of
competent jurisdiction shall hold that the duration or scope or other term of a
restriction set forth in Article 6 or Paragraphs 7.1, 7.2 and 7.3 is unreasonable
or unenforceable under circumstances now or hereafter existing, the maximum
duration or scope of restriction or other term reasonable under such
circumstances

 12
 

shall be substituted, and
each party hereto shall petition any such arbitrator or court to cause the
maximum duration or scope of restriction or other term reasonable under such
circumstances to be so substituted for the duration or scope of restriction or
other term set forth herein.

8.                                      Indemnification
and Advancement.  In the event Executive is made, or
threatened to be made, a party to any legal action or proceeding, by reason of
the fact that Executive is or was an employee or officer of the Company or
serves or served any other entity in any capacity at the Company’s request, Executive
shall be indemnified by the Company, and the Company shall advance Executive’s
related expenses when and as incurred, including but not limited to attorney
fees, as set forth in the current by-laws of the Company.  During his employment with the Company and thereafter so
long as the Executive may have liability arising out of his service as an
officer or director of the Company, the Company agrees to continue and maintain
a director’s and officer’s liability insurance policy covering the Executive with
coverage no less than that available to active directors and officers of the
Company.

9.                                      Warranties and Representations. 
Executive hereby represents and warrants to the Company that he is not
now under any obligation of a contractual or quasi-contractual nature known to
him  that is inconsistent or in conflict
with this Agreement or that would prevent, limit or impair the performance by
Executive of his obligations hereunder; and has been or has had the opportunity
to be represented by legal counsel in the preparation, negotiation, execution
and delivery of this Agreement and understands fully the terms and provisions
hereof.

10.                               Notices.  All
notices required or permitted to be given by either party hereunder shall be in
writing and shall be deemed sufficiently given if mailed by registered or
certified mail, or prepaid overnight courier to the party entitled thereto at
the address stated below, or to such changed address as the addressee may have
given by a similar notice, and shall be deemed received upon actual receipt:

 

	
  To the Company:

  	
   

  	
   

  
	
   

  	
   

  	
  Qwest Communications International Inc.

  1801 California Street, Ste. 5200

  Denver, Colorado 80202

  Attn: General Counsel

  
	
   

  	
   

  	
   

  
	
  With a Copy to:

  	
   

  	
  Gibson, Dunn & Crutcher LLP

  1801 California Street, Ste. 4200

  Denver, Colorado 80202

  Attn: Richard Russo, Esq.

  
	
   

  	
   

  	
   

  
	
  To Executive:

  	
   

  	
  Edward A. Mueller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  At the address maintained in the Company’s

  business records

  
	
   

  	
   

  	
   

  
	
  With a Copy to:

  	
   

  	
  Vedder, Price, Kaufman & Kammholz, P.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  222 N. LaSalle Street, Ste. 2600

  Chicago, Illinois 60601

  Attn:  Robert J. Stucker, Esq.

  

 

 

 13

11.          General
Provisions

11.1         Waiver.  No waiver by any party hereto of any failure
of any other party to keep or perform any covenant or condition of this
Agreement shall be deemed to be a waiver of any preceding or succeeding breach
of the same, or any other covenant or condition.

11.2         Amendments.  No provision of this Agreement may be
amended, modified or waived unless such amendment, modification or waiver shall
be agreed to in writing and signed by Executive in his personal capacity and by
the Chairman of the Compensation and Human Resources Committee of the Board.

11.3         Severability.  In case any one or more of the provisions of
this Agreement shall be held by any court of competent jurisdiction or any
arbitrator selected in accordance with the terms hereof to be illegal, invalid
or unenforceable in any respect, such provision shall have no force and effect,
but such holding shall not affect the legality, validity or enforceability of
any other provision of this Agreement and such provision may be modified in
such manner as such court or arbitrator shall reasonably determine in order to
give maximum effect to the intent of the parties as expressed herein.

11.4         Assignment.  No right to or interest in any payments shall
be assignable by either party; provided; however, that this provision shall not
preclude Executive from designating one or more beneficiaries to receive any
amount that may be payable after his death and shall not preclude his executor
or administrator from assigning any right hereunder to the person or persons
entitled hereto.  Further, the Company
may assign this Agreement: (i) to an affiliate so long as such affiliate
assumes the Company’s obligations hereunder, or (ii) in connection with a
merger or consolidation involving the Company or a sale of substantially all
its assets or shares to the surviving corporation or purchaser as the case may
be, so long as such assignee assumes the Company’s obligations hereunder.

11.5         Successors
and Assigns.  This Agreement and the
obligations of the Company and Executive hereunder shall be binding upon and
shall be assumed by their respective successors including, without limitation,
any corporation or corporations acquiring the Company, whether by merger,
consolidation, sale or otherwise.

11.6         Governing
Law; Venue; Jurisdiction. This Agreement is deemed to be accepted and
entered into in Denver, Colorado. 
Executive and the Company intend and hereby acknowledge that
jurisdiction over disputes with regard to this Agreement, and over all aspects
of the relationship between the parties hereto, shall be governed by the laws
of the State of Colorado without giving effect to its rules governing conflicts
of laws.  Executive agrees that in any
proceeding to enforce this Agreement, or in any dispute that arises between the
Company and the Executive regarding or relating to this Agreement and/or any
aspect of Executive’s employment relationship with the Company, venue and
jurisdiction are proper in the City and

 14
 

County of Denver,
and (if federal jurisdiction exists) the United States District Court for the
District of Colorado, and Executive waives all objections to jurisdiction and
venue in any such forum and any defense that such forum is not the most
convenient forum.

11.7         No
Representation.  No officer, employee
or representative of the Company has any authority to make any representation
or promise in connection with this Agreement or the subject matter hereto which
is not contained herein, and Executive agrees that he has not executed this
Agreement in reliance upon any such representation or promise.

11.8         Interpretation
of Agreement.  Each of the parties
has been represented by counsel in the negotiation and preparation of this
Agreement.  The parties agree that this
Agreement is to be construed as jointly drafted.  Accordingly, this Agreement will be construed
according to the fair meaning of its language, and the rule of construction
that ambiguities are to be resolved against the drafting party will not be
employed in the interpretation of this Agreement.

11.9         Headings.  The headings of paragraphs and subparagraphs
are included solely for convenience of reference and shall not control the
meaning or interpretation of any of the provisions of this Agreement.

11.10       Entire
Agreement.  This document constitutes
the entire understanding and Agreement of the parties with respect to the
subject matter of this Agreement, and any and all prior agreements,
understandings and representations are hereby terminated and cancelled in their
entirety and are of no further force or effect.

11.11       Counterparts.  This Agreement may be executed in two or more
counterparts with the same effect as if the signatures to all such counterparts
was upon the same instrument, and all such counterparts shall constitute but
one instrument.

11.12       No
Mitigation of Damages.  Executive
shall not be required to mitigate damages or the amount of any payment provided
for under this Agreement by seeking other employment or otherwise, nor shall
the amount of any payment provided for under this Agreement be reduced by any
compensation earned by Executive as a result of employment by another employer
or by retirement benefits after the Date of Termination.    The provisions of this Agreement, and any
payment provided for hereunder, shall not reduce any amounts otherwise payable,
or in any way diminish Executive’s then existing rights, or rights which would
accrue solely as a result of the passage of time, under any Company benefit
plan or other contract, plan or arrangement.

11.13       Dispute Resolution; Arbitration.  Executive and the Company agree that in the
event a dispute arises concerning or relating to Executive’s employment with
the Company, or any termination therefrom, the parties first shall attempt in
good faith to resolve such dispute through mediation.  If a resolution through mediation is not
reached, then such dispute shall be submitted to binding arbitration in
accordance with the employment arbitration rules of Judicial Arbitration and
Mediation Services (“JAMS”) by a single impartial arbitrator experienced
in employment law selected as follows: 
Company and Executive will attempt in good faith to agree upon impartial
arbitrator within thirty days of a request for arbitration.  If the parties cannot

 15
 

agree, they shall
request a panel of ten arbitrators from JAMS and select an arbitrator pursuant
to the JAMS rules.    The arbitration
shall take place in Denver, Colorado, and both Executive and the Company agree
to submit to the jurisdiction of the arbitrator selected in accordance with
JAMS’ rules and procedures.  The Federal
Arbitration Act, as amended, 9 U.S.C. § 1 et seq., (“FAA”)
and not state law, shall govern the arbitrability of all claims, provided they
are enforceable under the FAA.  Other
than as set forth herein, the arbitrator shall have no authority to add to,
detract from, change, amend, or modify existing law.  The arbitrator shall have the authority to
order such discovery as is necessary for a fair resolution of the dispute.  The arbitrator shall also have the authority
to award any and all relief or remedies provided under the statute or other law
pursuant to which an asserted prevailing claim or defense is raised, as if the
matter were being decided in court. The arbitrator may award punitive damages,
if and only to the extent allowed by Title VII of the Civil Rights Act of 1964,
as amended; the Civil Rights Act of 1991, as amended; the Age Discrimination in
Employment Act of 1967, as amended; and the Americans with Disabilities Act of
1990, as amended; and the arbitrator shall be bound by any limitations on the
amount of punitive or other damages imposed by said statutes. The arbitrator
has no other authority to award punitive damages.  The arbitrator will apply applicable statutes
of limitation, including contractual statutes of limitations, will honor claims
of privilege recognized by law, and will take reasonable steps to protect
confidential or proprietary information, including the use of protective
orders. The prevailing party in any arbitration shall be entitled to receive
reasonable attorneys’ fees, only to the extent such fees are provided by the
statute or other law pursuant to which an asserted claim or defense is raised,
as if the matter were being decided in court. The arbitrator’s decision and
award shall be final and binding, as to all Claims that were or could have been
raised in the arbitration, and judgment upon the award rendered by the
arbitrator may be entered by any court having jurisdiction thereof.  Executive will pay the arbitrator’s fees and
expenses up to $150 and Qwest will pay any arbitrator fees and expenses in
excess of such amount. Qwest will pay all of the arbitrator’s fees and expenses
if it commences the arbitration. The existence and subject matter of all
arbitration proceedings, including without limitation, any settlements or
awards there under, shall remain confidential and be subject to the
Confidentiality provision of this Agreement. Executive and Qwest agree that if
any term or portion of this Arbitration provision is, for any reason, held to
be invalid or unenforceable or to be contrary to public policy or any law, then
the invalid or unenforceable term or portion shall be severed in its entirety
from this Agreement and the remainder of this Arbitration provision shall not
be affected by any such invalidity or unenforceability but shall remain in full
force and effect, as if the invalid or unenforceable term or portion thereof
had not existed within the Arbitration provision.  Executive understands that Qwest would suffer
irreparable harm in the event of breached confidentiality, and such harm would
not be fully compensable in monetary damages. If any party hereto files a
judicial action asserting Claims subject to this Arbitration provision, and
another party successfully stays such action and/or compels arbitration of such
Claims, the party filing the initial judicial action shall pay the other party’s
costs and expenses incurred in seeking such stay and/or compelling arbitration,
including reasonable attorneys’ fees.  THE
COMPANY AND EMPLOYEE FURTHER AGREE THAT THE DISPUTE RESOLUTION PROCEDURE AS
PROVIDED IN THIS PARAGRAPH 11.13 SHALL BE THE EXCLUSIVE AND BINDING METHOD FOR
RESOLVING ANY SUCH DISPUTE AND WILL BE USED INSTEAD OF ANY COURT ACTION, WHICH
IS HEREBY EXPRESSLY WAIVED, EXCEPT FOR ANY REQUEST BY EITHER PARTY HERETO FOR

 16
 

TEMPORARY
OR PRELIMINARY INJUNCTIVE RELIEF, OR A CHARGE OF DISCRIMINATION FILED WITH AN
ADMINISTRATIVE AGENCY.

11.14      CONDITIONAL
REPAYMENT OF PAYMENTS AND BENEFITS.  If Executive receives benefits
under this Agreement, and, within two years following Executive’s termination
of employment, Company determines that during Executive’s employment with Qwest, Executive engaged in
conduct that would have constituted “Cause” for termination (as defined in
paragraph 4.6(a) above), regardless of (i) when during Executive’s
employment with Qwest such conduct occurred, (ii) when Qwest knew or
learns of such conduct or should have known of such conduct, or (iii) what
Qwest now knows or should have known about Executive’s conduct, then Company shall provide to Executive (or, if
applicable, Executive’s estate or beneficiary) written notification of such
determination, which written notification shall expressly set forth the basis
for Company’s determination in reasonable detail.  After Company provides this written
notification to Executive, it may stop or withhold any payments which have not
been made under this Agreement.  If
Executive disputes that such Cause exists or existed, Executive and his counsel
shall make a presentation to the Company to request that Company withdraw such
determination.  If the matter is not
settled or resolved after Executive’s presentation to the Company, either party
may commence an arbitration pursuant to the procedure set forth in Paragraph
11.13 of this Agreement.  In addition, if
Executive breaches Executive’s obligations under Article 6 or Paragraphs 7.1,
7.2 or 7.3 of this Agreement, Company may stop or withhold any payments which
have not been made under this Agreement.

If the arbitrator finds that
Cause exists or existed or that Executive has breached Executive’s obligations
under Article 6 or Paragraphs 7.1, 7.2 or 7.3 of this Agreement, or if
Executive does not timely commence an action disputing Company’s Cause
determination, Executive shall make prompt repayment to Company of the cash
payments provided under this Agreement and other benefits received by Executive
pursuant to this Agreement (including, but not limited to, the value of any
discounted COBRA coverage).  Consistent with applicable law, any repayments
shall include an interest factor equal to the applicable federal short term
interest rate pursuant to Internal Revenue Code paragraph 1274.  Interest shall begin to accrue on the 31st
day after Executive (or, if applicable, Executive’s estate or beneficiary)
received Company’s written notification of its determination that such Cause
exists or existed, and shall continue to accrue until complete repayment is
made to Company.  If Company
notifies Executive (or, if applicable, Executive’s estate or beneficiary) in writing of the
determination that Cause for termination exists prior to having made the
payments required pursuant to this Agreement, such payment shall not be made
unless the Company withdraws its determination, if the court determines that Cause
did not exist, or if the parties agree otherwise.

 17
 

IN WITNESS
WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

 

	
   

  	
   

  	
   

  
	
  

  	
   

  	
  QWEST COMMUNICATIONS

  
	
  EDWARD A.
  MUELLER

  	
  INTERNATIONAL INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  	
   

  
								

 

 18

Exhibit A

Board Service

 

Cakebread Winery
of Napa Valley

The Clorox Company

GSC Acquisition
Company

VeriSign, Inc.

 19
 

Exhibit
B

Initial Grant of Stock Options
and Restricted Stock

 

Subject to the terms of the Equity Agreement between Executive and the
Company dated August 10, 2007 (the “Grant Date”), the Executive shall be
granted: (1) non-qualified options to acquire 2,083,000 shares of Common Stock
(the “Option Award”); and (2) shares of restricted Common Stock having an
approximate value of $7,500,000 (the “Restricted Stock Award”).  The option price with respect to the Option
Award is the closing price per share of the Common Stock reported on the New
York Stock Exchange on the Grant Date. The number of shares of restricted
Common Stock shall be determined by dividing the dollar value above by the
closing price per share of the Common Stock reported on the New York Stock
Exchange on the Grant Date, then rounding to the nearest 1,000 shares.

 

 20
 

EXHIBIT C

WAIVER AND RELEASE
AGREEMENT

1.                                       Release and Waiver of Claims and Covenant Not to Sue.

As a free and voluntary
act, you hereby release and discharge and covenant not to sue, Qwest
Communications International Inc., any present or former subsidiary or
affiliated Company, any predecessor or successor, and the directors, officers,
employees, shareholders and agents of any or all of them, (hereinafter “Qwest”),
from any and all debts, obligations, claims, liability, damages, punitive
damages, demands, judgments and/or causes of action of any kind whatsoever,
including specifically but not exclusively:

·              all
claims relating to or arising out of your employment with Qwest;

·              all
claims arising out of your Employment Agreement or any other agreements between
you and the Company, except as specifically set forth herein;

·              all
claims relating to or arising from any claimed breach of an alleged oral or
written employment contract, quasi-contracts, implied contracts, payment for
services, wages or salary and/or promissory estoppel;

·              any
alleged tort claims;

·              any
claims for libel and/or slander;

·              all
claims relating to purported employment discrimination or civil rights
violations or arising under any federal or state employment statutes including,
without limitation, claims under Title VII of the Civil Rights Act of 1964, as
amended; claims under the Civil Rights Act of 1991; claims under the Age
Discrimination in Employment Act of 1967, as amended; claims under 42 U.S.C. §
1981, § 1981a, § 1983, § 1985, or § 1988; claims under the Family and Medical
Leave Act of 1993; claims under the Americans with Disabilities Act of 1990, as
amended; claims under the Rehabilitation Act of 1973; claims under the Fair
Labor Standards Act of 1938, as amended; claims under the Worker Adjustment and
Retraining Notification Act; claims under the Colorado Anti-Discrimination Act;
and claims under the Employee Retirement Income Security Act of 1974, as
amended; or any other applicable federal, state or local statute or ordinance,
including claims for attorneys’ fees;

·              any
and all claims which you might have or assert against Qwest (1) by reason of
your employment with and/or termination of employment from Qwest and all
circumstances related thereto; or (2) by reason of any other matter, cause, or
dispute  whatsoever between you and Qwest
which arose prior to the effective date of this Agreement.  This Agreement excludes any claims you may
make under (1) the applicable

 21
 

state unemployment
compensation laws, (2) applicable workers’ compensation statutes, (3) for
indemnification to the extent permitted or required by the bylaws of a Qwest
company, your Employment Agreement or applicable state law; (4) claims as a
shareholder of Qwest; (5) the right to enforce the severance and benefit
continuation provisions of your Employment Agreement and any other provision of
your Employment Agreement that by its terms extends beyond your termination of
employment; (6) claims for vested employee benefits; and (7) claims which arise
after the execution of this Agreement;

·              your
right to seek individual relief on your own behalf for any charges of
discrimination filed with any federal, state or local agency, pending or
otherwise, arising from or related to your employment or termination of
employment with Qwest.

2.                                       By
signing this Waiver and Release Agreement, you confirm that that you are
subject to the Arbitration agreement set forth at paragraph 11.13 of your
Employment Agreement.

3.                                       You agree that
the severance payments and benefits provided by your Employment Agreement are
considerations to which you would not otherwise be entitled unless you sign
this Agreement, and that these considerations constitute payment in exchange
for signing this Agreement.

4.                                       If one or more
terms, provisions or parts of this Agreement are found by a court or arbitrator
to be invalid, illegal, or incapable of being enforced by any rule of law or
public policy, the terms, provisions or parts shall be modified to the extent
(but not more than is) necessary to make the provision enforceable.  You agree that if any portion of this
Agreement is found to be unenforceable or prohibited, the remainder of this
Agreement shall remain in full force and effect, unless the material terms and
intent of this Agreement are materially changed by the fact that a portion of
this Agreement is unenforceable or prohibited.

5.                                       You
agree that this Agreement shall not be admissible in any proceeding as evidence
of any improper conduct by Qwest against you and Qwest denies that it has taken
any improper action against you in violation of any federal, state, or local law
or common law principle.

6.                                       You
acknowledge that no promises or representations have been made to induce you to
sign this Agreement other than as expressly set forth herein and that you have
signed this Agreement as a free and voluntary act.

7.                                       You
acknowledge that this Waiver and Release Agreement means, in part, that you
give up all your rights to damages and/or money based upon any claims against
Qwest of age discrimination.  You do not
waive your rights to make claims for damages and/or money which arise after the
date this Agreement is signed.  Under the
Age Discrimination in Employment Act, you have the right within seven days of
the date you sign this Agreement to revoke your waiver of rights to claim
damages and/or money.  In the event you
revoke your agreement to be obligated to the terms of this Agreement, the
benefits offered herein shall be null and void, meaning you will receive no
involuntary termination 

 22
 

benefits under your
Severance Agreement.  To be effective,
your revocation must be in writing and delivered to Executive Vice President
and Chief Human Resources Officer, Qwest Communications International, Inc.
1801 California Street, Denver, Colorado 80202, within the seven-day
period.  If by mail, the revocation must
be (1) postmarked within the seven-day period, (2) properly addressed, and (3)
sent by certified mail, return receipt requested.

8.                                       You
acknowledge that you (a) have had sufficient opportunity (not less than 45
days) to review this Waiver and Release Agreement, (b) have been encouraged to
consult with and have had sufficient opportunity to consult with your attorney
and financial advisor before signing this Waiver and Release Agreement, and (c)
that you understand and agree to all of the terms of this Waiver and Release
Agreement.

AGREEMENT

I have read and I understand the terms of the
foregoing Waiver and Release, and I hereby agree to all of the terms of the
foregoing Agreement.

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive’s Signature

  	
   

  	
  (Date)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Please return
  all pages of this signed agreement to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Executive
  Compensation

  	
   

  	
   

  
	
  1801 California
  Street

  	
   

  	
   

  
	
  23rd Floor

  	
   

  	
   

  
	
  Denver, Colorado
  80202

  	
   

  	
   

  
					

 

 23

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