Document:

EXHIBIT 10.31

 

EXHIBIT 10.31

Portions of this agreement
have been omitted and separately filed with the SEC with a request
for confidential treatment. The location of those omissions have been
noted by [**].

DISTRIBUTION AGREEMENT

FOR FLUVIRALTM (INFLUENZA VACCINE)

between

ID BIOMEDICAL CORPORATION

and

HENRY SCHEIN, INC.

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	1.

	 	DEFINITIONS
	 	 	1	 
	 
	 	 	 	 	 	 
	2.

	 	APPOINTMENT AND AUTHORITY OF DISTRIBUTOR
	 	 	3	 
	 
	 	 	 	 	 	 
	3.

	 	SUPPLY AND PURCHASE OF PRODUCT
	 	 	4	 
	 
	 	 	 	 	 	 
	4.

	 	PURCHASE PRICE AND PAYMENT
	 	 	7	 
	 
	 	 	 	 	 	 
	5.

	 	DELIVERY OF PRODUCT
	 	 	7	 
	 
	 	 	 	 	 	 
	6.

	 	MARKETING OF PRODUCT
	 	 	9	 
	 
	 	 	 	 	 	 
	7.

	 	REGULATORY COMPLIANCE
	 	 	10	 
	 
	 	 	 	 	 	 
	8.

	 	TRADEMARKS AND OTHER INTELLECTUAL PROPERTY
	 	 	12	 
	 
	 	 	 	 	 	 
	9.

	 	CONFIDENTIAL INFORMATION; PUBLICITY
	 	 	13	 
	 
	 	 	 	 	 	 
	10.

	 	FORCE MAJEURE
	 	 	14	 
	 
	 	 	 	 	 	 
	11.

	 	WARRANTIES OF IDB AND HSI
	 	 	15	 
	 
	 	 	 	 	 	 
	12.

	 	INDEMNIFICATION OBLIGATIONS OF IDB AND HSI
	 	 	17	 
	 
	 	 	 	 	 	 
	13.

	 	INSURANCE OBLIGATIONS OF IDB AND HSI
	 	 	18	 
	 
	 	 	 	 	 	 
	14.

	 	LIMITATION OF LIABILITY
	 	 	18	 
	 
	 	 	 	 	 	 
	15.

	 	TERM AND TERMINATION
	 	 	19	 
	 
	 	 	 	 	 	 
	16.

	 	NOTICES
	 	 	21	 
	 
	 	 	 	 	 	 
	17.

	 	ASSIGNMENT
	 	 	21	 
	 
	 	 	 	 	 	 
	18.

	 	GOVERNING LAW, JURISDICTION AND VENUE
	 	 	21	 
	 
	 	 	 	 	 	 
	19.

	 	MISCELLANEOUS
	 	 	22	 

	 	 	 
	SCHEDULES:

	 	 
	SCHEDULE 1

	 	MINIMUM QUANTITY; PURCHASE PRICE AND ADJUSTMENT; RESALE TO OTHER DISTRIBUTORS; AND
PAYMENT TERMS
	SCHEDULE 2

	 	TRADEMARK(S)
	SCHEDULE 3

	 	COMMITMENTS TO GOVERNMENT OF CANADA
	SCHEDULE 4

	 	ADVERSE REACTION REPORTING
	SCHEDULE 5

	 	PRODUCT RECALL PROCEDURE

i

 

Portions of this agreement have been omitted and separately filed with the SEC with a request for confidential treatment. The location of those omissions have been noted by [**].

DISTRIBUTION AGREEMENT

      This DISTRIBUTION AGREEMENT (together with the attachments and exhibits hereto, the
“Agreement”) is entered into as of December 2, 2004 (the “Effective Date”) by and between ID
BIOMEDICAL CORPORATION, a corporation organized and existing under the laws of the Company Act of
British Columbia and having its principal office at 1630 Waterfront Centre, 200 Burrard Street,
Vancouver, BC V6C 3L6 Canada (“IDB”), and HENRY SCHEIN, INC., a corporation organized and existing
under the laws of the State of Delaware, USA and having its principal office at 135 Duryea Road,
Melville, NY 11747 USA (“HSI”).

WHEREAS:

      A. IDB develops and manufactures proprietary vaccines, including an injectable vaccine for the
prevention of influenza virus infection in humans that is approved in Canada and under development
for the U.S. market, and has all right, title and interest in the Product (as defined below); and

      B. HSI is a leading distributor of vaccines in the Territory (as defined below), with
expertise in sales, marketing and cold chain logistics, and desires to and has agreed to act as
non-exclusive distributor of IDB for sales of Product in the Territory; and

      C. IDB is willing to supply HSI with Product for resale in the Territory, and HSI is willing
to purchase Product for resale in the Territory, on the terms and conditions of this Agreement.

      Now, therefore, in consideration of the foregoing premises and the mutual covenants and
undertakings set forth below, the Parties hereby agree as follows:

1. DEFINITIONS

      1.1 “Affiliate” means, with respect to a Party, any corporation or other business entity that,
directly or indirectly, is Controlled by, Controls or is under common Control with such Party, but
only for so long as such relationship exists. “Control,” as used in this Section 1.1, means having
the power to direct, or cause the direction of, the management and policies of any entity, whether
through ownership of voting securities, by contract, or otherwise.

      1.2 “Average Sell Price” shall mean [**]

      1.3 “Commencement Date” shall mean the date that IDB receives the initial Marketing
Authorization from the Regulatory Authority required to market Product in the Territory in the
first Flu Season, which shall in no event be later than April 1, 2008 or, if such initial Marketing
Authorization is received prior to such date, then the Commencement Date shall be as provided in
Section 7.2 below.

[**] - Confidential or
proprietary information redacted.

 

 

      1.4 “Confidential Information” shall mean any confidential or proprietary information
(including, without limitation, know-how, trade secrets, and other confidential or proprietary
information relating to Product research, development, manufacturing, marketing, sales and
financial information related thereto), whether oral, visual or written, that is disclosed by one
Party hereto (the “Disclosing Party”) to the other (the “Receiving Party”) in connection with this
Agreement, including, without limitation, reports provided by HSI to IDB pursuant to Section 2.3
below.

      1.5 “Flu Season” shall mean the period from approximately October 1 through March 31.

      1.6 “Intellectual Property” shall mean any patent, copyright, trade secret, know-how,
trademark, tradename, design right, moral rights or other intellectual property right related to
the Product under the laws of any governmental authority, domestic or foreign, including all
applications and registrations related to any of the foregoing.

      1.7 “Marketing Authorization” shall mean the Biologics License Application (BLA) approved by
the Regulatory Authority and required to distribute or to deliver for distribution Product lawfully
in the Territory, together with any renewals and replacements thereof and amendments thereto.

      1.8 “Minimum Doses” shall mean the number of doses of Product set forth in clause (i) of
Paragraph 1 of Schedule 1 to this Agreement.

      1.9 “Minimum Percentage” shall mean the percentage set forth in clause (ii) of Paragraph 1 of
Schedule 1 to this Agreement.

      1.10 “Minimum Quantity” shall mean the quantity of Product that the Parties have agreed shall
be the minimum quantity to be purchased by HSI from IDB for each Flu Season, as specified in
Paragraph 1 of Schedule 1 to this Agreement, as such Minimum Quantity may be modified from time to
time in accordance with the terms of this Agreement; such Minimum Quantity shall be subject to
IDB’s annual influenza vaccine commitments and pandemic commitments to the Government of Canada
during the Term (as provided in Section 3.2).

      1.11 “Net Sales Revenue” shall mean [**]

      1.12 “Other Distributors” shall mean sub-distributors, wholesalers and other resellers to
which HSI may sell Product in accordance with Paragraph 3 of Schedule 1 to this Agreement.

      1.13 “Parties” shall mean IDB and HSI, and “Party” shall mean either of them as the context
indicates.

      1.14 “Product” shall mean IDB’s injectable influenza virus vaccine product [**]

      1.15 “Purchase Price” shall mean the price to be paid by HSI to IDB for all doses of Product
supplied to HSI under this Agreement, as set forth in Paragraph 2 of Schedule 1 to this Agreement.

[**] - Confidential or
proprietary information redacted.

2

 

      1.16 “Regulatory Authority” shall mean the United States Food and Drug Administration, an
agency of the U.S. Department for Health and Human Services, and any successor agency thereto.

      1.17 “Shipping Point” shall mean a single distribution center located in the continental
United States to which Product shall be shipped under this Agreement, which single distribution
center shall be nominated by HSI in its discretion from time to time, but not more than once for
any given Flu Season.

      1.18 “Specifications” shall mean the specifications provided in the Marketing Authorization,
including, but not limited to, those specifications to ensure that the Product is and will continue
to be safe, pure and potent, as such specifications may be modified from time to time in accordance
with the terms of this Agreement or so as to comply with the requirements of the Regulatory
Authority.

      1.19 “Term” shall mean the duration of this Agreement as specified in Section 15.1.

      1.20 “Territory” shall mean the United States of America, including all fifty (50) states and
the District of Columbia, and all of its territories and possessions.

      1.21 “Third-Party Vaccine Products” shall mean injectable influenza virus vaccine products,
manufactured by or on behalf of any person or entity other than IDB or its Affiliates, [**]

      1.22 “Trademark(s)” shall mean the trademark(s), trade names, service marks and logos
identified in Schedule 2 to this Agreement, and such other trademark(s), trade names, service marks
and logos as may be identified and indicated to HSI by IDB in writing from time to time during the
Term.

      1.23 “Transfer Price” shall have the meaning given in Paragraph 2(B) of Schedule 1 to this
Agreement.

2. APPOINTMENT AND AUTHORITY OF DISTRIBUTOR

      2.1 Subject to the terms and conditions of this Agreement, IDB hereby appoints HSI as its
non-exclusive distributor for the resale of Product in the Territory, and HSI hereby agrees to act
in that capacity beginning on the Commencement Date. HSI hereby agrees that [**]. HSI shall have
the non-exclusive, non-assignable (except in accordance with Section 17 below), non-licensable and
non-sublicensable right, after the Commencement Date and throughout the Term, to promote, sell,
market and distribute Product to customers (either directly or through Affiliates or Other
Distributors) in the Territory; provided, however, HSI shall not resell to Other Distributors more
than the allowable maximum number of doses of Product specified in Paragraph 3 of Schedule 1. HSI
may, on and after the Commencement Date, describe itself as a distributor of Product for IDB in the
Territory but it shall not hold itself out as IDB’s agent or representative or as otherwise being
authorized to bind IDB in any way. IDB hereby grants to each of HSI’s Affiliates and Other
Distributors the rights granted to HSI in this Section 2.1 solely to the extent necessary to
perform their obligations with respect to the Product.

[**] - Confidential or
proprietary information redacted.

3

 

      2.2 HSI shall actively promote, distribute and sell Product only within the Territory, and
neither HSI nor its Affiliates or Other Distributors shall promote or solicit orders for Product or
donate, sell, offer to sell or otherwise distribute Product outside the Territory, or where they
ought reasonably to be aware that the ultimate destination for Product is outside the Territory.
HSI and its Affiliates and Other Distributors and their respective employees and agents shall not
promote Product for any indications not approved for such Product by the Regulatory Authority. HSI
shall forward to IDB all inquiries relating to Product from customers or potential customers
outside the Territory.

      2.3 As Product distributor, HSI shall determine the prices and other terms and conditions
under which it offers Product for sale and sells Product to customers within the Territory. On or
prior to the Commencement Date, HSI shall provide IDB with a resale certificate in such form, and
containing such information, as required by IDB. On a monthly basis during the Term, beginning
after the Commencement Date, HSI shall provide a detailed written report to IDB, in a mutually
agreeable format, describing [**]. HSI shall deliver such reports to IDB in connection with the
monthly meetings conducted pursuant to Section 6.3. Notwithstanding the foregoing, HSI shall not
be required to identify names or addresses of customers of Product or Third-Party Vaccine Products
and shall not be required to provide information which HSI is prohibited by contract or law from
providing to third parties.

      2.4 HSI shall not make any alterations or knowingly permit any alterations to be made to
Product without IDB’s express written consent, which consent may be withheld in IDB’s sole
discretion.

      2.5 The Parties acknowledge and agree that IDB may sell Product to any United States
governmental agency or body at any time between the Effective Date and the Commencement Date under
a special procurement process to address influenza vaccine shortages or other immediate needs of
the U.S. government, and such sales shall not be subject to the terms of this Agreement; provided,
however, that IDB may indicate to the U.S. government a preference for distribution of some
quantity of Product under such circumstances by and through HSI, although IDB shall not be deemed
to be in breach of this Agreement or to have any liability to HSI, and HSI shall have no right to
terminate this Agreement or exercise any other remedies against IDB, if IDB does not indicate such
preference to the U.S. government or the U.S. government fails to distribute Product under such
circumstances by or through HSI.

3. SUPPLY AND PURCHASE OF PRODUCT

      3.1 Subject to Section 3.2 and Paragraph 2(C) of Schedule 1 to this Agreement, IDB agrees to
use commercially reasonable efforts to develop, manufacture, apply for Marketing Authorization of,
apply for the release of and deliver to HSI, on or before the delivery dates specified in Schedule
1, the Minimum Quantity of Product as a final, packaged product. HSI hereby commits to purchase
the Minimum Quantity of Product provided by IDB to HSI for each Flu Season from and after the
Commencement Date during the Term, for the Purchase Price described in Schedule 1, provided
delivery and release of the Minimum Quantity occurs on or before [**] of such Flu Season. IDB
agrees to notify HSI promptly of any delay in the manufacturing and shipping schedule, the cause of
such delay and the anticipated extent of such delay, or in the event IDB is unable to manufacture
(and the cause for such inability to

[**] - Confidential or
proprietary information redacted.

4

 

manufacture) some or all of the Minimum Quantity of Product for any given Flu Season.
Recognizing the difficulties involved in vaccine manufacturing, the Parties acknowledge and agree
that IDB shall not be deemed to be in breach of this Agreement or to have any liability to HSI, and
HSI shall have no right to terminate this Agreement under this Section 3.1 or exercise any other
remedies against IDB, if IDB fails to manufacture any or all of the Minimum Quantity of Product for
any given Flu Season provided that IDB has used commercially reasonable efforts to develop,
manufacture, apply for Marketing Authorization of, apply for the release of and deliver to HSI, on
or before the delivery dates specified in Schedule 1, the Minimum Quantity of Product as a final,
packaged product. [**]

      3.2 Notwithstanding anything to the contrary in this Agreement, HSI acknowledges and agrees
that IDB’s obligation to supply the Minimum Quantity of Product to HSI under this Agreement is
subject to, and the Minimum Quantity shall be reduced by, IDB’s contractual annual commitments to
provide Product to the Government of Canada and additional contractual commitments to provide
Product to the Government of Canada in the event of influenza pandemics in Canada, if any, which
commitments shall have priority over IDB’s commitments to HSI hereunder. Such commitments to the
Government of Canada are described further on Schedule 3. The Parties agree that IDB shall not be
deemed to be in breach of this Agreement or to have any liability to HSI, and HSI shall have no
right to terminate this Agreement, in the event IDB is unable to supply HSI with the Minimum
Quantity of Product because of such commitments to the Government of Canada. IDB shall keep HSI
informed, in the monthly meetings described in Section 6.3, of the quantity (if any) of Product
necessary to meet such commitments to the Government of Canada for a given Flu Season and the
impact on the Minimum Quantity of Product available to HSI with respect to such Flu Season.

      3.3 Except as otherwise specified in Section 3.4 below, IDB agrees that, with respect to the
timing of shipment of a given quantity of Product into the Territory, IDB will allocate such
quantity of Product among HSI and IDB’s other distributors in the Territory on a pro rata basis,
based on HSI’s and each such other distributor’s respective Minimum Percentage. Thus, IDB will
supply HSI with a percentage of each lot of Product that is shipped into the Territory that is
approximately equal to HSI’s Minimum Percentage, subject to the overall Minimum Quantity
limitations set forth in this Agreement.

      3.4 HSI shall be granted a first right of refusal to acquire a percentage of increased
production of Product as provided in this Section 3.4. [**]

      3.5 All Product shall be packaged and labeled for sale and delivered by IDB to HSI in
accordance with the regulations of the Regulatory Authority, such packaging indicating that the
Product is manufactured by IDB and that the Trademarks are registered trademarks of IDB. Subject
to compliance with applicable regulations of the Regulatory Authority, IDB may at any time withdraw
the Product from the market or alter the Specifications as it deems necessary or appropriate and/or
as may be required by the Regulatory Authority, including without limitation changes in design,
production or packaging of Product.

      3.6 IDB shall be responsible for exporting Product from any location in which IDB may
manufacture or have manufactured Product and shall obtain any necessary export licenses required
for such export. IDB shall be responsible for obtaining any necessary licenses or

[**] - Confidential or
proprietary information redacted.

5

 

approvals of applicable regulatory agencies in the Territory required for the importation of
Product into the Territory and for the payment of all duties, fees and charges required for such
importation; provided, that, HSI shall be the importer of record of Product into the
Territory and HSI shall cooperate with and assist IDB, upon IDB’s written request and at IDB’s
expense, in obtaining approvals of regulatory agencies in the Territory required for the
importation of Product into the Territory.

      3.7 The Regulatory Authority’s release of each lot of Product is necessary before HSI is
allowed to distribute Product. The Parties recognize that the timing for obtaining Regulatory
Authority release is uncertain. However, IDB shall use its commercially reasonable efforts to
obtain the necessary Regulatory Authority releases as soon as reasonably possible each Flu Season
and, to the extent reasonably possible, by [**] of each Flu Season after the Commencement Date
for [**] of the Minimum Quantity and by [**] of each Flu Season after the Commencement Date for
[**] of the Minimum Quantity; provided, that, if and to the extent that Product is not
manufactured or available for release, or that some or all Regulatory Authority releases are not
obtained, on or before either [**] in a given Flu Season after the Commencement Date,
irrespective of the reason therefor, (i) IDB shall not be deemed to have breached any obligations
under this Agreement or to be liable to HSI hereunder provided that IDB has used its commercially
reasonable efforts to obtain the necessary Regulatory Authority releases as soon as reasonably
possible each Flu Season, and (ii) notwithstanding the provisions of Section 10 below, if [**] of
the Minimum Quantity of Product is not released by [**] in such Flu Season, HSI shall not be
obligated to purchase the amount of Product that was not released by such date. Notwithstanding
the foregoing, HSI may elect to purchase Product released after [**] (provided release is
obtained by a date acceptable to HSI), in which case it shall notify IDB in writing of HSI’s
decision to acquire Product released after [**] within five (5) business days after [**] ,
which notice shall include the quantity of Product HSI desires to purchase and the acceptable post-
[**] release date for such Product. If IDB reasonably believes such release date is achievable,
IDB shall use its commercially reasonable efforts to obtain Product release by such date (or by
such other date as the Parties may mutually agree in writing). HSI shall return to IDB (at IDB’s
expense) any Product not released by [**] that HSI decides not to purchase. HSI shall pay IDB
the Purchase Price for all Product released by [**] , as well as all Product released after
[**] that HSI elects to purchase, in accordance with the terms and conditions of this Agreement,
with no right to return such Product to IDB (except only as set forth in Sections 5.2 and 5.3) even
if HSI is unable to sell such Product.

      3.8 IDB will provide HSI with a copy of IDB’s key clinical development milestones for Product
in the Territory (the “Milestones”) promptly after execution of this Agreement, which Milestones
shall be subject to modification by IDB from time to time. IDB will provide HSI with written
reports regarding progress made with respect to the Milestones (as modified) as of June 30, 2005,
December 31, 2005, and quarterly thereafter through December 31, 2006. HSI agrees that the
Milestones and progress reports are being provided by IDB for informational purposes only, and that
IDB shall not be deemed to be in breach of this Agreement or to have any liability to HSI, and HSI
shall have no right to terminate this Agreement under this Section 3.8 or exercise any other
remedies against IDB, in the event the development of Product does not proceed in accordance with
the Milestones. HSI further agrees that the Milestones and all progress reports shall be
considered Confidential Information of IDB under this Agreement.

[**] - Confidential or
proprietary information redacted.

6

 

      3.9 [**]

4. PURCHASE PRICE AND PAYMENT

      4.1 HSI shall pay IDB the Purchase Price for the Minimum Quantity of Product, and all other
Product supplied by IDB to HSI under this Agreement, as the Purchase Price is described and
calculated in accordance with Paragraph 2 of Schedule 1.

      4.2 IDB may invoice HSI at any time after Product has been delivered to the Shipping Point.
Payment in full of the Transfer Price of all Product in each shipment shall be due and paid by HSI
to IDB within thirty (30) days after the later of (i) the date of delivery of such Product to the
Shipping Point or (ii) the date of release of such Product by the Regulatory Authority.
Reconciliation and payment or credit of the final Purchase Price (the Transfer Price as adjusted in
accordance with Paragraph 2(B) of Schedule 1) shall be made as provided in Paragraph 2(D) of
Schedule 1. Should HSI fail to pay IDB any amount due IDB on or before the due date for payment,
HSI shall pay IDB the full amount due plus interest on such unpaid amount from its original due
date until the date IDB receives full payment, such interest to be at the rate specified in
Paragraph 5 of Schedule 1. For the avoidance of doubt, in the event that Product is delivered to
HSI and invoiced by IDB, but subsequently is properly rejected by HSI in accordance with Sections
5.2 and 5.3 of this Agreement, then HSI shall pay the full Transfer Price, but IDB shall give
appropriate credit to HSI unless the rejected Product is replaced by IDB at IDB’s expense in
accordance with Section 5.3.

      4.3 During the term of this Agreement and for a period of three (3) years thereafter, HSI and
its Affiliates shall keep accurate books and records with respect to the sale and distribution of
Product in accordance with U.S. generally accepted accounting principles (“GAAP”) consistently
applied and in sufficient detail to enable IDB to determine the correctness of all payments made to
IDB hereunder. Upon written request by IDB, HSI shall permit an independent certified public
account or IDB in-house auditor or accountant (“Accountant”) (to be determined and selected by IDB
and reasonably acceptable to HSI), to inspect HSI’s books, records and facilities, and copy such
books and records, to the extent such Accountant reasonably deems necessary or appropriate for the
sole purposes of verifying the completeness and accuracy of the reports delivered and payments made
under this Agreement and ascertaining HSI’s compliance with its obligations under this Agreement.
The Accountant’s report based on such inspection shall be limited to a detailed report on those
subjects. [**] HSI will pay IDB the amount of any such deficiency within thirty (30) days of the
date of the invoice therefor, and shall pay interest at the rate specified in Paragraph 5 of
Schedule 1 for any past due amounts.

5. DELIVERY OF PRODUCT

      5.1 Subject to HSI’s satisfaction of its importation obligations under Section 3.6, IDB agrees
to deliver all Product ordered by HSI hereunder FOB Shipping Point.

      5.2 All Product is shipped on a non-returnable basis except only as set forth in Sections 3.7
and 5.3 and except if there is a Product recall. HSI shall pay IDB the Purchase Price for all
Product delivered to HSI and released by the Regulatory Authority even if HSI is unable

[**] - Confidential or
proprietary information redacted.

7

 

to sell such Product, subject only to HSI’s right to reject Product as provided below. Not
later than [**] days after its receipt of each shipment of Product at the Shipping Point, and
sooner if reasonably possible, HSI shall notify IDB as provided in Section 5.3 of any basis for
rejecting any such Product (the only bases for rejection being as specified in Section 5.3). If
HSI fails to give such notice to IDB within such period, then such Product shall be deemed to be
finally accepted by HSI. Notwithstanding the foregoing, if HSI thereafter discovers a latent
defect which could not readily be identified upon a reasonable inspection of Product at the time of
delivery to the Shipping Point, and such latent defect constitutes a Defective Product (as defined
in Section 11.4 below), HSI shall inform IDB of such Defective Product within five (5) business
days of such discovery, and the provisions of Section 5.3 shall apply.

      5.3 To reject Product, HSI shall, within the rejection period specified in Section 5.2, notify
IDB of its rejection in writing, describing in detail the basis for such rejection (which must be
either, and shall be limited to, (i) a Defective Product as defined in Section 11.4 below, or (ii)
physical damage to Product in the course of shipment to HSI) and the amount of Product affected,
and request a return authorization (“RA”) number. IDB shall provide the RA number to HSI within
[**] days after receipt of the request. Within [**] days after HSI’s receipt of the RA number,
HSI shall return to IDB the rejected Product, freight prepaid, with the RA number displayed on the
outside of the carton. IDB reserves the right to refuse to accept any rejected Product that does
not bear an RA number on the outside of the carton. As promptly as possible, and within [**]
days after receipt of properly rejected Product if reasonably possible, IDB shall use commercially
reasonable efforts to replace the Product, at its expense, as provided in Section 5.4. IDB shall
pay the shipping charges back to HSI for properly rejected Product; otherwise, HSI shall be
responsible for the shipping charges.

      5.4 In the event HSI rejects any shipment of Product in accordance with Sections 5.2 and 5.3
or in the event of failure to obtain Product releases from the Regulatory Authority by [**] of a
given Flu Season, then IDB shall use commercially reasonable efforts to provide, but shall not
guarantee to provide, replacement Product, subject in all respects to IDB’s commitments to the
Government of Canada as provided in Section 3.2. In the event IDB does not supply replacement
Product to HSI within a reasonable period (at least [**] days) and HSI notifies IDB in writing
that it elects not to wait beyond such period for replacement Product, then IDB shall credit HSI
for the amount, if any, previously paid by HSI for such rejected or unreleased Product, but IDB
shall not be deemed to be in breach of this Agreement or to have any liability to HSI because it
failed to supply replacement Product; provided, however, that if HSI has not yet paid for such
rejected or unreleased Product and IDB fails to supply replacement Product, HSI shall have no
obligation to pay for such rejected or unreleased Product. If IDB will not be able to supply
replacement Product until after [**] of a given Flu Season, then HSI may elect, at its option, to
accept such replacement Product after such date or to receive a credit for the amount, if any,
previously paid by HSI for the rejected or unreleased Product, provided that HSI notifies IDB in
writing of its election within five (5) business days after [**] . If HSI wrongfully rejects
Product or wrongfully fails to take delivery of any shipment of Product, then IDB shall be entitled
to invoice HSI for the Transfer Price and then the Purchase Price of such Product as set forth in
Schedule 1, together with the cost of disposing of such Product, if applicable, and HSI shall pay
such invoiced amount within thirty (30) days of the invoice date.

[**] - Confidential or
proprietary information redacted.

8

 

      5.5 Risk of loss of or damage to Product supplied by IDB to HSI shall pass to HSI at the time
Product is delivered to the Shipping Point. If HSI properly rejects Product in accordance with
Sections 5.2 and 5.3, then risk of loss of or damage to Product will pass back to IDB upon delivery
by HSI to the first return carrier. Title to Product shall pass to HSI at the time Product is
delivered to the Shipping Point. If any shipment of Product is delivered to the Shipping Point
before such Product is released by the Regulatory Authority, HSI shall quarantine such Product, at
its sole cost, until such Product is released. HSI shall have title to, and shall bear all
responsibility and liability with respect to, all Product after it is delivered to the Shipping
Point, including all Product in quarantine.

6. MARKETING OF PRODUCT

      6.1 Notwithstanding anything to the contrary in this Agreement, HSI hereby agrees that [**].
Without limiting HSI’s obligations under this Agreement, HSI may promote, sell and distribute
Third-Party Vaccine Products provided that such promotion, sale and distribution are consistent
with this Section 6.1 and HSI’s other obligations under this Agreement. [**]

      6.2 Without limiting its other obligations under this Agreement, HSI shall exercise
commercially reasonable efforts to actively promote the use and sale of Product and the use of the
FluviralTM brand name (or other Trademark as may be indicated by IDB) throughout the
Territory. In this context, “commercially reasonable efforts” means at least the quality and
quantity of efforts that HSI does or would use to promote the use and sale, and expand the sale, of
any influenza vaccine originated or sold by HSI that is distributed in substantially the same
quantities as the quantities of Product contemplated in this Agreement (with at least the same
level of advertising, promotion and sales support). IDB agrees to provide HSI with such technical
and clinical data as HSI may reasonably require in order to promote, distribute and sell Product in
the Territory, subject to the provisions of Section 9.

      6.3 HSI and IDB shall convene by telephone, videoconference or in person, on a quarterly
basis—and more frequently if reasonably requested by either Party— until the initial Marketing
Authorization for Product is received and then monthly thereafter—and more frequently if reasonably
requested by either Party—to discuss (as may be relevant at the time) regulatory developments
affecting Product, HSI’s marketing plan, strategy and marketing and sales efforts proposed for
Product for a given Flu Season, IDB’s Product supply issues, if any, IDB’s Product commitments to
the Government of Canada for a given Flu Season, as described in Section 3.2, and such other
relevant issues as either Party may propose. [**] Each Party shall consider in good faith the
views expressed by the other Party during such meetings.

      6.4 HSI shall, and shall require its Affiliates and Other Distributors to, conduct all
promotion, marketing, distribution and sale of Product, including, without limitation, handling,
inventory and storage of Product, in compliance with all applicable laws and regulations and all
applicable rules and requirements of IDB, including, without limitation, cold chain requirements
for Product as set forth in the package insert for Product each Flu Season, as the same may be
updated by IDB from time to time, and as otherwise may be required or reasonably prudent. When
promoting, marketing and selling Product, HSI shall, and shall require its Affiliates and Other
Distributors to: (i) provide IDB copies of all labels, promotion and marketing materials related
to Product promptly upon IDB’s request; (ii) make no false or misleading statements to

[**] - Confidential or
proprietary information redacted.

9

 

customers or others regarding IDB or Product, or make any representations, warranties or
guarantees with respect to Product other than those printed on the Product packaging or labeling
expressly included in Product information, in each case as provided or approved by IDB in writing
in advance and as permitted by law; (iii) comply with the procedures and requirements for adverse
reaction reporting (“Adverse Reaction Reporting”), which Adverse Reaction Reporting shall be as
required by applicable law or regulation and shall be mutually agreed upon in writing by the
Parties as promptly as practicable following receipt of appropriate regulatory approval and
Marketing Authorization for Product in the Territory (and prior to any distribution of Product by
HSI pursuant to this Agreement). (Once finalized, the Adverse Reaction Reporting will be attached
hereto as Schedule 4); (iv) in the event of a Product recall, perform such recall in accordance
with Section 11.4 and the applicable Product recall procedure (“Product Recall Procedure”), subject
to IDB’s prior written agreement to the recall and HSI’s ongoing consultation with IDB regarding
the recall. (The Product Recall Procedure will be mutually agreed upon in writing by the Parties
as promptly as practicable following receipt of appropriate regulatory approval and Marketing
Authorization for Product in the Territory (and prior to any distribution of Product by HSI
pursuant to this Agreement). (Once finalized, the Product Recall Procedure will be attached hereto
as Schedule 5); and (v) communicate with the Regulatory Authority concerning Product only with
IDB’s prior written consent (and, if requested by IDB, IDB’s participation in such communication).
If the Regulatory Authority requests information from HSI regarding Product, HSI shall keep IDB
fully informed of all such communications, provide IDB with copies of all such written
communications, consult with IDB regarding responses thereto, and allow IDB, at its request, to
control or to participate in formulating responses thereto (all in compliance with applicable laws
and regulations).

7. REGULATORY COMPLIANCE

      7.1 The Parties acknowledge that, as of the Effective Date of this Agreement, the Product has
not received Marketing Authorization from the Regulatory Authority. IDB shall, at its expense, use
commercially reasonable efforts to apply for, obtain and maintain in force the Marketing
Authorization(s) required to permit the supply, distribution and resale of Product in the Territory
in accordance with this Agreement. HSI shall give such reasonable assistance as IDB may require
from time to time in pursuing such applications for the Marketing Authorization. IDB shall
exercise commercially reasonable efforts to obtain the Marketing Authorization for Product in the
Territory as soon as reasonably practicable, but in any event on or before April 1, 2008 for the
2008/2009 Flu Season and by [**] in subsequent Flu Seasons. For the avoidance of doubt, IDB
gives no firm undertakings in relation to the grant of the Marketing Authorization by any date, or
at all, and, except for HSI’s right to terminate this Agreement as provided in Section 15.3.1, HSI
shall have no claim against IDB arising out of any failure to obtain the grant or renewal of the
Marketing Authorization.

      7.2 If IDB receives the initial Marketing Authorization on or before [**], 2005, the
Commencement Date shall be [**], 2005. If IDB receives the initial Marketing Authorization after
[**], 2005, then HSI shall have no obligation to acquire Product for the 2005/2006 Flu Season
provided, that, HSI may, by giving written notice to IDB within thirty (30) days after HSI
receives written notice that such initial Marketing Authorization has been received, elect to
acquire Product for the 2005/2006 Flu Season in which case the Commencement Date shall be the date
in 2005 as mutually agreed upon in writing by the Parties. Unless the Parties have

[**] - Confidential or
proprietary information redacted.

10

 

agreed upon such a 2005 Commencement Date, if IDB receives the initial Marketing Authorization
after [**], 2005 but on or before [**], 2006, the Commencement Date shall be [**], 2006. If IDB
receives the initial Marketing Authorization after [**], 2006, then HSI shall have no obligation to
acquire Product for the 2006/2007 Flu Season provided, that, HSI may, by giving written
notice to IDB within thirty (30) days after HSI receives written notice that such initial Marketing
Authorization has been received, elect to acquire Product for the 2006/2007 Flu Season in which
case the Commencement Date shall be the date in 2006 as mutually agreed upon in writing by the
Parties. Unless the Parties have agreed upon such a 2006 Commencement Date, if IDB receives the
initial Marketing Authorization after [**], 2006 but on or before [**], 2007, the Commencement Date
shall be [**], 2007. If IDB receives the initial Marketing Authorization after [**], 2007, then
HSI shall have no obligation to acquire Product for the 2007/2008 Flu Season provided,
that, HSI may, by giving written notice to IDB within thirty (30) days after HSI receives written
notice that such initial Marketing Authorization has been received, elect to acquire Product for
the 2007/2008 Flu Season in which case the Commencement Date shall be the date in 2007 as mutually
agreed upon in writing by the Parties. Unless the Parties have agreed upon such a 2007
Commencement Date or HSI has terminated this Agreement in accordance with Section 15.3.1 below, if
IDB receives the initial Marketing Authorization after [**], 2007 but on or before [**], 2008, the
Commencement Date shall be [**], 2008.

      7.3 IDB shall have the right (without liability to HSI) to terminate its obligations to supply
Product to HSI for any Flu Season upon notice to HSI if, as a result of any action taken by a
Regulatory Authority or any other governmental authority, it becomes impossible or commercially
impracticable for IDB to supply substantially all of the Minimum Quantity of Product for that Flu
Season in accordance with the terms of this Agreement. In such event, subject to Section 15.3,
this Agreement shall remain effective with respect to the supply of Product in subsequent Flu
Seasons.

      7.4 Unless the Regulatory Authority requires otherwise, the Marketing Authorization will be
issued in the name of and held by IDB. HSI shall give IDB prompt written notice of all changes to
the Marketing Authorization required by the Regulatory Authority of which it becomes aware. [**]

      7.5 HSI shall, at its expense, obtain and maintain in full force and effect throughout the
Term any and all licenses and approvals, other than the Marketing Authorization, necessary for the
storage, marketing, distribution and sale of Product in the Territory, in full compliance with all
applicable laws and regulations. HSI shall assume all responsibility for and shall comply with all
applicable laws and regulations concerning the inventory, storage, use, promotion, distribution and
sale of Products in the Territory and, correspondingly, for any damage, claim, liability, loss or
expense which IDB may suffer or incur by reason of said inventory, use, promotion, distribution and
sale, subject only to IDB’s obligations under Section 12.1. HSI shall not use any advertisement or
marketing material on, with respect to or relating to any Product unless such advertisement or
marketing material has first been submitted to and approved by IDB in advance in writing.

[**] - Confidential or
proprietary information redacted.

11

 

8. TRADEMARKS AND OTHER INTELLECTUAL PROPERTY

      8.1 All IDB Trademarks and derivatives thereof relating to Product, and all technology and
other Intellectual Property relating to Product and the goodwill associated therewith, are the sole
and exclusive property of IDB and/or its Affiliates. IDB hereby grants HSI permission to use the
Trademarks in the Territory for the limited purpose of HSI performing its rights and obligations
under this Agreement during the Term. Products shall be promoted, sold and distributed only under
the Trademarks. HSI shall ensure that each use of and reference to any of the Trademarks (by HSI,
its Affiliates or other Distributors) is accompanied by a statement that it is a registered
trademark of IDB. IDB may, in its sole discretion after consultation with HSI, modify or
discontinue the use of any Trademark and/or use one or more additional or substitute marks or
names, and HSI and its Affiliates and Other Distributors shall be obligated to do the same in
connection with marketing and selling Product. All representations of IDB’s Trademarks shall be
exact copies of those used by IDB or, if not, shall first be submitted to IDB for approval, which
approval shall not be unreasonably withheld or delayed. Upon written request, HSI shall give IDB
copies of examples of such usage in order to assess compliance with this Section.

      8.2 Neither HSI, its Affiliates, nor Other Distributors shall: (i) use the Trademarks in any
way that might prejudice their distinctiveness or validity or the goodwill of IDB therein; (ii) use
any Trademark in connection with the sale of any other product, or use any other trademark other
than the Trademarks, in connection with Product; (iii) modify Product or its labeling or packaging
or alter, obscure, or remove the Trademarks, indication of the source of origin, other means of
identification or other markings used on or in relation to Product; or (iv) at any time during or
after the term of this Agreement challenge or assist others to challenge the Trademarks or the
registration thereof, or use or make any application for registration in the Territory of any
trademarks or tradenames so resembling any trademark or tradename of IDB (including, without
limitation, any Trademark) as to be likely to cause confusion or deception.

      8.3 In the event HSI becomes aware of any infringement of, or threatened or suspected
infringement of, or challenge to any Trademark or other Intellectual Property of IDB, HSI shall
notify IDB immediately. IDB shall investigate any alleged violation and may take legal action as
it deems appropriate to resolve the issue and to prevent others from infringing on its Intellectual
Property rights within the Territory. At IDB’s reasonable request, and at IDB’s expense, HSI shall
cooperate with and assist IDB in connection with any such infringement.

      8.4 Except only for the limited rights as expressly permitted hereunder, and then only as
necessary for the proper performance of HSI’s obligations hereunder, HSI hereby acknowledges that
it shall acquire no rights, express or implied, in respect of any of IDB’s Intellectual Property,
including the tradenames or trademarks of IDB (including but not limited to the Trademarks) or of
the goodwill associated therewith and that all such rights and goodwill are, and shall remain,
vested in IDB.

      8.5 HSI will not do, nor will HSI allow or authorize its Affiliates, Other Distributors or
anyone else to do, any act which would or might invalidate or be inconsistent with the Intellectual
Property of IDB (including the Trademarks), and HSI shall not omit or allow or authorize anyone to
omit to do any act which, by its omission, would have that effect.

[**] - Confidential or
proprietary information redacted.

12

 

9. CONFIDENTIAL INFORMATION; PUBLICITY

      9.1 Both Parties recognize and acknowledge that each will have access to Confidential
Information of the other in connection with this Agreement. Other than as necessary to perform
their obligations under this Agreement, and except as otherwise permitted in this Section 9, both
Parties shall, during and after the Term keep all Confidential Information of the Disclosing Party
confidential and not disclose any such Confidential Information to any Third Party without the
express written consent of the Disclosing Party; and not use any Confidential Information of the
Disclosing Party for any purpose other than the performance of the Receiving Party’s obligations
under this Agreement.

      9.2 The Parties agree that the Confidential Information received from the Disclosing Party
hereunder shall not be disclosed to any employee, officer, or director of the Receiving Party or to
any of its Affiliates, except to those employees, officers, directors and Affiliates whose
responsibilities require such disclosure for purposes of performing the Receiving Party’s
obligations under this Agreement; provided that such employees, officers, directors and Affiliates
have entered into confidentiality agreements with provisions substantially similar to those set
forth in this Section 9.

      9.3 Confidential Information may be disclosed by a Receiving Party to the Regulatory Authority
or other governmental authority only to the extent necessary for the purposes contemplated by this
Agreement or as may be required by applicable law or regulation.

      9.4 Each Party agrees to use the same degree of care concerning the other Party’s Confidential
Information as it uses to protect its own confidential and proprietary technical information (but
no less than reasonable care) to prevent the unauthorized disclosure to any third party of the
Confidential Information received from the Disclosing Party hereunder. Except as expressly
provided in this Agreement, the Parties agree that they shall acquire no rights with respect to
Confidential Information of the other Party received hereunder.

      9.5 Confidential Information may be disclosed by a Receiving Party to a Third Party to the
extent that: (i) it is at the Effective Date, or thereafter becomes, public knowledge through no
act, omission or breach of this Agreement by the Receiving Party, its Affiliates or their
respective employees, officers or directors (provided that in doing so such Receiving Party shall
not disclose any Confidential Information which is not public knowledge); or (ii) it can be
reasonably shown by the Receiving Party, by written records in the Receiving Party’s possession
prior to disclosure, to have been known to the Receiving Party prior to disclosure by the
Disclosing Party; or (iii) such Confidential Information is required to be disclosed by law,
governmental or regulatory request or legal process; or (iv) to the extent such Confidential
Information is disclosed in connection with any legal or other dispute resolution proceedings
between the Parties hereto.

      9.6 The Receiving Party shall, within thirty (30) days following receipt of a request by the
Disclosing Party or termination or expiration of this Agreement, return and deliver (or if so
requested destroy and provide a certificate of destruction) to the Disclosing Party all copies of
Confidential Information of the Disclosing Party in the Receiving Party’s possession or under its
control; provided that each Party may retain one copy of such information solely for (i) archival

[**] - Confidential or
proprietary information redacted.

13

 

purposes, (ii) determination and reconciliation of the Parties’ respective rights and
obligations following such termination or expiration, or (iii) use in a dispute resolution
procedure that may arise between the Parties.

      9.7 Neither Party shall issue press releases or make public announcements relating to this
Agreement without the other Party’s prior written approval, which approval shall not be
unreasonably withheld or delayed; provided, however, that nothing in this Section shall impair
either Party’s compliance with any requirements of the Securities and Exchange Commission or the
national securities exchange or other stock market on which such Party’s securities are traded. In
connection with any filing by either Party of a copy of this Agreement with the Securities and
Exchange Commission (or the national securities exchange or other stock market on which such
Party’s securities are traded), the filing Party shall endeavor to obtain confidential treatment of
economic and trade secret information. Reasonably in advance of filing, the filing Party shall
provide to the other Party a copy of the proposed filing and the Parties shall work cooperatively
in good faith, taking into consideration the other Party’s suggestions, regarding the information
for which the filing Party will seek to obtain confidential treatment.

10. FORCE MAJEURE

      10.1 Neither Party shall be under any liability to the other for failure or delay in the
performance of any obligation hereunder or part thereof (other than obligations to pay money) to
the extent and for the period that such performance is prevented by reason of Force Majeure (as
defined below), provided that the Party claiming the benefit of this Section promptly begins, and
thereafter diligently pursues, the cure of such Force Majeure and gives written notice of the Force
Majeure to the other within thirty (30) days of the occurrence of the event of Force Majeure. For
purposes of this Agreement, “Force Majeure” shall mean any cause preventing or obstructing the
performance of this Agreement arising from or attributable to acts, events or circumstances beyond
the reasonable control of, and not caused by the negligence of, the Party affected, including but
not limited to epidemic of disease, Act of God, shortage of materials, war, acts of terrorism,
strikes or labor disputes, accidents, fire, breakdown of machinery, acts of government or other
legal authority (including any Regulatory Authority), riot or civil commotion. Notwithstanding the
foregoing, in the event IDB fails to deliver to the Shipping Point the Minimum Quantity, as such
Minimum Quantity may be adjusted as provided in this Agreement, for any given Flu Season due to an
event of Force Majeure, HSI shall have the option to extend the Term for one additional Flu Season
for each such Flu Season that the Minimum Quantity was not delivered, in which case, HSI shall
notify IDB in writing of HSI’s election to extend the Term within five (5) business days after the
last day of such Flu Season for which the Minimum Quantity was not delivered.

      10.2 If the performance of this Agreement shall be prevented for a period exceeding three (3)
months from the date of notice given pursuant to Section 10.1 due to an event of Force Majeure, the
Party receiving notice of an event of Force Majeure shall be entitled to terminate all obligations
regarding the supply of Product in the affected Flu Season forthwith by giving written notice to
the other. As regards the supply of Product for all other Flu Seasons during the Term, subject to
Sections 15.3 and 15.4, this Agreement shall continue in full force and effect.

[**] - Confidential or
proprietary information redacted.

14

 

11. WARRANTIES OF IDB AND HSI

      11.1 IDB warrants that:

     11.1.1 the Product supplied to HSI hereunder shall, at the time of delivery to the
Shipping Point, conform in all material respects to the Specifications, including, without
limitation, with respect to design of Product, and such Product will not, at the time of its
delivery to the Shipping Point, be adulterated or misbranded within the meaning of the U.S.
Food, Drug and Cosmetic Act, 21 U.S.C. §301 et seq., as it may be amended from time to time;

     11.1.2 to its actual knowledge as of the Effective Date, it has received no notice from
any third party claiming that the manufacture, use or sale of Product will infringe any
Intellectual Property rights of any third party;

     11.1.3 subject to Sections 3.1 and 7.1, it shall manufacture Product in compliance with
all applicable laws, rules and regulations, including the conditions of the Marketing
Authorization, including current Good Manufacturing Practice;

     11.1.4 it has taken, and during the Term will take, all commercially reasonable action
(as provided in Section 8.3) against any third party claiming any rights to Product which
would conflict with the rights granted to HSI hereunder.

     11.1.5 title to Product will pass to HSI (as provided in Section 5.5) free and clear of
all third party liens, claims, security interests, or other encumbrances;

     11.1.6 it has the full right, power and authority, and has taken all corporate action
necessary, to execute, deliver and perform this Agreement; and

     11.1.7 its execution and delivery of this Agreement does not, and performance by it of
its obligations hereunder will not, constitute a breach of, or conflict with, any agreement,
order, judgment, decree or other arrangement, whether written or oral, to which it is a
party or by which it is bound as of the Effective Date.

      11.2 HSI warrants that:

     11.2.1 its statements to IDB and calculations of the Average Sell Price, the Transfer
Price and the final Purchase Price of all Product supplied by IDB each Flu Season under this
Agreement, and all underlying data, as reported in accordance with Section 2.3 or otherwise
to IDB, shall be accurate statements and calculations of those terms, determined in
accordance with this Agreement (including in Schedule 1), and no discounts or other
concessions directly or indirectly related to HSI’s sales of other products to Other
Distributors or to the same customers that purchase Product shall be applied to or used in
the calculation of the Average Sell Price or to reduce Net Sales Revenue used in calculating
the Average Sell Price, the Transfer Price or the Purchase Price;

[**] - Confidential or
proprietary information redacted.

15

 

     11.2.2 it shall comply fully at its expense with all applicable laws, rules and
regulations in the Territory (including, without limitation, those of the Regulatory
Authority) pertaining to the storage, handling, inventory, marketing, distribution and sale
of Product, and shall market and sell Product only for the uses and applications set forth
in, and in accordance with, the Marketing Authorization;

     11.2.3 it has the full right, power and authority, and has taken all corporate action
necessary, to execute, deliver and perform this Agreement; and

     11.2.4 its execution and delivery of this Agreement does not, and performance by it of
its obligations hereunder will not, constitute a breach of, or conflict with, any agreement,
order, judgment, decree or other arrangement, whether written or oral, to which it is a
party or by which it is bound as of the Effective Date.

      11.3 EXCEPT FOR THE WARRANTIES EXPRESSLY SET FORTH IN SECTIONS 11.1 AND 11.2, NEITHER IDB NOR
HSI MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS, IMPLIED OR OTHERWISE. WITHOUT
LIMITING THE FOREGOING SENTENCE, IDB SPECIFICALLY DISCLAIMS, AND HSI EXPRESSLY WAIVES (i) ANY
EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO
PRODUCT, WHETHER USED ALONE OR IN CONNECTION WITH OTHER SUBSTANCES OR MATERIALS; AND (ii) ANY
LIABILITY WITH RESPECT TO ANY PRODUCT THAT HAS BEEN ALTERED, MODIFIED OR TAMPERED WITH AFTER
DELIVERY TO THE SHIPPING POINT; OR BEEN SUBJECTED TO MISUSE, NEGLIGENCE OR OTHERWISE DAMAGED AFTER
DELIVERY TO THE SHIPPING POINT; OR, AFTER DELIVERY TO THE SHIPPING POINT, HAS BEEN STORED, HANDLED,
OR USED IN A MANNER CONTRARY TO APPLICABLE LAWS OR REGULATIONS OR IDB’S INSTRUCTIONS; OR HAS
EXCEEDED ITS STATED EXPIRATION DATE.

      11.4 EXCEPT AS PROVIDED IN SECTION 12, HSI’S EXCLUSIVE REMEDY FOR BREACH OF ANY WARRANTY BY
IDB UNDER SECTION 11.1.1 IS THE DELIVERY BY IDB, IN ACCORDANCE WITH SECTIONS 5.3 AND 5.4, OF
ADDITIONAL QUANTITIES OF PRODUCT IN REPLACEMENT OF THE PRODUCT THAT, AT THE TIME OF DELIVERY TO THE
SHIPPING POINT, WAS NOT IN COMPLIANCE WITH IDB’S WARRANTY IN SECTION 11.1.1 (“DEFECTIVE PRODUCT”),
OR THE REFUND OF THE PURCHASE PRICE FOR SUCH DEFECTIVE PRODUCT, AT HSI’S OPTION. HSI shall have
the right, which it must exercise in accordance with the provisions of (and subject to the
limitations of) Sections 5.2 and 5.3, to return and demand the replacement of any such Defective
Product to IDB. Provided that HSI gives IDB all assistance reasonably requested by IDB relating to
any recall of Defective Product and is in material compliance with the Product Recall Procedures
and the requirements of the Regulatory Authority and any other applicable legal requirements in
connection therewith (to the extent such requirements are applicable to HSI), IDB shall reimburse
to HSI the costs reasonably incurred by HSI directly in connection with the recall of Defective
Product, including the replacement or destruction of such Defective Product. In all other
circumstances, HSI, not IDB, shall bear the cost of any recall or

[**] - Confidential or
proprietary information redacted.

16

 

replacement of such Defective Product. With respect to any Product recall, the Parties shall
follow the Product Recall Procedure to be set forth in Schedule 5 to this Agreement.

12. INDEMNIFICATION OBLIGATIONS OF IDB AND HSI

      12.1 IDB shall indemnify, defend and hold HSI and its Affiliates, and their respective
directors, officers, employees and agents (“HSI Indemnitees”), harmless from and against any and
all claims, actions, causes of action, liabilities, losses, costs and expenses (including
reasonable attorneys’ fees) incurred thereby or caused thereto arising out of third-party claims
(i.e., claims by parties other than an HSI Indemnitee) relating to Product to the extent that such
claims arise out of or result from (i) any defect in Product at the time it was delivered to the
Shipping Point, where such defect constitutes a breach of IDB’s warranty under Section 11.1.1; (ii)
the failure of IDB to provide disclosure of contraindications, adverse reactions or other
information in Product packaging or labeling as required under applicable laws or regulations;
(iii) any material breach of this Agreement by IDB (including, without limitation, material breach
of its warranties hereunder); (iv) the labeling or packaging of Product by or on behalf of IDB; (v)
the possession, distribution, sale and/or use of Product, including claims of bodily injury, death,
property damage or similar third-party claims; or (vi) the negligence or willful misconduct of IDB;
provided, that, IDB shall have no duty to indemnify, defend or hold harmless any HSI
Indemnitee to the extent HSI, its Affiliates or Other Distributors caused or contributed to losses
or claims (including claims of bodily injury, death, property damage or similar third-party
claims), or to the extent HSI is obligated to indemnify IDB under Section 12.2; and
provided, further, that, without diminishing IDB’s obligations under this Section 12.1,
nothing in this Section 12.1 shall create or imply liability for IDB under other sections of this
Agreement where such liability is expressly disclaimed.

      12.2 HSI shall indemnify, defend and hold IDB and its Affiliates, and their respective
directors, officers, employees and agents (“IDB Indemnitees”), harmless from and against any and
all claims, actions, causes of action, liabilities, losses, costs and expenses (including
reasonable attorneys’ fees) incurred thereby or caused thereto, arising out of third-party claims
(i.e., claims by someone other than an IDB Indemnitee and including claims of bodily injury, death,
property damage or similar third-party claims) relating to Product to the extent that such claims
arise out of or result from (i) any material breach of this Agreement by HSI (including, without
limitation, material breach of its warranties hereunder), (ii) any acts or omissions by or on
behalf of HSI, its Affiliates or Other Distributors or their respective employees, agents or
representatives, which are beyond the scope of HSI’s authorization granted herein or are not in
compliance with the obligations of HSI under this Agreement (including, without limitation, any
use, sale or other disposition of Product or Trademarks in a manner recommended, proposed or
represented by HSI which is contrary to or not in accordance with IDB’s written recommendations,
representations or authorization), or (iii) the negligence or willful misconduct of HSI; provided
that HSI shall have no duty to indemnify, defend or hold harmless any IDB Indemnitee to the extent
IDB is obligated to indemnify HSI under Section 12.1.

      12.3 It shall be a condition of IDB or HSI, as the case may be (the “Indemnifying Party”)
being liable to the other Party (the “Indemnified Party”) and its respective Indemnitees under the
foregoing indemnity obligations that: (i) the Indemnified Party shall notify the Indemnifying
Party in writing of any claim threatened or filed against it or against any of the

[**] - Confidential or
proprietary information redacted.

17

 

Indemnified Party’s Indemnitees promptly after learning of such claim; (ii) the Indemnifying
Party, at its sole cost, shall have the opportunity to assume the direction and control the defense
of such claim or proceeding with counsel of its choosing; (iii) the Indemnified Party shall
cooperate fully with and provide reasonable assistance to the Indemnifying Party and its
representatives and insurers in connection with such claim and (at the expense of the Indemnifying
Party) the mitigation of losses, costs, expenses and liabilities in connection therewith; and (iv)
neither the Indemnified Party nor its Indemnitee(s) shall compromise, settle or take any other
material steps relating to such claim without the prior written approval of the Indemnifying Party
(which shall not to be unreasonably withheld or delayed). The failure of the Indemnified Party to
notify the Indemnifying Party in writing promptly after learning of any such claim or proceeding
shall relieve the Indemnifying Party of any liability to the Indemnified Party under this Agreement
if and solely to the extent the Indemnifying Party can demonstrate that such late notice is
prejudicial to the ability of the Indemnifying Party to defend such action.

13. INSURANCE OBLIGATIONS OF IDB AND HSI

      13.1 Each Party will, at its own expense, maintain, during the Term and for a period of not
less than five (5) years following termination of this Agreement, insurance coverage insuring it
against such of its liabilities arising under its indemnity obligations under this Agreement as are
reasonably insurable, with limits of coverage not less than [**] per occurrence and [**] in the
aggregate. Each Party shall also maintain at its expense such other insurance as may be required
by governmental or statutory authorities (including, without limitation, the Regulatory Authority)
in the Territory. HSI shall be named as an additional insured under the insurance policies
maintained by IDB hereunder, and such policies shall provide for at least thirty (30) days’ prior
written notice to HSI in the event of cancellation or material reduction of coverage.

      13.2 Each Party shall provide the other Party with a certificate of insurance confirming that
such insurance coverage is in place, and confirming that the insurance premiums have been paid,
such certificates to be provided on or before IDB’s first delivery of Product to HSI under this
Agreement and at such other times as a Party may reasonably request.

14. LIMITATION OF LIABILITY

      EXCEPT IN CONNECTION WITH A PARTY’S WILLFUL MISCONDUCT, NEITHER PARTY SHALL BE LIABLE TO THE
OTHER FOR INDIRECT, INCIDENTAL, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES INCLUDING, BUT NOT
LIMITED TO, LOST PROFITS AND LOSS OF GOODWILL, ARISING FROM OR RELATING TO ANY BREACH OF THIS
AGREEMENT (OR ANY DUTY OF COMMON LAW, AND WHETHER OR NOT OCCASIONED BY THE NEGLIGENCE OF A PARTY OR
ITS AFFILIATES), REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED THAT NOTHING
IN THIS SECTION 14 IS INTENDED TO, OR DOES, LIMIT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF
EITHER PARTY UNDER SECTION 12; PROVIDED FURTHER THAT, FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS
SECTION IS INTENDED TO, OR DOES, LIMIT HSI’S OBLIGATION UNDER THIS AGREEMENT TO PURCHASE THE
MINIMUM QUANTITY OF PRODUCT FROM IDB AND PAY IDB THE PURCHASE PRICE THEREFOR DURING THE TERM OF

[**] - Confidential or
proprietary information redacted.

18

 

THIS AGREEMENT. NOTHING IN THIS SECTION 14, HOWEVER, SHALL LIMIT EITHER PARTY’S RIGHT TO
CLAIM DIRECT DAMAGES FROM THE OTHER PARTY.

15. TERM AND TERMINATION

      15.1 This Agreement shall take effect on the Effective Date and, subject to earlier
termination in accordance with all other relevant provisions hereof, shall continue through the
conclusion of the 2014/2015 Flu Season regardless of the Commencement Date under Section 7.2, or
such longer time as extended pursuant to Section 10.1 (the “Term”). The Parties may elect in
writing to extend the term of this Agreement on mutually agreeable terms and conditions.

      15.2 Without limiting any other rights of termination specified herein, either Party may
terminate this Agreement by written notice to the other Party (the “Notified Party”) (such
termination being effective immediately on the Notified Party’s receipt of such notice unless
otherwise specified or agreed), if:

     15.2.1 the Notified Party becomes bankrupt or the subject of procedures in bankruptcy,
or under insolvency laws or for reorganization, receivership, liquidation or dissolution,
and such procedures are not terminated within ninety (90) days; or

     15.2.2 the Notified Party commits a material breach of any of the provisions of this
Agreement and fails to remedy such breach within thirty (30) days of receipt of written
notice from the non-breaching Party (or such longer period as the non-breaching Party may
specify in such notice), such notice specifying the breach in detail and requiring it to be
remedied (for the avoidance of doubt, a material breach of this Agreement by HSI includes,
without limitation, HSI’s failure to purchase the Minimum Quantity of Product for any given
Flu Season which is available for purchase by HSI or to pay the Purchase Price therefor).

      15.3 Without limiting any other rights of termination specified herein, HSI may terminate this
Agreement by written notice to IDB (such termination being effective immediately on IDB’s receipt
of such notice unless otherwise specified or agreed), if:

     15.3.1 IDB fails to obtain the initial Marketing Authorization by [**] ; provided,
however, that HSI may exercise this right to terminate only until [**] ; or

     15.3.2 the Marketing Authorization is suspended for one hundred fifty (150) days or
more or is terminated; provided, however, that HSI may exercise this right to terminate only
until the date that is thirty (30) days after the Marketing Authorization is so suspended
(after 150 days) or terminated.

[**] - Confidential or
proprietary information redacted.

19

 

      15.4 Without limiting any other rights of termination specified herein, IDB may terminate this
Agreement by written notice to HSI (such termination being effective immediately on HSI’s receipt
of such notice unless otherwise specified or agreed), if any of the licenses or approvals required
to be maintained by HSI pursuant to Section 7.5 are suspended for one hundred fifty (150) days or
more or are terminated; provided, however, that IDB may exercise this right to terminate only until
the date that is thirty (30) days after it receives notice that such licenses or approvals are so
suspended or terminated.

      15.5 Upon the termination or expiration of this Agreement:

     15.5.1 HSI shall promptly (within thirty (30) days unless otherwise agreed by IDB) send
to IDB, or otherwise dispose of in accordance with IDB’s directions, all samples of Product
and all promotional, advertising and/or sales materials and technical information relating
to Product in the possession or control of HSI, its Affiliates or Other Distributors;

     15.5.2 HSI shall, and shall cause its Affiliates and Other Distributors to, immediately
cease to promote, market, advertise, sell or distribute Product, except only as and to the
extent permitted in Section 15.5.3 below;

     15.5.3 Within three (3) months of termination, except for termination by IDB based on
HSI’s unremedied breach, HSI may sell stocks of Product supplied by IDB to HSI but not yet
sold by HSI, subject to the applicable provisions of this Agreement, and shall dispose of
all remaining Product on hand in accordance with IDB’s directions and applicable laws and
regulations;

     15.5.4 HSI shall reasonably cooperate with IDB and any successor distributor appointed
by IDB with a view to ensuring an orderly transfer of distribution responsibilities;

     15.5.5 Within thirty (30) days after the termination or expiration of this Agreement,
HSI shall furnish to IDB a complete, accurate and current accounting and report of all
transactions subsequent to those shown in the last report to IDB provided in accordance with
Section 2.3, and with such accounting and report shall pay to IDB any remaining amounts due
under this Agreement; and

     15.5.6 The Parties shall comply with Section 9.6 hereof relating to Confidential
Information.

      15.6 The termination or expiration of this Agreement shall be without prejudice to the rights
and obligations of either Party accrued as of the date of such expiration or termination, in
addition to any other remedies that a Party may have under applicable statutory or common law
(subject to the terms, conditions and limitations of this Agreement). Each Parties’ obligations
under Sections 1, 4, 9, 11-16 and 18 (and, as applicable, the Schedules hereto), and such other
sections which, by their context, are intended to survive, shall survive expiration or termination
of this Agreement. Further, for the avoidance of doubt, HSI shall make all payments as are
required in connection with Product delivered by IDB prior to termination of this Agreement,
subject only to HSI’s right to reject such Product in accordance with Sections 5.2 and 5.3.

[**] - Confidential or
proprietary information redacted.

20

 

16. NOTICES

      Any notice given under or in connection with this Agreement shall be in writing and sent by
commercial courier or commercial overnight delivery service (e.g., FedEx, DHL) to the address(es)
of the other Party specified below or such other address as that Party may from time to time
specify in accordance with this Section. A notice shall be deemed delivered upon the date of its
actual receipt.

	 	 	 
	IDB	 	HSI
	 
	 	 
	Chief Executive Officer

	 	Michael Racioppi
	ID Biomedical Corporation

	 	President – Medical Group
	1630 Waterfront Center

	 	Henry Schein, Inc.
	200 Burrard Street

	 	135 Duryea Road
	Vancouver, BC V6C 3L6

	 	Melville, NY 11747
	Canada

	 	USA
	 
	 	 
	With copy to:

	 	With copy to:
	 
	 	 
	Vice President Legal Affairs

	 	General Counsel
	ID Biomedical Corporation of Quebec

	 	Henry Schein, Inc.
	525 Cartier Boulevard West

	 	135 Duryea Road
	Laval, Quebec

	 	Melville, NY 11747
	Canada

	 	USA

17. ASSIGNMENT

      Neither Party may assign this Agreement or any of its rights, duties or obligations hereunder
without the prior written consent of the other Party, which consent shall not be unreasonably
withheld or delayed; provided that either Party may assign (i) any of its rights, duties or
obligations hereunder to any of its Affiliates and (ii) this Agreement and its rights, duties and
obligations hereunder to a successor entity in connection with the sale of all or substantially all
of its assets or the merger, acquisition or other consolidation of such Party with or into another
party, and the other Party’s consent shall not be required hereunder in connection therewith. This
Agreement shall be binding upon and inure to the benefit of the permitted assigns and successors in
interest of the respective Parties.

18. GOVERNING LAW, JURISDICTION AND VENUE

      This Agreement is governed by and shall be construed in accordance with the laws of the United
States of America and the State of New York, without respect to their choice-of-law provisions.
The Parties shall attempt in good faith to resolve any disputes in a voluntary, amicable and
expeditious manner. In the event they are unable to resolve any such disputes in such manner, the
Parties hereby submit to the exclusive jurisdiction of the state and federal courts located in the
County or City of New York, USA, which shall be the sole and exclusive venue for the resolution of
any disputes based on or arising out of this Agreement; provided that a Party may seek injunctive
relief from any court of competent jurisdiction as necessary to

[**] - Confidential or
proprietary information redacted.

21

 

protect its rights under this Agreement pending final resolution of a dispute before such
courts in New York.

19. MISCELLANEOUS

      19.1 [**]

      19.2 Each Party acknowledges that in entering into this Agreement it does not do so on the
basis of, and does not rely on, any representation, warranty or other provision except as expressly
provided herein, and all conditions, warranties or other terms implied by statute or common law are
hereby excluded to the fullest extent permitted by law.

      19.3 All Schedules to this Agreement are hereby incorporated into this Agreement by reference.
This Agreement and such Schedules constitute the entire Agreement between the Parties and
supersede all previous communications, representations, agreements or understandings, whether oral
or written, between the Parties with respect to the subject matter hereof.

      19.4 Nothing contained in this Agreement shall or be deemed to constitute a partnership or a
relationship of principal and agent, employer and employee or a joint venture between the Parties,
and neither Party shall bind or conduct itself in a manner to suggest it has authority to bind the
other in any way except as expressly permitted in this Agreement. The relationship of IDB and HSI
established by this Agreement is that of independent contractors, and nothing contained in this
Agreement shall be construed to give either Party the power to direct or control the day-to-day
activities of the other. All sales and other agreements between HSI and HSI’s customers are HSI’s
exclusive responsibility and shall have no effect on HSI’s obligations under this Agreement.

      19.5 To be effective, any amendment to or waiver of any provision of this Agreement must be
made in writing and signed by a duly authorized representative of each Party. The failure on the
part of either Party to exercise or enforce any right under this Agreement shall not be deemed to
be a waiver of any such right or similar subsequent rights or operate to bar the exercise of
enforcement thereof at anytime or times thereafter.

      19.6 All dollar amounts set forth in this Agreement are U.S. Dollars.

      19.7 If any court or other competent authority holds any provision of this Agreement to be
void or unenforceable in whole or part, this Agreement shall continue to be valid as to the other
provisions and the remainder of the affected provision.

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

[Signatures on Next Page]

[**] - Confidential or
proprietary information redacted.

22

 

      IN WITNESS whereof this Agreement has been executed and delivered by the duly authorized
representatives of the Parties as of the Effective Date first above written.

	 	 	 
	Signed for and on behalf of

	 	Signed for and on behalf of
	 
	 	 
	ID BIOMEDICAL CORPORATION

	 	HENRY SCHEIN, INC.
	 
	 	 
	 
	 	 
	 
	 	 
	 

	 	 
	Full Name

	 	Full Name
	 
	 	 
	 
	 	 
	 

	 	 
	Title

	 	Title
	 
	 	 
	 
	 	 
	 

	 	 
	Signature

	 	Signature
	 
	 	 
	 
	 	 
	 

	 	 
	Date

	 	Date

[**] - Confidential or
proprietary information redacted.

23

 

SCHEDULE 1

MINIMUM QUANTITY; PURCHASE PRICE AND ADJUSTMENT;

RESALE TO OTHER DISTRIBUTORS; AND PAYMENT TERMS

1. ORDER DETAILS*

      *Beginning with respect to the first Flu Season commencing on or after the Commencement
Date:

	 	 	 
	Total Minimum Quantity per Flu Season	 	Delivery Date per Flu Season
	 
	 	 
	[**], the Minimum Quantity
per Flu Season to be supplied
by IDB and purchased by HSI
shall be the lesser of (i)
[**] doses of Product
(“Minimum Doses”) or (ii)
[**] percent (“Minimum
Percentage”) of IDB’s
production capacity for
Product for sale or
distribution in the Territory
for such Flu Season (after
fulfilling commitments to the
Government of Canada), [**].

	 	IDB will use commercially reasonable
efforts to deliver and obtain releases
for [**] of the Minimum Quantity by
[**], and for [**] of the Minimum
Quantity by [**] as provided in
Section 3.7 of the Agreement.

2. PRICES

(A) Purchase Price. Subject to Paragraphs 2(B) and 2(C) below, the Purchase Price
to be paid by HSI to IDB for Product supplied under this Agreement shall be:

[**]

(B) Transfer Price and Subsequent Adjustment. HSI shall pay a Transfer Price (as
defined below) to IDB for all doses of Product delivered by IDB to HSI and released by the
Regulatory Authority for a given Flu Season. As used in this Agreement, “Transfer Price”
shall mean

[**]

To determine the final Purchase Price due, such Transfer Price shall be subject to the
following adjustments

[**]

(C) Minimum Purchase Price.

[**]

(D) Reconciliation by February 28.

[**] - Confidential or
proprietary information redacted.

1

 

[**]

3. RESALE TO OTHER DISTRIBUTORS

HSI shall not in any one Flu Season resell Product to Other Distributors in an amount
greater, in the aggregate, than the lesser of (i) [**] doses of Product or (ii) [**]
percent of the total Product supplied by IDB to HSI for that Flu Season; [**] As a
condition of any such sale by HSI to Other Distributors, [**].

4. PAYMENT DETAILS

[**]

5. DEFAULT INTEREST RATE

[**]

[**] - Confidential or
proprietary information redacted.

2

 

SCHEDULE 2

TRADEMARK(s)

	 	 	 	 	 
	Trademark	 	Territory	 	Registered No.
	FLUVIRAL

	 	Canada	 	 

[**] - Confidential or
proprietary information redacted.

3

 

SCHEDULE 3

COMMITMENTS TO GOVERNMENT OF CANADA

      As described in Section 3.2, IDB has certain contractual commitments to the Government of
Canada requiring IDB to provide (i) an annual supply of Product to the Government of Canada and
(ii) a supply of Product in the event the Government of Canada declares an influenza pandemic. The
Minimum Quantity of Product to be supplied by IDB to HSI under this Agreement is subject to IDB’s
commitments to the Government of Canada.

      Other than in the case of a pandemic, the maximum amount of Product that IDB shall reserve for
supply to the Canadian government is, and shall in no event be greater than, 12 million doses per
Flu Season.

[**] - Confidential or
proprietary information redacted.

1

 

SCHEDULE 4

ADVERSE REACTION REPORTING

      [HSI and IDB shall mutually agree upon an adverse reaction reporting procedure, which shall be
in accordance with all applicable laws and regulations, as promptly as practicable following
receipt of appropriate Marketing Authorization for Product in the Territory]

[**] - Confidential or
proprietary information redacted.

1

 

SCHEDULE 5

PRODUCT RECALL PROCEDURE

      [HSI and IDB shall mutually agree upon a Product recall procedure, which shall be in
accordance with all applicable laws and regulations, as promptly as practicable following receipt
of Marketing Authorization for Product in the Territory]

[**] - Confidential or
proprietary information redacted.

1<PAGE>

                                                                   EXHIBIT 10.56

                                                 *CERTAIN CONFIDENTIAL
                                                 INFORMATION CONTAINED IN THIS
                                                 DOCUMENT, MARKED BY BRACKETS,
                                                 HAS BEEN OMITTED AND FILED WITH
                                                 THE SECURITIES AND EXCHANGE
                                                 COMMISSION PURSUANT TO RULE
                                                 24B-2 OF THE SECURITIES
                                                 EXCHANGE ACT OF 1934, AS
                                                 AMENDED.

                             COLLABORATION AGREEMENT

      THIS COLLABORATION AGREEMENT (the "AGREEMENT"), effective as of December
31, 2004 (the "EFFECTIVE DATE"), is by and between CELLADON CORPORATION, a
California corporation ("CELLADON"), with its principal place of business at
2223 Avenida de la Playa, Suite 300, c/o Enterprise Partners Venture Capital, La
Jolla, CA 92037, and TARGETED GENETICS CORPORATION, a Washington corporation
("TGC"), with its principal place of business at 1100 Olive Way, Suite 100,
Seattle, WA 98101.

      WHEREAS, TGC has developed substantial proprietary technology and is
engaged in the discovery, development and manufacture of viral and non-viral
gene-based product candidates and operates a cGMP-compliant production facility
for the manufacture of such candidates;

      WHEREAS, Celladon is engaged in the development of gene vector-delivered
therapeutic products based on phospholamban and/or SERCA2a for the treatment or
prevention of congestive heart failure;

      WHEREAS, the parties wish to establish a collaborative relationship
pursuant to which, among other things, TGC will assist Celladon in: (a)
designing a cardiac gene therapy product based in part on Celladon's proprietary
technology for clinical development by Celladon, (b) assessing the intellectual
landscape associated with such product, and (c) the development of a
manufacturing process and supplying such gene therapy product; and

      WHEREAS, concurrently herewith, the parties have entered into a
manufacturing and supply agreement pursuant to which TGC will be responsible for
the manufacture and supply of cardiac gene therapy products developed pursuant
to this Agreement, subject to the terms and conditions set forth therein (the
"MANUFACTURING AGREEMENT").

      NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants hereinafter set forth, Celladon and TGC, intending to be legally
bound, hereby agree as follows:

1. DEFINITIONS. Capitalized terms used but not otherwise defined herein shall
have the meanings provided in the Manufacturing Agreement. In addition, the
following terms shall have the meanings set forth below:

      1.1 "AAV VECTOR" shall mean an adeno-associated virus gene vector composed
of a viral capsid comprising three proteins known as VP1, VP2 and VP3, wherein
the genome is a single-strand DNA molecule flanked by inverted terminal repeats
("ITRs").

      1.2 "AFFILIATE" shall mean any company or entity controlled by,
controlling, or under common control with a party hereto and shall include any
company more than 50% of whose voting stock or participating profit interest is
owned or controlled, directly or indirectly, by a party, and any

                                       1
<PAGE>
company which owns or controls, directly or indirectly, more than 50% of the
voting stock of a party.

      1.3 "ALLOCABLE OVERHEAD" shall mean the costs incurred by a party or for
its account which are attributable to a party's supervisory services, occupancy
costs, payroll and its payroll, information systems, human relations or
purchasing functions and which are allocated to company departments based on
space occupied or headcount or other activity-based method consistently applied
by a party, or a standard rate if agreed to by the parties. Allocable Overhead
shall not include any costs attributable to general corporate activities,
including, by way of example, executive management, investor relations, business
development, legal affairs and finance.

      1.4 "APPROVAL APPLICATION" means any application necessary and appropriate
to obtain a Regulatory Approval, together with all required documents, data and
information concerning a Selected Product that is the subject of such
application.

      1.5 "BUDGET" shall have the meaning provided in Section 2.1.

      1.6 "CELLADON COST OF GOODS" shall mean, with respect to any Selected
Product in final form that is sold by Celladon or its Affiliates hereunder:

            (A) in the case of Selected Product in final form that is
manufactured in whole or in part by Celladon or its Affiliate(s), the actual
fully allocated cost of manufacturing such Selected Product (in accordance with
cGMP) determined in accordance with GAAP consistently applied throughout the
organization of Celladon and its Affiliate(s), which includes the direct and
indirect cost of any raw materials, packaging materials and labor (including
benefits) utilized in such manufacturing (including formulation, fill/finish,
quality assurance, quality control and stability testing, labeling and
packaging, as applicable), plus an appropriate share of all factory overhead,
both fixed and variable, allocated to the Selected Product being manufactured,
in accordance with the normal accounting practices for all other products
manufactured in the applicable facility; provided, however, that "Cost of Goods"
shall exclude any allocation of cost related to idle capacity, unless such
excess capacity is specifically reserved for Selected Product; and

            (B) in the case of Selected Product in final form that is
manufactured entirely by a Third Party, the actual price paid by Celladon or its
Affiliate(s) to such Third Party for such Selected Product.

      1.7 "CELLADON-ASSIGNED JOINT INVENTION" shall mean a Joint Invention that
is not a TGC-Assigned Joint Invention.

      1.8 "CELLADON PATENTS" shall mean, to the extent necessary or useful for
the development, manufacture, use or sale of any Gene Therapy Product, all
Patents that Celladon or any of its Affiliates Controls as of the Effective Date
or during the Term.

      1.9 "CELLADON TECHNOLOGY" shall mean: (a) the Celladon Patents; and (b)
Information not included in the Celladon Patents that Celladon or any of its
Affiliates Controls on the Effective Date or during the Term, including, without
limitation, all such Information that is conceived or developed by Celladon or
any of its Affiliates in the course and as part of the Collaboration.

                                       2
<PAGE>
      1.10 "cGMP" shall mean current good manufacturing practices for medicinal
products established by U.S. laws, rules and regulations (including 21 CFR Parts
210 and 211, as amended, and any successor regulations thereto, each as in
effect from time to time).

      1.11 "CMC" shall have the meaning provided in Section 3.2(b).

      1.12 "COLLABORATION" shall have the meaning provided in Section 2.1.

      1.13 "COLLABORATION TERM" shall have the meaning provided in Section 2.11.

      1.14 "COMMERCIALLY REASONABLE EFFORTS" means, with respect to the efforts
to be expended by any entity with respect to any objective, reasonable,
diligent, good faith efforts to accomplish such objective as such entity would
normally use to accomplish a similar objective under similar circumstances. With
respect to any objective relating to the commercialization of a product by any
entity, "Commercially Reasonable Efforts" means efforts and resources normally
used by such entity with respect to a product owned by such entity or to which
such entity has similar rights which is of similar market potential at a similar
stage in the development or life of such product, taking into account issues of
safety, efficacy, product profile, the competitiveness of the marketplace, the
proprietary position of the product, the regulatory structure involved,
profitability of the product and other relevant commercial factors.

      1.15 "COMMITTEE" shall have the meaning provided in Section 2.2.

      1.16 "CONFIDENTIAL INFORMATION" shall have the meaning provided in Section
8.1.

      1.17 "CONTROL" shall mean, with respect to any Information, Patent or
other intellectual property right, possession by a party of the ability (whether
by ownership, license or otherwise) to grant access, a license or a sublicense
to such Information or intellectual property right without violating the terms
of any agreement or other arrangement with any Third Party.

      1.18 "DEVELOPMENT COSTS" shall mean costs actually incurred by Celladon or
for its account that are specifically attributable to the development of
Selected Products. Development Costs will include, but not be limited to: (a)
costs of research and development of Selected Products, including costs of
studies on the toxicological, pharmacokinetic, metabolic or clinical aspects of
Selected Products conducted internally or by Third Parties; (b) Cost of Goods
for Selected Product for use in preclinical studies or clinical trials; (c)
costs of preparing and reviewing data or information for the purpose of
submission to the FDA and foreign regulatory authorities for the purpose of
obtaining Regulatory Approvals of Selected Products; (d) fees associated with
regulatory filings or other governmental requirements related to Selected
Products; and (e) applicable Allocable Overhead, including expenses for data
management, statistical designs and studies, document preparation, and other
administration expenses associated with clinical testing programs.

      1.19 "DEVELOPMENT PLAN" shall have the meaning provided in Section 2.1.

      1.20 "DMF" shall mean a drug master file (as such term is defined in 21
C.F.R. Part 314.420, as it may be amended from time to time), or any foreign
equivalent thereof, for a Selected Product.

                                       3
<PAGE>
      1.21 "FDA" shall mean the United States Food and Drug Administration, or
any successor agency thereto.

      1.22 "FIELD" shall mean the Therapeutic Field and/or the Pathway Field.

      1.23 "FINANCING" shall mean the purchase by Enterprise Partners and
Venrock (and/or their respective affiliated entities) of shares of the common
stock of TGC having an aggregate fair market value of US$6,000,000 pursuant to
that certain Stock Purchase Agreement by and among TGC and such entities dated
of even date herewith.

      1.24 "FIRST COMMERCIAL SALE" shall mean, with respect to any Product, the
first sale for end use or consumption of such Product in a country after the
governing health regulatory authority of such country has granted Regulatory
Approval. Sale to an Affiliate or Licensee shall not constitute a First
Commercial Sale unless the Affiliate or Licensee is the end user of the Product.

      1.25 "GAAP" shall mean U.S. generally accepted accounting principles
consistently applied.

      1.26 "GCP" means, to the extent applicable, the then-current good clinical
practices (under the regulations set forth in 21 C.F.R. Subchapter A and the
requirement imposed thereunder by the FDA) and in effect from time to time
during the Term, together with the then-current equivalent or corresponding
regulations and requirements in jurisdictions outside the United States.

      1.27 "GENE THERAPY PRODUCT" shall mean an AAV Vector-delivered therapeutic
product for the treatment or prevention of congestive heart failure based on one
or more of the following: (a) phospholamban mutant gene (S16EPLN) to inhibit
phospholamban-mediated events; (b) sarco(endo)plasmic reticulum Ca(2+)-ATPase
("SERCA2a"); (c) [*]; and/or (d) [*].

      1.28 "GROSS PROFIT" shall mean Gross Revenues, less the following:

            (A) (i) trade discounts, credits or allowances; (ii) credits or
allowances additionally granted upon returns, rejections or recalls; (iii)
freight, shipping and insurance charges; (iv) taxes, duties or other
governmental tariffs (other than income taxes); and (v) government mandated
rebates; all of the foregoing to the extent actually included in the calculation
of gross revenues;

            (B) the Celladon Cost of Goods of Selected Products sold by Celladon
and its Affiliates;

            (C) all royalties paid by Celladon or its Affiliates to Third
Parties and all royalties paid by TGC or its Affiliates to Third Parties with
respect to Patents and/or Information of such Third Parties that Celladon and
TGC (in the case of TGC Licensed Technology), deem necessary or useful for the
manufacture, use or sale of Selected Products (excluding any such royalties paid
with respect to delivery devices, such as catheters); and

                                              *CONFIDENTIAL TREATMENT REQUESTED.

                                       4
<PAGE>
            (D) all marketing and sales costs and revenue sharing (including for
example, royalties on product sales and/or sales milestones payments) incurred
by Celladon or its Affiliates with respect to marketing and sales of Selected
Products in jurisdictions where one or more Third Parties markets and sells
Selected Products on behalf of Celladon.

      1.29 "GROSS REVENUES" shall mean the gross revenues (including for
example, royalties on product sales and sales milestones) actually received by
Celladon and its Affiliates from the commercial sale of Selected Products after
Regulatory Approval thereof, determined in accordance with GAAP.

      1.30 "IND" shall mean an Investigational New Drug Application filed with
the FDA, or the equivalent application or filing filed with any equivalent
agency or governmental authority outside the United States of America (including
any supra-national agency such as in the European Union) necessary to commence
human clinical trials in such jurisdiction.

      1.31 "INFORMATION" shall mean all tangible and intangible (a) techniques,
technology, practices, trade secrets, inventions (whether patentable or not),
methods, knowledge, know-how, skill, experience, test data and results
(including pharmacological, toxicological and clinical test data and results),
analytical and quality control data, results or descriptions, software and
algorithms and (b) compositions of matter, cells, cell lines, assays, animal
models and physical, biological or chemical material.

      1.32 "JOINT INVENTION" shall mean any invention, whether patentable or
not, which is conceived or reduced to practice, either as part of the
Collaboration or under the Manufacturing Agreement, jointly by one or more
employees or contractors of Celladon and one or more employees or contractors of
TGC.

      1.33 "LEAD PARTY" shall have the meaning provided in Section 6.2(c).

      1.34 "LICENSEE" shall mean a Third Party to whom Celladon or any of its
Affiliates has granted a license or sublicense of the right to develop, make,
have made, use, distribute for sale, promote, market, offer for sale, sell, have
sold, import or export Products, beyond the mere right to purchase Products from
Celladon or its Affiliates.

      1.35 "MANUFACTURING AGREEMENT" shall mean the Manufacturing Agreement
between the parties dated the Effective Date and, as defined therein, the
"Commercial Agreement" to be entered into by the parties in the future.

      1.36 "MANUFACTURING DOCUMENTS" shall have the meaning provided in Section
3.2(b).

      1.37 "MANUFACTURING PROCESS" shall mean the manufacturing process for a
Selected Product developed by TGC pursuant to the terms of this Agreement and
used by TGC, its Affiliates or Third Party subcontractors in producing such
Selected Product under this Agreement.

                                       5
<PAGE>
      1.38 "NDA" shall mean a New Drug Application (as more fully defined in 21
C.F.R. 314.5 et seq.) and all amendments and supplements thereto filed with the
FDA, or the equivalent application filed with any equivalent agency or
governmental authority outside the United States of America (including any
supra-national agency such as in the European Union), including all documents,
data, and other information concerning a pharmaceutical product which are
necessary for gaining Regulatory Approval to market and sell such pharmaceutical
product.

      1.39 "PATENTS" shall mean (a) United States patents, re-examinations,
reissues, renewals, extensions and term restorations, and foreign counterparts
thereof, and (b) pending applications for United States patents, including,
without limitation, provisional applications, continuations,
continuations-in-part, divisional and substitute applications, including,
without limitation, inventors' certificates, and foreign counterparts thereof.

      1.40 "PATHWAY FIELD" shall mean modulation of the phospholamban/SERCA
biological pathway [*].

      1.41 "PHASE 1/2 CLINICAL TRIAL" shall mean a human clinical trial that
would satisfy the requirements for a Phase 1 study as defined in 21 C.F.R.
312.21(a) (or its successor regulation) and/or the requirements for a Phase 2
study as defined in 21 C.F.R. 312.21(b) (or its successor regulation).

      1.42 "PHASE 3 CLINICAL TRIAL" shall mean a human clinical trial that would
satisfy the requirements for a Phase 3 study as defined in 21 C.F.R. 312.21(c)
(or its successor regulation).

      1.43 "PRE-COMMERCIAL NET REVENUES" shall mean the amount (if any) by which
Pre-Commercial Payments received by Celladon exceed Development Costs paid by
Celladon.

      1.44 "PRE-COMMERCIAL PAYMENTS" shall mean all amounts actually received by
Celladon or an Affiliate of Celladon from any and all Licensees prior to the
First Commercial Sale of a Selected Product arising from the license or
sublicense of the right to develop, make, have made, use, distribute for sale,
promote, market, offer for sale, sell, have sold, import or export Selected
Products. Pre-Commercial Payments shall include up-front or license fees,
milestone payments, premiums above the fair market value on sales of securities,
annual maintenance fees and any other payments in respect of the grant to such
Licensee of a license or sublicense of the right to develop, make, have made,
use, distribute for sale, promote, market, offer for sale, sell, have sold,
import or export Selected Products (with any of the foregoing consideration
received by Celladon or its Affiliates other than in the form of cash to be
valued at its fair market value as of the date of receipt); provided, however,
that Pre-Commercial Payments shall not include any payments tied directly to the
provision of goods and services by Celladon or its Affiliate to such Licensee
(including research and development and manufacturing) to compensate Celladon or
its Affiliate for the fair market value of the provision of such goods and
services, or payments for securities (other than premiums above the fair market
value of such securities).

      1.45 "PROJECT LEADER" shall have the meaning provided in Section 2.2(d)

      1.46 "REGULATORY APPROVAL" shall mean any and all approvals (including
price and reimbursement approvals, if required), licenses, registrations, or
authorizations of any country, federal, supranational, state or local regulatory
agency, department, bureau or other government

                                              *CONFIDENTIAL TREATMENT REQUESTED.

                                       6
<PAGE>
entity that are necessary for the manufacture, use, storage, import, transport
and/or sale of a Selected Product in such jurisdiction.

      1.47 "ROYALTY TERM" shall mean, in the case of any Selected Product, in
any country, the period of time commencing on the [*] of such Selected Product
in such country and ending upon the later of (a) [*] after the date of [*] of
such Selected Product in such country, and (b) the expiration of the last to
expire of the [*] claiming the manufacture, use or sale of such Selected Product
in such country.

      1.48 "SELECTED PRODUCT" shall mean a Gene Therapy Product selected by
Celladon, in its sole discretion, by written notice thereof to TGC, as a
candidate for clinical development and commercialization by Celladon in the
Field. Notwithstanding the foregoing, Selected Products shall exclude TGC
Candidates.

      1.49 "SELECTED PRODUCT PATENTS" shall have the meaning provided in Section
6.1(b).

      1.50 "TERM" shall have the meaning provided in Section 9.1.

      1.51 "TGC ACCOUNTING METHOD" shall mean the method by which TGC accounting
and budgeting under this Agreement will be conducted. The details of such
accounting are set forth in Exhibit B. Exhibit B shall be revised in advance of
each twelve (12) month period of the Collaboration.

      1.52 "TGC-ASSIGNED JOINT INVENTION" shall mean a Joint Invention directed
to the [*].

      1.53 "TGC CANDIDATES" shall mean the adeno-associated virus-delivered gene
therapy candidates Controlled by TGC as of the Effective Date with potential
utility in the Field.

      1.54 "TGC LICENSED PATENTS" shall mean, to the extent necessary or useful
for the development, manufacture, use or sale of any Gene Therapy Product, all
Patents that TGC or any of its Affiliates Controlled (but not owned) as of the
Effective Date or during the Term, as a result of being licensed to TGC by a
Third Party.

      1.55 "TGC LICENSED TECHNOLOGY" shall mean: (a) the TGC Licensed Patents;
and (b) to the extent necessary or useful for the development, manufacture, use
or sale of any Gene Therapy Product, Information not included in the TGC
Licensed Patents, TGC Patents, TGC Technology or Joint Inventions that TGC or
any of its Affiliates Controls (but does not own) on the Effective Date or
during the Term, including, without limitation, all such Information that is
conceived or developed by TGC or any of its Affiliates, as a result of being
licensed to TGC by a Third Party, in the course and as part of the Collaboration
or in performing its obligations under the Manufacturing Agreement.

      1.56 "TGC PATENTS" shall mean, to the extent necessary or useful for the
development, manufacture, use or sale of any Gene Therapy Product, all Patents
that TGC or any of its Affiliates owns as of the Effective Date or during the
Term.

                                              *CONFIDENTIAL TREATMENT REQUESTED.

                                       7
<PAGE>
      1.57 "TGC TECHNOLOGY" shall mean: (a) the TGC Patents; and (b) to the
extent necessary or useful for the development, manufacture, use or sale of any
Gene Therapy Product, Information not included in the TGC Patents that TGC or
any of its Affiliates owns on the Effective Date or during the Term, including,
without limitation, all such Information that is conceived or developed by TGC
or any of its Affiliates in the course and as part of the Collaboration or in
performing its obligations under the Manufacturing Agreement.

      1.58 "THERAPEUTIC FIELD" shall mean the treatment or prevention of
congestive heart failure.

      1.59 "THIRD PARTY" shall mean any entity other than Celladon or TGC or an
Affiliate of Celladon or TGC.

      1.60 "TRANSFER PRICE" shall mean:

            (A) with respect to bulk Selected Product commercialized hereunder
that is supplied by TGC pursuant to the Manufacturing Agreement or by a Third
Party, the price actually paid by Celladon, its Affiliate or a Licensee for such
bulk Selected Product; and

            (B) with respect to bulk Selected Product commercialized hereunder
that is manufactured by Celladon or its Affiliate, Celladon's or its Affiliate's
actual fully allocated cost of manufacturing bulk Selected Product (in
accordance with cGMP) determined in accordance with GAAP consistently applied
throughout the organization of Celladon and its Affiliate(s), which includes the
direct and indirect cost of any raw materials, packaging materials and labor
(including benefits) utilized in such manufacturing (including formulation,
quality assurance, quality control and stability testing, labeling and
packaging, as applicable), plus an appropriate share of all factory overhead,
both fixed and variable, allocated to the Selected Product being manufactured,
in accordance with the normal accounting practices for all other products
manufactured in the applicable facility, provided that such cost of manufacture
shall exclude any allocation of cost related to idle capacity, unless such
excess capacity is specifically reserved for Selected Product.

      1.61 "VALID CLAIM" shall mean an unexpired claim of an issued patent
within the Celladon Patents or TGC Patents which has not been found to be
unpatentable, invalid or unenforceable by a court or other authority in the
subject country, from which decision no appeal is taken or can be taken.

2. COLLABORATION

      2.1 COLLABORATIVE DEVELOPMENT PROGRAM. Subject to the terms and conditions
of this Agreement, the parties shall conduct a collaborative development program
to design one or more Gene Therapy Products suitable for clinical development
and commercialization by Celladon in the Therapeutic Field, as more fully
described below in this Article 2 (collectively, the "COLLABORATION"). The
parties shall conduct the Collaboration during the Collaboration Term in
accordance with a written development plan to be mutually agreed upon within 60
days after the Effective Date and attached hereto as EXHIBIT A (the "DEVELOPMENT
Plan"). A Development Plan shall be created and mutually agreed upon by the
parties for each 12 month period of the Collaboration. The Development Plan
shall set forth the activities to be performed by TGC, the estimated timeline
for conduct of such activities and an estimated budget for the Development Plan

                                       8
<PAGE>
activities (the "BUDGET"). The parties shall report on the progress made
pursuant to the goals of the Development Plan, revise and update such
activities, Budget, and timeline as necessary, on a quarterly basis during the
Collaboration Term. If modifications in the activities or timeline of activities
conducted under the Development Plan are requested by Celladon, TGC shall make
good faith efforts to accommodate such requests within the parameters of
conducting its other programs, and taking into account its facility, capacity
and resource constraints. If activities contemplated by the Development Plan are
cancelled by Celladon less than [*] from their initiation, Celladon shall be
responsible for non-cancelable costs incurred by TGC in preparation for such
activities and shall be responsible for the hours or manufacturing facility time
allocated to such activities [*]. At any time, and from time to time, during the
Term or during any period when Celladon's license under Section 4.2(b) is in
effect, Celladon may, in its sole discretion, designate any Selected Product by
written notice thereof to TGC.

      2.2 COLLABORATION COMMITTEE. As promptly as practicable (but no later than
30 days) following the Effective Date, the parties shall establish a committee
(the "COMMITTEE") in accordance with this Section 2.2. The Committee shall be
responsible for execution of the Development Plan within the budget established
by the parties, and, in connection therewith, shall manage and monitor the
progress and results of the Collaboration, allocate resources (including,
without limitation, FTEs) among the various Development Plan activities and
encourage and facilitate ongoing cooperation between the parties.

            (A) COMPOSITION OF THE COLLABORATION COMMITTEE. The Committee shall
be composed of two named representatives of Celladon and two named
representatives of TGC. Each party shall appoint its respective representatives
to the Committee from time to time, and may substitute one or more of its
representatives, in its sole discretion, effective upon notice to the other
party of such change. These representatives shall have appropriate technical
credentials, experience and knowledge, and ongoing familiarity with the
Collaboration. Additional representatives or consultants may from time to time,
by mutual consent of the parties, be invited to attend Committee meetings,
subject to such representative's or consultant's written agreement to comply
with confidentiality and non-use obligations equivalent to those set forth in
Article 8. Each party shall bear its own expenses related to the attendance of
such meetings by its representatives. The Committee shall be chaired by a
representative of Celladon. Decisions of the Committee shall be made by
unanimous vote, with each party's representatives on the Committee collectively
having one vote. In the event that the Committee cannot or does not, after good
faith efforts, reach agreement on an issue, such issue shall be referred to the
Chief Executive Officers of Celladon and TGC. Such officers of the parties shall
meet promptly thereafter and shall negotiate in good faith to resolve such
issue.

            (B) MEETINGS. The Committee shall meet in accordance with a schedule
established by mutual written agreement of the parties, but no less frequently
than once per calendar quarter, with the location for such meetings alternating
between TGC and Celladon facilities (or such other locations as is mutually
agreed by the parties). Alternatively, the Committee may meet by means of
teleconference, videoconference or other similar communications equipment or by
a signed unanimous written consent in lieu of a meeting, but not by proxy. No
Committee meeting may be conducted unless both representatives of each party are
participating.

                                              *CONFIDENTIAL TREATMENT REQUESTED.

                                        9
<PAGE>
            (C) MINUTES. The hosting party shall have responsibility for
preparing definitive minutes of each Committee meeting, a draft of which shall
be circulated for comment to all members of the Committee within 10 days after
the relevant meeting. Such minutes shall provide a description, in reasonable
detail, of the Collaboration progress to date and of the discussions at the
meeting, a list of any actions or determination approved by the Committee and
any disagreements not resolved by the Committee. The Project Leaders for the
parties shall discuss any comments on such minutes and finalize the minutes by
no later than 30 days after the meeting. Any disagreement on the minutes shall
be resolved in accordance with Section 2.2(a).

            (D) PROJECT LEADERS. Celladon and TGC each shall appoint a person
from the Committee or another representative of Celladon and TGC not on the
Committee, but agreed upon by both parties to lead the project, to coordinate
its part of the Collaboration and to be the primary contact between the parties
with respect to the Collaboration ("PROJECT LEADERS"). Each party shall notify
the other party as soon as practicable upon changing this appointment.

      2.3 CONDUCT OF THE COLLABORATIVE DEVELOPMENT PROGRAM. Subject to the terms
and conditions of this Agreement, each party shall be responsible for managing
and controlling its respective obligations under the Development Plan. Each
party shall proceed diligently and in a timely manner with the work set out in
the Development Plan by using its good faith efforts to allocate sufficient
time, effort, equipment and facilities to the Collaboration and to use personnel
with sufficient skills and experience as are required to accomplish the
objectives of the Collaboration in accordance with the terms of this Agreement.
Each party shall be entitled to utilize the service of Third Parties to perform
its Collaboration responsibilities only upon the prior written consent of the
other party (not to be unreasonably withheld) or as specifically set forth in
the Development Plan or the Manufacturing Agreement. Notwithstanding any such
consent, each party shall remain at all times responsible for the performance of
its respective responsibilities under the Collaboration and shall use
Commercially Reasonable Efforts to obtain the written agreement of each such
Third Party, prior to the time such Third Party initiates work, to assign
ownership of Inventions made in the course of Collaboration activities to such
party.

      2.4 FUNDING OF COLLABORATIVE DEVELOPMENT PROGRAM.

            (A) FUNDING. Celladon shall be responsible for funding its own
Collaboration activities. TGC hereby covenants to contribute to the
Collaboration, up to US $2,000,000 ([*] through the performance of activities
pursuant to the Development Plan. Such $2,000,000 contribution of efforts shall
include payments to Third Parties contracted by TGC (raw material purchases,
release testing etc.), with the remainder comprised of internal research and
development and manufacturing efforts. Any Third Party costs incurred in
accordance with the Development Plan that exceed $300,000 in the aggregate shall
be borne by Celladon. For purposes of accounting for the $2,000,000 contribution
of efforts, TGC shall utilize the TGC Accounting Method set forth in Exhibit B.
If performance of TGC's obligations under the Development Plan reasonably
requires funding in excess of US$2,000,000, Celladon shall be responsible for
funding such excess expenses (in each case, to the extent of [*]. TGC's
obligation to contribute up to $2,000,000 through the contribution of efforts
under the Development Plan shall end on the second anniversary of the Effective
Date of this Agreement. If TGC's performance of activities under the Development
Plan does not reach $2,000,000 over the first 24 months of the Collaboration,
TGC shall have no further obligation to perform activities pursuant to the
Development Plan without compensation for

                                              *CONFIDENTIAL TREATMENT REQUESTED.

                                       10
<PAGE>
such activities by Celladon. All activities performed by TGC pursuant to the
Collaboration shall be paid for at the then applicable FTE Rate and
Manufacturing Rate specified in Exhibit B.

            (B) REPORTING OF COSTS. Within 45 days of the end of each quarter
during the Collaboration Term, TGC shall provide to Celladon a reasonably
detailed written report of the costs incurred by TGC in performing its
obligations under the Development Plan, including, without limitation, the
number of hours dedicated to specific activities and an itemized list of
out-of-pocket costs for materials, supplies and Third Party services used in the
performance of the Development Plan. From and after such time (if ever) as TGC
has applied US$2,000,000 to the performance of its obligations under the
Development Plan in accordance with Section 2.4(a), TGC shall provide an invoice
prior to the start of the quarter or partial quarter and Celladon shall pay [*]
of the following partial quarter and/or whole quarter's Development Plan
estimated budget within [*] days of the start of the next whole quarter. Upon
receipt by Celladon of the written report of the costs incurred by TGC in
performance of its obligations under the Development Plan during the quarter,
Celladon shall pay TGC the amount remaining, calculated by subtracting the
payment received by TGC for the estimated budget from the costs incurred by TGC.
Each quarterly report of TGC under this Section 2.4(b) shall be accompanied by
an itemized invoice for costs incurred by TGC in performance of the Development
Plan that are in excess of US$2,000,000 in the aggregate. Each such invoice
shall be due and payable upon receipt by Celladon. Failure to make payments to
TGC within [*] business days of receipt by Celladon shall result in the
obligation of Celladon to prepay the entire quarter estimated budget in advance
of the start of each quarter.

            (C) AUDIT OF COSTS. For a period of one year after each Development
Plan year, TGC shall keep complete and accurate records of the hours of
non-manufacturing time, the weeks of cGMP manufacturing facility time (both
determined in accordance with Exhibit B) and the Third Party costs utilized in
the performance of its obligations under the Development Plan, in sufficient
detail to permit Celladon to verify the accuracy of TGC's reports to Celladon
under Section 2.4(b). Such audit shall be limited to the computation of the FTE
Rate and the Manufacturing Rate specified in Exhibit B, and the compilation of
time, effort, and outside costs incurred by TGC in performance of the
Development Plan. For a period of one (1) year following the completion of each
calendar year, Celladon shall have the right to cause an independent, certified
public accountant reasonably acceptable to TGC to audit such records to confirm
such costs for a period covering not more than the preceding year. Such audits
may be exercised during normal business hours upon reasonable prior written
notice to TGC. Prompt adjustments shall be made by the parties to reflect the
results of such audit. Celladon shall bear the full cost of such audit unless
such audit discloses that TGC has overstated its costs in any report delivered
by it with respect to the period audited by [*] or more, in which case, TGC
shall bear the full cost of such audit and shall promptly reimburse to Celladon
the amount of any overpayment.

      2.5 EXCHANGE OF INFORMATION. Promptly following the Effective Date and
from time to time as necessary thereafter during the Collaboration Term, TGC
shall disclose to Celladon such TGC Technology as may be necessary or useful for
the performance by Celladon of its responsibilities under the Development Plan.
Promptly following the Effective Date and from time to time as necessary
thereafter during the Collaboration Term, Celladon shall disclose to TGC such
Celladon Technology as may be necessary or useful for the performance by TGC of
its responsibilities under the Development Plan or the Manufacturing Agreement.

                                              *CONFIDENTIAL TREATMENT REQUESTED.

                                       11
<PAGE>
      2.6 RECORDS AND REPORTS.

            (A) RECORDS. TGC and Celladon shall each maintain, and shall use
Commercially Reasonable Efforts to cause any of their Third Party contractors to
maintain, accurate and complete records that reflect all work done and results
achieved in the performance of the Collaboration and all results of any trials,
studies and other investigations conducted under this Agreement by or on behalf
of TGC and Celladon, their Affiliates and Third Party contractors, as
applicable.

            (B) INSPECTION OF RECORDS. No more frequently than once per calendar
year, a party shall have the right, during normal business hours and upon
reasonable notice without undue interruption to normal business operations and
provided such requests for visits are not otherwise unreasonable, to inspect all
records of the other party referred to in Section 2.6(a) and their Third Party
contractors (provided it is permitted under the agreement with the Third Party
contractor); provided, however, that such party shall not have the right to
review records to the extent that such records contain information that does not
relate to the subject matter of this Agreement and/or the Manufacturing
Agreement and access to such records shall be limited to the narrowest
practicable group of other party's personnel who have a strict need to know the
same for the purposes of such quality assurance inspections, audits and
investigations. TGC shall permit representatives of Celladon to enter TGC's
manufacturing facilities upon reasonable prior notice and at intervals of no
more than once per year, during normal business hours for the purpose of making
quality assurance audits of the facilities and of the procedures and processes
used by TGC in storing, manufacturing and shipping any Selected Product and to
inspect all related records. To the extent any such inspections, notices,
responses, filings, audits and investigations could lead to the disclosure of
any Confidential Information of TGC to Celladon: (i) access to such Confidential
Information shall be limited to the narrowest practicable group of Celladon's
quality assurance personnel who have a strict need to know the same for the
purposes of such quality assurance inspections, audits and investigations; and
(ii) any and all such Confidential Information and shall be protected by
Celladon under Article 8. Each party shall maintain such records and the
information disclosed therein in confidence in accordance with Article 8.

            (C) PROGRESS REPORTS. Within 45 days following the end of each
calendar quarter during the Collaboration Term, each party shall provide to the
other party a written progress report, or shall communicate by some other
mechanism agreed to by both parties, including circulation of the minutes of the
Committee, which shall describe the work performed by such party to date on the
Collaboration, evaluate the work performed in relation to the goals of the
Collaboration and provide such other information required by the Collaboration
or reasonably requested by the other party relating to the progress of the goals
or performance of the Collaboration. Such progress reports shall include the
progress and results of activities conducted outside of the Collaboration, by
Celladon or Third Parties on behalf of Celladon, on the Gene Therapy Products
that are part of the Collaboration. Such activities would include by example
preclinical, clinical and regulatory activities of the Gene Therapy Products or
Selected Products.

      2.7 INTELLECTUAL PROPERTY ANALYSIS AND LICENSING. Celladon and TGC, [*],
shall conduct [*] analysis under Third Party intellectual property rights with
respect to all elements of any Gene Therapy Product [*]. Third Party Patents may
be identified as necessary for Celladon to develop, make, have made, use, have
used, commercialize, offer for license, lease, sale or transfer a Selected
Product. The parties agree to consult with, inform, and collaborate on
identifying such

                                              *CONFIDENTIAL TREATMENT REQUESTED.

                                       12
<PAGE>
Third Party Patents and Information during the Term. Upon identification of any
Third Party Patents, the parties will mutually agree to [*] to obtain such
rights subject to the following conditions:

            (A) Celladon shall be responsible for securing rights or licenses to
Third Party Patents and Information directed to: (i) [*]; (ii) [*]; (iii) [*];
and (iv) [*]. In the event Celladon determines it requires such Third Party
Patent Rights and TGC makes a good faith determination that such Third Party
Patent Rights are not necessary for TGC, Celladon will not [*]. Celladon will
involve TGC in the process of obtaining the Third Party Patent Rights to the
extent necessary for TGC to ensure no such obligations are created.

            (B) TGC shall be responsible for securing rights or licenses to
Third Party Patents and Information directed to: (i) [*], (ii) [*], (iii) [*];
and (iv) [*].

All costs of [*] under Third Party intellectual property rights, licensing,
complying with or obtaining other rights to any such Third Party technology
shall be borne by [*] unless [*] in which case, Celladon and TGC shall determine
the appropriate [*]. Royalty obligations associated with obtaining such rights
shall be [*]. Each Party shall use Commercially Reasonable Efforts to secure
rights or licenses identified in Sections 2.7(a) and 2.7(b), and shall determine
a mutually agreeable solution if either Party is not able to secure the licenses
or rights identified by the Parties.

      2.8 COMPLIANCE. Each Party shall conduct the Collaboration in good
scientific manner and in accordance with all applicable laws, rules and
regulations, including, without limitation, and to the extent applicable, all
current governmental regulatory requirements concerning cGMP. Each party shall
notify the other party in writing of any material deviations from applicable
regulatory or legal requirements. Celladon shall permit representatives of TGC
to enter clinical trial sites upon reasonable prior notice at reasonable
intervals, but no more frequently than once per year per site unless a
significant adverse event has been reported to TGC, and with the approval, such
approval shall not be unreasonably withheld or delayed, of the appropriate
Celladon medical director, during normal business hours for the purpose of
making quality assurance audits of the clinical trial sites and of the
implementation of the clinical trial protocol according to the appropriate
regulatory documents. Each party hereby certifies that it will not and has not
employed or otherwise used in any capacity the services of any person debarred
under Section 21 USC 335a in performing any activities under this Agreement, the
Manufacturing Agreement or in performing activities, outside of this Agreement,
that will be utilized in regulatory documents to support the conduct of human
clinical trials of any Selected Product.

      2.9 MATERIALS. In order to facilitate the Collaboration, each party may
provide the other party with other chemical or biological materials as necessary
for the conduct of the Collaboration. Each party shall use materials supplied by
the other party solely: (a) for the purposes of carrying out its respective
activities under the Collaboration in accordance with the terms of this
Agreement during the Collaboration Term; (b) in the case of Celladon, of
developing, commercializing and, if applicable, manufacturing Selected Products
in accordance with this Agreement during the Term; and (c) in the case of TGC,
manufacturing Selected Products in accordance with the Manufacturing Agreement
during the Manufacturing Term. Neither party shall transfer, deliver or disclose
any such materials of the other party, or any derivatives, modifications or
components thereof, to any Third Party without the prior written approval of the
providing party, except that: (A) TGC may transfer materials provided by
Celladon (i) to TGC's subcontractors of its Collaboration activities as

                                              *CONFIDENTIAL TREATMENT REQUESTED.

                                       13
<PAGE>
permitted in accordance with Section 2.3 for the sole purpose of performing such
Collaboration activities or (ii) to TGC's Affiliates and Third Party
subcontractors under the Manufacturing Agreement for the sole purpose of
performing TGC's obligations thereunder; and (B) Celladon may transfer Materials
provided by TGC (i) to Celladon's permitted subcontractors of Collaboration
activities as permitted in accordance with Section 2.3 for the sole purpose of
performing such Collaboration activities or (ii) to Celladon's Affiliates,
licensees and agents without TGC's prior written consent for the sole purpose of
developing, commercializing and, if applicable, manufacturing Selected Products
in the Field; subject in each case to the terms and conditions of this Agreement
and the Manufacturing Agreement. Neither party shall use any materials provided
by the other party in humans, except as contemplated by this Agreement and
permitted by applicable law. Materials supplied by a party hereunder shall be
deemed to constitute Confidential Information of the supplying party.

      2.10 ACCESS TO OTHER TGC CAPABILITIES. Should Celladon wish to have TGC
perform preclinical, regulatory and/or clinical development or other services
not expressly contemplated by this Agreement (including, without limitation,
EXHIBIT A hereto), TGC shall, in its sole discretion and determination, provide
access to such capabilities, if and when available, at the rate specified in
Exhibit B or, in light of the services that would be provided, at a commercially
reasonable rate to be mutually agreed upon by the parties.

      2.11 COLLABORATION TERM. The term of the Collaboration (the "COLLABORATION
TERM") shall begin on the Effective Date and continue until the earlier of (i)
completion of all activities under the Development Plan, or (ii) the termination
of this Agreement by either party in accordance with Article 9. Celladon may
terminate the Collaboration prior to its expiration upon written notice to TGC;
provided, however, that Celladon shall pay to TGC within 30 days of such
termination a termination fee in an amount equal to [*] as set forth in the most
recently-approved budget included in a Development Plan. For the avoidance of
doubt, in the event that Celladon terminates the Collaboration under this
Section 2.11, then Article 2 shall terminate (subject to Celladon's compliance
with any obligation incurred prior to such termination), TGC's obligation
pursuant to Section 2.4(a) shall terminate, but this Agreement shall otherwise
remain in full force and effect in accordance with its terms related to
termination contained in Article 9.

3. DEVELOPMENT AND COMMERCIALIZATION OF SELECTED PRODUCTS.

      3.1 DEVELOPMENT AND COMMERCIALIZATION OF SELECTED PRODUCTS. Except as
otherwise expressly set forth in this Agreement or the Manufacturing Agreement,
Celladon shall be solely responsible for the worldwide development and
commercialization of Selected Products. Celladon agrees to use Commercially
Reasonable Efforts to obtain Regulatory Approval of Selected Products in the
United States and in such other countries as Celladon deems appropriate and,
following Regulatory Approval, to commercialize Selected Products. Celladon
shall provide quarterly updates to TGC of the progress of clinical development
of Selected Products, the filing of any IND or NDA with respect to a Selected
Product, and the Regulatory Approval of a Selected Product in any jurisdiction.
Celladon shall, on a timely basis, provide TGC with information in Celladon's
possession or control relevant to its or its Affiliates' or Third Party
subcontractors' role as the holder of the INDs and NDAs and the manager of the
clinical trials of Selected Products that is reasonably necessary for and
relevant to TGC's obligations hereunder in complying with such regulatory
requirements.

                                              *CONFIDENTIAL TREATMENT REQUESTED.

                                       14
<PAGE>
      3.2 REGULATORY FILINGS AND APPROVALS.

             (A) CELLADON RESPONSIBILITIES. Except as set forth in Section
 3.2(b) below or in the Manufacturing Agreement, Celladon or its designee shall
 be solely responsible for filing, obtaining and maintaining all INDs, NDAs,
 Regulatory Approvals and other licenses, registrations, listings,
 authorizations and approvals that may be required for the manufacture,
 development or commercialization of the Selected Products throughout the world
 (collectively, "REGULATORY DOCUMENTS"). Except as set forth in Section 3.2(b)
 below or in the Manufacturing Agreement, Celladon shall be the sole and
 exclusive owner of all Regulatory Documents. At Celladon's request, TGC shall
 take all actions necessary to assist Celladon in filing, obtaining and
 maintaining the Regulatory Documents. Celladon or its designee shall serve as
 the point of contact with the FDA and other regulatory agencies concerning any
 and all Regulatory Documents but may, as appropriate, request TGC's assistance
 with such matters. Celladon, with appropriate assistance from TGC as and to the
 extent provided under the appropriate Development Plan, will use Commercially
 Reasonable Efforts to assemble all Approval Applications needed to conduct
 clinical trials with any Selected Product developed or to be developed under
 the Agreement or supplied or to be supplied to Celladon under the Manufacturing
 Agreement. In connection with any Approval Application, Celladon will have the
 right to reference any relevant regulatory documents of TGC.

             (B) TGC RESPONSIBILITIES. TGC shall use its Commercially Reasonable
 Efforts to prepare, file and permit Celladon, at Celladon's request, to cross
 reference the Selected Product chemistry, manufacture and control ("CMC")
 information in any Regulatory Document for a Selected Product. For the
 avoidance of doubt, TGC shall own all right, title and interest in all TGC
 regulatory documents and all Approval Applications filed by TGC which are
 necessary to obtain Regulatory Approvals required for manufacture of Selected
 Product by TGC, including the documents provided as part of the CMC. With
 respect to INDs and NDAs to be filed in the United States with respect to
 Selected Products, CMC information shall follow the format and content set
 forth in 21 C.F.R. Parts 312 and 314, respectively, and all applicable rules,
 regulations and guidelines promulgated thereunder. TGC shall also be
 responsible for obtaining and maintaining any filings, permits and approvals
 necessary for the manufacture of clinical and commercial supply of Selected
 Products, including, without limitation, DMFs for each Selected Product and all
 applicable permits and approvals required to operate TGC's manufacturing
 facilities (collectively, "MANUFACTURING DOCUMENTS"). Celladon shall have, and
 TGC hereby grants to Celladon, the right to reference the Manufacturing
 Documents for the purpose of obtaining and maintaining Regulatory Approvals
 with respect to Selected Products, and TGC shall, promptly upon request by
 Celladon, provide Celladon or any regulatory agency specified by Celladon with
 appropriate letters of access or reference to the Manufacturing Documents. TGC
 specifically agrees to cooperate with any inspection by the FDA or other
 regulatory agency, including but not limited to any inspection prior to
 approval of any NDA for a Selected Product. Subject to Section 2.4 hereof, TGC,
 with appropriate assistance from Celladon, will use Commercially Reasonable
 Efforts to assemble all Approval Applications relating to the manufacture of
 any Selected Product developed or to be developed under the Agreement or
 supplied or to be supplied to Celladon under the Manufacturing Agreement.

      3.3 CLINICAL TRIAL CONDUCT. [*], Celladon shall be responsible for the
design, implementation, and evaluation of any human clinical studies used to
obtain clinical data for use in preparing Regulatory Approvals related to
clinical trials of a Selected Product. Celladon shall

                                              *CONFIDENTIAL TREATMENT REQUESTED.
                                       15
<PAGE>
conduct the Clinical Trials in compliance with GCP pursuant to regulations of
the FDA or other appropriate regulatory agency. Subject to the confidentiality
provisions of Section 8, Celladon, at its sole cost, shall provide TGC with a
complete copy of the protocols and investigators' brochures for the Clinical
Trials, as well as copies of all reports, abstracts and publications concerning
the data and results of the Clinical Trials. For the purpose of keeping TGC
apprised of the status of the Clinical Trials, Celladon shall provide to TGC a
copy of all updated investigators' brochures which Celladon is required to file
with the FDA or other regulatory agency anywhere.

             (A) ADVERSE EVENT REPORTING. Celladon shall be responsible for all
 reporting to regulatory authorities of adverse events associated with the use
 of any Selected Product supplied by TGC under the Manufacturing Agreement,
 except to the extent that applicable law requires TGC, as the manufacturer of
 Selected Product, to report such event. Each party shall advise the other
 promptly after such party advises the FDA or other regulatory authority of any
 such adverse events in accordance with the preceding sentence.

             (B) TRIAL TERMINATION. If any government agency requests a
 termination of a clinical trial or takes similar action in connection with any
 Selected Product, or if Celladon determines that an event, incident or
 circumstance has occurred which may result in the need for termination of a
 clinical trial, Celladon shall, within twenty-four (24) hours, advise TGC
 thereof by telephone, e-mail or facsimile, after which the parties shall
 promptly discuss, agree upon and work together to effect an appropriate course
 of action. Notification to FDA (or such other applicable government agency with
 respect to countries other than the United States) and compliance with
 applicable laws in conducting such trial termination shall be the
 responsibility of Celladon.

 4. EXCLUSIVITY, LICENSE GRANTS AND COVENANTS.

      4.1 EXCLUSIVITY.

             (A) It is the intent of the parties that, during the term of this
 Agreement and the Manufacturing Agreement, as applicable, the parties shall
 design and develop AAV Vector-based Gene Therapy Products. This Agreement and
 the Manufacturing Agreement further reflect the intent of the parties for TGC,
 or its authorized designee, to be the exclusive supplier to Celladon [*].
 Celladon may not produce or have produced by Third Parties [*].

             (B) The parties acknowledge that the identity, composition, method
 of making and purifying, dosages and delivery of any Selected Product have not
 been fixed as of the Effective Date and it is the purpose of this Agreement and
 the Manufacturing Agreement to develop and define such Selected Product.
 Therefore it is acknowledged and agreed by the parties that: (i) the technology
 and intellectual property licensed under this Agreement with respect to any
 Selected Product will be limited to only such TGC Technology and TGC Licensed
 Technology as is necessary for development and commercialization of a Selected
 Product; (ii) such necessary TGC Technology and TGC Licensed Technology may
 change from time to time as a result of the ongoing activities under this
 Agreement and the Manufacturing Agreement; and (iii) such TGC Technology and
 TGC Licensed Technology will only be as set forth in EXHIBIT C, as it may be
 amended from time to time. The initial version of EXHIBIT C shall be mutually
 agreed upon and attached hereto within 90 days after the Effective Date.
 Thereafter, the Committee shall periodically (but no less frequently than every
 six months) review EXHIBIT C to ascertain whether any update or amendment to
 EXHIBIT C is then appropriate, and each such update or amendment

                                              *CONFIDENTIAL TREATMENT REQUESTED.
                                       16
<PAGE>
shall be subject to the mutual agreement of the parties, not to be unreasonably
withheld. In addition, EXHIBIT C shall be updated as appropriate promptly after
each of the following events: (i) delivery of the first batch of Selected
Product to Celladon; (ii) IND filing with respect to a Selected Product; (iii)
NDA filing with respect to a Selected Product; and (iv) First Commercial Sale of
a Selected Product.

      4.2 LICENSE GRANT TO CELLADON. Subject to the terms and conditions of this
Agreement (including, without limitation, Section 4.1(b) hereof), TGC hereby
grants to Celladon:

            (A) [*] license, [*] perform Celladon's obligations under the
Development Plan; and

            (B) an [*] license, [*], under the TGC Technology and TGC Licensed
Technology to [*], have [*] Gene Therapy Products and Selected Products in the
Field; provided, however, [*] within 30 days of receipt of an invoice therefor
(together with reasonable supporting documentation), except to the extent an
alternative arrangement is otherwise agreed to by Celladon and TGC. For so long
as Celladon has any license hereunder, TGC shall not grant [*] any right or
license under the TGC Licensed Technology [*]. Notwithstanding the [*] of the
foregoing license, TGC shall retain the right to practice the TGC Technology and
the TGC Licensed Technology to perform its obligations under this Agreement and
the Manufacturing Agreement. All licenses granted under this Section 4.2 are
subject to and limited by, and Celladon agrees to comply with, the applicable
terms and conditions of the applicable Third Party agreements (as amended from
time to time), to the extent that TGC has provided Celladon with true and
complete copies of such agreements (including any amendments thereto).

     4.3 LICENSE GRANT TO TGC. Subject to the terms and conditions of this
Agreement, Celladon hereby grants to TGC a [*] license, [*] solely to perform
TGC's obligations under the Development Plan and the Manufacturing Agreement.

      4.4 TGC CANDIDATES. TGC shall have the right to develop and commercialize
the TGC Candidates that TGC Controls on the Effective Date for any indication
(including, without limitation, the Therapeutic Field). TGC represents and
warrants that it has not initiated and does not have any plans to initiate
preclinical, clinical or any other development of a TGC Candidate in the
Therapeutic Field. If or when TGC initiates development of a TGC candidate in
the Therapeutic Field, TGC shall provide sufficient evidence to Celladon that
TGC possessed Control of the TGC Candidate prior to the Effective Date.

5.    MILESTONES AND ROYALTIES.

      5.1 MILESTONE PAYMENTS. Within 30 days following the first occurrence of
each of the events set forth below by a Selected Product, Celladon shall pay to
TGC the milestone payment set forth below (whether such milestone is achieved by
Celladon, its Affiliate or sublicensee):

<TABLE>
<CAPTION>
MILESTONE EVENT                                   MILESTONE PAYMENT
--------------------------------------------      -----------------
<S>                                               <C>
Initiation of first Phase 1/2 Clinical Trial                   [*]
Initiation of first Phase 3 Clinical Trial                     [*]
FDA Approval of NDA                                            [*]
                                                 -----------------
</TABLE>

                                              *CONFIDENTIAL TREATMENT REQUESTED.
                                       17
<PAGE>
<TABLE>
<S>                                               <C>
                TOTAL                                          [*]
</TABLE>

A trial shall be deemed "initiated" when the first human participant in such
trial is dosed with Selected Product. For purposes of clarification, milestone
payments shall be due for each Selected Product that achieves the applicable
milestone. The Phase 1/2 Clinical Trial and Phase 3 Clinical Trial milestone
payments shall be due only [*], regardless of the [*]. The FDA approval
milestone payment shall be due for each indication for which a Selected Product
receives FDA approval of an NDA; provided, however, that the milestone payment
amount for each indication approved after the initial indication shall be
reduced to [*]. For purposes of the preceding sentence, the Therapeutic Field
constitutes a single indication (e.g., if a Selected Product receives FDA
approval of an NDA for [*], and the same Selected Product subsequently receives
FDA approval of [*], such second FDA approval will not trigger any milestone
payment hereunder). Notwithstanding the foregoing, if Celladon realizes
Pre-Commercial Net Revenues in excess of [*], then Celladon shall pay to TGC the
greater of (a) [*] and (b) [*] Net Revenues (which payment shall be in lieu of,
and not in addition to, the payments specified in the preceding table of
Milestone Events).

      5.2 ROYALTIES. Celladon shall pay to TGC royalties on Gross Profit from
the sale of Selected Products by Celladon, its Affiliates and their respective
Licensees at the applicable rate(s) determined in accordance with this Section
5.2, subject to adjustment as set forth below in this Article 5:

            (A) JURISDICTIONS IN WHICH LICENSEES MARKET SELECTED PRODUCTS. With
respect to sales of Selected Products in any jurisdiction in which a Licensee
conducts the marketing and sale of Selected Products:

                  (I) If the Transfer Price for bulk Selected Product is equal
to or greater than [*]% of Gross Revenues from the sale of such Selected
Product, Celladon shall pay to TGC a royalty equal to [*]% of Gross Profit;

                  (II) If the Transfer Price for bulk Selected Product is less
than [*]% but greater than or equal to [*]% of Gross Revenues from the sale of
such Selected Product, Celladon shall pay to TGC a royalty equal to (x) [*]% of
Gross Profit plus (y) the same amount (percent) of Gross Profit by which [*]% of
Gross Revenues exceeds the Transfer Price (for a maximum potential royalty of
[*]% of Gross Profit). For example, if the transfer price equals [*]% of Gross
Revenues, then Celladon pays TGC (x) [*]% of Gross Profit plus (y) [*] (or
[*]%), and consequently the Celladon payment to TGC would equal [*]% of Gross
Profit; and

                  (III) If the Transfer Price for bulk Selected Product is less
than [*]% of Gross Revenues from the sale of such Selected Product, Celladon
shall pay to TGC a royalty equal to (x) the royalty calculated in accordance
with Section 5.2(a)(ii) above plus (y) [*]% of the amount by which [*]% of Gross
Revenues exceeds the Transfer Price. For example, if the transfer price equals
[*]% of Gross Revenues, then the payment by Celladon to TGC is calculated as
follows: (x) [*]% of Gross Profit plus (y) [*]%, and consequently the Celladon
payment to TGC would equal [*]% of Gross Profit.

            (B) JURISDICTIONS IN WHICH CELLADON OR ITS AFFILIATES MARKET
SELECTED PRODUCTS. With respect to sales of Selected Products in any
jurisdiction in which Celladon or its Affiliates conduct the marketing and sale
of Selected Products:

                                              *CONFIDENTIAL TREATMENT REQUESTED.
                                       18
<PAGE>
                  (I) If the Transfer Price for bulk Selected Product is equal
to or greater than [*]% of Gross Revenues from the sale of such Selected
Product, Celladon shall pay to TGC a royalty equal to [*]% of Gross Profit;

                  (II) If the Transfer Price for bulk Selected Product is less
than [*]% but greater than or equal to [*]% of Gross Revenues from the sale of
such Selected Product, Celladon shall pay to TGC a royalty equal to (x) [*]% of
Gross Profit plus (y) the same amount of Gross Profit by which [*]% of Gross
Revenues exceeds the Transfer Price (for a maximum potential royalty of [*]% of
Gross Profit). For example, if the transfer price equals [*]% of Gross Revenues,
then Celladon pays TGC (x) [*]% of Gross Profit plus (y) [*] ([*]%), and
consequently the Celladon payment to TGC would equal [*]% of Gross Profit; and

                  (III) If the Transfer Price for bulk Selected Product is less
than [*]% of Gross Revenues from the sale of such Selected Product, Celladon
shall pay to TGC a royalty equal to (x) the royalty calculated in accordance
with Section 5.2(b)(ii) above plus (y) [*]% of the Gross Profit by which [*]% of
Gross Revenues exceeds the Transfer Price. For example, if the transfer price
equals [*]% of Gross Revenues, then Celladon pays TGC (x) [*]% of Gross Profit
plus (y) [*]%, and consequently the Celladon payment to TGC would equal [*]% of
Gross Profit.

      5.3 ROYALTY REDUCTION. In the event that responsibility for manufacturing
Selected Products is [*], then the royalty that TGC would otherwise be entitled
to receive under Section 5.2 shall be reduced by [*]%. However, if the parties
mutually agree in writing to transfer responsibility for manufacturing Selected
Products to a commercial partner of Celladon's, then [*].

      5.4 ROYALTY PAYMENTS AND REPORTS. Pre-Commercial Net Revenues and
royalties shall be calculated and reported for each calendar quarter. All
royalty payments and any portion of Pre-Commercial Net Revenues due to TGC under
this Agreement shall be paid within [*] of the end of each calendar quarter.
Each payment shall be accompanied by a report of Pre- Commercial Net Revenues
and Gross Profit in sufficient detail to permit confirmation of the accuracy of
the payment made. Celladon shall keep, and shall cause its Affiliates and
Licensees to keep, complete and accurate records pertaining to Pre-Commercial
Net Revenues and Gross Profit in sufficient detail to permit TGC to confirm the
accuracy of all payments due hereunder.

      5.5 EXCHANGE RATE; MANNER AND PLACE OF PAYMENT. All payments hereunder
shall be payable in U.S. dollars. When conversion of payments from any foreign
currency is required, such conversion shall be at an exchange rate equal to the
weighted average of the rates of exchange for the currency of the country from
which the royalty payments are payable as published by The Wall Street Journal,
Eastern U.S. Edition, during the calendar quarter for which a payment is due.
All payments owed under this Agreement shall be made by wire transfer in
immediately available funds to a bank and account designated in writing by TGC,
unless otherwise specified in writing by TGC.

      5.6 INCOME TAX WITHHOLDING. TGC will pay any and all taxes levied on
account of any payments made to it under this Agreement. If any taxes are
required to be withheld by Celladon, Celladon will (a) deduct such taxes from
the payment made to TGC, (b) timely pay the taxes to the proper taxing
authority, and (c) send proof of payment to TGC and certify its receipt by the
taxing authority within 30 days following such payment.

                                              *CONFIDENTIAL TREATMENT REQUESTED.
                                       19
<PAGE>
      5.7 AUDITS. During the Term and for a period of three years thereafter,
Celladon shall keep (and shall cause its Affiliates and Licensees to keep)
complete and accurate records pertaining to Pre-Commercial Net Revenues and
Gross Profit in sufficient detail to permit TGC to confirm the accuracy of all
payments due hereunder. TGC shall have the right to cause an independent,
certified public accountant reasonably acceptable to Celladon to audit such
records to confirm Pre-Commercial Net Revenues, Gross Profit and payments due
hereunder for a period covering not more than the preceding three years. Such
audits may be exercised during normal business hours upon reasonable prior
written notice to Celladon only by an independent certified public accountant
selected by Celladon, who does not current provide TGC auditing services and is
reasonably acceptable to TGC. Prompt adjustments shall be made by the parties to
reflect the results of such audit. TGC shall bear the full cost of such audit
unless such audit discloses an underpayment by Celladon of more than [*]% of the
amount of payments due under this Agreement, in which case, Celladon shall bear
the full cost of such audit and shall promptly remit to TGC the amount of any
underpayment.

6.    INTELLECTUAL PROPERTY

      6.1 INVENTORSHIP AND OWNERSHIP OF INVENTIONS. Inventorship of inventions
shall be determined in accordance with the rules of inventorship under United
States patent laws or the applicable rules and guidelines of the country in
which the patent is being applied for ("INVENTIONS").

            (A) CELLADON INVENTIONS AND PATENTS. Subject only to the licenses,
rights and covenants expressly set forth in Articles 4, 6 and 9 of this
Agreement, Celladon shall retain all right, title and interest in and to the
Celladon Patents and Celladon Technology, including, without limitation, all
inventions conceived of or reduced to practice as part of the Collaboration
solely by Celladon employees and contractors. For the purposes of this
Agreement, Celladon Technology includes all Celladon-Assigned Joint Inventions,
and Celladon Patents include all Patents claiming any Celladon-Assigned Joint
Inventions. TGC hereby assigns to Celladon, and shall cause its employees,
affiliates, contractors, and subcontractors to assign to Celladon, all right,
title and interest in and to all Celladon-Assigned Joint Inventions. TGC further
agrees to cooperate and provide reasonable assistance to Celladon, and to cause
its employees, affiliates, contractors, and subcontractors to cooperate and
provide reasonable assistance to Celladon, to obtain and from time to time
enforce United States and foreign Patents claiming any Celladon-Assigned Joint
Inventions.

            (B) TGC INVENTIONS AND PATENTS. Subject only to the licenses, rights
and covenants expressly set forth in Articles 4, 6 and 9 of this Agreement and
Article 5 of the Manufacturing Agreement, TGC shall retain all right, title and
interest in and to the TGC Patents and TGC Technology, including, without
limitation, all inventions conceived of or reduced to practice as part of the
Collaboration solely by TGC employees and contractors. For the purposes of this
Agreement, TGC Technology includes all TGC-Assigned Joint Inventions, and TGC
Patents include all Patents claiming any TGC-Assigned Joint Inventions. Celladon
hereby assigns to TGC, and shall cause its employees, affiliates, contractors,
and subcontractors to assign to TGC, all right, title and interest in and to all
TGC-Assigned Joint Inventions. Celladon further agrees to cooperate and provide
reasonable assistance to TGC, and to cause its employees, affiliates,
contractors, and subcontractors to cooperate and provide reasonable assistance
to TGC, to obtain and from time to time enforce United States and foreign
Patents claiming any TGC-Assigned Joint Inventions.

                                              *CONFIDENTIAL TREATMENT REQUESTED.
                                       20
<PAGE>
      6.2 PATENT PROSECUTION AND MAINTENANCE; ABANDONMENT.

            (A) CELLADON PATENTS. Celladon, or Celladon's designee, shall have
the sole right, but not the obligation, to file, prosecute and maintain the
Celladon Patents and shall bear all patent costs associated therewith.

            (B) TGC PATENTS. TGC, or TGC's designee, shall have the sole
responsibility to file, prosecute and maintain such TGC Patents and shall bear
all patent costs associated therewith. In the event that (i) TGC elects, in any
country, not to continue to prosecute and thereby abandon an application for, or
not to maintain and thereby abandon, a TGC Patent or a TGC Licensed Patent (to
the extent that TGC has the right to prosecute and maintain such TGC Licensed
Patent), and (ii) Celladon could reasonably be expected to consider such TGC
Patent or TGC Licensed Patent necessary or useful for the development of a Gene
Therapy Product, then TGC shall notify Celladon not less than two (2) months
before the next deadline for any action that may be taken with respect to such
TGC Patent or TGC Licensed Patent with the U.S. Patent & Trademark Office or any
foreign patent office. Celladon, thereafter, shall have the right to pursue, at
Celladon's expense and in Celladon's sole discretion, filing, prosecution and
maintenance of such TGC Patent or TGC Licensed Patent (provided, however, that
with respect to any TGC Licensed Patent, Celladon shall only have a right to
pursue filing, prosecution and maintenance to the extent permitted in the
applicable license agreement pursuant to which TGC has a license under such TGC
Licensed Patent).

      6.3 COOPERATION OF THE PARTIES. Each party agrees to cooperate fully in
the preparation, filing, prosecution and maintenance of any Patents under this
Agreement and in the obtaining and maintenance of any patent extensions,
supplementary protection certificates and the like with respect to any Patent
claiming a Selected Product being developed or commercialized by Celladon in
accordance with this Agreement. Such cooperation includes, but is not limited
to:

            (A) executing all papers and instruments, or requiring its employees
or contractors, to execute such papers and instruments, so as to effectuate the
ownership of Inventions set forth in Section 6.1, and Patents claiming or
disclosing such Inventions, and to enable the other party to apply for and to
prosecute patent applications in any country; and

            (B) promptly informing the other party of any matters coming to such
party's attention that may affect the preparation, filing, prosecution or
maintenance of any such patent applications.

      6.4 INFRINGEMENT BY THIRD PARTIES. If any Patent Controlled by either
party and licensed hereunder is or might reasonably be infringed by a Third
Party through the manufacture, use or sale of any product that is competitive
with a Gene Therapy Product, the party to this Agreement first having knowledge
of such infringement shall promptly notify the other Party in writing. Such
notice shall set forth in reasonable detail the facts and circumstances of the
alleged infringement known to such party.

            (A) CELLADON PATENTS. Celladon shall have the first right, but not
an obligation, to institute, prosecute and control, using counsel of Celladon's
choice, any action or proceeding with respect to any alleged infringement of any
Celladon Patent. Celladon, represented by counsel of its choice, shall bear its
costs and expenses in connection with any such action or proceeding.

                                       21
<PAGE>
            (B) TGC PATENTS. TGC shall have the first right, but not an
obligation, to institute, prosecute and control, using counsel of TGC's choice,
any action or proceeding with respect to any alleged infringement of any TGC
Patent or TGC Licensed Patent. TGC, represented by counsel of its choice, shall
bear its costs and expenses in connection with any such action or proceeding. At
TGC's request and expense, Celladon shall provide TGC with reasonable
cooperation and assistance with respect to any such action or proceeding, and,
if Celladon reasonably believes that such infringement of a TGC Patent or TGC
Licensed Patent, if continued, would affect materially and adversely the
development, manufacture, use or sale of a Gene Therapy Product, Celladon shall
have the right, at its own expense, to be represented in any such action by
counsel of its own choice.

      If TGC fails to bring an action or proceeding within (i) [*] following the
notice of alleged infringement, or (ii) [*] before the time limit, if any, set
forth in the appropriate laws and regulations for the filing of such actions,
whichever comes first (and such infringement has not otherwise abated), and
Celladon reasonably believes that such infringement of a TGC Patent or TGC
Licensed Patent, if continued, would affect [*] of a Gene Therapy Product, then,
to the extent TGC is not contractually restricted from allowing Celladon to do
so, Celladon shall have the right, but not the obligation, to institute and/or
prosecute and control an action or proceeding in its name with respect to such
an infringement by counsel of Celladon's choice. In the event that Celladon
institutes any such action or proceeding, TGC agrees to be joined as a party
plaintiff if necessary for Celladon to institute and prosecute such action or
proceeding, and to give Celladon reasonable assistance and authority to
institute and prosecute such action or proceeding. In addition, if the Patent
alleged to be infringed is a TGC Licensed Patent and TGC does not have authority
to require such Third Party to join as a party plaintiff, TGC agrees to use
Commercially Reasonable Efforts to cause such Third Party to agree to be joined
as a plaintiff if helpful or necessary for Celladon to prosecute an action or
proceeding, and to give Celladon reasonable assistance and authority to
institute and prosecute such action or proceeding. Celladon, represented by
counsel of its choice, shall bear its costs and expenses and the costs and
expenses of TGC in connection with any such action or proceeding.

                                              *CONFIDENTIAL TREATMENT REQUESTED.
                                       22
<PAGE>
In the event a party brings an infringement action in accordance with this
Section 6.4, the other party shall cooperate fully, including, if required to
bring such action, the furnishing of a power of attorney or being named as a
party. Neither party shall have the right to settle any patent infringement
litigation under this Section 6.4 relating to any Patent claiming the
manufacture, use or sale of a Selected Product being developed or commercialized
by or on behalf of Celladon (or its Affiliates or Third Party licensees),
without the prior written consent of such other party. Except as otherwise
agreed to by the parties as part of a cost-sharing arrangement, any recovery
realized as a result of such litigation, after reimbursement of any litigation
expenses of Celladon and TGC, shall be retained by the party that brought and
controlled such litigation for purposes of this Agreement, except that any
recovery realized as a result of such litigation that is attributable to lost
sales or lost profits with respect to Selected Products shall belong to
Celladon. Notwithstanding the foregoing, the parties acknowledge that, in the
case of infringement of a TGC Licensed Patent, the agreement under which such
TGC Licensed Patent was licensed to TGC may require reimbursement of such Third
Party licensor's costs in connection with such infringement action or may
otherwise provide for an allocation of recoveries that is inconsistent with the
preceding sentence. In such event, the parties shall discuss in good faith and
mutually agree upon a cost- and recovery-sharing arrangement that is both
reasonable in light of the parties' respective interests in the applicable TGC
Licensed Patent and consistent with the applicable Third Party agreement.

      6.5 INFRINGEMENT OF THIRD PARTY RIGHTS. Neither party shall have the right
to settle any infringement claim or action by a Third Party alleging that the
manufacture, use or sale of a Selected Product being developed or commercialized
by or on behalf of Celladon (or its Affiliates or Third Party licensees)
infringes the Patents of a Third Party, without the prior written consent of
such other party. Such consent shall not be unreasonably withheld or delayed,
but may be withheld if such settlement would materially and adversely affect the
interest of the other party.

            (A) CELLADON'S RIGHT TO DEFEND. Celladon shall have the sole right
to control any defense of any such claim involving alleged infringement of Third
Party Patents by Celladon's activities at its own expense and by counsel of its
own choice, and TGC shall have the right, at its own expense, to be represented
in any such action by counsel of its own choice.

            (B) TGC'S RIGHT TO DEFEND. TGC shall have the sole right to control
any defense of any such claim involving alleged infringement of Third Party
rights by TGC's activities at its own expense and by counsel of its own choice,
and Celladon shall have the right, at its own expense, to be represented in any
such action by counsel of its own choice, to the extent TGC is not contractually
restricted from allowing Celladon to do so. If during the term of this
Agreement, a party reasonably determines that a Third Party's Patent covering
any of the Gene Therapy Product components described in Section 2.7(a) or 2.7(b)
may be infringed by any activity of TGC under this Agreement or under the
Manufacturing Agreement, such party shall promptly notify the other party of
such possible infringement.

                  (I) In the case of infringement of a Third Party's Patent
covering any Gene Therapy Product component described in Section 2.7(a), TGC
shall have the sole right to control any defense of any such claim and by
counsel of its choice at the reasonable expense of Celladon, and Celladon shall
have the right, at its own expense, to be represented in any such action by
counsel of its own choice.

                                       23
<PAGE>
                  (II) In the case of infringement of a Third Party's Patent
covering any Gene Therapy Product component described in Section 2.7(b), TGC
shall have the sole right to control any defense of any such claim and by
counsel of its choice, at TGC's sole expense, and Celladon shall have the right,
at the reasonable expense of TGC, to be represented in any such action by
counsel of its own choice.

Nothing in this Section 6.5 shall require TGC to conduct patent searches or
otherwise seek to determine the existence of any such infringement.

7.    REPRESENTATIONS AND WARRANTIES

      7.1 MUTUAL REPRESENTATIONS AND WARRANTIES. Each party represents and
warrants to the other that: (a) it is duly organized and validly existing under
the laws of its jurisdiction of incorporation or formation, and has full
corporate or other power and authority to enter into this Agreement and to carry
out the provisions hereof; (b) it is duly authorized to execute and deliver this
Agreement and to perform its obligations hereunder, and the person or persons
executing this Agreement on its behalf has been duly authorized to do so by all
requisite corporate or partnership action; and (c) this Agreement is legally
binding upon it, enforceable in accordance with its terms, and does not conflict
with any agreement, instrument or understanding, oral or written, to which it is
a party or by which it may be bound, nor violate any material law or regulation
of any court, governmental body or administrative or other agency having
jurisdiction over it.

      7.2 CELLADON REPRESENTATIONS AND WARRANTIES. Celladon represents and
warrants to TGC that, as of the Effective Date:

            (A) there are no pending legal actions of which Celladon has
received written notice, judgments or settlements against or owed by Celladon
with respect to the Celladon Technology, and Celladon has not received written
notice of any pending or threatened claims or litigation seeking to invalidate
any Celladon Patents or claiming misappropriation by Celladon of other
intellectual property rights in the Celladon Technology;

            (B) all inventors of any inventions included within the Celladon
Technology who were Celladon employees at the time such invention was made have
an obligation to assign their entire right, title and interest in and to such
inventions and the corresponding Patents to Celladon, and, to Celladon's
knowledge, no person, other than those persons named as inventors on any
Celladon Patents claiming inventions owned by Celladon, is an inventor of the
invention(s) included in such Celladon Patents; and

            (C) Celladon represents and warrants to TGC that Celladon will (i)
maintain all Approval Applications and obtain all necessary Regulatory Approvals
as Sponsor of the clinical trials for which Selected Product is being supplied
under the Manufacturing Agreement, (ii) comply with Applicable Laws as Sponsor
of the clinical trials for which Selected Product is being supplied under the
Manufacturing Agreement, and (iii) as its activities relate to the relationship
between Celladon and TGC under this Agreement, only conduct clinical trials of
Selected Products.

            (D) Celladon has not received written notice concerning the
institution or possible institution of any interference, reexamination, reissue,
revocation or nullification involving any Celladon Patents.

                                       24
<PAGE>
      7.3 TGC REPRESENTATIONS AND WARRANTIES. TGC represents and warrants to
Celladon that, as of the Effective Date:

            (A) there are no pending legal actions of which TGC has received
written notice, judgments or settlements against or owed by TGC with respect to
the TGC Technology or the TGC Licensed Technology, and TGC has not received
written notice of any pending or threatened claims or litigation seeking to
invalidate any TGC Patents or TGC Licensed Patents or claiming misappropriation
by TGC of other intellectual property rights in the TGC Technology or TGC
Licensed Technology;

            (B) all inventors of any inventions included within the TGC
Technology who were TGC employees at the time such invention was made have an
obligation to assign their entire right, title and interest in and to such
inventions and the corresponding Patents to TGC, and, to TGC's knowledge, no
person, other than those persons named as inventors on any TGC Patents claiming
inventions owned by TGC, is an inventor of the invention(s) included in such TGC
Patents; and

            (C) TGC has not received written notice concerning the institution
or possible institution of any interference, reexamination, reissue, revocation
or nullification involving any TGC Patents or TGC Licensed Patents.

      7.4 LIMITATION OF LIABILITY. EXCEPT FOR PAYMENTS UNDER ARTICLE 5 OR
LIABILITY FOR BREACH OF ARTICLE 8, NEITHER PARTY SHALL BE ENTITLED TO RECOVER
FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES
IN CONNECTION WITH THIS AGREEMENT OR ANY LICENSE GRANTED HEREUNDER; provided,
however, that this Section 7.4 shall not be construed to limit either party's
indemnification obligations under Article 10.

8.    CONFIDENTIALITY

      8.1 CONFIDENTIAL INFORMATION. Except to the extent expressly authorized by
this Agreement or otherwise agreed in writing by the parties, the parties agree
that, during the Term and for five (5) years thereafter, the receiving party
shall keep confidential and shall not publish or otherwise disclose and shall
not use for any purpose other than as expressly provided for in this Agreement
any Information furnished to it by the other party pursuant to this Agreement or
the Manufacturing Agreement, or any Information developed as part of the
Collaboration or the Manufacturing Agreement (collectively, "CONFIDENTIAL
INFORMATION"). Each party may use such Confidential Information only to the
extent required to accomplish the purposes of this Agreement. Each party will
use at least the same standard of care as it uses to protect proprietary or
confidential information of its own to ensure that its employees, agents,
consultants and other representatives do not disclose or make any unauthorized
use of the Confidential Information. Each party will promptly notify the other
upon discovery of any unauthorized use or disclosure of the Confidential
Information.

      8.2 EXCEPTIONS. Confidential Information shall not include any information
which the receiving party can prove by competent evidence: (a) is now, or
hereafter becomes, through no act or failure to act on the part of the receiving
party, generally known or available; (b) is known by the receiving party at the
time of receiving such information, as evidenced by its records; (c) is
hereafter

                                       25
<PAGE>
furnished to the receiving party by a Third Party, as a matter of right and
without restriction on disclosure; (d) is independently discovered or developed
by the receiving party without the use of Confidential Information belonging to
the disclosing party; or (e) is the subject of a written permission to disclose
provided by the disclosing party.

      8.3 AUTHORIZED DISCLOSURE. Each party may disclose Confidential
Information belonging to the other party as expressly permitted by this
Agreement or if and to the extent such disclosure is reasonably necessary in the
following instances:

            (A) filing or prosecuting Patents as permitted by this Agreement;

            (B) regulatory filings for Selected Products as permitted by this
Agreement;

            (C) prosecuting or defending litigation as permitted by this
Agreement;

            (D) complying with applicable court orders or governmental
regulations;

            (E) in the case of Celladon, conducting development and/or
commercialization activities in accordance with a license granted under Sections
4.1 and 4.2;

            (F) disclosure to Affiliates, Licensees, employees, consultants,
agents or other Third Parties in connection with due diligence or similar
investigations by such Third Parties, and disclosure to potential Third Party
investors in confidential financing documents, provided, in each case, that any
such Affiliate, Licensee, employee, consultant, agent or Third Party agrees to
be bound by similar terms of confidentiality, invention assignment and non-use
at least equivalent in scope to those set forth in this Article 8 (excluding,
without the written consent of both TGC and Celladon, the permission contained
in this Section permitting further disclosure to subsequent Third Parties).

Notwithstanding the foregoing, in the event a party is required to make a
disclosure of the other party's Confidential Information pursuant to Section
8.3(c) or (d), it will, except where impracticable, give reasonable advance
notice to the other party of such disclosure and use efforts to secure
confidential treatment of such information at least as diligent as such party
would use to protect its own confidential information, but in no event less than
reasonable efforts. In any event, the parties agree to take all reasonable
action to avoid disclosure of Confidential Information hereunder. The parties
will consult with each other on the provisions of this Agreement to be redacted
in any filings made by the parties with the Securities and Exchange Commission
or as otherwise required by law.

                                       26
<PAGE>
      8.4 PUBLICATIONS. Each party to this Agreement recognizes that the
publication of papers regarding results of and other information regarding the
Collaboration, including oral presentations and abstracts, may be beneficial to
both parties provided such publications are subject to reasonable controls to
protect Confidential Information. Accordingly, a party shall have the right to
review and comment on any material proposed for disclosure or publication by the
other party, such as by oral presentation, manuscript or abstract, which
utilizes data generated from the Collaboration and/or includes Confidential
Information of the other party. Before any such material is submitted for
publication, the party proposing publication shall deliver a complete copy to
the other party at least 45 days prior to submitting the material to a publisher
or initiating any other disclosure. Such other party shall review any such
material and recommend any changes it reasonably believes are necessary to
preserve Confidential Information to the party proposing publication within 30
days of the delivery of such material to such other party, and the incorporation
of such recommended changes shall not be unreasonably refused. With respect to
oral presentation materials and abstracts, such other party shall make
reasonable efforts to expedite review of such materials and abstracts, and shall
return such items as soon as practicable to the party proposing publication with
appropriate comments, if any, but in no event later than 30 days from the date
of delivery to the non-publishing party. The publishing party shall comply with
the other party's request to delete references to the other party's Confidential
Information in any such material and agrees to delay any submission for
publication or other public disclosure for a period of up to an additional 90
days for the purpose of preparing and filing appropriate patent applications.

      8.5 PUBLICITY. The parties agree to issue a joint press release in the
form attached hereto as EXHIBIT D on, or as promptly as practicable following,
the Effective Date. It is understood that each party may desire or be required
to issue subsequent press releases relating to the Agreement or activities
thereunder. The parties agree to consult with each other reasonably and in good
faith with respect to the text and timing of such press releases prior to the
issuance thereof, provided that a party may not unreasonably withhold or delay
consent to such releases, and that either party may issue such press releases as
it determines, based on advice of counsel, are reasonably necessary to comply
with laws or regulations or for appropriate market disclosure. In addition,
following the initial press release announcing this Agreement, either party
shall be free to disclose, without the other party's prior written consent, the
existence of this Agreement, the identity of the other party and those terms of
the Agreement which have already been publicly disclosed in accordance herewith.

9.    TERM AND TERMINATION

      9.1 TERM. The term of this Agreement (the "TERM") shall commence on the
Effective Date and continue until the expiration of the last Royalty Term for
any Selected Product, unless earlier terminated pursuant to Sections 9.2, 9.3,
9.4 or 9.5.

      9.2 TERMINATION FOR CAUSE.

            (A) Celladon shall have the right to terminate this Agreement for
cause as follows: (i) upon or after the bankruptcy, insolvency, dissolution or
winding up of TGC (other than a dissolution or winding up for the purpose of
reconstruction or amalgamation); or (ii) upon [*] prior written notice to TGC
upon or after the [*] breach of this Agreement by TGC if TGC has not cured such
breach within the [*] period following written notice of termination by Celladon
(unless the parties have mutually agreed to a reasonable plan within a [*]
period following notification,

                                              *CONFIDENTIAL TREATMENT REQUESTED.
                                       27
<PAGE>
detailing the activities to be implemented to cure such breach and the time it
will take to cure such breach). For the avoidance of doubt, scientific issues,
not attributable to either party's gross negligence or willful misconduct, that
cause delays in performance or increase the costs of activities under the
Development Plan shall constitute a failure under Article 9.5 rather than a
material breach.

            (B) TGC shall have the right to terminate this Agreement for cause
as follows: (i) upon or after the bankruptcy, insolvency, dissolution or winding
up of Celladon (other than a dissolution or winding up for the purpose of
reconstruction or amalgamation); or (ii) upon [*] prior written notice to
Celladon upon or after the [*] breach by Celladon of (A) its obligation [*] or
(B) its [*] obligations under [*], unless, in either case, Celladon cures such
breach within the [*] period following written notice of termination by TGC.

      9.3 TERMINATION BY CELLADON. Subject to the payment obligations contained
in Section 2.11 and Section 5.2, Celladon shall have the right to terminate this
Agreement for any reason or for no reason at any time after expiration or
termination of the Collaboration Term upon 30 days' prior written notice to TGC.

      9.4 AUTOMATIC TERMINATION. This Agreement shall terminate automatically in
the event that, following delivery of the first batch of a Selected Product
under the Manufacturing Agreement, TGC [*] with respect to Selected Product or
otherwise becomes [*] of Selected Products (other than due to Force Majeure),
and TGC does not, within [*] of written demand by Celladon, restore such
capability or resume supply of Selected Products, as applicable. Any automatic
termination pursuant to the preceding sentence shall be effective at the end of
such [*] notice period, except in the event (a) TGC has restored [*], as
applicable, prior to the end of such [*] period, (b) Celladon provides TGC with
written notice prior to the end of such [*] period that Celladon does not wish
to terminate this Agreement, or (c) prior to the end of such [*] period, the
parties have mutually agreed to a reasonable plan detailing the activities to be
implemented to restore [*], as applicable, and the time it will take to
implement the same.

      9.5 TERMINATION BY MUTUAL AGREEMENT FOR TECHNICAL NON-VIABILITY. If either
party in good faith determines at any stage of the Collaboration Term that it
will not be possible to carry out the Development Plan based on (i) significant
scientific or technical hurdles that materially increase the cost and the
timeline for development of a Gene Therapy Product, (ii) failure of a Gene
Therapy Product to meet safety or technical criteria set out in the Development
Plan, (iii) a reasonable determination by the Committee that further development
of any Gene Therapy Product is not technically or commercially viable, (iv) [*],
or (v) as a result of Force Majeure (as described in Section 12.9 below), the
parties shall discuss the same [*] for up to [*] business days and may, upon
mutual written agreement, terminate this Agreement. For purposes of
clarification, notwithstanding either party's identification of any actual or
potential technical non-viability issues as described above, this Agreement
shall remain in full force and effect in accordance with its terms, unless and
until the parties mutually agree in writing to terminate this Agreement.

      9.6 EFFECT OF TERMINATION; SURVIVING OBLIGATIONS.

            (A) Upon termination of this Agreement by Celladon pursuant to
Section 9.2(a) or automatic termination of this Agreement pursuant to Section
9.4:

                                              *CONFIDENTIAL TREATMENT REQUESTED.
                                       28
<PAGE>
                  (I) the licenses granted under Sections 4.2(a) and 4.3 and the
rights granted under Section 4.4, if then in effect, shall [*] and

                  (II) the license granted by TGC to Celladon under Section
4.2(b) shall [*], subject to compliance by Celladon with all applicable
provisions of this Agreement (including, without limitation, the payment
obligations set forth in Article 5).

            (B) Upon termination of this Agreement by TGC pursuant to Section
9.2(b), termination of this Agreement by Celladon pursuant to Section 9.3, or
mutual termination of this Agreement pursuant to Section 9.5, [*]

            (C) Expiration or termination of this Agreement shall not relieve
the parties of any obligation accruing prior to such expiration or termination.
Except as set forth below or elsewhere in this Agreement, the obligations and
rights of the parties under Sections 2.9 (last sentence only), 2.11 (last
sentence only), 5.2, 5.7, 6.1, 6.6, 7.4, 8.1, 8.2, 8.3, 8.4, 9.7, 9.8 and 9.9,
and Articles 10, 11, 12 and 13 of this Agreement shall survive expiration or
termination of this Agreement. In addition, for so long as Celladon retains a
license from TGC under this Section 9.6, the obligations and rights of the
parties under Sections 6.2, 6.3, 6.4, 6.5, 6.6 and 9.9 shall survive termination
of this Agreement.

            (D) Within 30 days following the expiration or termination of this
Agreement, except, in the case of Celladon, for so long as Celladon retains
license rights under Section 9.5, each party shall deliver to the other party
any and all Confidential Information of the other party in its possession.

      9.7 EXERCISE OF RIGHT TO TERMINATE. The use by either party hereto of a
termination right provided for under this Agreement shall not give rise to the
payment of damages or any other form of compensation or relief to the other
party with respect thereto.

      9.8 DAMAGES; RELIEF. Subject to Section 9.7 above, termination of this
Agreement shall not preclude either party from claiming any other damages,
compensation or relief that it may be entitled to upon such termination.

      9.9 RIGHTS IN BANKRUPTCY. All rights and licenses granted under or
pursuant to this Agreement and/or the Manufacturing Agreement are, and will
otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy
Code, licenses of right to "intellectual property" as defined under Section 101
of the U.S. Bankruptcy Code. The parties agree that either party, as licensee of
such rights under this Agreement, will retain and may fully exercise all of its
rights and elections under the U.S. Bankruptcy Code. The parties further agree
that, in the event of the commencement of a bankruptcy proceeding by or against
TGC under the U.S. Bankruptcy Code, Celladon will be entitled to a complete
duplicate of (or complete access to, as appropriate) any such intellectual
property and all embodiments of such intellectual property, and same, if not
already in its possession, will be promptly delivered to it (i) upon any such
commencement of a bankruptcy proceeding upon its written request therefor,
unless TGC elects to continue to perform all of its obligations under this
Agreement, or (ii) if not delivered under (i) above, following the rejection of
this Agreement by or on behalf of TGC upon written request therefor by Celladon.

                                              *CONFIDENTIAL TREATMENT REQUESTED.
                                       29
<PAGE>
 10.   INDEMNIFICATION

      10.1 INDEMNIFICATION BY TGC. TGC hereby agrees to save, defend and hold
Celladon and its Affiliates and their respective directors, officers, employees
and agents (each, a "CELLADON INDEMNITEE") harmless from and against any and all
claims, suits, actions, demands, liabilities, expenses and/or loss, including
reasonable legal expense and attorneys' fees (collectively, "LOSSES"), to which
any Celladon Indemnitee may become subject as a result of any claim, demand,
action or other proceeding by any Third Party to the extent such Losses arise
directly or indirectly out of: (i) the breach by TGC of any warranty,
representation, covenant or agreement made by TGC in this Agreement or the
Manufacturing Agreement; (ii) TGC's performance of its obligations under this
Agreement or the Manufacturing Agreement; or (iii) the gross negligence or
willful misconduct of any TGC Indemnitee; except, in each case, to the extent
such Losses result from the breach by Celladon of any warranty, representation,
covenant or agreement made by Celladon in this Agreement or the Manufacturing
Agreement or the gross negligence or willful misconduct of any Celladon
Indemnitee.

      10.2 INDEMNIFICATION BY CELLADON. Celladon hereby agrees to save, defend
and hold TGC and its Affiliates and their respective directors, officers,
employees and agents (each, a "TGC INDEMNITEE") harmless from and against any
and all Losses to which any TGC Indemnitee may become subject as a result of any
claim, demand, action or other proceeding by any Third Party to the extent such
Losses arise directly or indirectly out of: (i) the development, manufacture,
use, handling, storage, sale or other disposition of any Selected Product by
Celladon, its Affiliates or Licensees, (ii) the breach by Celladon of any
warranty, representation, covenant or agreement made by Celladon in this
Agreement or the Manufacturing Agreement; (iii) Celladon's performance of its
obligations under this Agreement or the Manufacturing Agreement; or (iv) the
gross negligence or willful misconduct of any Celladon Indemnitee; except, in
each case, to the extent such Losses result from the breach by TGC of any
warranty, representation, covenant or agreement made by TGC in this Agreement or
the Manufacturing Agreement or the gross negligence or willful misconduct of any
TGC Indemnitee.

      10.3 CONTROL OF DEFENSE. Any entity entitled to indemnification under this
Article 10 shall give notice to the indemnifying party of any Losses that may be
subject to indemnification, promptly after learning of such Losses, and the
indemnifying party shall assume the defense of such Losses with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed by
the indemnifying party with counsel so selected, the indemnifying party will not
be subject to any liability for any settlement of such Losses made by the
indemnified party without its consent (but such consent will not be unreasonably
withheld or delayed), and will not be obligated to pay the fees and expenses of
any separate counsel retained by the indemnified party with respect to such
Losses.

 11.   DISPUTE RESOLUTION

      11.1 DISPUTE RESOLUTION. In the event of any dispute arising out of or
relating to this Agreement or the Manufacturing Agreement, the parties shall,
through their respective Chief Executive Officers, first meet and attempt to
resolve the dispute in face-to-face negotiations. This meeting shall occur
within 15 days after either party provides notice to the other party that it
wishes to invoke such negotiations. If the parties are unable to resolve such
dispute through such negotiations, then, except in the case of a dispute,
controversy or claim that concerns (a) the validity or infringement of a patent,
trademark or copyright or (b) any antitrust, anti-monopoly or

                                       30
<PAGE>

competition law or regulation, whether or not statutory, the dispute shall be
resolved by binding arbitration before a single independent and neutral
experienced arbitrator selected by mutual agreement of the parties. In the event
that the parties are unable to mutually agree on the appointment of such
arbitrator, then such arbitration shall be conducted before a panel of three
independent and neutral experienced arbitrators, one chosen by TGC, one chosen
by Celladon and the third chosen by the foregoing two arbitrators. Any such
arbitration proceeding shall be administered by the American Arbitration
Association, with limited discovery, in accordance with its then current rules
governing commercial disputes. The place of arbitration shall be San Francisco,
California. The arbitrator(s) shall have no authority to award punitive or any
other type of damages not measured by a party's compensatory damages. Except to
the extent necessary to confirm an award or as may be required by law, neither a
party nor any arbitrator may disclose the existence, content, or results of an
arbitration without the prior written consent of both parties. In no event shall
an arbitration be initiated after the date when commencement of a legal or
equitable proceeding based on the dispute, controversy or claim would be barred
by the applicable California statute of limitations. Each party shall bear its
own attorneys' fees, costs and disbursements arising out of the arbitration, and
shall pay an equal share of the fees and costs of the arbitrators; provided,
however, that the arbitrators shall be authorized to determine whether a party
is the prevailing party, and if so, to award to that prevailing party
reimbursement for its reasonable attorneys' fees, costs and disbursements
(including, for example, expert witness fees and expenses, photocopy charges,
travel expenses, etc.) and/or the fees and costs of the arbitrators. Each party
shall fully perform and satisfy the arbitration award within 15 days of the
service of the award. By agreeing to this binding arbitration provision, the
parties understand that they are waiving certain rights and protections which
may otherwise be available if a dispute between the parties were determined by
litigation in court, including, without limitation, the right to seek or obtain
certain types of damages precluded by this provision, the right to a jury trial,
certain rights of appeal and a right to invoke formal rules of procedure and
evidence.

      11.2 INJUNCTIVE RELIEF. Notwithstanding the provisions of Section 11.1,
each party acknowledges and agrees that, due to the unique and valuable nature
of the other party's proprietary information and materials, there can be no
adequate remedy at law for any breach by such party of the provisions of this
Agreement, that any such breach may result in irreparable harm to the other
party for which monetary damages would be inadequate to compensate such party
and that the other party shall have the right, in addition to any other rights
available under applicable law, to obtain from any court of competent
jurisdiction injunctive relief to restrain any breach or threatened breach of,
or otherwise to specifically enforce, any covenant or obligation of such party
under such provisions, without the necessity of posting any bond or security.

 12.   GENERAL PROVISIONS

      12.1 GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California, excluding its
conflicts of laws principles.

      12.2 ENTIRE AGREEMENT; MODIFICATION. This Agreement, together with the
Manufacturing Agreement, is both a final expression of the parties' agreement
and a complete and exclusive statement with respect to all of its terms. This
Agreement, together with the Manufacturing Agreement, supersedes all prior and
contemporaneous agreements and communications, whether oral, written or
otherwise, concerning any and all matters contained herein or in the
Manufacturing Agreement. No rights or licenses with respect to any intellectual

                                       31
<PAGE>

property of either party are granted or deemed granted hereunder or in
connection herewith, other than those rights expressly granted in this Agreement
or the Manufacturing Agreement. This Agreement may only be modified or
supplemented in a writing expressly stated for such purpose and signed by the
parties to this Agreement.

      12.3 RELATIONSHIP BETWEEN THE PARTIES. The parties' relationship, as
established by this Agreement, is solely that of independent contractors. This
Agreement does not create any partnership, joint venture or similar business
relationship between the parties. Neither party is a legal representative of the
other party, and neither party can assume or create any obligation,
representation, warranty or guarantee, express or implied, on behalf of the
other party for any purpose whatsoever.

      12.4 NON-WAIVER. The failure of a party to insist upon strict performance
of any provision of this Agreement or to exercise any right arising out of this
Agreement shall neither impair that provision or right nor constitute a waiver
of that provision or right, in whole or in part, in that instance or in any
other instance. Any waiver by a party of a particular provision or right shall
be in writing, shall be as to a particular matter and, if applicable, for a
particular period of time and shall be signed by such party.

      12.5 ASSIGNMENT. Except as expressly provided hereunder, neither this
Agreement nor any rights or obligations hereunder may be assigned or otherwise
transferred by either party without the prior written consent of the other party
(which consent shall not be unreasonably withheld or delayed); provided,
however, that either party may assign this Agreement and its rights and
obligations hereunder without the other party's consent:

             (A) in connection with the transfer or sale of all or substantially
 all of the business of such party to which this Agreement relates to a Third
 Party, whether by merger, sale of stock, sale of assets or otherwise, provided
 that in the event of a transaction (whether this Agreement is actually assigned
 or is assumed by the acquiring Party by operation of law (e.g., in the context
 of a reverse triangular merger)), intellectual property rights of the acquiring
 party to such transaction (if other than one of the parties to this Agreement)
 shall not be included in the technology licensed hereunder; and provided,
 further, that, in the case of assignment of this Agreement by TGC in connection
 with such a transaction, TGC remains a going concern and such transaction is
 not in connection with any liquidation, insolvency or bankruptcy proceedings;
 or

             (B) to an Affiliate, provided that the assigning party shall remain
 liable and responsible to the non-assigning party hereto for the performance
 and observance of all such duties and obligations by such Affiliate.

 The rights and obligations of the parties under this Agreement shall be binding
 upon and inure to the benefit of the successors and permitted assigns of the
 parties. Any assignment not in accordance with this Agreement shall be void.

      12.6 NO THIRD PARTY BENEFICIARIES. This Agreement is neither expressly nor
impliedly made for the benefit of any party other than those executing it.

      12.7 SEVERABILITY. If, for any reason, any part of this Agreement is
adjudicated invalid, unenforceable or illegal by a court of competent
jurisdiction, such adjudication shall not affect or

                                       32
<PAGE>

impair, in whole or in part, the validity, enforceability or legality of any
remaining portions of this Agreement. All remaining portions shall remain in
full force and effect as if the original Agreement had been executed without the
invalidated, unenforceable or illegal part.

      12.8 NOTICES. Any notice to be given under this Agreement must be in
writing and delivered either in person, by any method of mail (postage prepaid)
requiring return receipt, or by overnight courier or facsimile confirmed
thereafter by any of the foregoing, to the party to be notified at its
address(es) given below, or at any address such party has previously designated
by prior written notice to the other. Notice shall be deemed sufficiently given
for all purposes upon the earliest of: (a) the date of actual receipt; (b) if
mailed, three days after the date of postmark; or (c) if delivered by overnight
courier, the next business day the overnight courier regularly makes deliveries.

       If to Celladon, notices must be addressed to:

                        Celladon Corporation
                        2223 Avenida de la Playa
                        Suite 300
                        c/o Enterprise Partners Venture Capital
                        La Jolla, CA 92037
                        Attention: Carl Eibl
                        Facsimile:  (858) 731-0231

       If to TGC, notices must be addressed to:

                        Targeted Genetics Corporation
                        1100 Olive Way
                        Suite 100
                        Seattle, WA 98101
                        Attention: Chief Executive Officer
                        Facsimile:  (206) 223-0288

      12.9 FORCE MAJEURE. Except for the obligation to make payment when due,
each party shall be excused from liability for the failure or delay in
performance of any obligation under this Agreement by reason of any event beyond
such party's reasonable control including but not limited to Acts of God, fire,
flood, explosion, earthquake, or other natural forces, war, civil unrest,
accident, destruction or other casualty, any lack or failure of transportation
facilities, any lack or failure of supply of raw materials, any strike or labor
disturbance, or any other event similar to those enumerated above. Such excuse
from liability shall be effective only to the extent and duration of the
event(s) causing the failure or delay in performance and provided that the party
has not caused such event(s) to occur. Notice of a party's failure or delay in
performance due to force majeure must be given to the other party within 10 days
after its occurrence. All delivery dates under this Agreement that have been
affected by force majeure shall be tolled for the duration of such force
majeure. In no event shall any party be required to prevent or settle any labor
disturbance or dispute.

                                       33
<PAGE>

      12.10 INTERPRETATION.

             (A) CAPTIONS & HEADINGS. The captions and headings of clauses
contained in this Agreement preceding the text of the articles, sections,
subsections and paragraphs hereof are inserted solely for convenience and ease
of reference only and shall not constitute any part of this Agreement, or have
any effect on its interpretation or construction.

             (B) SINGULAR & PLURAL. All references in this Agreement to the
singular shall include the plural where applicable, and all references to gender
shall include both genders and the neuter.

             (C) ARTICLES, SECTIONS & SUBSECTIONS. Unless otherwise specified,
references in this Agreement to any article shall include all sections,
subsections, and paragraphs in such article; references in this Agreement to any
section shall include all subsections and paragraphs in such sections; and
references in this Agreement to any subsection shall include all paragraphs in
such subsection.

             (D) DAYS. All references to days in this Agreement shall mean
calendar days, unless otherwise specified.

             (E) AMBIGUITIES. Ambiguities and uncertainties in this Agreement,
if any, shall not be interpreted against either party, irrespective of which
party may be deemed to have caused the ambiguity or uncertainty to exist.

      12.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original document, and all of
which, together with this writing, shall be deemed one instrument.

               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

                                       34
<PAGE>

       IN WITNESS WHEREOF, the parties hereto have duly executed this
COLLABORATION AGREEMENT as of the Effective Date.

CELLADON CORPORATION                      TARGETED GENETICS CORPORATION

By: /s/ Carl Eibl                         By: /s/ H. Stewart Parker
   ------------------------------------      -----------------------------------
Name:   Carl Eibl                         Name:   H. Stewart Parker
     ----------------------------------        ---------------------------------
Title:                                    Title:  CEO
      ---------------------------------         --------------------------------

                                       35
<PAGE>

                                    EXHIBIT A

                                DEVELOPMENT PLAN

             [To be provided pursuant to the terms of Section 2.1.]

                                       36
<PAGE>

                                    EXHIBIT B

                              TGC ACCOUNTING METHOD

All TGC accounting and budgeting under this agreement will be based on work
performed, or to be performed, using Generally Accepted Accounting Principles,
following TGC's established cost accounting practices. TGC will account for
actual work hours incurred on the project based on its time collection system,
as performed in accordance with the approved Development Plan, extended by the
applicable pre-established fixed Full-Time Equivalent rate (FTE Rate) or rate
for manufacturing activities (Manufacture Rate). Additionally, TGC shall account
for non-labor costs directly managed and funded by TGC as set forth in the
Development Plan on an [*]. The applicable FTE Rate and Manufacturing Rate shall
be calculated at the beginning of each calendar year based upon TGC's projected
cost and activity budgets. The computation of the applicable FTE Rate and
Manufacturing Rate shall be made available for Celladon's review and approval
prior to the commencement of each new calendar year. Such rates shall be
applicable for Development Plan activities performed during the applicable
calendar year. All quarterly activity reports will be presented in a format
substantially consistent with the format set forth in the Development Plan. For
both budgeting, cost accounting purposes and, to the extent applicable, billing
purposes, the FTE Rate and Manufacturing Rate shall be used for each activity
budgeted and expended.

Calculation of FTE Rate:
     The FTE rate applicable to research and development activities under the
     Development Plan will be [*]. The FTE Rate is determined based on the
     number of total working hours in a 12-month period, excluding normal
     vacations, sick days and holidays, which amount totals [*] hours per year,
     per person. The FTE Rate will be applied to the hours utilized by TGC
     personnel in the conduct of activities pursuant to the Development Plan.
     The FTE Rate includes [*]. No general corporate activities [*] are included
     in the FTE rate.

     TGC shall disclose in each report delivered to Celladon under Section 2.4
     of this Agreement the number of FTEs devoted to the Collaboration during
     the applicable period, including a breakdown of such FTEs among major
     categories of activities.

Calculation of Manufacturing Rate:
     The [*] rate applicable to manufacturing suite usage under the Development
     Plan in 2005 will be $[*] in TGC's manufacturing facility that is being
     used (including space allocated for use), prepared for use, or cleaned
     after use for the manufacture of Selected Products, their components or
     other Development Plan activities. The Manufacturing Rate includes [*]. The
     Manufacturing Rate shall also include provision for an allocation of costs
     to reflect amortization of [*]. The Manufacturing Rate shall exclude any
     allocation of cost [*], unless such [*] for Selected Product. In the case
     of Selected Product manufactured entirely by a Third Party contracted by
     TGC, [*] for such Selected Product shall be considered the manufacturing
     rate.

                                       37     *CONFIDENTIAL TREATMENT REQUESTED.
<PAGE>

                                    EXHIBIT C

                   TGC TECHNOLOGY AND TGC LICENSED TECHNOLOGY

           [To be provided pursuant to the terms of Section 4.1(b).]

                                       38
<PAGE>

                                    EXHIBIT D

                          FORM OF JOINT PRESS RELEASE

                           [TARGETED GENETICS LOGO](R)

CONTACT:
Targeted Genetics Corporation
Stephanie Seiler
(206) 713-0124

           TARGETED GENETICS AND CELLADON ANNOUNCE A COLLABORATION TO
                      DEVELOP AAV-BASED GENE THERAPIES FOR
                            CONGESTIVE HEART FAILURE

    -Deal terms include $6 million equity investment in Targeted Genetics by
                           Celladon's lead investors-

SEATTLE, WA AND LA JOLLA, CA - January 4, 2005 - Targeted Genetics Corporation
(Nasdaq: TGEN) and Celladon Corporation today announced a collaboration
agreement to develop adeno associated virus (AAV)-based gene therapies for the
treatment of congestive heart failure. Simultaneous with the initiation of this
collaboration, Enterprise Partners and Venrock Associates, venture capital funds
that have invested in Celladon, made a $6 million common stock investment in
Targeted Genetics.

The collaboration combines Targeted Genetics' expertise in the development,
manufacture and clinical evaluation of AAV-based therapies with Celladon's
portfolio of genes with potential in the treatment of congestive heart failure.
Under the terms of the agreement, Targeted Genetics and Celladon will work
together to develop AAV vectors for the treatment of heart failure.

"Celladon was founded with the goal of becoming the leader in developing
molecular therapies for congestive heart failure," said Drew Senyei, M.D.,
Chairman at Celladon and Managing Director at Enterprise Partners Venture
Capital. "An extensive evaluation of available gene delivery technologies has
led us to believe that AAV vectors have the greatest potential to address the
medical and commercial needs of a chronic disease such as congestive heart
failure. We believe that Targeted Genetics is the partner of choice for
developing AAV-based products due to their exceptional expertise in the
development, manufacture and clinical evaluation of gene based therapies."

"Our collaboration with Celladon broadens our leadership position and
development of AAV-based therapies and presents an exciting opportunity to
expand our capabilities into the area of congestive heart failure," said H.
Stewart Parker, President and Chief Executive Officer of Targeted Genetics. "The
ability of AAV vectors to deliver genes to cardiac muscle cells combined with
the long-term gene expression properties of these vectors makes them
particularly exciting in the treatment of chronic cardiac diseases such as
congestive heart failure. Five million people in the United States today are
living with congestive heart failure, and our efforts to innovate new therapies
in this area are consistent with our mission to address diseases with
significant unmet medical need."

"Celladon's therapeutic candidates target the SERCA2a pathway, an important
regulator of myocardial contractility. Malfunction in this pathway can lead to
progressive heart failure," said Krisztina Zsebo, President of Celladon
Corporation. "Pre-clinical studies by Celladon's co-founders, Dr. Kenneth R.
Chien M.D., Ph.D. and Dr. Roger J. Hajjar, M.D., prominent researchers in the
field of cardiovascular medicine, indicate that AAV agents targeting this
pathway can reverse the progression of congestive heart failure in animal
models. Gene delivery may provide a new approach to unlocking the therapeutic
potential of this pathway, whereas previous traditional small molecule attempts
have not been successful."

Under the terms of the collaboration agreement, Targeted Genetics agreed to
commit $2 million towards the development, manufacture and preclinical
development of AAV vectors containing the SERCA2a gene and phospholamban gene
mutations. Celladon agreed to cover all additional development, manufacture and
preclinical development costs. Targeted Genetics will receive milestone payments
upon the completion of pre-specified product development milestones, and also
will receive significant royalties on any sales of potential products
commercialized under the collaboration. Simultaneously with the signing of the
agreement with Celladon, Celladon investors Enterprise Partners and Venrock
Associates purchased $6 million of Targeted Genetics' stock in a directed public
offering at $1.52 per share.

"We are pleased that these investors have decided to increase their investment
in our company beyond the amount of funding committed to the Celladon
collaboration. In addition to funding development activities under the
collaboration, this investment will also help to support our other therapeutic
product development programs," said Todd E. Simpson, Chief Financial Officer of
Targeted Genetics.

ABOUT CONGESTIVE HEART FAILURE
Congestive heart failure (CHF) is a serious condition in which the heart loses
its ability to pump blood efficiently. According to the National Heart, Lung and
Blood Institute, about 5 million people in the United States alone have heart
failure, and another 550,000 new cases are diagnosed each year. CHF contributes
to or causes about 300,000 deaths annually. The disease is most common in people
aged 65 or older, women and African Americans. The most common symptoms of heart
failure are shortness of breath, feeling tired, and swelling in the ankles,
feet, legs, and sometimes the abdomen. There is no cure for CHF.

ABOUT TARGETED GENETICS
Targeted Genetics Corporation develops gene-based products for preventing and
treating acquired and inherited diseases. The Company has three clinical product
development programs, targeting cystic fibrosis, AIDS prophylaxis and rheumatoid
arthritis. The Company also has a promising pipeline of product candidates
focused on hemophilia and cancer, and a broad platform of gene delivery
technologies for application in nucleic acid-based drug development. For more
information about Targeted Genetics, visit its website at
www.targetedgenetics.com.

Contact:  Stephanie Seiler
          206-713-0124

ABOUT CELLADON

Celladon, Inc., a privately held company based in La Jolla, California, was
founded by Dr. Kenneth R. Chien M.D., Ph.D. and Dr. Roger J. Hajjar, M.D. The
company is focused on developing novel molecular therapies for congestive
heart failure. The company's first product targets the treatment of
congestive heart failure by enhancing calcium cycling in the heart through a
gene based therapy. Founding investors include Enterprise Partners Venture
Capital and Venrock Associates. For more information about Celladon, visit
its website at www.celladon.net.

Contact:  Moya Gollaher
          Enterprise Partners
          (858)731-0244

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: Targeted Genetics Corporation has included in this press release certain
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 concerning Targeted Genetics' business ,
collaboration with Celladon, projected financial resources, intellectual
property, clinical trials and regulatory filings and anticipated data from
Targeted Genetics' clinical and preclinical programs. The words or phrases "can
be," "expects," "may affect," "anticipates," "may depend," "believes,"
"estimates," "plans," "projects" and similar words and phrases are intended to
identify such forward-looking statements. These forward-looking statements,
involve current expectations, forecasts of future events and other statements
that are not historical facts. Inaccurate assumptions and known and unknown
risks and uncertainties can affect the accuracy of forward-looking statements.
Actual results could differ materially from expectations for a number of
reasons, including failure of our partners to provide funding, our failure or
our partner's failure to make progress with our clinical trials, our failure or
our partner's failure to obtain positive results from our preclinical programs,
our failure or our partner's failure to obtain or maintain regulatory approvals,
our failure or our partner's failure to maintain or protect our intellectual
property and the other risks described in the section entitled "Factors
Affecting Our Operating Results, Our Business and Our Stock Price" in our
Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 and "Risk
Factors" in our Prospectus Supplement, dated December 31, 2004 and Base
Prospectuses filed with the Securities and Exchange Commission on January 4,
2005. You should not rely unduly on these forward-looking statements, which
apply only as of the date of this release. We undertake no duty to publicly
announce or report revisions to these statements as new information becomes
available that may change our expectations.

                                       39

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}]]