DEFA14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 30, 2009

Maxygen, Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-28401	77-0449487
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

515 Galveston Drive

Redwood City, CA 94063

(Address of principal executive offices)

(650) 298-5300

(Registrant’s telephone number, including area code)

Not Applicable.

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On June 30, 2009, Maxygen, Inc. (the “Company”) entered into a Master Joint Venture Agreement (the “Joint Venture Agreement”) with Astellas Pharma Inc. (“Astellas”) and Astellas Bio Inc. (“Bio”), pursuant to which the parties will establish a joint venture subsidiary (the “Joint Venture”) focused on the discovery, research and development of multiple protein pharmaceutical programs, including the Company’s MAXY-4 program and other early stage programs. The Company and Astellas are also parties to a Co-Development and Commercialization Agreement, dated as of September 18, 2008 (the “MAXY-4 Agreement”), pursuant to which the parties are collaborating on the development and commercialization of the Company’s MAXY-4 program candidates for autoimmune diseases and transplant rejection.

In connection with the consummation (the “Closing”) of the transaction contemplated by the Joint Venture Agreement (the “Transaction”), the Company will enter into an asset contribution agreement with the Joint Venture, pursuant to which the Company will contribute substantially all of its programs and technology assets in protein pharmaceuticals, including the MAXY-4 Agreement but excluding its MAXY-G34 program, in exchange for an ownership interest in the Joint Venture. At the Closing, the Company and Bio also will enter into a unit purchase agreement with the Joint Venture under which each party will invest $10 million of cash in the Joint Venture, immediately following which the Company will have an ownership interest in the Joint Venture of approximately 83% and Astellas will have the remaining ownership interest of approximately 17%. Astellas will be granted an option (the “Buy-Out Option”) to acquire all of the Company’s ownership interest in the Joint Venture at specified exercise prices that will increase each quarter from $53 million to $123 million over the term of the option, which expires on the third anniversary of the Closing.

Pursuant to the Joint Venture Agreement, Astellas and the Joint Venture also will enter into a collaboration agreement (the “Other Products Collaboration Agreement”), pursuant to which Astellas will fund substantially all of the costs, estimated at up to $30 million over the three-year option term and subject to certain limitations, related to the discovery, research and development by the Joint Venture of multiple protein therapeutics (other than the MAXY-4 program). Astellas will be granted an option to obtain an exclusive license to any one product developed by the Joint Venture under the Other Products Collaboration Agreement, and to proprietary products of Astellas, if any, which Astellas and the Joint Venture agree to develop under the Other Products Collaboration Agreement. This product option is subject to certain conditions and is exercisable only if Astellas does not exercise the Buy-Out Option prior to expiration of its term. The on-going development costs for the MAXY-4 program will be shared by Astellas and the Joint Venture in accordance with the existing terms of the MAXY-4 Agreement. The Other Products Collaboration Agreement also limits the research, development, manufacture and commercialization activities that the Joint Venture may conduct without Astellas’ consent.

To support the research and development operations of the Joint Venture, the Company also will enter into a technology license agreement with the Joint Venture

under which the Company will grant the Joint Venture certain exclusive licenses to use the Company’s MolecularBreeding™ technology platform and ancillary protein expression technologies for the discovery, research and development of protein pharmaceuticals, subject to certain existing licenses and other limitations.

Pursuant to the Joint Venture Agreement, the parties also will enter into a limited liability company agreement, investors’ rights agreement, co-sale agreement and voting agreement that will govern the parties’ relationship as investors in the Joint Venture. The terms and conditions related to the Buy-Out Option will be set forth in the investors’ rights agreement. In addition, under these agreements, the Joint Venture (and the Company as a majority owner) will be prohibited from taking certain actions with respect to the business of the Joint Venture and the Company’s ownership interest without the consent of Astellas. Certain of these restrictions will be eliminated if Astellas does not exercise the Buy-Out Option prior to the expiration of the option term, and additional restrictions will be substantially eliminated when no amounts are outstanding under the bridge loan agreement.

In the event Astellas does not exercise the Buy-Out Option prior to the expiration of the three-year option term, all rights to the protein therapeutics developed by the Joint Venture (with the exception of any products for which Astellas has exercised its license option) will be retained by the Joint Venture. In the event that Astellas does not exercise its Buy-Out Option and does not exercise its product option under the Other Products Collaboration Agreement, an Astellas subsidiary will be required to provide the Joint Venture with up to 18 months of transition funding in the form of revolving loans of up to $20 million on pre-agreed terms in accordance with a form bridge loan agreement.

Pursuant to the terms of the Joint Venture Agreement, the Company is not permitted to solicit other proposals related to its business as a whole or the business or assets to be contributed to the Joint Venture, to share information or have discussions regarding alternative acquisition proposals or to approve or recommend alternative acquisition proposals. These restrictions are subject to certain exceptions, including customary “fiduciary out” exceptions, which permit the Company’s board of directors to take certain actions in connection with alternative acquisition proposals in order to comply with its fiduciary duties. The Company may terminate the Joint Venture Agreement under certain circumstances. In connection with certain terminations, the Company must pay to Astellas a termination fee of $1,500,000.

Each of the parties has made customary representations and warranties in the Joint Venture Agreement and the Company has agreed to customary covenants, including covenants regarding the operation of the Company’s business prior to the Closing. Each party has likewise undertaken certain customary indemnification obligations. The Transaction has been approved by the boards of directors of the Company and Astellas and is subject to customary closing conditions, including the approval of the Transaction by the Company’s stockholders. The parties expect the Closing to occur late in the third quarter or early in the fourth quarter of 2009.

The Company’s board of directors approved the Transaction and recommends that the Company’s stockholders adopt the Transaction and the principal agreements related thereto.

The foregoing description of the Transaction does not purport to be complete and is qualified in its entirety by reference to the Joint Venture Agreement and the agreements contemplated thereunder, copies of which are attached as exhibits to this Current Report on Form 8-K and are incorporated herein by reference.

In addition, a copy of the press release issued by the Company regarding the Transaction also is attached as an exhibit to this Current Report on Form 8-K and is incorporated herein by reference.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On June 30, 2009, in connection with the Transaction, the Company entered into various compensation arrangements (described below) that are contingent upon the Closing.

Change of Control Agreements with Certain Officers

The Company has entered into Amended and Restated Change of Control Agreements (the “Restated Change of Control Agreements”) with each of Russell Howard, the Company’s chief executive officer, Elliot Goldstein, the Company’s chief operating officer, and Lawrence Briscoe, the Company’s chief financial officer.

The Restated Change of Control Agreements amend the existing change of control agreements between the Company and each of these officers to expressly provide that the Closing will constitute a “change of control” thereunder and to establish a termination date for each officer’s employment with the Company after a transition period following the Closing. Upon termination, the Restated Change of Control Agreements provide each officer with payments and benefits substantially the same as provided in the existing change of control agreements. These benefits include full accelerated vesting of outstanding equity awards and a lump-sum cash payment (less applicable withholding) following termination of employment equal to three times the executive’s 2009 base salary, which payment will equal $1,561,560 for Mr. Howard, $1,319,484 for Mr. Goldstein and $1,111,419 for Mr. Briscoe. Pursuant to the Restated Change of Control Agreements, the receipt of any benefits are subject to each officer entering into a 36-month non-competition and non-solicitation agreement with the Company. Under the terms of the Restated Change of Control Agreements, each officer also has agreed to enter into a consulting agreement with the Company to provide for the performance of consulting services to the Company following the termination date.

The Restated Change of Control Agreements will become effective only if the Closing occurs prior to December 31, 2009. Prior to the Restated Change of Control

Agreements becoming effective, or if the Restated Change of Control Agreements are terminated without becoming effective, the existing change of control agreements between the Company and each of these individuals will continue to remain in effect.

The foregoing description of the Change of Control Agreements does not purport to be complete and is qualified in its entirety by reference to the form of Change of Control Agreement attached as Exhibit 10.1 to this Current Report on Form 8-K, which is incorporated herein by reference. The Change of Control Agreement with each officer substantially conforms to the form of Change of Control Agreement.

Change of Control and Compensation Arrangements with Grant Yonehiro

The Company has also entered into a Retention Agreement (the “Retention Agreement”) with Grant Yonehiro, the Company’s chief business officer. Under the Retention Agreement, effective as of and contingent upon Closing, Mr. Yonehiro will be eligible to receive a transaction bonus of $600,000 from the Company, subject to his continued employment with the Company or the Joint Venture through such date. The Retention Agreement also provides that Mr. Yonehiro will be eligible for and considered for a bonus (in an amount, if any, determined at the discretion of the Board) for the 2009 calendar year, which will be paid at the same time other employees of the Company are considered for a bonus for such calendar year. In addition, all of Mr. Yonehiro’s outstanding equity-based awards will be accelerated to vest in full upon the Closing.

Under the Retention Agreement, Mr. Yonehiro will also be eligible to receive retention payments from the Company of $200,000 on each of the first three anniversaries of the Closing, in each case subject to his continued employment with the Company or the Joint Venture.

In addition, if Mr. Yonehiro’s employment is terminated prior to the third anniversary of the Closing as a result of his death or “disability,” by the Company other than for “cause,” by Mr. Yonehiro for “good reason,” or due to the Company’s dissolution or liquidation, then Mr. Yonehiro will be entitled to receive a lump-sum severance payment (less applicable withholding taxes) equal to the greater of (i) any remaining unpaid retention payments (described above), or (ii) six months of his then applicable base salary, as well as continued coverage under the Company’s group health and medical benefit plans.

Pursuant to the Retention Agreement, the receipt of any benefits by Mr. Yonehiro is subject to his entry into a 36-month non-competition and non-solicitation agreement with the Company. Under the Retention Agreement, Mr. Yonehiro has also agreed to enter into a consulting agreement with the Company to provide for the performance of services to the Company following any termination of employment. The Retention Agreement will become effective only if the Closing occurs.

As a result of the benefits provided in the Retention Agreement, the Company has also entered into an amended and restated change of control agreement with

Mr. Yonehiro (the “Change of Control Agreement”). The Change of Control Agreement amends and restates Mr. Yonehiro’s existing change of control agreement in its entirety solely to provide for its automatic termination on December 31, 2009 unless a “change of control” occurs on or prior to such date and to conform its provisions to the safe harbor good-reason termination provisions under Section 409A of the Internal Revenue Code. If the Closing does not occur, the Change of Control Agreement will not become effective and the existing change of control agreement between the Company and Mr. Yonehiro will continue to remain in effect.

The Company and Mr. Yonehiro have also entered into an employment offer letter agreement, to become effective as of an and contingent upon the Closing, pursuant to which Mr. Yonehiro will serve as Chief Executive Officer and President of the new Joint Venture. The offer letter provides that Mr. Yonehiro will receive an annual base salary from the Joint Venture of $300,000 and a discretionary bonus award for 2010 ranging from 0% to 60% of base salary, with a target payment of 45%. Following his commencement of employment, the Joint Venture will grant Mr. Yonehiro 3,750,000 common units of limited liability company interest of the Joint Venture as “profits interest” units pursuant to an equity incentive plan. Bio has agreed to purchase vested profits interest units at the time that the Buy-Out Option is exercised in accordance with the terms of the equity incentive plan. The purchase of these profits interest units would not reduce the total amount payable by Bio for Maxygen’s interest in the Joint Venture. The offer letter provides that if the Joint Venture terminates Mr. Yonehiro’s employment without cause or Mr. terminates his employment with Joint Venture for good reason, then conditioned on execution of a release of claims, Mr. Yonehiro will be entitled to severance payments of six months continued base salary and medical premium reimbursement and six months accelerated vesting and of outstanding Joint Venture and Maxygen equity awards. In addition, Mr. Yonehiro’s outstanding options will have their post-termination exercise period extended by six months.

The foregoing descriptions of the Retention Agreement, the Change of Control Agreement and the contingent offer letter with the Joint Venture subsidiary do not purport to be complete and are qualified in their entirety by reference to the copies of these agreements attached as Exhibits 10.2, 10.3 and 10.4 to this Current Report on Form 8-K, each of which is incorporated herein by reference.

Acceleration of RSU Vesting

The Company has modified the restricted stock unit awards granted to all employees and to Mr. Isaac Stein, the chairman of our board of directors, in 2008 to provide for accelerated vesting of all remaining shares of the Company’s common stock underlying such awards. Under the amended vesting schedule, all remaining shares underlying such awards will vest in full 90 days after consummation of the Transaction, subject to the recipient’s continued employment or other service relationship with the Company on such date. The amendment will result in the accelerated vesting of 45,000 remaining shares underlying restricted stock units awarded to Mr. Stein. This amendment will not result in the acceleration of vesting for restricted stock units awarded to our executive officers, which is otherwise provided for in the Change of Control Agreements (described above) with respect to Russell Howard, Elliot Goldstein and Lawrence Briscoe, and in the Retention Agreement (described above) with respect to Grant Yonehiro.

Additional Information and Where You Can Find It

In connection with the transaction discussed herein, Maxygen will file a proxy statement with the SEC. The proxy statement will be furnished to the stockholders of Maxygen. Investors and security holders of Maxygen are urged to read the proxy statement when it becomes available because it will contain important information about Maxygen and the proposed transaction. The proxy statement (when it becomes available), and any other documents filed by Maxygen with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Maxygen by contacting Maxygen at info@maxygen.com or via telephone at (650) 298-5300. Investors and security holders are urged to read the proxy statement and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction.

Maxygen and its respective directors and executive officers may be deemed to be participants in the solicitation of proxies from its stockholders in favor of the proposed transaction. Information about the directors and executive officers of Maxygen and their respective interests in the proposed transaction will be available in the proxy statement.

Cautionary Statement Regarding Maxygen Forward-Looking Statements

This document contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations and beliefs of Maxygen’s management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The forward-looking statements contained in this document include statements about the proposed transaction, the timing of the transaction and the potential benefits of the transaction and the strategic restructuring. These statements are not guarantees of future performance, involve certain risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Therefore, actual outcomes and results may differ materially from what is expressed herein. For example, if Maxygen does not receive required stockholder approval or fails to satisfy other conditions to closing, the Joint Venture will not be formed. Further, there is no assurance that the Joint Venture will be successful or that Astellas will exercise its Buy-Out Option or product license option even if the Joint Venture is successful. In any forward-looking statement in which Maxygen expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: failure of the Maxygen stockholders to approve the formation of the Joint Venture and the other transactions, the failure of any other closing condition to be satisfied, unexpected delays in the formation of the Joint Venture, risks inherent in drug

development, such as potential difficulties or delays in the development, testing, regulatory approvals, progression or production of drug compounds, the failure to develop products suitable for commercialization, the delay or suspension of predicted development and commercial timelines for any potential products, the failure to protect intellectual property portfolio and rights; the failure to identify and develop new potential products, and the risk that any compounds developed may have adverse side effects or inadequate therapeutic efficacy, and other economic, business, competitive, and/or regulatory factors affecting Maxygen’s business and the market it serves generally, including those set forth in Maxygen’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, especially in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections, and its Current Reports on Form 8-K and other SEC filings. Maxygen is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
2.1	Master Joint Venture Agreement, dated as of June 30, 2009, by and among Maxygen, Inc., Astellas Pharma Inc. and Astellas Bio Inc.
2.1.1	Form of Asset Contribution Agreement
2.1.2	Form of Other Products Collaboration Agreement
2.1.3	Form of License Agreement
2.1.4	Form of Limited Liability Company Agreement
2.1.5	Form of Investors’ Rights Agreement
10.1*	Form of Amended and Restated Change of Control Agreement
10.2*	Retention Agreement, dated June 30, 2009, between Maxygen, Inc. and Grant Yonehiro
10.3*	Amended and Restated Change of Control Agreement, dated June 30, 2009, between Maxygen, Inc. and Grant Yonehiro
10.4*	Contingent Offer Letter to Grant Yonehiro from Maxygen, Inc. dated June 26, 2009
99.1	Press release, dated June 30, 2009, issued by Maxygen, Inc. entitled, “Maxygen Announces Joint Venture with Astellas to Develop Protein Pharmaceuticals”

* Management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MAXYGEN, INC.
Date: July 1, 2009	By:	/s/    Russell Howard
		Russell Howard
		Chief Executive Officer

EXHIBIT INDEX

Exhibit No.	Description
2.1	Master Joint Venture Agreement, dated as of June 30, 2009, by and among Maxygen, Inc., Astellas Pharma Inc. and Astellas Bio Inc.
2.1.1	Form of Asset Contribution Agreement
2.1.2	Form of Other Products Collaboration Agreement
2.1.3	Form of License Agreement
2.1.4	Form of Limited Liability Company Agreement
2.1.5	Form of Investors’ Rights Agreement
10.1*	Form of Amended and Restated Change of Control Agreement
10.2*	Retention Agreement, dated June 30, 2009, between Maxygen, Inc. and Grant Yonehiro
10.3*	Amended and Restated Change of Control Agreement, dated June 30, 2009, between Maxygen, Inc. and Grant Yonehiro
10.4*	Contingent Offer Letter to Grant Yonehiro from Maxygen, Inc. dated June 26, 2009
99.1	Press release, dated June 30, 2009, issued by Maxygen, Inc. entitled, “Maxygen Announces Joint Venture with Astellas to Develop Protein Pharmaceuticals”

* Management contract or compensatory plan or arrangement.

EX-2.1

EXHIBIT 2.1

MASTER JOINT VENTURE AGREEMENT

by and between

Maxygen, Inc., a Delaware Corporation,

Astellas Phama Inc., a Japanese Corporation,

and

Astellas Bio Inc., a Delaware Corporation

Dated as of June 30, 2009

TABLE OF CONTENTS

			Page
ARTICLE 1		DEFINITIONS	1
ARTICLE 2		THE JOINT VENTURE	11
	2.1	Formation of CPC	11
	2.2	Operation of CPC	11
	2.3	CPC Governance	11
ARTICLE 3		THE CLOSING	11
	3.1	Time and Place of Closing	11
	3.2	Closing Deliverables by Maxygen	11
	3.3	Closing Deliverables by Bio	12
	3.4	Closing Deliverables by Astellas	13
	3.5	Closing Deliverables by CPC	13
ARTICLE 4		REPRESENTATIONS AND WARRANTIES	13
	4.1	Representations and Warranties of Maxygen	13
	4.2	Representations and Warranties of Bio	16
	4.3	Representations and Warranties of Astellas	17
	4.4	Disclosure; No Other Representations and Warranties; Projections	18
ARTICLE 5		COVENANTS	20
	5.1	Maxygen’s Conduct of the Business	20
	5.2	Restrictions on Maxygen’s Conduct of the Business Prior to Closing	20
	5.3	Litigation	23
	5.4	No Solicitation of Competing Transaction	23
	5.5	Employees	26
	5.6	CPC Employee Equity Plan	27
	5.7	Necessary Consents	27
	5.8	Regulatory Approvals	27
	5.9	Information Rights	28
	5.10	Stockholder Meeting	29
	5.11	Stockholder Vote	29
	5.12	Satisfaction of Conditions Precedent	29
	5.13	Execution of Transaction Agreements and Other Documents	29

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(continued)

			Page
	5.14	Tax Matters	29
	5.15	Other Products Collaboration Arrangements	30
ARTICLE 6		CONDITIONS TO CLOSING	30
	6.1	Conditions Precedent to Obligations of Bio	31
	6.2	Conditions Precedent to Obligations of Maxygen	32
ARTICLE 7		TERMINATION	32
	7.1	Voluntary Termination	32
	7.2	Buy-Out Option Termination	33
	7.3	Effects of Termination	33
	7.4	Termination Fee; Remedies	34
ARTICLE 8		CERTAIN POST CLOSING COVENANTS AND AGREEMENTS	35
	8.1	Non-Assignable Assets	35
	8.2	Delivery and Contribution of Assets	35
	8.3	Certain Notifications	36
	8.4	Amendments	37
	8.5	COBRA	37
	8.6	Expenses	37
	8.7	Confidentiality	37
	8.8	Assignment Notification and Acknowledgement	40
ARTICLE 9		INDEMNIFICATION; ENFORCEMENT AND REMEDIES	40
	9.1	Survival of Representations and Warranties	40
	9.2	Indemnification by Maxygen	41
	9.3	Indemnification by Bio and Astellas	41
	9.4	Indemnification by CPC	41
	9.5	Procedures for Indemnification	41
	9.6	Limitations on Indemnification	42
	9.7	Enforcement of Certain Transaction Agreements by Bio	43
	9.8	Astellas Agreement Indemnity	43
	9.9	Indemnity for Certain Third Party Claims	44
	9.10	Single Remedy	44

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TABLE OF CONTENTS

(continued)

			Page
	9.11	Limitation on Liability	45
ARTICLE 10		DISPUTE RESOLUTION	45
	10.1	Disputes	45
	10.2	Arbitration	45
	10.3	Intellectual Property Disputes	46
	10.4	Provisional Remedies	46
ARTICLE 11		MISCELLANEOUS	46
	11.1	Governing Law	46
	11.2	Joinder Agreement	46
	11.3	Assignment	46
	11.4	Notices	47
	11.5	Waiver	48
	11.6	Waiver of Jury Trial	48
	11.7	Severability	48
	11.8	Entire Agreement/Modification	49
	11.9	Non-Solicitation	49
	11.10	Relationship of the Parties	49
	11.11	Force Majeure	49
	11.12	Third Party Beneficiaries	50
	11.13	Further Assurances	50
	11.14	Counterparts	50
	11.15	Interpretation	50
	11.16	Construction	51

EXHIBITS

Exhibit A	Certificate
Exhibit A.1	LLC Agreement
Exhibit A.2	Minutes
Exhibit B	Asset Contribution Agreement
Exhibit C	Co-Sale Agreement
Exhibit D	Investors’ Rights Agreement
Exhibit E	Joinder Agreement
Exhibit F	Other Products Collaboration Agreement

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(continued)

		Page
Exhibit G	Purchase Agreement
Exhibit H	Transition Services Agreement
Exhibit I	Voting Agreement
Exhibit J	Opinion of Counsel to Maxygen
Exhibit K	Opinion of Counsel to Bio
Exhibit L	Equity Incentive Plan
Exhibit M	Press Releases
Exhibit N	Maxygen JVA Disclosure Schedules
Exhibit O	Astellas JVA Disclosure Schedules
Exhibit P	Astellas Agreement Assignment and Novation
Exhibit Q	UCOE License

Schedules

Schedule 1.41	Key Employees
Schedule 3.2(f)	Acknowledgement/Notification Agreements
Schedule 1.52	Permitted Encumbrance
Schedule 5.2	Work Plan and Budget
Schedule 9.9	Patents

The registrant agrees to furnish to the Securities and Exchange Commission upon request a copy of any omitted schedule or exhibit.

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EXECUTION VERSION

MASTER JOINT VENTURE AGREEMENT

This Master Joint Venture Agreement (this “Agreement”) is made and entered into as of this 30th day of June, 2009 by and between Maxygen, Inc. a Delaware corporation, having its principal offices at 515 Galveston Drive Redwood City, CA 94063 (together with its Affiliates, “Maxygen”), Astellas Pharma Inc., a Japanese corporation, having its principal offices at 2-3-11, Nihonbashi-Honcho, Chuo-ku, Tokyo 103-8411, Japan (“Astellas”) and Astellas Bio Inc., a Delaware corporation, having its principal offices at Three Parkway North Deerfield, IL 60015-2548 (“Bio”). Maxygen, Astellas and Bio are together referred to herein as the “Parties.”

RECITALS

WHEREAS, the Parties desire to create a new limited liability company, CPC (“CPC”), for the purpose of developing and commercializing the 4 Program (as defined below), and the Other Programs (as defined below) (the “Joint Venture”), and in furtherance thereof, agree on Maxygen’s contribution of certain Maxygen assets to CPC in exchange for equity in CPC, and, immediately following the contribution of such assets to CPC, on Bio’s and Maxygen’s contribution of cash to CPC in exchange for equity in CPC and on the option granted to Bio to purchase Maxygen’s entire equity position in CPC;

WHEREAS, in order to achieve such objectives, the Parties desire to effectuate the Joint Venture and to form CPC by causing a Certificate of Formation in substantially the form attached hereto as Exhibit A (the “Certificate”) to be filed and entering into this Agreement and the other Transaction Agreements, the Closing of such agreements to constitute one single, integrated transaction;

WHEREAS, the Parties would not have entered into this Agreement nor any other Transaction Agreement but for the other Party’s agreement to be duly bound by the other Transaction Agreements; and

WHEREAS, the Parties desire to clarify the governance and operation of the Joint Venture and the mechanics to the closing of the Transactions (as defined below).

NOW, THEREFORE, in consideration of the premises and mutual covenants herein below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

The following capitalized terms shall have the corresponding meanings as used in this Agreement:

1.1 “4 Program” has the meaning assigned to it in the Recitals of the Asset Contribution Agreement.

1.2 “Affiliate” means any corporation or other business entity that controls, is controlled by, or is under common control with a Party, for so long as such control exists. A corporation or other entity shall be regarded as in control of another corporation or entity if it owns or directly or indirectly controls at least fifty percent (50%) of the outstanding shares or other voting rights of the other corporation or entity having the right to elect directors or such lesser percentage that is the maximum permitted to be owned by a foreign entity in those jurisdictions where majority ownership by foreign entities is prohibited, or (a) in the absence of the ownership of at least fifty percent (50%) of the outstanding shares or other voting rights of a corporation, or (b) in the case of a non-corporate business entity, if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or non-corporate business entity, as applicable, whether through the ownership or control of voting securities, by contract or otherwise. Notwithstanding the foregoing, for the purposes of the Transaction Agreements, (i) CPC shall not be an Affiliate of any Party and (ii) for the avoidance of doubt, none of GlaxoSmithKline plc, Conus Partners, Inc., R.A. Investment Group or Codexis, Inc., or any of their respective affiliates, or any of their successors or assigns, shall be an Affiliate of Maxygen as a result of their current equity ownership in Maxygen or Maxygen’s current equity ownership in them, as the case may be other than to the extent any such entity is otherwise an Affiliate of Maxygen.

1.3 “Alternative Proposal” means any inquiry, proposal or offer from any Third Party with respect to an Alternative Transaction.

1.4 “Alternative Transaction” means (a) any acquisition of all, or substantially all, of the Business or any material portion of the Contributed Assets, or any material asset which is part of the Contributed Assets (b) any merger, consolidation or other business combination including Maxygen or (c) any acquisition or similar transaction (including, without limitation, a tender or exchange offer) involving the purchase of (i) 50% or more of the assets of Maxygen, its Subsidiaries, if any, on a consolidated basis, or (ii) 50% or more of the outstanding shares of capital stock of Maxygen. For the avoidance of doubt, “Alternative Transaction” does not include any acquisition, asset sale, merger, consolidation, other business combination or similar transaction that excludes the Business and the Contributed Assets.

1.5 “Asset Contribution Agreement” means the asset contribution agreement substantially in the form attached hereto as Exhibit B.

1.6 “Astellas Agreement” means the Co-Development and Commercialization Agreement by and between Astellas and Maxygen dated September 18, 2008 and any amendments thereto.

1.7 “Astellas Agreement Assignment and Novation” has the meaning assigned to it in the Asset Contribution Agreement.

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1.8 “Assumed Liabilities” has the meaning assigned to it in Section 2.4 of the Asset Contribution Agreement.

1.9 “Board” means the board of directors of a corporation or equivalent group of a legal entity.

1.10 “Bridge Loan Agreement” means the loan agreement in substantially the form attached to the Investors’ Rights Agreement as Exhibit D.

1.11 “Business” has the meaning assigned to it in Section 1.2 of the Asset Contribution Agreement.

1.12 “Business Day” means any day other than a Saturday, Sunday or any other day on which commercial banks in Japan or California or Delaware (as applicable) are authorized or required by Legal Requirement to remain closed.

1.13 “Buy-Out Option” has the meaning assigned to it in the Investors’ Rights Agreement.

1.14 “Cause” means, with respect to a Party’s employee, such employee’s (a) failure to perform assigned duties or responsibilities, which failure, if curable within the discretion of the Party, is not cured to the reasonable satisfaction of the Party within twenty (20) days after receipt by such employee of written notice of such failure from the Party, (b) engaging in any act of dishonesty, fraud, embezzlement, misrepresentation, or similar conduct, (c) violation of any federal, state, or local law or regulation applicable to the Party’s business, (d) breach of any confidentiality agreement, invention assignment agreement, or any other employment agreement between the employee and the Party, or (e) conviction of or entry of a plea of nolo contendere or guilty to, any crime or commission of any act of moral turpitude.

1.15 “Charter Documents” means the certificate of incorporation and bylaws of a corporate Party (or their respective equivalents in the jurisdiction of such party’s incorporation), or with respect to a limited liability company, its certificate of formation and limited liability company agreement (or their respective equivalents in such party’s jurisdiction of formation).

1.16 “Closing Date” means the date on which the Transaction is consummated in accordance with Article 3 and Article 6, which in any event shall be no later than (a) the second Business Day following the first date that the conditions set forth in Article 6 are satisfied or waived (other than those to be specifically delivered at Closing) or (b) such other date as the Parties mutually agree.

1.17 “Code” means the Internal Revenue Code of 1986, as amended.

1.18 “Co-Sale Agreement” means the co-sale agreement in substantially the form attached hereto as Exhibit C.

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1.19 “Confidential Information” means all confidential and/or proprietary information of a Person, including information derived from reports, investigations, research, work in progress, programs, product concepts, marketing and sales programs, financial projections, cost summaries, pricing formula, contract analyses, financial information, projections, confidential filings with any state or federal agency, and all other confidential concepts, methods of doing business, ideas, materials or information prepared or performed for, by or on behalf of such Person by its employees, officers, directors, agents, representatives, or consultants.

1.20 “Contributed Assets” has the meaning assigned to it in Section 2.1 of the Asset Contribution Agreement.

1.21 “Consent” means any approval, consent, ratification, permission, waiver or authorization (including any Governmental Approval).

1.22 “Contract” means any binding agreement, contract, consensual obligation, promise, understanding, arrangement, commitment or undertaking of any nature (whether written or oral and whether express or implied).

1.23 “Contributor Benefit Plans” has the meaning assigned to it in Section 1.6 of the Asset Contribution Agreement.

1.24 “Damages” means, and includes, any loss, damage, Liability, injury, claim, demand, settlement, judgment, award, fine, penalty, Tax, fee (including any legal fee, accounting fee, expert fee or advisory fee), charge, out-of-pocket cost (including any cost of investigation) or out-of-pocket expense of any nature.

1.25 “DGCL” means the Delaware General Corporation Law.

1.26 “DLLCA” means the Delaware Limited Liability Company Act.

1.27 “Disclosure Schedules” means collectively the disclosure schedules of the Transaction Agreements.

1.28 “Dollars” or “$” refers to United States dollars.

1.29 “Employee” has the meaning assigned to it in the Asset Contribution Agreement.

1.30 “Encumbrance” means any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, equity, trust, equitable interest, claim, preference, right of possession, lease, tenancy, license, encroachment, covenant, infringement, interference, Order, proxy, option, right of first refusal, preemptive right, community property interest, legend, defect, impediment, exception, reservation, limitation, impairment, imperfection of title, condition or restriction of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset (except as imposed by any Legal

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Requirement, or, in the case of a license, by the terms of the license) and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset) other than Permitted Encumbrances.

1.31 “Entity” means any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust or company (including any limited liability company or joint stock company).

1.32 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

1.33 “Excluded Liability” has the meaning assigned to it in the Asset Contribution Agreement.

1.34 “Facility” has the meaning assigned it in Article 1 of the Asset Contribution Agreement.

1.35 “GAAP” means U.S. generally accepted accounting principles as in effect on the date hereof.

1.36 “Governmental Approval” has the meaning assigned it in Section 1.27 of the Asset Contribution Agreement.

1.37 “Governmental Authority” means any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, unit, or body and any court or other legal tribunal); (d) any governmental multinational organization or body; or (e) individual, Entity or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing or arbitral authority or power of any nature.

1.38 “Intellectual Property” has the meaning assigned to it in Section 1.28 of the Asset Contribution Agreement.

1.39 “Investors’ Rights Agreement” means the investors’ rights agreement in substantially the form attached hereto as Exhibit D.

1.40 “Joinder Agreement” means the joinder agreement substantially in the form attached hereto as Exhibit E.

1.41 “Key Employee” means those employees of Maxygen listed on Schedule 1.41.

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1.42 “Knowledge” of a Party means, with respect to any fact, circumstance, event or other matter in question, the knowledge of such fact, circumstance, event or other matter by any of the following individuals (a) with respect to Maxygen: Russell Howard, Larry Briscoe, Elliot Goldstein, John Borkholder, Grant Yonehiro, Sridhar Viswanathan, Erik Karrer and Norm Kruse, as well as, solely with respect to Sections 5.5, Jim Shunk and (b) with respect to Bio and Astellas: Toshiyuki Ishii, Naoki Okamura, Yoshihito Daimon, and Emiko Yano.

1.43 “Legal Requirement” means any federal, state, local, municipal, foreign or other law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, Order, edict, decree, proclamation, treaty, convention, rule, regulation, permit, ruling, directive, pronouncement, requirement (licensing or otherwise), specification, determination or decision that has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Authority.

1.44 “Liability” means any debt, obligation, duty or liability of any nature (including any unknown, undisclosed, unmatured, unaccrued, unasserted, contingent, indirect, conditional, implied, vicarious, derivative, joint, several or secondary liability), regardless of whether such debt, obligation, duty or liability would be required to be disclosed on a balance sheet prepared in accordance with generally accepted accounting principles and regardless of whether such debt, obligation, duty or liability is immediately due and payable.

1.45 “Material Adverse Effect” means:

(a) with respect to CPC, Bio or Astellas, any event, change or effect that, when taken individually or together with all other events, changes and effects, (a) is materially adverse to the condition (financial or otherwise), properties, assets, liabilities or operations of CPC, Bio or Astellas, as the case may be, taken as a whole, or (b) prevents or materially delays consummation of the Transactions or otherwise prevents CPC, Bio or Astellas, as the case may be, from performing its obligations under this Agreement or any Transaction Agreement; and

(b) with respect to Maxygen, any event, change or effect that, when taken individually or together with all other events, changes and effects, (a) is materially adverse to the condition (financial or otherwise), properties, assets (including the Contributed Assets), liabilities (including the Assumed Liabilities), or operations of the Business, taken as a whole, or (b) prevents or materially delays consummation of the Transactions or otherwise prevents Maxygen from performing its obligations under this Agreement or any Transaction Agreement.

(c) For purposes of the foregoing paragraphs (a) and (b), none of the following shall be deemed, either alone or in combination, to constitute a Material Adverse Effect, nor shall any of the following be taken into account in determining that there has been a Material Adverse Effect: any event, change or effect resulting from or arising out of (i) the performance by a Party of its obligations under the Transaction

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Agreements in accordance with their terms or as required by applicable Legal Requirements, (ii) general economic changes, including changes in the market(s) in which the relevant Party operates or which the relevant Party serves, to the extent that they do not disproportionately and adversely affect the relevant Party, (iii) any natural disaster or any acts of terrorism, sabotage, military action or war (whether or not declared) or any escalation or worsening thereof or (iv) any change in applicable Legal Requirements.

1.46 “Maxygen Contracts” has the meaning assigned to the term “Contributor Contracts” in Section 2.1(l) of the Asset Contribution Agreement.

1.47 “Option Closing” has the meaning assigned to it in Section 5.1 of the Investors’ Rights Agreement.

1.48 “Order” means any: (a) temporary, preliminary or permanent order, judgment, injunction, edict, decree, ruling, pronouncement, determination, decision, opinion, verdict, sentence, stipulation, subpoena, writ or award that is or has been issued, made, entered, rendered or otherwise put into effect by or under the authority of any court, administrative agency or other Governmental Authority; or (b) Contract with any Governmental Authority that is or has been entered into in connection with any Proceeding.

1.49 “Other Products Collaboration Agreement” means the agreement in substantially the form attached hereto as Exhibit F.

1.50 “Other Programs” has the meaning assigned to it in Section 1.40(b) of the Asset Contribution Agreement.

1.51 “Patents” has the meaning assigned to it in the Asset Contribution Agreement.

1.52 “Permitted Encumbrance” means, with respect to the Facility or the Contributed Assets, any or all of the following: (a) Encumbrances for Taxes and other similar governmental charges and assessments which are not yet delinquent or liens for Taxes being contested in good faith by any appropriate proceedings for which adequate reserves have been established, (b) conditional sales contracts (covering personal property and equipment, but not real property or Intellectual Property) and equipment leases entered into in the ordinary course of business, (c) liens of landlords and liens of carriers, warehousemen, mechanics and materialmen and other like liens arising in the ordinary course of business for sums not yet due and payable, and (d) any and all terms and conditions under Contracts specified in Schedule 1.52.

1.53 “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity including Governmental Authority.

1.54 The “Preferred Unit Agreements” means the Investors’ Rights Agreement, the Co-Sale Agreement and the Voting Agreement.

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1.55 “Proceeding” means any action, suit, complaint, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination or investigation that is or has been commenced, brought, conducted or heard at law or in equity or before any Governmental Authority or any arbitrator or arbitration panel.

1.56 “Programs” has the meaning assigned to it in Section 1.40 of the Asset Contribution Agreement.

1.57 The “Purchase Agreement” means the unit purchase agreement in substantially the form attached hereto as Exhibit G.

1.58 “Receivables” means all amounts owed by Astellas and payments accruing from Astellas on or after the Closing Date under the Astellas Agreement.

1.59 “Related Entity” has the meaning assigned to it in the Investors’ Rights Agreement.

1.60 “Representatives” means officers, directors, attorneys, advisors and agents of a Party, except that CPC shall not be a Representative of any other Party. In addition, all Affiliates of Maxygen, Astellas or Bio shall be deemed to be “Representatives” of Maxygen, Astellas or Bio, respectively.

1.61 “SEC” means the Securities and Exchange Commission.

1.62 “Specified Dispute” means any dispute based primarily on the interpretation or construal of the Delaware General Corporation Law.

1.63 “Stockholder Approval” means the affirmative vote of a majority of outstanding shares of Maxygen’s common stock entitled to vote in accordance with the DGCL and Maxygen’s Charter Documents authorizing (a) the transfer and delivery of the Contributed Assets pursuant to the Asset Contribution Agreement, (b) the grant of the Buy-Out Option and (c) the delivery and sale of the Buy-Out Units (as defined in the Investors’ Rights Agreement) upon the Option Closing.

1.64 “Superior Proposal” means any bona fide written Alternative Proposal that Maxygen’s Board shall have determined in good faith would be more favorable to the Maxygen’s stockholders (in their capacity as such) than the Transactions after (a) receiving the advice of its financial advisor, (b) taking into account the likelihood and timing of consummation of such Alternative Proposal on the terms set forth therein and the likelihood and timing of consummation of the Transactions, including the exercise of the Buy-Out Option, on their terms, (c) taking into account all appropriate legal (with the advice of outside counsel), financial (including the financing terms of any such proposal), regulatory or other aspects of such proposal and any other relevant factors permitted by applicable Legal Requirements.

1.65 “Subsidiary” means any corporation, association, partnership, limited liability company, joint venture or other business entity of which more than 50%

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of the voting stock or other equity interest is owned directly or indirectly by any Person or one or more of the other Subsidiaries of such Person or a combination thereof. Notwithstanding the foregoing, for the purposes of the Transaction Agreements, CPC shall not be a Subsidiary of either Maxygen, Astellas or Bio.

1.66 “Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental fee or other assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount and any interest on such penalty, addition to tax or additional amount, imposed by any Tax Authority.

1.67 “Tax Authority” means any Governmental Authority responsible for the imposition, assessment or collection of any Tax (domestic or foreign).

1.68 “Technology License Agreement” has the meaning assigned to it in Section 4.2(c) of the Asset Contribution Agreement.

1.69 “Termination Fee” means an amount in cash equal to one million five hundred thousand dollars ($1,500,000.00).

1.70 “Third Party” means any entity other than Bio, Maxygen, CPC, Astellas or their respective Affiliates. For the avoidance of doubt, sublicensees which are not an Affiliate of Bio, Maxygen, CPC, or Astellas shall be included in the definition of Third Party.

1.71 “Transaction Agreements” means collectively (a) this Agreement; (b) Asset Contribution Agreement; (c) Purchase Agreement; (d) Preferred Unit Agreements; (e) Transition Services Agreement; (f) Other Products Collaboration Agreement; (g) Technology License Agreement; (h) Joinder Agreement; (i) Bridge Loan Agreement; (j) LLC Agreement; (k) Astellas Agreement Assignment and Novation (excluding, for the avoidance of doubt, the Astellas Agreement itself) in the form attached hereto as Exhibit P; (l) UCOE License Assignment Agreement (as defined in the Asset Contribution Agreement) in the form attached hereto as Exhibit Q; (m) Patent Assignment (as defined in the Asset Contribution Agreement); (n) Assignment and Assumption (as defined in the Asset Contribution Agreement); and (o) the Space Sharing Agreements (as defined in the Asset Contribution Agreement).

1.72 “Transactions” means, collectively, the transactions contemplated by the Transaction Agreements.

1.73 “Transition Services Agreement” means the agreement substantially in the form attached hereto as Exhibit H.

1.74 “Voting Agreement” means the voting agreement in substantially the form attached hereto as Exhibit I.

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1.75 “United States” means the United States of America and its possessions and territories.

1.76 Additional Definitions. Each of the following terms shall have the meaning defined in the corresponding sections of this Agreement indicated below:

Term	Section Reference
Agreement	Preamble
Assignment Consent	8.1
Astellas	Preamble
Bio	Preamble
CEOs	10.1
Certificate	Recitals
Closing	3.1
COBRA	8.5
CPC	Recitals
Equity Incentive Plan	5.6
Indemnified Party	9.5(a)
Indemnifying Party	9.5(a)
Joint Venture	Recitals
JVA Disclosure Schedule	Article 4
LLC Agreement	2.3
Managers	2.3
Maxygen	Preamble
Minutes	2.3
New Litigation Claim	5.3
Non-Assignable Asset	8.1
Offerees	5.5(a)
Outside Termination Date	7.1(b)
Parties	Preamble
Proxy Statement	5.11
Representing Party	Article 4
Separate Transaction	5.4(a)
Stockholders’ Meeting	5.10
Survival Date	9.1
Transferred Employees	5.5(b)

1.77 Name of CPC. The Parties acknowledge that, prior to its formation, CPC may be designated by a different name. Upon such redesignation, all references in this Agreement to “CPC” in the Transaction Agreements and any other agreements related to the Transactions shall be deemed to be a reference to such different name, if any.

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ARTICLE 2

THE JOINT VENTURE

2.1 Formation of CPC. Maxygen shall cause to be filed on or prior to the Closing Date with the Secretary of the State of Delaware the Certificate with such changes therein, if any, as may be jointly approved by the Parties. Subject to Section 8.6, the expenses of forming CPC, including the reasonable legal and other expenses related thereto but, for the avoidance of doubt, excluding any legal and other expenses incurred by the Parties in connection with the negotiation and effectuation of the Transaction Agreements, shall be borne by CPC.

2.2 Operation of CPC. The Parties hereby agree to jointly develop and operate CPC in accordance with the Transaction Agreements.

2.3 CPC Governance. In connection with the formation of CPC, the Parties shall cause the limited liability agreement, in substantially the form attached hereto as Exhibit A.1 (the “LLC Agreement”) and the minutes of the initial meeting of CPC’s managers (the “Managers”) (or action by unanimous written consent of the Managers covering substantially similar matters), in substantially the form attached hereto as Exhibit A.2 (the “Minutes”), to be adopted as the limited liability company agreement and minutes of CPC.

ARTICLE 3

THE CLOSING

3.1 Time and Place of Closing. The closing of the Transactions shall take place remotely via the exchange of documents and signatures on the Closing Date at such place as the Parties mutually agree upon in writing (which consummation of the Transactions at such place is designated as the “Closing”).

3.2 Closing Deliverables by Maxygen. At the Closing, Maxygen shall deliver the following items duly executed by Maxygen, as applicable:

(a) Officer’s Certificate. A certificate executed on behalf of Maxygen by an officer of Maxygen, dated as of the Closing Date, certifying as to accuracy of the provisions set forth in Sections 6.1(a), 6.1(b), and 6.1(c).

(b) Secretary’s Certificate. A certificate of Maxygen’s Secretary certifying as to the accuracy of the:

(i) certificate of incorporation and bylaws of Maxygen as in effect as of the Closing Date,

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(ii) resolutions of Maxygen’s Board authorizing the execution, delivery and performance of this Agreement and of all other Transaction Agreements,

(iii) authorization of the stockholders of the execution, delivery and performance of the Transaction Agreements and the Transactions, and

(iv) incumbency of Maxygen’s officers executing this Agreement and all other Transaction Agreements.

(c) Certificate of Good Standing. Certificates from the Secretary of State of Delaware and the Secretary of State of California, each as to Maxygen’s good standing and payment of all applicable franchise taxes.

(d) Opinion of Counsel. An opinion, in the form reasonably acceptable to Bio, dated as of the Closing Date from Maxygen’s legal counsel, Wilson Sonsini Goodrich & Rosati, Professional Corporation, in substantially the form attached hereto as Exhibit J.

(e) Transaction Agreements. Maxygen shall execute and deliver the items specified in Section 1.2(b) of the Purchase Agreement and Sections 4.2 and 4.4 of the Asset Contribution Agreement as well as all Transaction Agreements (other than the Bridge Loan Agreement) to which Maxygen is a party.

(f) Assignment and Notification. Copies of the notice and/or acknowledgement letters listed on Schedule 3.2(f), which for the avoidance of doubt, shall not be required to be executed, accepted or otherwise acknowledged by any Person other than Maxygen and/or CPC as applicable.

3.3 Closing Deliverables by Bio. At the Closing, Bio shall deliver the following items duly executed by Bio, as applicable:

(a) Officer’s Certificate. A certificate executed on behalf of Bio by an officer of Bio, dated as of the Closing Date, certifying as to the accuracy of the:

(i) provisions set forth in Sections 6.2(a) and 6.2(b),

(ii) Bio’s Charter Documents as in effect as of the Closing Date,

(iii) resolutions of Bio’s Board authorizing the execution, delivery and performance of this Agreement and of all other Transaction Agreements, and

(iv) incumbency of Bio’s officers executing this Agreement and any other Transaction Agreement to which Bio is a party.

(b) Transaction Agreements. Bio shall execute and deliver all Transaction Agreements to which Bio is a party.

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3.4 Closing Deliverables by Astellas. At the Closing, Astellas shall deliver the following items duly executed by Astellas, as applicable:

(a) Officer’s Certificate. A certificate executed on behalf of Astellas by an officer of Astellas, dated as of the Closing Date, certifying as to the accuracy of the:

(i) provisions set forth in Sections 6.2(a) and 6.2(b),

(ii) Astellas’ Charter Documents as in effect as of the Closing Date,

(iii) resolutions of Astellas’ Board authorizing the execution, delivery and performance of this Agreement and of all other Transaction Agreements, and

(iv) incumbency of Astellas’ officers executing this Agreement and any other Transaction Agreement to which Astellas is a party.

(b) Transaction Agreements. Astellas shall execute and deliver all Transaction Agreements to which Astellas is a party.

(c) Opinion of Counsel. An opinion, in the form reasonably acceptable to Maxygen, dated as of the Closing Date from Bio’s and Astellas’ legal counsel, Morrison & Foerster LLP, in substantially the form attached hereto as Exhibit K.

3.5 Closing Deliverables by CPC. At the Closing, the Parties hereto shall cause CPC to execute and deliver the items specified in Section 1.2(b) of the Stock Purchase Agreement and Section 4.4 of the Asset Contribution Agreement, the Joinder Agreement, as well as all Transaction Agreements (other than the Bridge Loan Agreement) to which CPC is a party.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

Except as set forth in the corresponding sections of the disclosure schedule of each Party delivered to the other Parties concurrently with the execution and delivery of this Agreement (as the case may be, the Maxygen, the Bio or the Astellas “JVA Disclosure Schedule”) or, with respect to Maxygen, as disclosed in the reports, schedules, forms, statements and other documents filed by Maxygen with the SEC (and with respect to such reports, schedules, forms, statements and other documents filed prior to January 1, 2009, such items shall be, and are specifically cross referenced in the Maxygen JVA Disclosure Schedule), each Party (the “Representing Party”) hereby represents and warrants to the other Parties, as a material inducement for such other Party’s entry into this Agreement that as of the date hereof:

4.1 Representations and Warranties of Maxygen.

(a) Organization and Qualification. Maxygen is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted.

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(b) Authority. Maxygen has all necessary power and authority to execute and deliver this Agreement and the other Transaction Agreements and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the other Transaction Agreements and the consummation by Maxygen of the Transactions have been duly and validly authorized by all requisite corporate action and no other corporate proceedings on the part of Maxygen are necessary to authorize this Agreement or the other Transaction Agreements or to consummate the Transactions (other than obtaining Stockholder Approval). This Agreement has been, and at Closing the other Transaction Agreements (other than the Bridge Loan Agreement) will be, duly and validly executed and delivered by Maxygen. This Agreement constitutes, and at Closing the other Transaction Agreements (other than the Bridge Loan Agreement) will constitute, the legal, valid and binding obligations of Maxygen, enforceable against Maxygen in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws and equitable principles related to or limiting creditors’ rights generally, by the availability of equitable remedies and defenses and, to the extent the indemnification provisions contained in the Investors’ Rights Agreement may further be limited by applicable laws and principles of public policy.

(c) Charter Documents; Books and Records. Maxygen has not provided any copies of minutes of meetings and other proceedings (including any actions taken by written consent or otherwise without a meeting) of the stockholders of Maxygen, Maxygen’s Board or any committees of Maxygen’s Board. The minutes and other records of meetings and other proceedings (including any actions taken by written consent or otherwise without a meeting) of the stockholders of Maxygen, Maxygen’s Board or any committees of Maxygen’s Board contain no information relevant to the Business and/or the Transactions other than has otherwise been disclosed to Bio or Astellas in connection with its due diligence review of the Business and the Contributed Assets. Maxygen holds none of its capital stock in treasury.

(d) No Conflicts; Required Consents. No consents are required with respect to Maxygen’s execution and delivery of this Agreement, the other Transaction Agreements, and the consummation of the Transactions. The execution, delivery and performance of this Agreement and the other Transaction Agreements by Maxygen do not and will not either with or without notice or lapse of time:

(i) conflict with, violate or result in any breach of: (A) Maxygen’s certificate of incorporation or bylaws or equivalent organizational documents; or (B) any Legal Requirement with respect to Maxygen applicable to Maxygen or by which its Business, assets, or properties are bound or affected, except those which would not have a Material Adverse Effect;

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(ii) give any Governmental Authority or other Person the right to (A) exercise any remedy or obtain any relief under any Legal Requirement or any order, judgment, injunction, decree, or award of any arbitrator to which Maxygen is subject, (B) declare a default of, exercise any remedy under, accelerate the performance of, cancel, terminate, modify or receive any payment under any indenture or loan or credit agreement or any other agreement, to which Maxygen is a party or by which Maxygen or any of the assets or properties constituting the Business may be bound or affected or (C) revoke, suspend or modify any Governmental Approval, except, with respect to any of clauses (A) through (C), as would not be reasonably likely to result in a Material Adverse Effect with respect to Maxygen;

(iii) cause Maxygen to become subject to, or to become liable for the payment of, any material Tax;

(iv) assuming the Consents listed in Section 4.1(d) of the Maxygen JVA Disclosure Schedule are obtained, or notices and/or acknowledgements are sent, result in any breach of or constitute a default under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of any Encumbrance on the Facility or the Contributed Assets other than Permitted Encumbrances pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation except as would not be reasonably likely to result in a Material Adverse Effect with respect to Maxygen; or

(v) require Maxygen to obtain any consent of, or make or deliver any filing or notice to, a Governmental Authority, other than as expressly contemplated by the Transaction Agreements.

(e) Broker’s Fees. Maxygen has no liability or obligation to pay any fees or commissions to any broker, finder, agent or attorney, with respect to the Transactions.

(f) Board Approval. Maxygen’s Board has (i) approved this Agreement, the other Transaction Agreements and the Transactions, (ii) determined that the Transactions are in the best interests of the stockholders of Maxygen and are on terms that are fair to such stockholders, and (iii) recommended that the stockholders of Maxygen approve the Transaction Agreement and the Transactions (including, without limitations, the Buy-Out Option).

(g) Reasonably Equivalent Value; Good Faith; Fraudulent Conveyance. Maxygen is not entering into the Transactions with the intent to hinder, delay or defraud any Person to which it is, or may become, indebted. The units delivered to Maxygen pursuant to the Asset Contribution Agreement and the Purchase Agreement have a value that is not less than the reasonably equivalent value and/or fair market value of the Contributed Assets less the Assumed Liabilities. As of the date hereof, and immediately after giving effect

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to the Transactions, the sum of Maxygen’s assets, at a fair valuation, is greater than all of Maxygen’s total liabilities, including, without limitation, all contingent obligations at fair valuation. Maxygen is able, and will continue to be able immediately after the Closing, to meet its debts (including disputed, contingent and unliquidated liabilities) as they mature and will not become insolvent as a result of the Transactions. Immediately after the Closing, Maxygen will have sufficient capital and property remaining to conduct the business in which it will thereafter be engaged.

4.2 Representations and Warranties of Bio.

(a) Organization and Qualification. Bio is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted.

(b) Authority. Bio has all necessary power and authority to execute and deliver this Agreement and the other Transaction Agreements and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the other Transaction Agreements and the consummation by Bio of the Transactions have been duly and validly authorized by all requisite corporate action and no other corporate proceedings on the part of Bio are necessary to authorize this Agreement or the other Transaction Agreements or to consummate the Transactions. This Agreement has been, and at Closing the other Transaction Agreements to which Bio is a party will be, duly and validly executed and delivered by Bio. This Agreement constitutes, and at Closing the other Transaction Agreements to which Bio is a party will constitute, the legal, valid and binding obligations of Bio, enforceable against Bio in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws and equitable principles related to or limiting creditors’ rights generally, by the availability of equitable remedies and defenses, and to the extent the indemnification provisions contained in the Investors’ Rights Agreement may further be limited by applicable laws and principles of public policy.

(c) No Conflicts; Required Consents. No consents are required with respect to Bio’s execution and delivery of this Agreement, the other Transaction Agreements, and the consummation of any of the Transactions. The execution, delivery and performance of this Agreement and the other Transaction Agreements by Bio do not:

(i) conflict with, violate or result in any breach of: (A) Bio’s Charter Documents, or (B) any Legal Requirement applicable to Bio or by which its business, assets, or properties are bound or affected except those which would not have a Material Adverse Effect with respect to Bio,

(ii) give any Governmental Authority or other Person the right to (A) exercise any remedy or obtain any relief under any Legal Requirement or any order, judgment, injunction, decree, or award of any arbitrator to which Bio is subject; (B) declare a default of, exercise any remedy under, accelerate the performance of, cancel, terminate, modify or receive any payment under any indenture or loan or credit

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agreement or any other agreement, to which Bio is a party or by which Bio or any of the assets or properties constituting the Business may be bound or affected or (C) revoke, suspend or modify any Governmental Approval, except, with respect to any of clauses (A) through (C), as would not be reasonably likely to result in a Material Adverse Effect with respect to Bio,

(iii) cause Bio to become subject to, or to become liable for the payment of, any material Tax or

(iv) require Bio to obtain any consent of, or make or deliver any filing or notice to, a Governmental Authority, other than as expressly contemplated by the Transaction Agreements.

(d) Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or to Bio’s Knowledge, currently threatened that questions the validity of this Agreement, the Transaction Agreements or the right of Bio to enter into them, or to consummate the Transactions.

(e) Broker’s Fees. Bio has no liability or obligation to pay any fees or commissions to any broker, finder, agent or attorney, with respect to the Transactions.

(f) Board Approval. Subject to Section 4.4(b), Bio’s Board has approved this Agreement, the other Transaction Agreements and the Transactions.

4.3 Representations and Warranties of Astellas.

(a) Organization and Qualification. Astellas is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted.

(b) Authority. Astellas has all necessary power and authority to execute and deliver this Agreement and the other Transaction Agreements and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the other Transaction Agreements and the consummation by Astellas of the Transactions have been duly and validly authorized by all requisite corporate action and no other corporate proceedings on the part of Astellas are necessary to authorize this Agreement or the other Transaction Agreements or to consummate the Transactions. This Agreement has been, and at Closing the other Transaction Agreements to which Astellas is a party will be, duly and validly executed and delivered by Astellas. This Agreement constitutes, and at Closing the other Transaction Agreements to which Astellas is a party will constitute, the legal, valid and binding obligations of Astellas, enforceable against Astellas in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws and equitable principles related to or limiting creditors’ rights generally, by the availability of equitable remedies and defenses and, to the extent the indemnification provisions contained in the Investors’ Rights Agreement may further be limited by applicable laws and principles of public policy.

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(c) No Conflicts; Required Consents. No consents are required with respect to Astellas’ execution and delivery of this Agreement, the other Transaction Agreements, and the consummation of any of the Transactions. The execution, delivery and performance of this Agreement and the other Transaction Agreements by Astellas do not:

(i) conflict with, violate or result in any breach of: (A) Astellas’ Charter Documents, or (B) any Legal Requirement applicable to Astellas or by which its business, assets, or properties are bound or affected except those which would not have a Material Adverse Effect with respect to Astellas,

(ii) give any Governmental Authority or other Person the right to (A) exercise any remedy or obtain any relief under any Legal Requirement or any order, judgment, injunction, decree, or award of any arbitrator to which Astellas is subject; (B) declare a default of, exercise any remedy under, accelerate the performance of, cancel, terminate, modify or receive any payment under any indenture or loan or credit agreement or any other agreement, to which Astellas is a party or by which Astellas or any of the assets or properties constituting the Business may be bound or affected or (C) revoke, suspend or modify any Governmental Approval, except, with respect to any of clauses (A) through (C), as would not be reasonably likely to result in a Material Adverse Effect with respect to Astellas,

(iii) cause Astellas to become subject to, or to become liable for the payment of, any material Tax or

(iv) require Astellas to obtain any consent of, or make or deliver any filing or notice to, a Governmental Authority, other than as expressly contemplated by the Transaction Agreements.

(d) Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or to Astellas’ Knowledge, currently threatened that questions the validity of this Agreement, the Transaction Agreements or the right of Astellas to enter into them, or to consummate the Transactions.

(e) Broker’s Fees. Astellas has no liability or obligation to pay any fees or commissions to any broker, finder, agent or attorney, with respect to the Transactions.

(f) Board Approval. Subject to Section 4.3(b), Astellas’ Board has approved this Agreement, the other Transaction Agreements and the Transactions.

4.4 Disclosure; No Other Representations and Warranties; Projections.

(a) Subject to Section 4.3(c), no representation or warranty in this Article 4 or in any document delivered by any Party or any of their respective Affiliates pursuant to this Agreement or any other Transaction Agreement, and no certificate or instrument furnished to any other Party pursuant hereto or in connection with this Agreement, when taken as a whole, contains any untrue statement of a material fact, or

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omits to state a material fact necessary to make the statement herein or therein, in light of the circumstances in which they were made, not misleading. Each, Representing Party has delivered or made available to any other Party, as applicable, true, correct and complete copies of all documents, including all amendments, supplements and modifications thereof or waivers currently in effect thereunder, described in the respective JVA Disclosure Schedules.

(b) To each Party’s Knowledge there is no fact known to it relating to the Transactions that may have a Material Adverse Effect on such Party’s ability to consummate the Transactions.

(c) Each of the Parties acknowledges that the detailed representations and warranties contained herein have been negotiated at arm’s length among sophisticated business entities. Except for the representations and warranties expressly set forth in this Agreement, the other Transaction Agreements, or other agreements between the Parties (including, without limitation, the Astellas Agreement), Bio and Astellas agree that neither Maxygen nor any other person acting on behalf of Maxygen, makes or has made any other express or implied representation or warranty to Bio or Astellas as to the accuracy or completeness of any information regarding Maxygen, the Business, the Transactions or any other matter. Except for the representations and warranties expressly set forth in this Agreement, the other Transaction Agreements or other agreements between the Parties (including, without limitation, the Astellas Agreement), Maxygen agrees that neither Bio nor any other person acting on behalf of Bio, makes or has made any other express or implied representation or warranty to Maxygen as to the accuracy or completeness of any information regarding Bio, its business and operations, the Transactions or any other matter.

(d) In connection with Bio’s and Astellas’ investigation of Maxygen and the Business, Bio and Astellas have received from or on behalf of Maxygen certain projections, forecasts and business plans with respect to Maxygen, the Business and CPC. Each of Bio and Astellas acknowledges that there are uncertainties inherent in attempting to make such projections, forecasts and business plans, that each of Bio and Astellas is familiar with such uncertainties, and that each of Bio and Astellas is responsible for making its own evaluation of the adequacy and accuracy of all projections, forecasts and business plans so furnished to it (including the reasonableness of the assumptions underlying such projections and forecasts). Accordingly (and without limiting any other provisions of this Agreement or the Transaction Agreements, the Astellas Agreement or other agreements between the Parties), neither Maxygen nor any other Person acting on its behalf makes any representation or warranty with respect to such projections, forecasts and business plans (including the reasonableness of the assumptions or the accuracy of the information underlying such projections and forecasts).

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ARTICLE 5

COVENANTS

During the time period from the date of this Agreement until the earlier to occur of the (a) Closing Date and (b) the termination of this Agreement in accordance with the provisions of Article 7 hereof, the Parties covenant and agree as follows:

5.1 Maxygen’s Conduct of the Business. Except as required by applicable Legal Requirements, as consented to in writing by Bio (which consent shall not be unreasonably delayed or withheld), as set forth in Section 5.1 of the Maxygen JVA Disclosure Schedule or as otherwise expressly provided for hereby or by the other Transaction Agreements, Maxygen covenants to:

(a) Conduct the Business only in, and Maxygen shall not take any action except in, the ordinary course of business and in a manner consistent with past practice;

(b) Pay all of its Liabilities and Taxes relating to the Contributed Assets or the Business when due, subject to good faith disputes over such Liabilities or Taxes;

(c) Maintain insurance coverage in amounts adequate to cover the reasonably anticipated risks of Maxygen relating to the Contributed Assets or the Business;

(d) Use commercially reasonable efforts to (i) preserve intact all rights of the Business, to keep available the services of its Employees and consultants who provide services to the Business and (ii) preserve good relationships with its employees, licensors, licensees, suppliers, contractors and other persons with which Maxygen has business relations as related to the Business; and

(e) Promptly notify Bio of any event or occurrence that would cause the condition set forth in Section 6.1(c) to fail to be satisfied, or which results in any material Encumbrance on any of the Contributed Assets.

5.2 Restrictions on Maxygen’s Conduct of the Business Prior to Closing. Without limiting the generality of Section 5.1 above, except as required by applicable Legal Requirements, as consented to in writing by Bio (which consent shall not be unreasonably delayed or withheld), as set forth in Section 5.2 of the Maxygen JVA Disclosure Schedule or as otherwise expressly provided for hereby or by the other Transaction Agreements, Maxygen covenants not to:

(a) Enter into, create, incur or assume (i) any borrowings under capital leases relating to the Contributed Assets or the Business or (ii) any obligations which would have a Material Adverse Effect on Maxygen or CPC’s ability to conduct the Business in substantially the same manner and condition as currently conducted by Maxygen;

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(b) Acquire any business or any Entity by merging or consolidating with, or by purchasing any equity securities or all or substantially all of the assets of, any such business or Entity or any similar transaction, in each case such as are material, individually or in the aggregate, to Maxygen’s Business or the Contributed Assets;

(c) Sell, transfer, lease, out-license or otherwise encumber any of its material assets relating to the Contributed Assets or the Business (including the Contributed Assets), or otherwise enter into any Contract or other transaction that would limit, reduce or restrict the Intellectual Property or other assets to be assigned or licensed to CPC under the Asset Contribution Agreement (or the Technology License Agreement) except for (i) transfer of materials in the ordinary course of business under standard material transfer agreements solely for internal research use, which transfer of materials excludes any transfer, out-license or assignment of any Intellectual Property Rights beyond the grant of a limited, non-exclusive right to use such materials for internal research purposes, (ii) transfer of materials to contractors in the performance of activities under the Astellas Agreement in accordance with the terms of that agreement and the plans and budgets approved by the JSC thereunder, or (iii) transfer materials to contractors in the performance of the research activities to be conducted by Maxygen as described in Section 5.15 of this Agreement in accordance with Schedule 5.2 attached hereto;

(d) Enter into any agreements or commitments relating to the Contributed Assets or the Business with another Person, except on commercially reasonable terms in the ordinary course of business;

(e) Violate any Legal Requirement applicable to the Business or the Contributed Assets except those that would not have a Material Adverse Effect with respect to Maxygen;

(f) Violate any Maxygen Contract or Governmental Approval applicable to the Business or the Contributed Assets, the violation of which could reasonably be expected to have a Material Adverse Effect with respect to Maxygen;

(g) Terminate or amend any Maxygen Contract (other than (i) employment or similar agreements, which are provided for under clauses (q) and (r), below and (ii) the extension of the lease of the Lab Facility) or Governmental Approval applicable to the Business or the Contributed Assets;

(h) Commence a Proceeding which would affect in any adverse manner the Contributed Assets or the Business;

(i) Purchase, lease, in-license or otherwise acquire any assets relating to the Contributed Assets or the Business, except for (i) supplies, materials, services and equipment purchased, leased, in-licensed or acquired by Maxygen in the ordinary course of business consistent with past practice, (ii) supplies, materials, services and in-licenses of intellectual property in furtherance of activities under the Astellas Agreement, as permitted under the terms of that agreement and the plans and budgets approved by the

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JSC thereunder, or (iii) supplies, materials, services and in-licenses to intellectual property in furtherance of activities to be conducted by Maxygen as described in Section 5.15 of this Agreement in accordance with Schedule 5.2 attached hereto;

(j) Provide any credit, loan, advance, guaranty, endorsement, indemnity, warranty or mortgage relating to the Contributed Assets or the Business to any Person, including any of the customers, stockholders, officers, employees or directors of Maxygen, other than those made in the ordinary course of business;

(k) Borrow from any Person by way of a loan, advance, guaranty, endorsement, indemnity, or warranty if such act would have a Material Adverse Effect with respect to Maxygen;

(l) Change its credit practices, accounting methods or practices or standards used to maintain its books, accounts or business records as they relate to the Business or Contributed Assets, if such act would have a Material Adverse Effect with respect to Maxygen;

(m) Change the terms of its accounts or other payables or Receivables or take any action directly or indirectly to cause or encourage any acceleration or delay in the payment, collection or generation of its accounts or Receivables with respect to the Contributed Assets or the Business, if such act would have a Material Adverse Effect with respect to Maxygen;

(n) Incur with respect to the Business or Contributed Assets any indebtedness for borrowed money, any deferred purchase price of property or leases which would be capitalized in accordance with GAAP, any reimbursement and other obligations in respect of letters of credit and surety or performance bonds, any net obligations in respect of derivative products, any accounts payable or trade payables other than accounts payable and trade payables incurred in the ordinary course, or any similar transaction (contingent or otherwise); and any liability as a surety, guarantor, accommodation party or otherwise for or upon the indebtedness or obligation of any other Person of the nature described above;

(o) With respect to the Contributed Assets or the Business, other than in the ordinary course of business, (i) change the management organization or personnel arrangements with sales brokers, market research projects or working capital levels (payables and Receivables); (ii) change the discretionary costs, such as maintenance and repairs, research and development, and training; (iii) make any changes in capital expenditures or deferrals of capital expenditures; (iv) deviate from operating budgets; or (v) change any of its business policies, including, advertising, investments, marketing, pricing, purchasing, production, personnel, sales, returns, budget or product acquisition policies, if any such act would have a Material Adverse Effect with respect to Maxygen;

(p) Amend the terms of its certificate of incorporation or bylaws in any manner that would be reasonably likely to materially impede or delay the consummation of the Transactions;

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(q) Hire any new employee who is substantially related to the Business other than in the ordinary course of business, terminate any Key Employee other than for Cause, increase the annual level of compensation of any Offeree except for regular, scheduled compensation increases in the ordinary course of business, establish or adopt any Employee Benefit Plan, or grant any new severance entitlements or any unusual or extraordinary bonuses, benefits or other material compensation to any Offeree, in each case other than in the ordinary course of business or pursuant to written agreements, arrangements or policies in effect as of the date of this Agreement;

(r) Make any severance payments to any Offeree, except payments made pursuant to written agreements, arrangements or policies in effect as of the date of this Agreement;

(s) Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any amendment to a Tax Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material Taxes related to the Business or Contributed Assets, except those that would not have a Material Adverse Effect with respect to Maxygen;

(t) Fail to maintain all inventory relating to the Business at current levels or fail to maintain the Contributed Assets in good repair, order and condition, reasonable wear and tear excepted, if any such failure would have a Material Adverse Effect with respect to Maxygen;

(u) Intentionally take any other action or fail to take any action that would cause a Material Adverse Effect with respect to Maxygen; or

(v) Enter into any Contract or agree, in writing or otherwise, to take any of the actions described in Section 5.2(a) through 5.2(u) above.

5.3 Litigation. Maxygen will (a) notify Bio in writing promptly after having Knowledge of any action, suit, arbitration, mediation, proceeding, claim, or investigation by or before any Governmental Authority or arbitrator initiated by or against it or any of its Affiliates, or to Maxygen’s Knowledge, is threatened in writing against it, any of its Affiliates or any of their respective directors or officers in their capacity as such which relate to the Business or the Contributed Assets (a “New Litigation Claim”), (b) notify Bio of ongoing material developments in any New Litigation Claim and (c) consult in good faith with Bio regarding the conduct of the defense of any New Litigation Claim.

5.4 No Solicitation of Competing Transaction.

(a) Maxygen shall not, and Maxygen shall cause its Representatives not to, directly or indirectly:

(i) Initiate, solicit, or knowingly encourage any inquiries that would reasonably be expected to lead to an Alternative Proposal (including by way of making statements or furnishing information regarding the Business or the Contributed Assets or Assumed Liabilities); or

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(ii) Hold any discussions or enter into any agreements with, or provide any information or respond to, any Third Party concerning an Alternative Proposal or cooperate in any way with, agree to, assist or participate in, solicit, knowingly facilitate or knowingly encourage any effort or attempt by any Third Party to do or seek any of the foregoing. If at any time prior to the earlier of (A) the Closing and (B) the termination of this Agreement pursuant to its terms, Maxygen is approached in any manner by a Third Party (a “Competing Party”) concerning an Alternative Proposal, Maxygen shall promptly inform Bio regarding such contact, and furnish Bio with a copy of any inquiry or proposal, or, if not in writing, a description thereof, including the name of such Competing Party, and Maxygen shall keep Bio informed of the status and material terms of any future notices, requests, correspondence or communications related thereto.

Nothing contained in this Section 5.4 shall prohibit Maxygen or any of Maxygen’s Representatives from taking or restrict Maxygen’s or its Representatives’ ability to take any actions whatsoever related to any acquisition, asset sale, merger, consolidation, other business combination or similar transaction (or inquiry, proposal, discussions, negotiations with respect thereto or that the Board of Maxygen determines is reasonably likely to lead thereto) that does not include the Business or the Contributed Assets (such transactions referred to as a “Separate Transaction”). Furthermore, none of the actions specified in the immediately foregoing sentence shall be or be deemed to be a breach of this Section 5.4 regardless of whether any such actions subsequently result in an Alternative Proposal within the meaning of this Section 5.4 (which Alternative Proposal, if any, shall, for the avoidance of doubt, be otherwise subject to the terms of this Section 5.4) if such Alternative Proposal was not solicited by Maxygen or any of Maxygen’s Representatives, nor knowingly encouraged by Maxygen or any of Maxygen’s Representatives when responding to a proposal regarding a Separate Transaction. For purposes of this Agreement, the party that “solicits” an Alternative Proposal shall be deemed to mean the party that first proposes an Alternative Transaction and not the party that receives such proposal provided such receiving party did not knowingly encourage the other party to make such proposal.

(b) Subject to the provisions set forth in Section 5.4(c), nothing contained in this Section 5.4 or otherwise in this Agreement shall prohibit Maxygen’s Board or any of Maxygen’s Representatives from (i) authorizing a communication with any party that is limited to making such party aware of the provisions of this Section 5.4; (ii) furnishing information to (but only subject to customary confidentiality requirements and limitations on use and provided that Maxygen (A) shall promptly provide Bio with copies of any non-public information concerning Maxygen provided to any other party if and to the extent such information has not otherwise been previously provided Bio and (B) shall take reasonable precautions to protect such non-public information) or entering into discussions or negotiations with any Third Party that has made (and not withdrawn) a bona fide Alternative Proposal and entering into discussions with such Third Party, if such Alternative Proposal was not solicited or knowingly encouraged by Maxygen in the

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course of discussions regarding a Separate Transaction and if Maxygen’s Board determines that the Alternative Proposal is or is reasonably likely to lead to a Superior Proposal; and (iii) to the extent required, taking and disclosing to Maxygen’s stockholders a position contemplated by Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act with regard to an Alternative Proposal, or making any other disclosure to Maxygen’s stockholders if Maxygen’s Board determines that disclosure is required under applicable Legal Requirements.

(c) Maxygen shall not propose publicly to approve or recommend an Alternative Proposal unless Maxygen’s Board (after consultation with outside legal counsel and considering in good faith any counter-offer or proposal made by Bio pursuant to clause (iii) hereof) (i) determines that the Alternative Proposal constitutes a Superior Proposal that requires such action in order to comply with Maxygen’s fiduciary duties to its stockholders under applicable Legal Requirements; (ii) shall have given Bio at least five (5) Business Days notice that it intends to approve or recommend such Alternative Proposal (which notice shall attach a copy of the most recent version of all transaction agreements to which Maxygen is proposed to be a party relating to the Alternative Proposal that Maxygen’s Board has determined to be a Superior Proposal) and an opportunity to meet with Maxygen, its financial advisor, and its outside legal counsel, all with the purpose and intent of enabling Bio and Maxygen to discuss and negotiate in good faith a modification of the terms and conditions of this Agreement (it being understood and hereby agreed that a new two (2) Business Days notice and negotiation period shall be required if the Alternative Proposal that Maxygen’s Board has determined to be a Superior Proposal is revised in any material respect); and (iii) shall have determined that such Alternative Proposal continues to be a Superior Proposal after taking into consideration any counter-offer or proposal made by Bio.

(d) Subject to the provisions of this Section 5.4, and Maxygen’s compliance therewith in all material respects, the Parties acknowledge and agree that Maxygen may enter into an agreement for such Superior Proposal and terminate this Agreement immediately prior to, or immediately after, such acceptance of such Superior Proposal pursuant to the terms of Section 7.1(e) hereof. For the avoidance of doubt, Maxygen shall be required to terminate this Agreement prior to, or immediately after, its acceptance of such Superior Proposal as a condition to its entry into an agreement for such Superior Proposal.

(e) Maxygen shall not be permitted to take any of the actions specified in clauses (b) through (d), above, with respect to any Alternative Proposal or any Third Party making an Alternative Proposal after the Stockholder Approval and prior to the earlier of (i) the Closing and (ii) the termination of this Agreement.

(f) This Section 5.4 shall terminate upon the earlier of (i) the Closing and (ii) the termination of this Agreement.

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5.5 Employees.

(a) Transferred Employees. Maxygen on behalf of CPC has offered employment, and may continue to, but shall have no obligation to, offer employment, to be effective as of or after the Closing Date and contingent upon the Closing in a form of offer letter mutually agreeable to the Parties, with compensation packages determined by, or to be determined by, CPC but which such compensation packages shall offer a base salary or base hourly rate of pay (as applicable) at least equivalent to the base salary or base hourly rate of pay provided to the employee by Maxygen, to those employees of Maxygen who are listed in Section 5.5 of the Maxygen and Bio JVA Disclosure Schedules (the “Offerees”). Section 5.5 of the Maxygen JVA Disclosure Schedule also notes those Offerees who, as of the date hereof, have accepted the contingent employment offer with CPC referred to above. Maxygen shall use commercially reasonable efforts to (i) encourage the Offerees to continue their employment with Maxygen until Closing, (ii) assist CPC in employing the Offerees, including by encouraging those Offerees who have not accepted the contingent employment offer with CPC to accept such offer with CPC prior to the Closing and (iii) to the extent that any Offerees do not accept the contingent employment offer prior to the Closing, assist CPC in identifying and hiring reasonably appropriate replacements for any such Offerees. In the event Maxygen has Knowledge prior to the Closing Date that any Offeree does not intend to accept the contingent employment offer with CPC, or that any Offeree who has accepted such offer intends to revoke his or her acceptance, Maxygen shall promptly notify Bio of such information.

(b) The Parties agree that the employment relationship between CPC and those Offerees who accept an offer of employment with CPC (the “Transferred Employees”) shall be a new employment relationship, effective upon the Closing, and that it is not the intention of the Parties that any contracts of employment of any employees of Maxygen shall be assumed by CPC as a result of the Transactions except as expressly contemplated by this Agreement or the Transaction Agreements.

(c) Employee Benefit Arrangements. In order to secure an orderly and effective transition of the employee benefit arrangements for Transferred Employees and their respective beneficiaries and dependents, Maxygen shall cooperate with CPC, subject to privacy and other Legal Requirements, to (i) exchange information related to the Transferred Employees, including employment records, benefits information, and financial statements and (ii) take any other reasonably necessary actions with respect to the Transferred Employees and their respective beneficiaries and dependents, subject to compliance with applicable Legal Requirements.

(d) Contributor Benefit Plans. Maxygen shall retain the Contributor Benefit Plans and the assets and liabilities of any Contributor Benefit Plan with respect to any Transferred Employee. CPC shall become a participating employer in such Contributor Benefit Plans specified in the Transition Services Agreement as of the Closing Date and continuing until the day prior to the date the Buy-Out Option is consummated (or such earlier date as mutually agreed by the Parties). In the event CPC’s participation in the Contributor Benefit Plans is terminated in connection with the

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consummation of the Buy-Out Option, Bio shall provide employee benefits to eligible CPC employees under Bio benefit plans on terms and conditions that are comparable to similarly situated employees of Bio’s U.S. Affiliates. No Contributor Benefit Plan shall be assumed by CPC nor any assets or liabilities of any Contributor Benefit Plan transferred to CPC with respect to any Transferred Employee except as expressly contemplated by this Agreement or the Transaction Agreements. CPC shall recognize the prior service with Maxygen of each Transferred Employee in connection with, and shall provide credit for, any accrued but unused vacation, sick time, or personal time off earned by each Transferred Employee in connection with such prior service as specified in the Transition Services Agreement. The Parties agree that CPC shall not have any liability or responsibility with respect to the administration of the Contributor Benefit Plans as a result of the consummation of the Transactions; provided that this subsection (d) shall not apply if Contributor Benefit Plans or the assets and liabilities thereunder are transferred to CPC in connection with the exercise of the Buy-Out Option with the consent of Bio. Such consent may be withheld for any reason or no reason at all. Nothing contained in this Section 5.5 shall alter the at-will employment relationship of any employees of Maxygen.

5.6 CPC Employee Equity Plan. The Parties shall cause CPC, at the meeting of CPC’s Managers to which the Minutes relate, to establish the CPC 2009 Equity Incentive Plan in substantially the form attached hereto as Exhibit L (the “Equity Incentive Plan”), pursuant to which equity awards may be granted to employees and other eligible service providers of CPC or any parent or Subsidiary thereof.

5.7 Necessary Consents. Maxygen will use all commercially reasonable efforts to obtain such written consents, assignments, waivers and authorizations or other certificates from Third Parties (including those listed in Section 4.1(d) of the Maxygen JVA Disclosure Schedule), give notices to Third Parties and take such other actions as may be reasonably necessary or appropriate, in addition to those set forth in this Article 5, to facilitate and effect the consummation of the Transactions and to facilitate and allow CPC to carry on the Business after the Closing Date and to keep in effect and avoid the breach of, violation of, termination of, or material and adverse change to any Contributor Contract to which Maxygen is a party or is bound or by which any of its assets or properties are bound or affected.

5.8 Regulatory Approvals. The Parties shall promptly execute and file, or join in the execution and filing of, any application, notification or other document that may be necessary in order to obtain the authorization, approval or consent of any Governmental Authority, whether federal, state, local or foreign, which may be reasonably required in connection with the consummation of the Transactions. The Parties shall use commercially reasonable efforts to obtain, and to cooperate with CPC to promptly obtain, all such authorizations, approvals and consents, and shall pay any associated filing fees payable with respect to such authorizations, approvals and consents, necessary to consummate the Transactions and/or to allow CPC to conduct the Business as it was conducted prior to the Closing. Each Party shall promptly inform one another of any material communication between such Party and any Governmental Authority regarding any of the Transactions. If any of the Parties or any of their

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respective Affiliates receives any formal or informal request for supplemental information or documentary material from any Governmental Authority with respect to the Transactions, the relevant Party shall make, or cause to be made, as soon as reasonably practicable, a response in compliance with such request. The Party receiving such communication or request shall direct, in its sole discretion, the making of such response, but shall consider in good faith the views of the other Parties.

5.9 Information Rights.

(a) Maxygen shall:

(i) give Bio full access during normal hours to the Facility, to Persons having business relationships with Maxygen (including suppliers, licensors, licensees, and any landlords), and to all its books and records as such relate to the Contributed Assets, the Assumed Liabilities, the Business or the employees, whether located on their premises or at another location, upon reasonable notice from Bio to Maxygen,

(ii) cause its officers to furnish Bio with such financial and operating data and other information reasonably requested by Bio (including copies thereof) and cooperate and assist with Bio’s investigation of the Business, the Contributed Assets and the Assumed Liabilities as it from time to time may request, including financial statements and schedules,

(iii) allow Bio the opportunity to interview the employees engaged in the Business upon reasonable advance notice and such as would not materially interfere which such employees’ operation of the Business, and

(iv) assist and cooperate with Bio in the development of integration plans for implementation by Bio following the Closing; provided, that no investigation pursuant to this Section 5.9(a)(iv) shall affect or be deemed to modify any representation or warranty made by Maxygen or Bio herein,

provided, however, that Maxygen may restrict or otherwise prohibit access to any documents or information to the extent that (i) any applicable Legal Requirement requires Maxygen to restrict or otherwise prohibit access to such documents or information, (ii) access to such documents or information would give rise to a material risk of waiving any attorney-client privilege, work product doctrine or other privilege applicable to such documents or information or (iii) access to a Contract to which Maxygen or any of its Subsidiaries is a party or otherwise bound would violate or cause a default under, or give a Third Party the right terminate or accelerate the rights under, such Contract. Any access to Maxygen’s properties shall be subject to Maxygen’s reasonable security measures and insurance requirements.

(b) Maxygen shall confer on a regular and frequent basis with one or more designated representatives of Bio to report material operational matters and the general status of on-going operations of the Business. Maxygen shall promptly notify Bio of any material change in the financial condition, results of operations or properties of the Business and shall keep Bio fully informed of such events.

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5.10 Stockholder Meeting. Maxygen shall (i) duly call, give notice of, convene and hold an annual or special meeting of its stockholders (the “Stockholders’ Meeting”) as promptly as practicable following the date hereof, for the purpose of obtaining Stockholder Approval and (ii) subject to Section 5.4, include in the Proxy Statement (as defined below), and not subsequently withdraw or modify in any manner adverse to Bio, the recommendation of the Maxygen Board regarding Stockholder Approval.

5.11 Stockholder Vote. Maxygen will prepare and deliver to its stockholders a proxy statement (the “Proxy Statement”) which shall solicit Stockholder Approval. Maxygen will provide Bio with the opportunity to review the Proxy Statement prior to the mailing of the Proxy Statement and will consider any comments provided by Bio or its counsel in good faith before filing the Proxy Statement with the SEC.

5.12 Satisfaction of Conditions Precedent. The Parties will use commercially reasonable efforts to satisfy or cause to be satisfied all of the conditions precedent which are set forth in Article 6 promptly as reasonably possible and will use commercially reasonable efforts to cause the Transactions to be consummated as promptly as reasonably possible.

5.13 Execution of Transaction Agreements and Other Documents. Subject to the satisfaction or waiver of the applicable conditions specified in the Transaction Agreements, the Parties shall execute, or cause to be executed, the Transaction Agreements and such other agreements, instruments and documents reasonably necessary to consummate the Transactions to which each Party is a party.

5.14 Tax Matters.

(a) It is the intent of the Parties that CPC shall be organized and operated as a “partnership” for federal, state and local income and franchise Tax purposes. In accordance therewith, (i) the Parties shall not file any election with any Tax Authority to have CPC treated otherwise, and (ii) each Party hereby represents, covenants, and warrants that it shall not maintain a position inconsistent with such treatment.

(b) The Parties acknowledge and agree that the purchase of Maxygen’s ownership interest in CPC and the outstanding Common Units pursuant to the Buy-Out Option shall be treated for federal and applicable state and local income or franchise Tax purposes as a transaction described in Situation 1 of Revenue Ruling 99-6, 1999-1 C.B. 432, pursuant to which: (i) CPC will terminate under Section 708(b)(1)(A) of the Code when Bio purchases Maxygen’s entire interest in CPC and all the outstanding Common Units, (ii) Maxygen and the holders of the Common Units will be treated as selling their entire interest in CPC in accordance with Section 741 of the Code, and (iii) CPC will be deemed to make a liquidating distribution of all of its assets to Bio,

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Maxygen and the holders of the Common Units, following which Bio will be treated as acquiring the assets deemed distributed to Maxygen and the holders of the Common Units, so that, pursuant to Section 1012 of the Code, Bio’s tax basis in the CPC assets attributable to Maxygen’s and the holders of the Common Units’ interest in CPC shall be the purchase price for their interests in CPC as determined pursuant to the Buy-Out Option.

5.15 Other Products Collaboration Arrangements. Maxygen shall use commercially reasonable efforts to conduct the research activities described in, and in accordance with, the detailed workplan and budget attached as Schedule 5.2 hereto. Maxygen shall keep Astellas reasonably informed regarding such activities and respond to reasonable requests for information from Astellas with respect thereto. All Intellectual Property generated, invented or created in the conduct of such activities by or for Maxygen other than Enabling Intellectual Property (as defined in the Asset Contribution Agreement) shall, upon Closing, be included within the Other Program Intellectual Property (and therefore the Contributed Assets) assigned to CPC under the Asset Contribution Agreement. After Closing, and within fifteen (15) days after receiving an invoice therefor from Maxygen, Astellas shall pay directly to Maxygen amounts to reimburse Maxygen for FTEs (as defined in the Other Products Collaboration Agreement, and at the FTE Rate specified in that agreement) and external expenses, in each case actually incurred by Maxygen in the conduct of such activities in accordance with Schedule 5.2, provided that, in no event shall Astellas be obligated to pay to Maxygen more than the amounts budgeted for such activities in Schedule 5.2. Promptly following Closing, Maxygen shall provide CPC with any information and materials generated in the course of conducting such activities not already in CPC’s possession as well as such reports and analyses regarding such activities as are reasonably required for CPC to comply with its obligations under the Other Products Collaboration Agreement. In the event that this Agreement terminates without Closing, (i) Maxygen shall exclusively bear all the costs and expenses incurred in conducting such activities, without any obligation for Astellas to reimburse Maxygen in connection with such activities, and (ii) as among Maxygen, Astellas and CPC, all Intellectual Property generated, invented or created in the conduct of such activities by or for Maxygen shall be retained exclusively by Maxygen, and Maxygen shall have the right to research, develop and commercialize, or license Third Parties to research, develop and commercialize, such Intellectual Property without the consent of, or further obligation to, Bio or CPC.

ARTICLE 6

CONDITIONS TO CLOSING

The obligations of each of the Parties to consummate the Transactions are subject to the fulfillment or satisfaction, on and as of the Closing Date, of each of the following conditions (any one or more of which may be waived in a writing executed by each of the counter Parties).

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6.1 Conditions Precedent to Obligations of Bio. The obligations of Bio to consummate the Transactions are subject to the satisfaction of the following conditions, unless waived by Bio in writing:

(a) Representations and Warranties. The representations and warranties of Maxygen set forth in this Agreement and in the forms of the Transaction Agreements to be delivered to Bio by Maxygen under this Agreement as attached to this Agreement on the date hereof, shall be true and correct without reference to any qualification as to “materiality” or “Material Adverse Effect,” such that the aggregate effect of any inaccuracies in such representations and warranties does not constitute a Material Adverse Effect with respect to Maxygen, on and as of the date hereof and as of the Closing Date as if made on the date thereof (except to the extent such representation or warranty specifies an earlier date).

(b) Performance of Obligations. Maxygen shall have performed in all material respects all obligations and covenants required to be performed by it under this Agreement and in the forms of the Transaction Agreements to be delivered to Bio by Maxygen under this Agreement as attached to this Agreement on the date hereof, on or prior to the Closing Date.

(c) No Material Adverse Effect. There has been no event or circumstance that has had, or would be reasonably likely to result in, a Material Adverse Effect with respect to Maxygen since the date of this Agreement that is continuing.

(d) Noncompetition Releases. Maxygen shall have delivered letters from Maxygen releasing the Transferred Employees from any noncompetition restrictions contained in agreements between Maxygen and such Transferred Employee prior to the Closing that restrict their ability to provide services in connection with the Business contributed to CPC in accordance with the Transactions, whether now or hereinafter operated by CPC or by Bio. The condition in the foregoing sentence shall not require any Transferred Employee to waive or release any protection of Confidential Information or Intellectual Property that is not being contributed to CPC.

(e) Legal Requirements. No Legal Requirement shall be in effect which prohibits or materially restricts the consummation of the Transactions at the Closing, or which otherwise materially and adversely affects the right or ability of CPC to own, operate or control the Business or the Contributed Assets in whole or in part, and no Proceeding is pending or threatened in writing by a Governmental Authority which is reasonably likely to result in a Legal Requirement having such an effect.

(f) Stockholder Approval. Stockholder Approval shall have been obtained.

(g) Deliveries. Maxygen shall have delivered to Bio all of the closing documents and agreements set forth in Section 3.2 hereof; and CPC shall have delivered to Bio all of the closing documents and agreements set forth in Section 3.5 hereof.

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6.2 Conditions Precedent to Obligations of Maxygen. The obligations of Maxygen to consummate the Transactions are subject to the satisfaction of the following conditions, unless waived by Maxygen in writing:

(a) Representations and Warranties. The representations and warranties of Bio and Astellas set forth in this Agreement and in the forms of the Transaction Agreements to be delivered to Maxygen by Bio and Astellas under this Agreement as attached to this Agreement on the date hereof, shall be true and correct without reference to any qualification as to “materiality” or “Material Adverse Effect,” such that the aggregate effect of any inaccuracies in such representations and warranties does not constitute a Material Adverse Effect with respect to Bio or Astellas, on and as of the date hereof and as of the Closing Date as if made on the date thereof (except to the extent such representation or warranty specifies an earlier date).

(b) Performance of Obligations. Bio and Astellas shall have performed in all material respects all obligations and covenants required to be performed by it under this Agreement and in the forms of the Transaction Agreements to be delivered to Bio and Astellas by Maxygen under this Agreement as attached to this Agreement on the date hereof, on or prior to the Closing Date.

(c) Legal Requirements. No Legal Requirement shall be in effect which prohibits or makes illegal the consummation of the Transactions at the Closing, and no Proceeding is pending or threatened in writing by a Governmental Authority which is reasonably likely to result in a Legal Requirement having such an effect.

(d) Stockholder Approval. Stockholder Approval shall have been obtained.

(e) Deliveries. Bio and Astellas shall have delivered to Maxygen all of the closing documents and agreements set forth in Section 3.3 hereof; and CPC shall have delivered to Maxygen all of the closing documents and agreements set forth in Section 3.4 hereof.

ARTICLE 7

TERMINATION

7.1 Voluntary Termination. This Agreement may be terminated at any time before the Closing:

(a) by the mutual written consent of Bio and Maxygen;

(b) by either Bio or Maxygen, if all conditions to such Party’s obligations to consummate the transactions contemplated by this Agreement have not been satisfied or waived, and the Closing has not occurred, on or before November 30, 2009 (the “Outside Termination Date”); provided, however, that the right to terminate this Agreement under this Section 7.1(b) will not be available to any Party whose breach of a covenant under Article 5 will have been a principal cause of, or will have resulted in, the failure of the Closing to occur on or before such date;

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(c) by either Bio or Maxygen if any Governmental Authority shall have issued an Order or taken any other action permanently enjoining, restraining or otherwise prohibiting the Transactions and such Order has become final and nonappealable; provided that the party seeking to terminate this Agreement pursuant to this subparagraph shall not have initiated such proceeding or taken any action in support of such proceeding or failed to comply with Section 5.8 in any material respect;

(d) by either Bio or Maxygen if Stockholder Approval shall have failed to be obtained at a meeting of Maxygen’s stockholders (giving effect to any adjournment or postponement thereof);

(e) by Maxygen in order to enter into an agreement for a Superior Proposal;

(f) by Bio if Maxygen has materially breached Section 5.4; or

(g) by Bio if Maxygen has withdrawn or adversely changed its recommendation to its stockholders to approve the Transactions.

7.2 Buy-Out Option Termination. Unless earlier terminated pursuant to Section 7.1, this Agreement shall terminate upon the earlier of (x) the Option Closing or (y) the termination of the Buy-Out Option.

7.3 Effects of Termination. In the event of a termination of this Agreement pursuant to Sections 7.1(a), (b), (c) or (d) or Section 7.2, none of the Parties nor any of their respective members, managers, directors, officers or agents shall, other than as otherwise expressly provided for herein, have any further liability to the other Party under this Agreement, except for any deliberate breach or deliberate omission resulting in breach of any of the provisions of this Agreement and except as provided for in this Section 7.3 below and Section 7.4(a). Upon termination of this Agreement prior to Closing, Section 8.6 shall apply and each of the Parties shall keep confidential all information provided by the other Party pursuant to this Agreement which is not in the public domain to the same extent as provided for in Section 8.7 (as if the Closing shall have occurred), and shall return any such information upon the other Party’s request (except to the extent such information is authorized to be held and used by such Party under the Astellas Agreement or any Transaction Agreement). Upon termination of this Agreement after the Closing, (a) Sections 8.3 and 8.5 shall terminate immediately (but the remainder of Article 8 shall remain in full force and effect) and (b) Sections 8.1, 8.2 and 8.4 shall terminate as to Bio and Astellas (but not as to CPC for which such sections shall remain in effect) at such time as and to the extent that neither Astellas nor Bio no longer has any interest in the Contributed Assets (including pursuant to the Astellas Agreement) other than by virtue of a minority ownership of CPC (i.e., such sections shall not terminate in the event of the Option Closing), which interest in the Contributed Assets shall include, for example, a license or a research and development collaboration

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involving compounds arising out of the Programs (e.g., in the event Astellas obtains a license under the Other Products Collaboration Agreement or for so long as the Astellas Agreement remains in effect). If this Agreement is terminated for any reason, this Agreement will be of no further force or effect; provided, however, that this Section 7.3 (and the applicable provisions described as surviving above, subject to the terms hereof), Section 7.4, Article 9, Article 10, and Article 11 will remain in full force and effect.

7.4 Termination Fee; Remedies.

(a) If this Agreement is terminated by (i) either Bio or Maxygen pursuant to Section 7.1(d), (ii) Section 7.1(g), or (iii) Maxygen pursuant to Section 7.1(e), then Maxygen shall promptly, and in any event within five (5) Business Days after the date of such termination (except as provided in the proviso below), pay Bio the Termination Fee by wire transfer of immediately available funds; provided, however, that in the case of a termination pursuant to clause (i) above: (A) such payment shall be made only if (x) a bona fide Alternative Proposal is publicly made prior to meeting of Maxygen’s stockholders regarding the approval of the Transactions and not withdrawn and (y) Maxygen enters into a definitive acquisition agreement for an Alternative Transaction with a party other than Bio within twelve (12) months following such termination and such Alternative Transaction is consummated, and (B) such payment shall be made promptly, but in no event later than five (5) Business Days, after the consummation of such Alternative Transaction.

(b) Notwithstanding the foregoing, Maxygen shall not be required to pay the Termination Fee if there has been a breach by Bio of any representation, warranty, covenant or agreement contained in this Agreement that would be reasonably likely to, individually or in the aggregate, result in a failure of a condition set forth in Section 6.2(a) or Section 6.2(b). The Parties acknowledge that in no event shall Maxygen be responsible for paying the Termination Fee more than once.

(c) The Parties acknowledge that the agreements contained in Section 7.4(a) are an integral part of the Transactions, and that, without these agreements, the Parties would not enter into this Agreement or proceed with the Transactions. The Parties further agree that the damages resulting from the termination of this Agreement in accordance with Section 7.4(a) are uncertain and incapable of accurate calculation and that the Termination Fee constitutes a reasonable forecast of the actual damages that may be incurred by Bio under such circumstances. The Termination Fee constitutes liquidated damages and not a penalty and shall be the sole monetary remedy in the event that a Termination Fee is paid pursuant to Section 7.4(a).

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ARTICLE 8

CERTAIN POST CLOSING COVENANTS AND AGREEMENTS

8.1 Non-Assignable Assets.

(a) Notwithstanding the provisions set forth in Section 6.1 hereof, if any of the Maxygen Contracts or other Contributed Assets are not assignable or transferable as set forth under the Asset Contribution Agreement or if any of the Licensed Intellectual Property (as defined in the Asset Contribution Agreement) is not licenseable as set forth under the Technology License Agreement (each, a “Non-Assignable Asset”) to CPC without the consent of, or waiver by, a Third Party (each, an “Assignment Consent”), either as a result of the provisions thereof, applicable Legal Requirements or otherwise, and any of such Assignment Consents are not obtained by Maxygen on or prior to the Closing Date, Bio may elect by written notice to either (i) have Maxygen permanently retain the Non-Assignable Asset and all Liabilities relating thereto at the Closing; or (ii) have Maxygen continue its efforts to obtain the Assignment Consents after Closing. In case Bio elects (i) above, then this Agreement and the related instruments of transfer shall not constitute an assignment or transfer or license, as the case may be, of such Non-Assignable Assets, CPC shall not assume Maxygen’s rights or obligations under such Non-Assignable Asset or assume the rights or obligations under the Technology License Agreement with respect to such Non-Assignable Asset, as the case may be, and such Non-Assignable Asset shall become an Excluded Asset, as defined in the Asset Contribution Agreement (and such Non-Assignable Asset shall not be included in the Maxygen Contracts or other Contributed Assets or Licensed Intellectual Property, as the case may be). If Bio elects item (ii) above, without limiting Maxygen’s obligations under Section 6.1, Maxygen shall use commercially reasonable efforts to obtain all such Assignment Consents as soon as reasonably practicable after the Closing Date and thereby assign and transfer (or license, as the case may be) to CPC such Non-Assignable Assets. Following any such Assignment Consents, such assets shall be deemed Maxygen Contracts or other Contributed Assets or Enabling Intellectual Property or Licensed Intellectual Property, as the case may be, for purposes of this Agreement (provided that, prior to any such Assignment Consent, CPC shall not assume any of Maxygen’s obligations under the corresponding Non-Assignable Asset or assume the rights or obligations under the Technology License Agreement with respect to the corresponding Non-Assignable Asset, as the case may be, unless and until such Assignment Consent is obtained).

(b) After the Closing, Maxygen shall cooperate with Bio in any reasonable arrangement designed to provide CPC with all of the benefits of the Non-Assignable Assets as if the appropriate Assignment Consents had been obtained, including by granting subleases and establishing arrangements whereby Maxygen and/or CPC shall undertake the work necessary to perform under Maxygen Contracts.

8.2 Delivery and Contribution of Assets.

(a) Where delivery or legal contribution (by assignment or license as applicable) of any Contributed Asset to CPC is not effected in accordance with

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Section 4.5 of the Asset Contribution Agreement, Maxygen shall deliver possession of, or, if applicable, contribute (by assignment or license, as the case may be) such Contributed Asset to CPC pursuant to a schedule that the Parties shall work in good faith to agree upon promptly.

(b) Where, following the date determined in accordance with Section 4.5 of the Asset Contribution Agreement, Bio determines that Maxygen is in possession of Contributed Assets which were transferable to CPC pursuant to the Asset Contribution Agreement, then Bio shall notify Maxygen of the existence of the same and, pursuant to a schedule to be agreed to by Maxygen and Bio, Maxygen shall transfer possession of the same to CPC.

(c) Where delivery or legal contribution (by assignment or license as applicable) of any Excluded Asset to CPC is effected, the Parties shall cause CPC to deliver possession of, or, if applicable, distribute (by assignment or license, as the case may be) such Excluded Asset to Maxygen pursuant to a schedule that the Parties shall work in good faith to agree upon promptly.

8.3 Certain Notifications. Maxygen shall give prompt notice to Bio, and Bio shall give prompt notice to Maxygen, of:

(a) any fact, circumstance, event, or action by Maxygen or Bio, respectively, (i) which, if known on the date of this Agreement, would have been required to be disclosed in or pursuant to this Agreement or any other Transaction Agreement; or (ii) the existence, occurrence, or taking of which would result in any of the representations and warranties of Maxygen contained in this Agreement or in any other Transaction Agreement not being true and correct when made or at Closing, but in each case only if such fact, circumstance, event, or action, if in existence as of the Closing Date, would be reasonably likely to cause the condition set forth in either Sections 6.1(a) or 6.2(a), as the case may be, not to be satisfied,

(b) the occurrence or non-occurrence of any event, the occurrence or non-occurrence of which, if in existence as of the Closing Date, would be reasonably likely to cause the condition set forth in either Sections 6.1(a) or 6.2(a), as the case may be, not to be satisfied, and

(c) any failure of, circumstance or event which will result in, or could reasonably be expected to result in, the failure of Maxygen or Bio, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder, but only if such noncompliance, if in continuing as of the Closing Date, would cause the condition set forth in either Sections 6.1(b) or 6.2(b), as the case may be, not to be satisfied; provided, that the delivery of any notice pursuant to this Section 8.3(c) shall not limit or otherwise affect any remedies available to the party receiving such notice.

Notwithstanding the foregoing, neither Maxygen nor Bio shall be deemed to be in breach of this Section 8.3 by virtue of their failure to disclose any fact, circumstance, event of which Maxygen or Bio, as applicable, did not have Knowledge at any time that such disclosure would be required by this Section 8.3.

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8.4 Amendments. CPC and Maxygen agree not to amend or modify the Asset Contribution Agreement, the Technology License Agreement, or any other agreement entered into in connection with the Transaction to which CPC and Maxygen are counterparties but Bio or Astellas US Holding, Inc. is not, or any part or provision of any of the foregoing, and CPC agrees not to waive any of its rights or remedies under the Technology License Agreement or any other agreement entered into in connection with the Transaction to which CPC and Maxygen (but not Bio or Astellas US Holding, Inc.) are counterparties, in all such cases without the prior written consent of Bio. Notwithstanding the foregoing, (a) CPC and Maxygen may make immaterial modifications to the Transition Services Agreement without Bio’s consent upon written notice to Bio, and (b) following the termination of the Buy-Out Option without exercise by Bio thereof, Astellas’ prior consent shall not be required for any amendments, modifications or waivers that would not materially diminish, restrict or limit any rights or licenses granted to Astellas under any agreements between Astellas and CPC or diminish CPC’s ability to perform its obligations to Astellas under any such agreements.

8.5 COBRA. Maxygen shall be responsible for providing continuation coverage to the extent required by Section 4980B of the Code or similar state law (“COBRA”) to those employees of Maxygen, and other qualified beneficiaries under COBRA with respect to such employees, who have a COBRA qualifying event prior to or in connection with the Transactions. Except as required by law, CPC shall not be responsible for the failure of the Maxygen to comply with any of the requirements of COBRA, including applicable notice requirements. Maxygen shall indemnify, defend and hold the CPC and Bio and its Affiliates harmless from any and all Liabilities or increase in costs incurred by CPC and Bio and its Affiliates, as applicable, as a result of the failure of Maxygen to comply with any of the requirements of COBRA, including applicable notice requirements.

8.6 Expenses. Whether or not the Transactions contemplated herein are consummated, except as otherwise provided herein, all fees and expenses incurred in connection with this Agreement and the Transactions including, but not limited to, all legal, accounting, financial, advisory, consulting and all other fees and expenses of Third Parties incurred by a Party in connection with the negotiation and effectuation of the terms and conditions of this Agreement and the Transactions shall be the obligation of the respective Party incurring such fees and expenses. Notwithstanding the foregoing, if any broker, finder or investment banker is entitled or becomes entitled to any brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Maxygen or Bio, then Maxygen or Bio, as the case may be, shall be solely responsible and shall pay such fee or commission.

8.7 Confidentiality.

(a) Confidentiality Obligations. Subject to paragraph (b) below and except to the extent otherwise expressly authorized by the Transaction Agreements (or

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the Astellas Agreement) or otherwise agreed to in writing by the applicable Parties, each Party shall keep confidential and shall not publish or otherwise disclose, nor use for any purpose other than for the purpose of exercising its rights or performing its obligations under this Agreement or any other Transaction Agreement (or the Astellas Agreement), any Confidential Information of any other Party hereto. Confidential Information of a Party shall consist of any Confidential Information disclosed by such Party to another Party under this Agreement or any other Transaction Agreement; provided, however, that any Confidential Information that is part of the Contributed Assets assigned to CPC under the Asset Contribution Agreement shall be deemed Confidential Information of CPC as of and after the Closing Date (but Confidential Information of Maxygen prior to the Closing Date) and such Confidential Information shall not be deemed to be known by Maxygen as of and after the Closing Date for purposes of the exclusions below (and Maxygen shall thereupon be deemed the receiving Party with respect to such Confidential Information for purposes of such exclusions and the other provisions of this Section 8.7). For the avoidance of doubt, the terms, conditions, all Parties and the existence of the Transaction Agreements shall be considered Confidential Information of all Parties until such time as and solely to the extent disclosed pursuant to Section 8.7(c) or to the extent as otherwise required by applicable Legal Requirements (subject to a reasonable opportunity for prior review and comment by the other Parties). Notwithstanding any of the foregoing to the contrary, Confidential Information shall not include any information that:

(i) was already known to the receiving Party, other than under an obligation of confidentiality (except to the extent such obligation has expired or an exception is applicable under the relevant agreement pursuant to which such obligation was established), at the time of disclosure to such Party;

(ii) was generally available to the public or otherwise part of the public domain at the time of its disclosure to a Party hereunder;

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

(iv) was independently discovered or developed by such Party without reference to or use of Confidential Information of another Party, as demonstrated by documented evidence; or

(v) was disclosed to such Party, other than under an obligation of confidentiality (except to the extent such obligation has expired or an exception is applicable under the relevant agreement pursuant to which such obligation was established), by a Third Party who had no obligation not to disclose such information to others.

The obligations set forth in this Section 8.7(a) shall remain in effect during the term of this Agreement or for five (5) years following termination of this Agreement.

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(b) Authorized Disclosure. Except as expressly provided otherwise in the Transaction Agreements (or the Astellas Agreement), each Party may use and disclose Confidential Information of the other Parties as follows: (i) under appropriate confidentiality provisions substantially equivalent to those in this Agreement (except that the term of confidentiality may be shorter than the term of confidentiality herein, but in no event less than five (5) years after the termination of the agreement with the disclosee containing such confidentiality provisions): (A) in connection with the performance of its obligations or as reasonably necessary or useful in the exercise of its rights under the Transaction Agreements (or the Astellas Agreement), including the right to grant licenses or sublicenses or extension of the licenses and sublicenses to Affiliates and subcontractors as permitted hereunder or in the other Transaction Agreements (or the Astellas Agreement), and (B) to the extent such disclosure is reasonably necessary or useful in conducting activities under the 4 Program or Other Programs; (ii) to the extent such disclosure is reasonably necessary in prosecuting or maintaining any patent or other Intellectual Property in accordance with the Transaction Agreements (or the Astellas Agreement), prosecuting or defending litigation related to the Transaction Agreements (or the Astellas Agreement), complying with applicable governmental regulations with respect to performance under the Transaction Agreements or the Astellas Agreement (including to comply with the applicable rules of any public stock exchange upon which the stock of such Party or its Affiliate is listed), making any regulatory filings, otherwise obtaining marketing approvals or fulfilling post-marketing approval obligations for products that are the subject a Transaction Agreement (or the Astellas Agreement), or otherwise required by applicable Legal Requirements; provided, however, that if a Party is required by applicable Legal Requirements or court order to make any such disclosure of another Party’s Confidential Information such Party will, except where impracticable for necessary disclosures (for example, in the event of medical emergency), give reasonable advance notice to such other Party of such disclosure requirement and, in each of the foregoing, (but not to the extent inappropriate in the case of prosecution and maintenance of patents), will use its reasonable efforts to seek confidential treatment of such Confidential Information required to be disclosed; (iii) in communication with advisors (including financial advisors, lawyers and accountants) or actual or bona fide potential investors or acquirers, or actual or bona fide potential licensees or sublicensees related to products that are the subject of the Transaction Agreements (or the Astellas Agreement), or approved or permitted contractors, service providers, vendors and the like used (or to be used) in connection with activities under any Transaction Agreement or the Astellas Agreement, each on a need to know basis, and in each case under standard confidentiality obligations (subject to the allowances for term of confidentiality provided in subsection (i) above), or (iv) to the extent mutually agreed to by the Parties. In addition to the foregoing, with respect to complying with the disclosure requirements of the SEC or similar regulatory bodies or the rules of an applicable public stock exchange, in connection with any required disclosure of material information related to this Agreement, the Parties shall consult with one another concerning the information to be disclosed where practicable.

(c) Press Release. Notwithstanding the foregoing, the Parties shall agree upon and release a mutually agreed press release or press releases to announce the execution of the Transaction Agreements in substantially the forms attached hereto as

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Exhibit M together with a corresponding question & answer outline for use in responding to inquiries about the Transaction Agreements; thereafter, the Parties may each disclose to Third Parties the information contained in such press releases and question & answer outline without the need for further approval by the others. The Parties acknowledge that Maxygen will file a Current Report on Form 8-K with the SEC and will attach this Agreement and other Transaction Agreements as exhibits to such report.

(d) Coordination Regarding Required Disclosures. In the event any Party proposes to make a disclosure of another Party’s Confidential Information because such Party believes that such disclosure is required by any Legal Requirement or applicable stock exchange rule, and another Party requests the opportunity to discuss whether or not such Party is required to make such disclosure, the Parties will use reasonable efforts to refer the matter, if time permits, to the respective in-house or outside counsel for each Party for discussion. If time does not permit such discussion, or if after such discussion between counsel, the Party desiring to make the disclosure still believes such Party is required by any Legal Requirement or applicable stock exchange rule to make such disclosure, it may do so, upon written notice to the other Parties. For clarity, nothing in this Section 8.7 shall prevent any Party from making disclosures in compliance with applicable Legal Requirements.

(e) Coordination with Certain Other Agreements. Notwithstanding anything herein to the contrary, this Section 8.7 shall not apply to disclosures of Confidential Information (and associated use of such Confidential Information) under the Astellas Agreement or the Other Products Collaboration Agreement to the extent subject to the applicable confidentiality provisions of such agreements, and any such disclosure and/or use shall be governed solely by the Astellas Agreement or the Other Products Collaboration Agreement, as applicable.

8.8 Assignment Notification and Acknowledgement. At or promptly following the Closing, Maxygen or CPC, as applicable, shall provide to the counterparties the notice and/or acknowledgement letters listed on Schedule 3.2(f) (copies of which were provided at Closing pursuant to Section 6.1(g) hereof). For the avoidance of doubt, such notice and or acknowledgment letters shall not be required to be executed, accepted or otherwise acknowledged by any Person other than Maxygen or CPC, as applicable.

ARTICLE 9

INDEMNIFICATION; ENFORCEMENT AND REMEDIES

9.1 Survival of Representations and Warranties. All representations and warranties of the Parties in this Agreement or any other Transaction Agreement (with the exception of the representations and warranties contained in the Technology License Agreement and the Other Products Collaboration Agreement, which representations and warranties shall survive in accordance with their terms) shall survive the Closing until the earlier to occur of (x) the third anniversary of the Closing Date and (y) the Option Closing (the “Survival Date”); provided, that all representations and warranties contained in Sections 4.1(b), 4.2(b), 4.3(b) shall survive indefinitely.

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9.2 Indemnification by Maxygen. Subject to the limitations set forth in this Article 9, Maxygen shall indemnify, defend and hold harmless Astellas, CPC and their respective Representatives as indemnitees from and against any and all Damages, whether or not involving a Third Party claim, including reasonable attorneys’ fees, to the extent resulting from:

(a) any breach of a representation or warranty of Maxygen contained in this Agreement or in any other Transaction Agreements;

(b) any breach of a covenant of Maxygen contained in this Agreement or in any other Transaction Agreements; or

(c) an Excluded Liability.

9.3 Indemnification by Bio and Astellas. Subject to the limitations set forth in this Article 9, Bio and Astellas shall, on a joint and several basis, indemnify, defend and hold harmless Maxygen and CPC and their respective Representatives as indemnitees from and against any and all Damages, whether or not involving a Third Party claim, including reasonable attorneys’ fees, to the extent resulting from:

(a) any breach of a representation or warranty of Bio, Astellas US Holding, Inc. or Astellas contained in this Agreement or in any other Transaction Agreements; or

(b) any breach of a covenant of Bio, Astellas US Holding, Inc. or Astellas contained in this Agreement or in any other Transaction Agreements.

9.4 Indemnification by CPC. Subject to the limitations set forth in this Article 9, CPC shall indemnify, defend and hold harmless Maxygen and Astellas and their respective Representatives as indemnitees, from and against any and all Damages, whether or not involving a Third Party claim, including reasonable attorneys’ fees, to the extent resulting from:

(a) any breach of a representation or warranty of CPC contained in this Agreement or in any other Transaction Agreements;

(b) any breach of a covenant of CPC contained in this Agreement or in any other Transaction Agreements; or

(c) any Assumed Liability.

9.5 Procedures for Indemnification.

(a) A party entitled to be indemnified pursuant to Section 9.2, 9.3, or 9.4 above (the “Indemnified Party”) shall promptly notify the party liable for such indemnification (the “Indemnifying Party”) in writing, of any claim or demand with reasonable specificity, under which the Indemnified Party has determined has given or is reasonably likely to give rise to a right of indemnification under this Agreement within

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thirty (30) days of such determination; provided, however, that a failure to provide such notice shall not relieve any Indemnifying Party of its obligations hereunder except to the extent that it has been materially prejudiced by such failure.

(b) If the Indemnified Party shall notify the Indemnifying Party of any claim or demand pursuant to Section 9.5(a) above, and if such claim or demand relates to a claim or demand asserted by a Third Party against the Indemnified Party that the Indemnifying Party acknowledges is a claim or demand for which it must indemnify or hold harmless the Indemnified Party under Section 9.2, 9.3 or 9.4 above, the Indemnifying Party shall have the right to employ counsel of its choice to defend any such claim or demand asserted against the Indemnified Party. The Indemnified Party shall have the right to participate in the defense of any such claim or demand at its own expense; provided that, in connection with any Third Party claim Indemnified Party shall have determined in good faith that such Third Party claim may result in any non-monetary Damages, then such Indemnified Party shall have the right to elect, by notice to the Indemnifying Party, to be represented by separate counsel, and in any such case the reasonable fees and expenses of such separate counsel shall be borne by the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party in writing, as promptly as possible (but in any case before the due date for the answer or response to a claim) after the date of the notice of claim given by the Indemnified Party to the Indemnifying Party under Section 9.5(a), of its election to defend in good faith any such Third Party claim or demand. Subject to any agreement to which the Indemnified Party is a party and/or Legal Requirement, the Indemnified Party shall make available to the Indemnifying Party or its agents, at the Indemnifying Party’s cost, all records and other material in the Indemnified Party’s possession reasonably required by it for its use in contesting any Third Party claim or demand, subject to customary and appropriate confidentiality limitations. The Indemnifying Party shall not settle or compromise any such claim or demand unless the claim or demand was solely for money damages and the Indemnified Party is given a full and complete release of any and all liability by all relevant parties relating thereto without the prior consent of the Indemnified Party (such consent not to be unreasonably delayed or withheld).

9.6 Limitations on Indemnification.

(a) Except with respect to, Section 9.8 and Section 9.9 hereof and as provided in the last sentence of this Section 9.6(a), each Indemnifying Party’s total monetary liability arising out of its obligations under this Article 9 shall not exceed twenty million dollars ($20,000,000); provided, however, that Bio and Astellas together shall be entitled to recover in the aggregate no more than twenty million dollars ($20,000,000) from Maxygen and CPC together; and further provided, however, that Maxygen and CPC together shall be entitled to recover in the aggregate no more than twenty million dollars ($20,000,000) from Bio and Astellas together. Nothing in this Agreement shall be deemed to limit a Person’s liability for Damages to the extent that Person committed fraud.

(b) The foregoing indemnification provisions are in addition to, and not in derogation of, any statutory, equitable or common-law remedy any Indemnified

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Party may have for breach of any covenant or agreement in this Agreement or any other Transaction Agreement. Notwithstanding the foregoing, and subject to Section 7.4 hereof, the indemnification provided for in this Article 9 shall be the sole and exclusive monetary remedy to any Indemnified Party for any Damages (including any monetary remedy under any equitable theory) arising out of the breach of the representations and warranties in this Agreement or any other Transaction Agreement (except for the Technology License Agreement and the Other Products Collaboration Agreement which shall not be subject to such limitation except to the extent provided in such agreement) or with respect to Excluded Liabilities or Assumed Liabilities; provided, however, that the foregoing shall not limit any Party from seeking or obtaining specific performance, injunctions or other similar relief.

(c) Except with respect to Section 9.9 hereof, and except as provided in Section 9.8 below, no Indemnified Party shall be entitled to recover Damages under this Article 9 after the Survival Date; provided, however, that such Indemnified Party may recover Damages under this Article 9 with respect to any Third Party claim, action, suit or proceeding for which indemnification is asserted hereunder and in accordance with the terms hereof prior to the Survival Date.

9.7 Enforcement of Certain Transaction Agreements by Bio. Maxygen hereby grants to Bio the right and power to enforce and to seek to obtain such legal, equitable, arbitral or other remedies as would be available to CPC under the Asset Contribution Agreement for any breach by Maxygen of any representation and warranty made by Maxygen to CPC in Article 5 of the Asset Contribution Agreement or breach by Maxygen of any covenant in Article 2 or Article 4 of the Asset Contribution Agreement or in Section 5.1 or Section 5.2 of this Agreement (including by way of enforcement of CPC’s indemnification rights in Section 9.2 of this Agreement with respect thereto); provided that any remedy obtained by Bio pursuant to this Section 9.7 shall be paid, assigned or distributed to, or otherwise recovered or obtained on behalf of, CPC only and not to or on behalf of Bio in its capacity as a Unit holder in CPC. For the avoidance of doubt, Bio shall not by reason of this Section 9.7 be entitled to any legal, equitable, arbitral or other remedy for any breach by Maxygen of any representation and warranty made by Maxygen to CPC in Article 5 of the Asset Contribution Agreement or breach by Maxygen of any covenant in Article 2 or Article 4 of the Asset Contribution Agreement or in Section 5.1 or Section 5.2 of this Agreement with respect to any loss, injury or other damage that Bio may suffer or incur in its capacity as a Unit holder in CPC.

9.8 Astellas Agreement Indemnity. Subject to Section 9.6(c), CPC shall indemnify Maxygen for (and solely limited to) any amount paid to Astellas by Maxygen in compensation for a breach of the Astellas Agreement, as provided for under the Astellas Agreement Assignment and Novation; provided, however, that the foregoing excludes any indemnification by CPC for any such amounts to the extent the breach of the Astellas Agreement underlying such amounts arises or results from a breach by Maxygen of any representations, warranties or covenants of Maxygen under any of the Transaction Agreements. For the avoidance of doubt, if the amounts paid by Maxygen to Astellas for breach of the Astellas Agreement are attributable to both a breach by Maxygen of a Transaction Agreement and to causes that are not attributable to such a breach by Maxygen, only a reasonably allocable portion of such amounts attributable to such breach by Maxygen shall be excluded from the foregoing indemnity.

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9.9 Indemnity for Certain Third Party Claims. Maxygen shall defend Bio and CPC, and their respective Representatives as indemnitees from and against any Third Party action, claim, suit or proceeding (and indemnify and hold harmless Bio and CPC and their respective Representatives from seventy-five percent (75%) of all Damages, including reasonable attorney’s fees, resulting therefrom) arising out of an allegation that the conduct of the Programs by or for CPC in the manner Maxygen conducted such Programs prior to the Closing Date or in a manner that Maxygen anticipated that CPC would conduct such Programs after the Closing Date, infringes (whether directly, indirectly, contributory, by inducement or otherwise) any of the Patents listed on Schedule 9.9. The indemnity provided for in this Section 9.9 shall terminate upon the earlier to occur of the Option Closing or the expiration of the last-to-expire of the Patents within the foregoing listed Patents; provided, however, that Bio and CPC may recover after such termination (and enforce this Section 9.9 with respect thereto) for any claim for indemnification under this Section 9.9 with respect to a claim asserted by a Third Party prior to the termination date of the indemnity provided for in this Section 9.9 in accordance with this Section 9.9. For the avoidance of doubt, the foregoing indemnity includes costs related to the initial response to any claims or warning letters concerning the infringement described above and the cost of any license agreement entered into to end or settle any indemnified claims, actions, suits or proceedings, and CPC and Bio shall permit Maxygen to control such responses to claims or warning letters, and negotiation of the terms of such a license agreement, if any, subject to reasonable consultation with Bio. The procedures in Section 9.5 shall apply to any indemnification under this Section 9.9; provided, however, that any settlement or license agreement shall be subject to Bio’s prior approval, not to be unreasonably withheld; further provided, however, Maxygen may enter into a settlement of such claim without Bio’s prior approval if such settlement provides solely for payment of money and the Indemnified Party is given a full and complete release of any and all liability by all relevant parties relating thereto, and CPC and Bio shall not be obligated to bear 25% of amounts paid under any such settlement entered into by Maxygen without Bio’s approval. All costs and expenses incurred by Maxygen in defending, responding to or litigating any claims, actions, suits or proceedings subject to indemnification hereunder (or negotiating associated settlements or licenses) shall be borne solely by Maxygen (without any obligation on Maxygen or CPC to share any of the costs thereof), provided that any payments made by Maxygen to the Third Party claimant for settlement or license to resolve any such indemnifiable claim (as each is approved as provided above) shall be subject to 25% cost sharing by Bio and/or CPC.

9.10 Single Remedy. For the avoidance of doubt, nothing in this Agreement nor any other Transaction Agreement is intended to nor shall be deemed to grant any Party more than a single monetary damages remedy or recovery in any given instance, for any other Party’s breach of an individual representation or warranty with respect to any specific given event, fact or circumstance even though such representation or warranty may be present in more than one Transaction Agreement or claimed by its incorporation by reference to be contained in more than one Transaction Agreement. Any dispute arising out of or in connection with this Agreement shall be submitted for resolution in accordance with Article 10 hereof.

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9.11 Limitation on Liability. Notwithstanding anything in this Agreement to the contrary, no Party shall be entitled to any indirect, special, incidental, consequential or punitive damages of any kind in any legal, equitable, arbitral or other proceeding for any breach by any other Party of a representation, warranty, covenant or agreement contained in this Agreement or in any other Transaction Agreement (but for the avoidance of doubt, without limiting a Party’s right to attorneys fees and other fees and costs to the extent provided therein), including for claims brought under this indemnity or otherwise, except to the extent that any such damages are awarded in a proceeding or paid in a settlement with a Third Party and are otherwise subject to recovery under the terms and conditions of this Agreement and the other Transaction Agreements.

ARTICLE 10

DISPUTE RESOLUTION

10.1 Disputes. Any dispute arising out of or in connection with this Agreement shall first be submitted for resolution by the Parties in accordance with this Section 10.1. Any Party shall, by written notice to the other Parties, have any such dispute referred to the Chief Executive Officers (the “CEOs”) (or an executive officer designated by the respective CEO) of the Parties for attempted resolution by good faith negotiations within ten (10) Business Days of such notice. In such event, each Party shall cause its CEO or the CEO’s designated executive officer to meet and be available to attempt to resolve such issue. If the Parties should resolve such dispute or claim, a memorandum setting forth their agreement will be prepared and signed by each Party if requested by any Party. The Parties shall cooperate in an effort to limit the issues for consideration in such manner as narrowly as reasonably practicable in order to resolve the dispute.

10.2 Arbitration. Other than with respect to any Specified Dispute, if the dispute between the Parties is not resolved under Section 10.1 within the ten (10) Business Day period described above, any dispute or controversy arising out of or in connection with this Agreement, or the validity, enforceability, construction, performance or breach hereof shall be finally and exclusively settled by binding arbitration under this Section 10.2 under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by the arbitrator appointed in accordance with the rules thereof and the decisions of the arbitrator shall be final and binding on the parties hereto. The place of the arbitration proceeding shall be in San Francisco, California. The Parties agree that the decision shall be the sole, exclusive and binding remedy between them regarding determination of the matters presented to the arbitrator; provided that, for the avoidance of doubt, the arbitrator shall not award any remedy other than the Termination Fee with respect to those matters specified in Sections 7.4(a) or 7.4(b). The costs of such arbitration, including administrative and arbitrator’s fees, shall be shared equally by the Parties, and each Party shall bear its own expenses and attorney’s fees incurred in

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connection with the arbitration; provided that the arbitrator may require a Party to reimburse one or more other Parties for expenses and attorney’s fees if it determines that any dispute has been submitted to arbitration in bad faith. The Parties shall use good faith efforts to complete arbitration under this Section 10.2 within ninety (90) days following the initiation of such arbitration. The arbitrator shall establish reasonable additional procedures (including with respect to discovery) to facilitate and complete such arbitration within such ninety (90) day period. Any written evidence originally in a language other than English shall be submitted in English translation accompanied by the original or a true copy thereof.

10.3 Intellectual Property Disputes. Notwithstanding the above, any disputes related to intellectual property rights of the Parties which are not resolved under Section 10.1 shall be brought to a court of competent jurisdiction in the country in which such intellectual property rights were granted.

10.4 Provisional Remedies. Other than as expressly provided for in Section 7.4 and Section 9.6, nothing in this Agreement shall limit the right of any Party to seek to obtain in any court of competent jurisdiction any interim relief or provisional remedy, including injunctive relief (but not, for the avoidance of doubt, any monetary damages or monetary relief under any equitable theory), pending resolution under this Article 10 as applicable, that may be necessary to protect the rights or property of that Party. Seeking or obtaining such interim relief or provisional remedy in a court shall not be deemed a waiver of the agreement to arbitrate. For clarity, any such interim relief or provisional remedies shall be cumulative and not exclusive and are in addition to any other remedies that any Party may have under this Agreement or applicable Legal Requirement.

ARTICLE 11

MISCELLANEOUS

11.1 Governing Law. This Agreement and any dispute arising from the performance or breach hereof shall be governed by and construed and enforced in accordance with the substantive laws of the State of Delaware, without reference to conflicts of laws principles that would result in laws of a jurisdiction other then the State of Delaware governing. Notwithstanding the above, any dispute regarding validity or enforceability of any patent shall be governed by the patent laws of the jurisdiction in which such patent was issued solely for the purpose of resolution of the dispute as to validity and enforceability.

11.2 Joinder Agreement. Bio and Maxygen hereby consent to the joining of CPC as a party hereto as if originally a Party upon CPC’s formation and execution of the Joinder Agreement. For the avoidance of doubt, upon CPC’s execution of the Joinder Agreement, CPC shall be a Party as the term is used and defined herein.

11.3 Assignment. Except as provided in Section 11.3, this Agreement shall not be assignable or otherwise transferred, in whole or in part, by any Party to any

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Third Party without the written consent of the other Parties, provided that this Agreement may without requiring the consent of any other Party be assigned, transferred, delegated or sublicensed to (i) an entity that acquires all or substantially all of the business or assets of such Party, whether by merger, reorganization, acquisition, asset sale or otherwise, or (ii) a Related Entity of such Party, (including, for the avoidance of doubt and without limitation, a liquidating trust or similar entity), in each case subject to the agreement in writing of such transferee to be subject to the terms and conditions of this Agreement, the Asset Contribution Agreement and the Purchase Agreement. Except as expressly provided in this Section 11.3, any attempted assignment or transfer of this Agreement shall be null and void. The terms and conditions of this Agreement shall be binding on and inure to the benefit of the permitted successors and assigns of the Parties.

11.4 Notices. Any notice, request, delivery, approval or consent required or permitted to be given under this Agreement shall be in English language, in writing, shall specifically refer to this Agreement and shall be deemed to have been sufficiently given if delivered in person, transmitted by as a PDF attachment to an email (receipt verified) or by express courier service (signature required) or five (5) Business Days after it was sent by registered letter, return receipt requested (or its equivalent), provided that no postal strike or other disruption is then in effect or comes into effect within two (2) Business Days after such mailing, to the Party to which it is directed at its address or email address shown below or such other address or email address as such Party will have last given by notice to the other Parties.

If to Maxygen,
or CPC addressed to:	Maxygen, Inc.
	515 Galveston Drive
	Redwood City, California 94063
	USA
	Attention: Chief Business Officer
	Telephone: (650) 298-5300
	Email address: corporatesecretary@maxygen.com
with copy to:	Maxygen, Inc.
	515 Galveston Drive
	Redwood City, California 94063
	USA
	Attention: General Counsel
	Telephone: (650) 298-5300
	Email address: corporatesecretary@maxygen.com
and a copy to:	Wilson Sonsini Goodrich & Rosati
	Professional Corporation
	650 Page Mill Road
	Palo Alto, CA 94304-1050
	USA
	Attention: Tony Jeffries
	Telephone: (650) 493-9300
	Email address: tjeffries@wsgr.com

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If to Bio or Astellas, addressed to:	Astellas Pharma Inc.
	3-11, Nihonbashi-Honcho 2-chome
	Chuo-ku, Tokyo 103-8411
	Japan
	Attention: Vice President, Business Development
	Telephone: (813) 3244-2500
	Email address: masaki.doi@jp.astellas.com
with a copy to:	Astellas Pharma Inc.
	3-11, Nihonbashi-Honcho 2-chome
	Chuo-ku, Tokyo 103-8411
	Japan
	Attention: Vice President, Legal
	Telephone: (813) 3244-3231
	Email address: kazunori.okimura@jp.astellas.com
with a copy to:	Morrison & Foerster LLP 1290 Avenue of the Americas New York, NY 10104
	Attention: Michael O. Braun, Esq. Telephone: (212) 468-8000 Email address: mbraun@mofo.com

11.5 Waiver. No Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of any Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by any Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

11.6 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT.

11.7 Severability. If any provision hereof is held invalid, illegal or unenforceable by any arbitrator or court of competent jurisdiction from which no appeal can be or is taken, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect in such tribunal or jurisdiction, as the case may be, and shall be liberally construed in order to carry out the intentions of the Parties as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other tribunal or jurisdiction.

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11.8 Entire Agreement/Modification. The Transaction Agreements and the Astellas Agreement (including Exhibits thereto) set forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties with respect to the subject matter hereof and thereof, and supersede all prior agreements and understandings between the Parties with respect to such subject matter. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of each of the Parties.

11.9 Non-Solicitation. Until the later of (x) three (3) years from the date of this Agreement or (y) one (1) year following the consummation of the purchase of Maxygen’s ownership interest in CPC pursuant to the Buy-Out Option, no Party shall, either directly or indirectly, solicit any employee of another Party to terminate his or her employment with such other Party and become employed by such other Party, whether or not such employee is a full-time employee of such other Party, and whether or not such employment is pursuant to a written agreement or is at-will. Nothing herein shall be construed to prohibit any Party from hiring any employees who are not Offerees that: (i) first make contact with such Party on their own initiative regarding employment, (ii) are identified to such party as a result of a non-directed Third Party executive search; or (iii) respond to advertisements for employment that are aimed at the public at large in any newspaper, trade magazine, or other periodical or media in general circulation.

11.10 Relationship of the Parties. The Parties agree that the relationship of Maxygen and Bio established by this Agreement is that of independent contractors. Furthermore, the Parties agree that this Agreement does not, is not intended to, and shall not be construed to, establish an agency, partnership or any other relationship. Except as may be specifically provided herein, no Party shall have any right, power or authority, nor shall they represent themselves as having any authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of any other Party, or otherwise act as an agent for any other Party for any purpose.

11.11 Force Majeure. Except with respect to payment of money, no Party shall be liable or responsible to any other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfillment or the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by or results from fire, earthquake, tornado, embargo, prohibition or intervention, riot, civil commotion, war, act of war (whether war be declared or not), insurrection, terrorist act, strike, flood, governmental act or restriction (beyond the reasonable control of the respective Party), act of God, or other cause that is beyond the reasonable control and not caused by the negligence or misconduct of the affected Party. Any Party affected by such force majeure will provide the other Parties with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and will use commercially reasonable efforts to overcome the difficulties created thereby and to resume performance of its

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obligations as soon as practicable. If the performance of any such obligation under this Agreement is delayed owing to such a force majeure for any continuous period of more than one hundred eighty (180) days, the Parties hereto will consult with respect to an equitable solution, including the possibility of the mutual termination of this Agreement.

11.12 Third Party Beneficiaries. Except for the rights to indemnification provided for the Indemnified Parties pursuant to Article 9, all rights, benefits and remedies under this Agreement are solely intended for the benefit of the Parties, and except for such rights to indemnification expressly provided pursuant to Article 9, no Third Party shall have any rights whatsoever to (i) enforce any obligation contained in this Agreement (ii) seek a benefit or remedy for any breach of this Agreement, or (iii) take any other action relating to this Agreement under any legal theory, including but not limited to, actions in contract, tort (including but not limited to negligence, gross negligence and strict liability), or as a defense, setoff or counterclaim to any action or claim brought or made by the Parties.

11.13 Further Assurances. At any time or from time-to-time on and after the date of this Agreement, any Party shall at the request of the other Parties (i) deliver to the requesting Party such records, data or other documents as may be reasonably necessary to give effect to the provisions of this Agreement, (ii) execute, and deliver or cause to be delivered, all such consents, documents or further instruments of assignment, transfer or license as may be reasonably necessary to give effect to this Agreement, and (iii) take or cause to be taken all such actions, as the requesting Party may reasonably deem necessary or desirable in order for the requesting Party to obtain the full benefits of this Agreement and the transactions contemplated hereby.

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

11.15 Interpretation. Unless otherwise indicated herein, with respect to any reference made in this Agreement to a Section (or Article, Subsection, Paragraph, Subparagraph or Clause), Exhibit or Schedule, such reference shall be to a section (or article, subsection, paragraph, subparagraph or clause) of, or an exhibit or schedule to, this Agreement. The table of contents and any article, section, subsection, paragraph or subparagraph headings contained in this Agreement and the recitals at the beginning of this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed, as the context indicates, to be followed by the words “but (is/are) not limited to.” Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context indicates is appropriate. Where specific language is used to clarify or illustrate by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict the construction of the general statement which is being clarified or illustrated. Unless otherwise specified, any reference to a time or date shall be with reference to the time or date, as the case may be, in Wilmington, Delaware.

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11.16 Construction. The construction of this Agreement shall not take into consideration the Party who drafted or whose representative drafted any portion of this Agreement, and no canon of construction shall be applied that resolves ambiguities against the drafter of a document. Each Party acknowledges that: (a) it has read this Agreement; (b) it has been represented in the preparation, negotiation and execution of this Agreement by legal counsel of its own choice or has voluntarily declined to seek such counsel; and (c) it understands the terms and consequences of this Agreement and is fully aware of the legal and binding effect of this Agreement.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their duly authorized representatives as of the date first written above.

MAXYGEN, INC.		ASTELLAS PHARMA INC.
By:	/s/ Russell J. Howard	By:	/s/ Yoshihiko Hatanaka
Name:	Russell J. Howard	Name:	Yoshihiko Hatanaka
Title:	Chief Executive Officer	Title:	Senior Corporate Executive & Chief
			Strategy Officer
ASTELLAS BIO INC.
By:	/s/ Yoshihiko Hatanaka
Name:	Yoshihiko Hatanaka
Title:	Senior Corporate Executive & Chief
	Strategy Officer

SIGNATURE PAGE TO THE MASTER JOINT VENTURE AGREEMENT

EX-2.1.1

EXHIBIT 2.1.1

ASSET CONTRIBUTION AGREEMENT

by and between

Maxygen, Inc., a Delaware Corporation

and CPC, a Limited Liability Company

Dated as of [                    ], 2009

TABLE OF CONTENTS

		Page
ARTICLE 1	DEFINITIONS	2
ARTICLE 2	THE CONTRIBUTION	12
2.1	Contributed Assets	12
2.2	Excluded Assets	15
2.3	Shared Books and Records	15
2.4	Assumed Liabilities	16
2.5	Excluded Liabilities	17
2.6	Sales and Use Taxes	17
ARTICLE 3	CONSIDERATION	17
3.1	Issuance of Units	17
3.2	Tax-Free Contribution	17
ARTICLE 4	CLOSING AND POST-CLOSING MATTERS	17
4.1	Time and Place of Closing	17
4.2	Closing Deliveries by Contributor	18
4.3	Closing Deliveries by Company	19
4.4	Closing Deliveries by Contributor and Company	19
4.5	Delivery of Contributed Assets	19
4.6	Novation Agreement	20
4.7	Employment Taxes	20
ARTICLE 5	REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR	20
5.1	Incorporation by Reference	20
5.2	[Reserved]	20
5.3	Transactions with Affiliates	20
5.4	Absence of Changes	21
5.5	Undisclosed Liabilities	21
5.6	Tax Matters	21
5.7	Intellectual Property	22
5.8	Insurance	26
5.9	Title; All Material Assets; Condition of Assets	27
5.10	Real Property Leases	28
5.11	Employees and Consultants	28

TABLE OF CONTENTS

(continued)

5.12	Contributor Benefit Plans	29
5.13	Material Contracts	30
5.14	Restrictions on Business Activities	33
5.15	Compliance with Laws; Governmental Approvals	33
5.16	Proceedings and Orders	34
5.17	Litigation	34
5.18	Environmental Matters	35
5.19	Bulk Sales	36
5.20	No Other Agreement	36
5.21	Power of Attorney	36
5.22	Export Controls; Foreign Corrupt Practices Act	36
5.23	Antiboycott Laws	36
ARTICLE 6	REPRESENTATIONS AND WARRANTIES OF COMPANY	36
6.1	Organization and Qualification	36
6.2	Authority	36
ARTICLE 7	MISCELLANEOUS PROVISIONS	37
7.1	Governing Law	37
7.2	Assignment	37
7.3	Notices	37
7.4	Waiver	39
7.5	Waiver of Jury Trial	39
7.6	Severability	39
7.7	Entire Agreement/Modification	39
7.8	Relationship of the Parties	39
7.9	Force Majeure	40
7.10	Third Party Beneficiaries	40
7.11	Expenses	40
7.12	Further Assurances	40
7.13	Counterparts; Facsimile	41
7.14	Interpretation	41
7.15	Construction	41

-ii-

TABLE OF CONTENTS

(continued)

7.16	Provisional Relief; Specific Performance	41
7.17	Confidentiality; Publicity	42
7.18	Indemnification; Sole Remedy; Dispute Resolution	42

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EXHIBITS AND SCHEDULES

Exhibits

Exhibit 4.2(a) Exhibit 4.2(b) Exhibit 4.2(c) Exhibit 4.2(e) Exhibit 4.4(a)	General Assignment and Bill of Sale Form of Patent Assignment Form of Technology License Agreement Forms of Space Sharing Agreements Assignment and Assumption Agreement
Schedules
Schedule 1.12	Employees
Schedule 1.21	Excluded Machinery and Equipment
Schedule 1.22	Excluded Personal Property
Schedule 1.23(a)	Exclusively Out-Licensed Protein
Schedule 1.23(b)	MaxyBody
Schedule 1.26	G&A Function
Schedule 2.1(a)	4 Program Assets
Schedule 2.1(b)(1)	Anticipated Program Proteins or Polypeptides
Schedule 2.1(b)(2)	Other Program Intellectual Property
Schedule 2.1(e)	Other Contributor Intellectual Property
Schedule 2.1(h)	Machinery and Equipment
Schedule 2.1(i)	Personal Property
Schedule 2.1(k)	Personal Property Leases
Schedule 2.1(l)(1)	Contributor Contracts
Schedule 2.1(l)(2)	Excluded Contributor Contracts
Schedule 2.1(m)	Governmental Approvals
Schedule 2.1(n)	Environmental Permits
Schedule 2.1(o)	Assigned Books and Records
Schedule 2.1(p)	Accrued Vacation

The registrant agrees to furnish to the Securities and Exchange Commission upon request a copy of any omitted schedule or exhibit.

ASSET CONTRIBUTION AGREEMENT

This Asset Contribution Agreement (this “Agreement”) is made and entered into as of this [    ] day of [                        ], 2009, by and between Maxygen, Inc., a Delaware corporation, having its principal offices at 515 Galveston Drive, Redwood City, CA 94063 (together with its Affiliates, “Contributor”), and CPC, a Delaware limited liability company, having its principal offices at 515 Galveston Drive, Redwood City, CA 94063 (“Company”). Contributor and Company are collectively referred to herein as the “Parties.”

RECITALS

WHEREAS, Contributor has conducted discovery, research and development of certain proteins, including certain CTLA-4 proteins, with potential usefulness as human pharmaceutical products, and owns or possesses certain patents and know-how with respect thereto;

WHEREAS, Company desires to discover, develop, manufacture and commercialize protein pharmaceutical products utilizing among other things the core team of personnel currently employed by Contributor in connection with the conduct of such activities, and in connection therewith desires to obtain certain assets and licenses from Contributor related to Contributor’s programs for discovery, research and development of CTLA-4 proteins and, subject to certain exceptions, other protein therapeutics (including assignment to Company of Contributor’s rights and obligations under the Astellas Agreement);

WHEREAS, Contributor desires to contribute to Company, and Company desires to acquire from Contributor, certain assets, properties, rights, claims, liabilities and obligations on the terms and conditions set forth herein in exchange for shares of Series A Preferred Stock of Company to be issued to Contributor therefor (the “Issued Units”) upon the terms and subject to the conditions set forth in the Purchase Agreement (as defined below), which represent the first issuance of Units by the Company;

WHEREAS, immediately following the contribution of assets, properties, rights, claims, liabilities and obligations by Contributor to Company, each of Contributor and Astellas Bio Inc., a Delaware corporation (“Bio”), intends to make a $10,000,000 cash investment in Company in exchange for preferred units of Company pursuant to the Series A and Series B Preferred Unit Purchase Agreement of even date herewith, by and among Company, on the one hand, and Contributor, and Bio, on the other hand (the “Purchase Agreement”);

WHEREAS, concurrently herewith Astellas Pharma Inc., a corporation formed under the laws of Japan (“Astellas”), Astellas US Holding, Inc., a Delaware corporation, Bio, Contributor and Company have entered into other Transaction Agreements;

WHEREAS, the contribution of assets to, and the assumption of the Assumed Liabilities, as defined below, by, Company and the issuance of the Issued Units to Contributor, are each intended to be effected on a tax-free basis pursuant to Section 721 of the Code (and any comparable provisions of applicable state or local tax laws);

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NOW, THEREFORE, in consideration of the foregoing recitals and the mutual representations, warranties, covenants and promises contained herein, the adequacy and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

1.1 “Books and Records” means all books, files, papers, correspondence, databases, electronic files, documents (including originals or copies of agreements) and records in Contributor’s possession or control, in whatever medium, excluding (a) originals and drafts of Contracts that are not Contributor Contracts assigned to Company, (b) electronic mail correspondence that are no longer in existence as of the Closing Date or which are deleted in the ordinary course of business under Contributor’s standard retention policy, (c) minutes of meetings of the Board of Contributor and (d) books, files, papers, correspondence, databases, electronic files, documents and records produced in connection with the negotiation of the potential sale of the Business or Contributed Assets to Third Parties (including originals or copies of agreements with such Third Parties with respect to such negotiations) to the extent containing the contents of, or correspondence regarding, such negotiation with such Third Party.

1.2 “Business” means the conduct of the Programs by or for Contributor, including, without limitation, the exploitation of assets and rights and the performance of activities and obligations relevant to the Programs and the discovery, research, development, manufacture, commercialization and other exploitation of Products within the Programs.

1.3 “Code” means the Internal Revenue Code of 1986, as amended.

1.4 “Company Business” means the conduct of the Programs by or for Company or its Affiliates or its licensees, including, without limitation, the exploitation of assets and rights and the performance of activities and obligations relevant to the Programs and the discovery, research, development, manufacture, commercialization and other exploitation of Products within the Programs.

1.5 “Constructive Knowledge” of a Party means, with respect to any fact, circumstance, event or other matter in question, (a) the actual knowledge of such fact, circumstance, event or other matter, or (b) the knowledge of such fact, circumstance, event or other matter that would have been ascertained after reasonable inquiry, consistent with such Person’s title and responsibilities, in either case, by any of the following individuals with respect to such Party or the Party’s employees who directly report to such individuals: Russell Howard, Larry Briscoe, Elliot Goldstein, John Borkholder, Grant Yonehiro, Sridhar Viswanathan, Erik Karrer and Norm Kruse.

1.6 “Contributor Benefit Plans” means every material written, unwritten, formal or informal plan, agreement, program, policy or other arrangement providing for direct or indirect compensation (other than workers’ compensation, unemployment compensation and other government programs), employment, severance, consulting, disability benefits, supplemental unemployment benefits, vacation benefits, retirement benefits, deferred compensation,

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profit-sharing, bonuses, stock options, stock appreciation rights, other forms of incentive compensation, post-retirement insurance benefits, or other benefits, including, without limitation, each “employee benefit plan,” as defined in Section 3(3) of ERISA, which is maintained or contributed to by Contributor or any Member of the Controlled Group for the benefit of any Employee, or pursuant to which the Contributor has or may have any liability with respect to any Employee.

1.7 “Contributor Intellectual Property” means all Intellectual Property included within the Contributed Assets, collectively, the 4 Program Intellectual Property, Other Program Intellectual Property and Other Contributor Intellectual Property. Contributor Intellectual Property does not include any Licensed Intellectual Property.

1.8 “Control” means, with respect to any particular Patent, Intellectual Property Right, Know-How, Technology, Intellectual Property, or other particular asset and any and all rights therein, (a) ownership by the applicable Party or (b) possession by the Party granting the applicable right, license or sublicense to the other Party as provided herein, of the power and authority, whether arising by ownership, license, or other authorization, to disclose, and, if applicable, to deliver the particular Know-How or asset to the other Party, and to grant and to authorize under such Patent or Know-How or asset the right, license or sublicense, as applicable, to such other Party without giving rise to a violation of terms of any written agreement with any Third Party. “Controlled” and “Controlling” shall have their correlative meanings.

1.9 “Copyrights” means all copyrights, and all rights, title and interests in all copyrights, copyright registrations and applications for copyright registration, certificates of copyright and copyrighted interests throughout the world, and all rights, title and interests in related applications and registrations throughout the world.

1.10 “CTLA-4 Variant” has the meaning assigned to it in the Astellas Agreement.

1.11 “Defined Benefit Plan” means either a plan described in Section 3(35) of ERISA or a plan subject to the minimum funding standards set forth in Section 302 of ERISA and Section 412 of the Code.

1.12 “Employee” means the employees of Contributor substantially related to the Programs, who are set forth on Schedule 1.12 attached hereto.

1.13 “Enabling Intellectual Property” means the Enabling Technology as defined under the Technology Licensed Agreement. For clarity, Enabling Technology excludes (a) any Patents listed on Schedules 2.1(a), 2.1(b)(2), or 2.1(e) attached hereto, and (b) any CTLA-4 Variants and Other Protein Variants resulting from the use of the Enabling Technology, together with genetic materials encoding, and cell lines expressing, any such CTLA-4 Variant or Other Protein Variant.

1.14 “Environment” means any ambient workplace, indoor or outdoor air, surface water, drinking water supply, groundwater, or other waterways, land surface or subsurface strata, soil, wildlife, plants, or other natural resources, or buildings, structures and fixtures.

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1.15 “Environmental Claim” means any legal proceeding, order or written notice of violation from any Governmental Authority or any Person alleging liability under any Environmental Law.

1.16 “Environmental Law” means any applicable Legal Requirement concerning: (a) the Environment, including pollution, contamination, cleanup, preservation, protection, and reclamation thereof; (b) human health or safety related to the exposure to a Regulated Substances; (c) any Release or threatened Release of any Regulated Substance; or (d) the management of any Regulated Substance, including the presence, manufacture, generation, use, labeling, warning, notification, treatment, handling, storage, disposal, transportation, re-use, recycling or reclamation of any Regulated Substance.

1.17 “Environmental Permit” means any permit, registration, approval, identification number, license or other authorization required under or issued pursuant to any Environmental Law.

1.18 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.19 “Excluded Books and Records” means Books and Records other than Assigned Books and Records.

1.20 “Excluded Laboratory Notebooks” means laboratory notebook no. 2183 of Contributor.

1.21 “Excluded Machinery and Equipment” means all tools, machinery and equipment (including manufacturing assembly and test equipment) that are listed on Schedule 1.21 attached hereto.

1.22 “Excluded Personal Property” means all personal property, office furnishings, supplies and other tangible personal listed on Schedule 1.22 attached hereto.

1.23 “Excluded Protein Variant or Vaccine” means (i) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a (A) granulocyte colony stimulating factor (G-CSF), (B) Exclusively Out-Licensed Protein, (C) MaxyBody (which, for the avoidance of doubt, shall not include any Ig portion of a CTLA-4 Variant or Other Protein Variant), (D) a protein from an infectious agent or a polynucleotide encoding such protein that in each case is intended to be used as a Vaccine (including infectious agents or other constructs incorporating a Vaccine and/or genetic material encoding a Vaccine (including live-attenuated or whole killed virus), but solely when such agent, construct or material is included with or otherwise incorporates a protein from an infectious agent (or variant, homolog, derivative, mutant or fragment of such protein as described in (E), below) or a polynucleotide encoding such protein (or such variant, homolog, derivative, mutant or fragment) and is intended to be used as a Vaccine), or (E) any variant, homolog, derivative, mutant, or fragment of subsection (A) or (B) or (D), which in the case of (D) is intended to be used as a vaccine (each, an “Excluded Protein Molecule”) and (ii) any Excluded Protein Molecule that is conjugated or otherwise coupled to any other molecule (e.g., polyethylene glycol, immunoglobulin domain, sialylation, pegylated, or glycosylation). In no event shall Excluded Protein Variants or Vaccines include any CTLA-4 Variants or (x) any

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amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a protein or polypeptide listed on Schedule 2.1(b)(1) attached hereto, or (y) any variant, homolog, derivative, mutant, or fragment of subsection of (x), provided that in the case of (y) such variant, homolog, derivative, mutant, or fragment has not been altered or modified in such a way as to cause such variant, homolog, derivative, mutant, or fragment to fall within (A), (B), (C), or (D) of the definition of Excluded Protein Variant or Vaccine set forth in the first sentence of this Section 1.23, or to fall within (E) above such that a reasonable, independent expert knowledgeable and experienced in working with protein pharmaceuticals would primarily consider such variant, homolog, derivative, mutant, or fragment to be a variant of a protein or polypeptide within (A), (B) or (D) above or a material portion thereof (rather than as a variant of some other protein or material portion thereof). For purposes of this definition of Excluded Protein Variant or Vaccine:

(a) “Exclusively Out-Licensed Protein” has the meaning set forth in Schedule 1.23(a) attached hereto; and

(b) “MaxyBody” shall have the meaning set forth on Schedule 1.23(b) attached hereto.

1.24 “Facility” means, collectively, the laboratory and offices located at 515 Galveston Drive, Redwood City, California 94063 (the “Lab Facility”), and 301 Galveston Drive, Redwood City, California 94063 (the “Office Facility”).

1.25 “Field” shall have the meaning set forth in the Technology License Agreement.

1.26 “G&A Function” means a general and administrative function as is reasonably required to operate the Business consistent with past practice, which shall consist, in all material respects, of those assets and agreements specified on Schedule 1.26 attached hereto.

1.27 “Governmental Approval” means any: permit, license, certificate, concession, approval, consent, ratification, permission, clearance, confirmation, exemption, waiver, franchise, certification, designation, rating, registration, variance, qualification, accreditation or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Legal Requirement including, without limitation, any filing or application with the U.S. Food and Drug Administration (the “FDA”), or any foreign counterpart thereof, including investigational new drug applications filed with the FDA as more fully defined in 21 C.F.R. §312.3, and foreign equivalents thereof, but excluding Environmental Permits.

1.28 “Intellectual Property” means (a) Technology and (b) Intellectual Property Rights therein and thereto.

1.29 “Intellectual Property Rights” means any and all rights in and to Technology, including without limitation, Patents, Trade Secrets, Copyrights, Trademarks, moral rights, and mask work rights.

1.30 “Joint Venture Agreement” means the Master Joint Venture Agreement among the Contributor, Bio and Astellas, dated as of June 30, 2009.

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1.31 “Know-How” means any and all data, information and tangible materials including (a) ideas, discoveries, inventions or improvements; (b) research and development data, such as medicinal chemistry data, nonclinical data, preclinical data, pharmacology data, chemistry data (including analytical, product characterization, manufacturing, and stability data), toxicology data, clinical data (including investigator reports (both preliminary and final), statistical analyses, expert opinions and reports, safety and other electronic databases), analytical and quality control data and stability data, in each case together with supporting data; (c) databases, specifications, formulations, formulae; (d) practices, knowledge, techniques, methods, formulas, processes, manufacturing information; and (e) research materials and compositions of matter, including compounds, reagents, clinical candidates, chemical and biological material, cell lines, assays, compound libraries, animal models, and other physical, biological, or chemical material, in each of the foregoing cases, that is Controlled by Contributor. Know-How excludes any Patent rights with respect thereto (but does include information in unpublished patent applications).

1.32 “Laboratory Notebooks” means laboratory notebooks that qualify as Shared Books and Records.

1.33 “Leased Real Property” means all of the Contributor’s rights in the Real Property Lease and the leasehold estate created thereby, together with all of Contributor’s right, title and interest in all land, buildings, structures, easements, appurtenances, improvements (including construction in progress) and fixtures located on the premises described therein;

1.34 “Licensed Intellectual Property” means the Licensed Technology as defined under the Technology License Agreement, which definition, for the avoidance of doubt, includes the Enabling Intellectual Property.

1.35 “Member of the Controlled Group” means each trade or business, whether or not incorporated, that would be treated as a single employer with Contributor under Section 4001 of ERISA or Section 414(b), (c), (m) or (o) of the Code.

1.36 “Multiemployer Plan” means a plan described in Section 3(37) of ERISA.

1.37 “Other Protein Variant” means (a) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a human or animal protein including, without limitation, any protein or polypeptide listed on Schedule 2.1(b)(1) attached hereto, or any variant, homolog, derivative, mutant or fragment of the foregoing subsection (a), including, without limitation, amino acid chains resulting from the use of Shuffling, in each case other than any (i) CTLA-4 Variant or (ii) Excluded Protein Variant or Vaccine, (each such protein or variant, homolog, derivative, mutant or fragment thereof, an “Other Protein Molecule”) and (b) any Other Protein Molecule that is conjugated or otherwise coupled to any other molecule (e.g., polyethylene glycol, immunoglobulin domain, sialylation, pegylated, or glycosylation).

1.38 “Patents” means all patent rights and all rights, title and interests in all patent applications and patents to issue on them, all letters patent or equivalent rights and applications, including utility patents, design patents, plant patents, statutory invention registrations, and any reissue, re-examination, renewal, supplementary protection certificates, extension, division, provisional, substitution, continuation, or continuation-in-part applications thereto throughout the world.

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1.39 “PP&E” means, collectively, (a) Personal Property, (b) Machinery and Equipment and (c) all buildings, structures, improvements, furnishings, furniture, fixtures, displays, appliances and other personal property of every kind and nature owned or leased by the Contributor in connection with the Contributed Assets or the Facility.

1.40 “Programs” mean, collectively, (i) the 4 Program and (ii) the Other Programs.

(a) “4 Program” means any and all activities performed by or on behalf of Contributor, Company or any of their licensees or Affiliates, (i) pursuant to the Astellas Agreement, or (ii) otherwise directed to any CTLA-4 Variant including, without limitation, activities for the discovery, research, development, manufacture, commercialization or other exploitation of any CTLA-4 Variant or CTLA-4 Product intended for use in the Field.

(b) “Other Programs” means, individually and collectively, any and all activities performed by or on behalf of Contributor, Company or any of their licensees or Affiliates, directed to any Other Protein Variant including, without limitation, activities for the discovery, research, development, manufacture, commercialization or other exploitation of any Other Protein Variant or Other Protein Product intended for use in the Field.

1.41 “Products” mean, collectively, (i) any CTLA-4 Product and (ii) any Other Protein Product.

(a) “CTLA-4 Product” means any pharmaceutical product that contains a CTLA-4 Variant as an ingredient. For the avoidance of doubt, CTLA-4 Product shall include any formulation, delivery device, dispensing device or packaging required for effective use of the CTLA-4 Product.

(b) “Other Protein Product” means any pharmaceutical product that contains an Other Protein Variant as an ingredient. For the avoidance of doubt, Other Protein Product shall include any formulation, delivery device, dispensing device or packaging required for effective use of the Other Protein Product; provided, however, that Other Protein Product shall exclude all Vaccines.

1.42 “Real Property Lease” means, collectively, (a) that certain Lease between Metropolitan Life Insurance Company, as lessor, and Contributor, as lessee, dated as of October 21, 1998, as amended to date, for certain premises consisting of the Lab Facility, and (b) that certain Lease between Metropolitan Life Insurance Company, as lessor, and Contributor, as lessee, dated December 2004, as amended to date, for certain premises consisting of the Office Facility.

1.43 “Registered Intellectual Property Rights” means all United States, international and foreign: (a) Patents, including applications therefor; (b) registered Trademarks, applications to register Trademarks, including intent-to-use applications, or other registrations or applications related to Trademarks; (c) Copyrights registrations and applications to register Copyrights; and (d) any other Technology that is the subject of an application, certificate, filing, registration or other document issued by, filed with, or recorded by, any state, government or other public or private legal authority at any time.

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1.44 “Regulated Substances” means any material, waste or substance that in relevant quantity, form and or concentration is listed, defined, classified, controlled or regulated by any Governmental Authority as “hazardous,” “toxic,” or a “pollutant,” or “contaminant,” pursuant to any Environmental Law, including but not limited to any explosives, radon, radioactive materials, friable asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum products (including waste petroleum and petroleum products).

1.45 “Release” shall have the same meaning as under 42 USC Section 9601(22) of the Comprehensive Environmental Responsibility Compensation & Liability Act of 1980 (“CERCLA”).

1.46 “Remedial Action” shall have the same meaning as under 42 USC Section 9601(24) of the CERCLA.

1.47 “Shared Books and Records” shall mean all Books and Records (Assigned Books and Records and/or Excluded Books and Records, as the case may be) that relate to the Contributed Assets and/or Assumed Liabilities and/or the Programs but that also relate to the Excluded Assets and/or Excluded Liabilities and/or programs or activities of Contributor as of or prior to the Effective Date other than Programs.

1.48 “Shuffling” means techniques, methodologies, processes, materials or instrumentation for performing recombination-based modification of genetic material for the creation of potentially useful variant nucleic acids or proteins. “Shuffle” and “Shuffled” have their correlative meanings.

1.49 “Subsidiaries” shall refer to Maxygen ApS (Denmark) and Maxygen Holdings Ltd. (Cayman Islands).

1.50 “Technology” means any or all of the following: (a) works of authorship including, without limitation, computer programs, source code and executable code, whether embodied in software, firmware or otherwise, documentation, designs, files, net lists, records, data and mask works; (b) inventions (whether or not patentable and whether or not reduced to practice), improvements, and technology; (c) proprietary and confidential information and materials, including technical data and customer and supplier lists, Trade Secrets, discoveries, processes, formulas, and other Know-How; (d) databases, data compilations and collections and technical data; and (e) all copies and instantiations of the foregoing in any form and embodied in any media, in each of the foregoing cases that is Controlled by Contributor.

1.51 “Trademarks” means all trademarks, service marks, trade names, rights in trade dress, logos, slogans, trade names, internet domain names and addresses, and all trademark interests throughout the world together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all right, title and interest in related applications, registrations, and renewals throughout the world, whether arising under the laws of the United States or any other country or other jurisdiction.

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1.52 “Trade Secrets” means all trade secrets under applicable law and other rights in Know-How, and confidential or proprietary information, processing, manufacturing or marketing information, new developments, research, inventions, processes, ideas or other proprietary information that provide Contributor with advantages over competitors who do not have access to such information and documentation thereof (including related papers, blueprints, drawings, chemical compositions, formulae, diaries, notebooks, specifications, designs, methods of manufacture and data processing software, compilations of information) and all claims and rights related thereto.

1.53 “Transfer Taxes” means all federal, state, local or foreign sales, use, transfer, real property transfer, mortgage recording, stamp duty, value-added or similar Taxes that may be imposed in connection with the transfer of Contributed Assets or assumption of Assumed Liabilities, together with any interest, additions to Tax or penalties with respect thereto and any interest in respect of such additions to Tax or penalties.

1.54 “Vaccine” means a formulation intended to be administered in a formulation containing one or more Antigen(s) (and/or a nucleic acid sequence encoding an Antigen) in the form of (i) an infectious agent (e.g., bacteria, viruses, parasite, protozoa) whether live, attenuated or dead, (ii) protein(s), (iii) nucleic acid(s), (iv) cells, spores and vectors (i.e., viruses and/or virus-like particles, liposomes, beads and/or other substrates for Antigen presentation), (v) fragments of any of the foregoing, and/or (vi) a combination of any of the preceding, which formulation is administered for the purpose of inducing an Immune Response in the human and/or animal recipient specifically directed to at least one such Antigen for the prevention or treatment of a disease state, symptom and/or condition in humans and/or animals caused by an infectious agent. For the purposes of this definition of Vaccine:

(a) “Antigen” means a molecule (i.e., protein, polypeptide, peptide, carbohydrate, glycoprotein, glycolipid and/or any combination of the foregoing that is, or is derived in whole or part from, a molecule associated with an infectious agent) that produces an Immune Response to such molecule in a human and/or animal recipient.

(b) “Immune Response” means an immune state directed to the applicable infectious agents (or a molecule associated with such infectious agent) resulting from the modulation of activity (i.e., an increase, decrease and/or qualitatively different activity) of one or more lymphoid cells (e.g., B cells, NK cells, T cells and/or professional antigen-presenting cells, such as monocytes, macrophages, Langerhans cells, dendritic cells) following the administration of a stimulus.

1.55 All other capitalized terms used herein shall have the meanings ascribed to them herein or in the Joint Venture Agreement as set forth below:

Term	Reference (*)
4 Program	1.40(a)
4 Program Intellectual Property	2.1(a)
Accrued Vacation	2.1(p)
Affiliate	JVA 1.2
Agreement	Preamble

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Term	Reference (*)
Alk-Abello Agreement	2.2(f)
Antigen	1.54(a)
Assigned Books and Records	2.1(o)
Assignment and Assumption	4.4(a)
Assumed Liabilities	2.4
Astellas	Recitals
Astellas Agreement	JVA 1.6
Astellas Agreement Assignment and Novation	2.1(d)
Bio	Recitals
Board	JVA 1.9
Bridge Loan Agreement	JVA 1.10
Business Day	JVA 1.12
Business Governmental Approvals	5.15(b)
CERCLA	1.45
Closing	4.1
Closing Date	JVA 1.16
Company	Preamble
Confidential Information	JVA 1.19
Consent	JVA 1.21
Contract	JVA 1.22
Contributed Assets	2.1
Contributor	Preamble
Contributor Contracts	2.1(l)
Contributor Disclosure Schedule	ARTICLE 5
Contributor Liabilities	5.5
Contributor Registered Intellectual Property Rights	5.7(a)
CTLA-4 Product	1.41(a)
Dollars / $	JVA 1.28
Encumbrance	JVA 1.30
Entity	JVA 1.31
Excluded Assets	2.2
Excluded Contributor Contracts	2.1(l)
Excluded Liabilities	2.5
Excluded Protein Molecule	1.23
Exclusively Out-Licensed Protein	1.23(a)
FDA	1.27
Financial Statements	5.3
General Assignment and Bill of Sale	4.2(a)
Governmental Authority	JVA 1.37
Immune Response	1.54(b)
Insurance Policies	5.8

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Term	Reference (*)
Investors’ Rights Agreement	JVA 1.39
Issued Units	Recitals
Knowledge	JVA 1.42
Lab Facility	1.24
Legal Requirement	JVA 1.43
Liability	JVA 1.44
Machinery and Equipment	2.1(h)
Material Adverse Effect	JVA 1.45
Material Contracts	5.13(a)
MaxyBody	1.23(b)
Maxygen JVA Disclosure Schedule	JVA Article 4
Non-Assignable Asset	JVA 8.1
Offerees	JVA 5.5(a)
Office Facility	1.24
Order	JVA 1.48
Other Contributor Intellectual Property	2.1(e)
Other Programs	1.40(b)
Other Program Intellectual Property	2.1(b)
Other Protein Molecule	1.37
Other Protein Product	1.41(b)
Patent Assignment	4.2(b)
Parties	Preamble
Permitted Encumbrance	JVA 1.52
Permitted Uses	2.3
Person	JVA 1.53
Personal Property	2.1(i)
Personal Property Leases	2.1(k)
Proceeding	JVA 1.55
PTO	5.7(a)
Purchase Agreement	Recitals
Related Entity	JVA 1.59
Representatives	JVA 1.60
SEC	JVA 1.61
Space Sharing Agreements	4.2(e)
Tax	JVA 1.66
Tax Authority	JVA 1.67
Tax Returns	5.6(a)
Technology License Agreement	4.2(c)
Third Party	JVA 1.70

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Term	Reference (*)
Transaction Agreements	JVA 1.71
Transactions	JVA 1.72
Transition Services Agreement	JVA 1.73
Transferred Employees	JVA 5.5(b)
UCOE License Assignment Agreement	2.1(f)
United States	JVA 1.75

* For the purpose of this Section 1.55 only, “JVA” means the Joint Venture Agreement. References to Preambles, Recitals, Articles and numbers mean Preambles Recitals, Articles and Section numbers of this Agreement, respectively, unless “JVA” is attached thereto, in which case those words refer to Recitals and Sections mean Preambles Recitals, Articles and Section numbers of the Joint Venture Agreement, respectively.

ARTICLE 2

THE CONTRIBUTION

2.1 Contributed Assets. Subject to the terms and conditions of this Agreement, at the Closing, Contributor shall contribute, transfer, convey, assign and, subject to and in accordance with Section 4.5 hereof, deliver to Company, and Company shall acquire from Contributor, all of Contributor’s right, title and interest in the assets, properties, goodwill and rights of Contributor that are primarily used (or primarily have been used) in, result from (to the extent provided below), or primarily relate to, the conduct of the Business as of or prior to the Closing Date of every nature, kind and description, tangible and intangible, wherever located, whether or not carried on the books of Contributor, free and clear of all Encumbrances (collectively, the “Contributed Assets”), including, without limitation, the assets listed below, except those assets expressly identified as Excluded Assets in Sections 2.2(a)-2.2(i) hereof. Where reference is made to assets, properties, goodwill and rights that “have been used in [. . .] the conduct of the Business,” such references shall be interpreted to mean only the relevant assets, properties, goodwill and rights that Contributor owns or otherwise has rights to as of the Closing Date.

(a) The 4 Program Assets. All Intellectual Property Controlled by Contributor (i) resulting from or generated under the 4 Program as conducted by or for Contributor as of or prior to the Closing Date (including all CTLA-4 Variants), or (ii) primarily used (or primarily have been used) in, or primarily useful for, the 4 Program or both the 4 Program and the Other Programs in each case as conducted (or anticipated to be conducted) by or for Contributor as of or prior to the Closing Date, in each case excluding all Licensed Intellectual Property, but including, without limitation, the Intellectual Property listed on Schedule 2.1(a) attached hereto and all Intellectual Property owned by Contributor and licensed to Astellas under the Astellas Agreement (“4 Program Intellectual Property”);

(b) Other Program Assets. All Intellectual Property Controlled by Contributor (i) resulting from or generated under the Other Programs as conducted by or for Contributor prior

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to the Closing Date (including, without limitation, work conducted on the Other Programs between the date of execution of this Agreement and the Closing Date) that is primarily related to, or primarily useful for, the Other Programs or the 4 Program (including the proteins and polypeptides listed on Schedule 2.1(b)(1) attached hereto, and any Other Protein Variants), or (ii) primarily used (or primarily have been used) in, or primarily useful for, a particular Other Program as conducted (or anticipated to be conducted) by or for Contributor as of or prior to the Closing Date, to the extent transferable or assignable, in each case excluding all Licensed Intellectual Property, but including, without limitation, the Intellectual Property listed on Schedule 2.1(b)(2) attached hereto (“Other Program Intellectual Property”);

(c) License. Concurrently with this Agreement, Contributor shall grant to Company licenses (or sublicenses, as applicable) under the Licensed Intellectual Property Controlled by Contributor for the purpose of conducting the 4 Program and Other Programs, all as set forth in, and on the terms and conditions set forth in, the Technology License Agreement;

(d) Astellas Agreement. All of Contributor’s rights and obligations under the Astellas Agreement other than rights to payments thereunder that accrue prior to the Closing Date, but including Contributor’s right to receive certain milestone, royalty and other payments thereunder accruing on or after the Closing Date, as set forth in the Astellas Agreement Assignment and Limited Novation (“Astellas Agreement Assignment and Novation”);

(e) Other Intellectual Property. All Intellectual Property, if any, Controlled by Contributor as of the Closing Date that are primarily used in (or primarily have been used) as of or prior to the Closing Date, or primarily useful for, more than one particular Program that is not otherwise included in the 4 Program Intellectual Property or Other Program Intellectual Property under Section 2.1(a) or 2.1(b)(2) hereof, but excluding all Licensed Intellectual Property and, for clarity, excluding all Intellectual Property that is primarily used (or primarily has been used) by Contributor or its Affiliates other than for conducting Programs, but including the Intellectual Property listed on Schedule 2.1(e) attached hereto (“Other Contributor Intellectual Property”);

(f) UCOE License. All of Contributor’s rights and obligations under the Research and Commercial UCOE License Agreement between ML Laboratories PLC and Maxygen ApS and Maxygen, Inc. and Maxygen Holdings Ltd. dated May 27, 2005, other than payments thereunder that accrue prior to the Closing Date, as set forth in the UCOE License Assignment Agreement (“UCOE License Assignment Agreement”);

(g) [Reserved];

(h) Machinery and Equipment. All tools, machinery and equipment (including manufacturing assembly and test equipment) owned by Contributor that are used (or have been used) in the Programs as conducted by Contributor as of or prior to the Closing Date or that are used (or have been used) in the G&A Function, wherever located and whether held by Contributor or Third Parties, except for Excluded Machinery and Equipment, including the Machinery and Equipment listed on Schedule 2.1(h) attached hereto (the “Machinery and Equipment”);

(i) Personal Property. All personal property, office furnishings, supplies and other tangible personal property that are used (or have been used) in the Programs or the G&A

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Function as of or prior to the Effective Date and owned by Contributor, whether held by Contributor or Third Parties, except for Excluded Personal Property (the “Personal Property”) including, without limitation, the items listed on Schedule 2.1(i) attached hereto;

(j) [Reserved];

(k) Personal Property Leases. All rights in leases of personal property including, without limitation, leased equipment that are used (or have been used) in the Business or the G&A Function, including, without limitation, the items listed on Schedule 2.1(k) (including without limitation the transfer of the personal property so leased) attached hereto, and excluding all rights in leases related to Excluded Machinery and Equipment and Excluded Personal Property (the “Personal Property Leases”);

(l) Contracts. All rights to or under any and all contracts, agreements (including grant agreements) or commitments that primarily relate to, or are primarily useful for, the Programs (but for the avoidance of doubt excluding all contracts, agreements or commitments primarily related to the Licensed Intellectual Property) and are assignable to Company, as listed on Schedule 2.1(l)(1) attached hereto, (collectively, the “Contributor Contracts”); all such contracts, agreements (including grant agreements) or commitments that would meet the foregoing definition but for the fact that they are not assignable, or the Parties have agreed not to assign to Company, are listed on Schedule 2.1(l)(2) attached hereto (collectively, “Excluded Contributor Contracts”).

(m) Governmental Approvals. All Governmental Approvals (and pending applications therefor), including any formal correspondence to or from the FDA, that are used (or have been used) in the operation of the Programs, as listed on Schedule 2.1(m) attached hereto, to the extent transferable or assignable;

(n) Environmental Permits. All Environmental Permits that are used in the operation of the Programs, as listed on Schedule 2.1(n) attached hereto, to the extent transferable or assignable.

(o) Assigned Books and Records. All Books and Records that (i) primarily relate to the Contributed Assets and/or Assumed Liabilities or (ii) arose out of or primarily relate to the conduct of the 4 Program by or for Contributor or that primarily relate to the Other Programs (the “Assigned Books and Records”), including, without limitation, those Books and Records listed on Schedule 2.1(o), in each case subject to any applicable Legal Requirements (including any required releases that may need to be obtained from the Offerees) and provided that Assigned Books and Records may include Books and Records that Contributor may be required by law to retain in its possession; and

(p) Funds to cover Accrued Vacation. A lump sum payment from Contributor to Company at the Closing for the amount of accrued and unpaid days of vacation earned by the Transferred Employees who commence employment with Company under Contributor’s vacation policies as of the Closing Date, as set forth in Schedule 2.1(p) attached hereto, which schedule may be updated (and the lump sum payment provided for shall be increased or decreased, as appropriate) as necessary by Contributor up to the Closing to reflect any subsequent changes in the vacation balances for such employees (“Accrued Vacation”).

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2.2 Excluded Assets. Contributor does not contribute, transfer, convey or assign any assets, properties, goodwill or rights to Company other than the Contributed Assets (“Excluded Assets”). Company acknowledges that this Agreement shall give Company no rights to any Excluded Assets and rights expressly granted pursuant to this Agreement and/or the Transaction Agreements, including any drug research or development program, drug target, product, product candidate or prospective product candidate of Contributor. Specifically, the following assets are included among the Excluded Assets and are excluded from the contribution, transfer, conveyance, assignment or delivery provided for under Section 2.1 hereof:

(a) the Licensed Intellectual Property including the Enabling Intellectual Property and any Copyrights in software or computer code within the Licensed Intellectual Property (except, in all such cases, to the extent licensed or sublicensed to Company under the Technology License Agreement);

(b) Excluded Books and Records;

(c) Excluded Machinery and Equipment;

(d) Excluded Personal Property;

(e) Excluded Contributor Contracts;

(f) All proteins, nucleic acid chains, cell lines and other biological materials, and all data and information, resulting from or generated under the programs directed to allergens conducted by or for Contributor prior to the Closing Date under the Collaboration Agreement between Maxygen, Inc. and Alk-Abelló AS dated February 8, 2001, (the “Alk-Abello Agreement”), and Intellectual Property Rights in and to the foregoing which Intellectual Property Rights (i) resulted from or were generated under the programs related to allergens conducted by or for Contributor prior to the Closing Date under the Alk-Abello Agreement and (ii) are solely related to, or solely useful for, the discovery, research, development, manufacture, commercialization or other exploitation of one or more allergens;

(g) All Trademarks of Contributor;

(h) All Contributor Benefit Plans, and all assets owned or held by all Contributor Benefit Plans; and

(i) Any real property leases or other interests in real property except pursuant to the Space Sharing Agreements.

2.3 Shared Books and Records. Contributor shall provide Company with access to Assigned Books and Records that are Shared Books and Records and Company shall provide Contributor with access to Excluded Books and Records that are Shared Books and Records to the extent permitted by applicable law. Each of Contributor and Company shall permit the other to make copies of or other extracts from such Shared Books and Records and, upon request, provide

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assistance in accessing Shared Books and Records in the other’s possession (it being understood that each of Contributor and Company shall be entitled to access and/or copy directly any Shared Books and Records owned by the other which are already accessible to such Party without notifying or asking the other Party). Without limiting the foregoing, Contributor shall deliver to Company copies, certified as true and correct, of all Laboratory Notebooks that are Excluded Books and Records, other than certain portions of the Excluded Laboratory Notebook, in accordance with Section 4.5 hereof. Contributor shall only be required to deliver to Company a copy of the portions of the Excluded Laboratory Notebook relating to CTLA-4 Variants or the 4 Program and to make available the original thereof in limited circumstances as described in Section 4.5 hereof. Subject to the requirements of Section 8.7 of the Joint Venture Agreement, each of Contributor and Company shall have (and hereby grant each other) a worldwide, fully paid, nonexclusive, perpetual, non-revocable license to use, reproduce, distribute, and make derivative works of, the Shared Books and Records solely for the Permitted Uses. “Permitted Uses” shall mean (a) with respect to Contributor, any purpose reasonably related to its operation of its business, other than the Business, and its ownership and exploitation of the Excluded Assets, and (b) with respect to Company, any purpose reasonably related to its operation of the Business and its ownership and exploitation of the Contributed Assets, in each case subject to applicable terms and conditions (including applicable obligations of confidentiality) set forth in the Transaction Agreements. For the avoidance of doubt, the provisions in this Agreement regarding the Books and Records (including the assignment, retention and/or sharing thereof) shall not affect the terms and conditions regarding (nor increase or decrease any rights with respect to, or ownership of) Patents and/or Know How (including any assignment, retention and/or license thereof) in this Agreement or the other Transaction Agreements.

2.4 Assumed Liabilities. Subject to the terms and conditions of this Agreement, at the Closing, Contributor shall assign, and Company shall assume, the Assumed Liabilities. For the purposes of this Agreement, the “Assumed Liabilities” means only the following Liabilities of Contributor, and in any event shall not include any Excluded Liabilities:

(a) Any Liability arising before or after the Closing Date under the Astellas Agreement (excluding amounts payable thereunder that have accrued prior to the Closing Date), and except as provided in the Astellas Agreement Assignment and Novation, and any Liability arising after the Closing Date under any Contributor Contracts excluding in each case any Liability for Contributor’s Employees (except as provided in this Section 2.4);

(b) All Liabilities arising after the Closing Date under the Technology License Agreement;

(c) [Reserved];

(d) All Liabilities arising after the Closing Date under the Personal Property Leases;

(e) All Liabilities for providing Accrued Vacation to the Transferred Employees who commence employment with the Company;

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(f) Subject to and excluding any Liabilities to be borne by Contributor as expressly provided under this Agreement or the Transaction Agreements, all Liabilities of Contributor under or in respect of any other Contributed Asset to the extent that such Liabilities are incurred after the Closing Date and are required to be performed after the Closing Date; and

(g) All employment-related Liabilities relating to the Transferred Employees arising on or after the Closing Date; provided that such employees commence employment or other service provider relationship with Company (excluding Liabilities pursuant to Contributor Benefit Plans except as provided in the Transition Services Agreement and other than Liabilities for Accrued Vacation as provided in Section 2.4(e) hereof).

2.5 Excluded Liabilities. Except for the Assumed Liabilities, Company shall not assume and shall not be deemed to have assumed or be liable or responsible for, any Liability of Contributor or any Affiliate of Contributor (collectively, the “Excluded Liabilities”).

2.6 Sales and Use Taxes. Contributor shall bear and pay any and all Transfer Taxes arising out of the transfer of the Contributed Assets to Company. To the extent permitted by applicable law, Company and Contributor shall use commercially reasonable efforts to minimize such Transfer Taxes, including, without limitation, by ensuring that the Issued Units issued to Contributor pursuant to this Agreement are the first issuance of units by the Company.

ARTICLE 3

CONSIDERATION

3.1 Issuance of Units. As consideration for Contributor’s contribution of the Contributed Assets to Company, subject to the terms of this Agreement and the Purchase Agreement, on the Closing Date, Company shall issue to Contributor the Issued Units as provided in the Purchase Agreement.

3.2 Tax-Free Contribution. Contributor and Company acknowledge and agree that the issuance of the Issued Units to Contributor pursuant to this Agreement is intended to qualify as an issuance of shares which is described in Section 721 of the Code (and any comparable provisions of applicable state or local tax laws), and Contributor and Company agree to report and treat the transactions described in this Agreement consistently therewith.

ARTICLE 4

CLOSING AND POST-CLOSING MATTERS

4.1 Time and Place of Closing. The closing of the contribution and the other transactions provided for in this Agreement shall take place remotely via exchange of closing deliverables, including executed documents, on the Closing Date or at such other place as Contributor and Company mutually agree upon, orally or in writing; provided that in any event, the Closing shall be deemed to have occurred simultaneously with the closing of the issuance and sale of the Issued Units (which consummation of such transactions at such time and place is designated as the “Closing”).

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4.2 Closing Deliveries by Contributor. At the Closing, Contributor shall deliver the following items to Company, duly executed by Contributor, as applicable, all of which shall be in form and substance reasonably acceptable to Company (provided that any items in substantially the form attached as a schedule or exhibit to this Agreement shall be deemed to be reasonably acceptable to Company):

(a) General Assignment and Bill of Sale. General Assignment and Bill of Sale covering all of the applicable Contributed Assets, substantially in the form attached hereto as Exhibit 4.2(a) (the “General Assignment and Bill of Sale”);

(b) Intellectual Property Assignment. Without limiting inclusion of any applicable Intellectual Property under Section 4.2(a) hereof, any and all documents necessary to properly record and effectuate the assignment and transfer to Company of all of Contributor’s right, title and interest in and to the Contributor Registered Intellectual Property, including a patent assignment (the “Patent Assignment”) substantially in the form of Exhibit 4.2(b) hereto, for all of the Patents that are part of the Contributor Registered Intellectual Property, duly executed by Contributor;

(c) Technology License Agreement. An agreement in substantially the form of Exhibit 4.2(c) attached hereto (the “Technology License Agreement”), pursuant to which Contributor will grant to Company certain licenses (or sublicenses, as applicable) under the Licensed Intellectual Property Controlled by Contributor for purposes of conducting the 4 Program and Other Programs, all as set forth in, and on the terms and conditions set forth in, the Technology License Agreement;

(d) [Reserved]

(e) Space Sharing Agreements for Facility and Assignment of Personal Property Leases. Space sharing agreements (the “Space Sharing Agreements”) for substantially all of the Lab Facility and a portion of the Office Facility in the forms attached hereto as Exhibit 4.2(e) attached hereto and assignments of the Personal Property Leases duly executed by Contributor and the consent thereto by the lessor(s) to the extent required pursuant to the terms of such leases (in form and substance reasonably satisfactory to Company);

(f) Consents; Acknowledgements. Duly executed Consents of all Third Parties required by Contributor to consummate the Transactions, in form and substance reasonably satisfactory to Company, if any, as well as any notices and/or acknowledgements required to be provided to Third Parties in connection with the assignment of any Contributor Contracts, as listed in Schedule 4.2(f) attached hereto.

(g) Contributor Contracts. Originals or true, correct and complete copies of all Contributor Contracts;

(h) [Reserved]

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(i) Books and Records. Subject to Section 4.5 hereof, the Assigned Books and Records.

4.3 Closing Deliveries by Company. At the Closing, Company shall deliver the following items to Contributor:

(a) Unit Certificate. A certificate representing the Issued Units as specified in Section 1.2(b) of the Purchase Agreement in exchange for the Contributed Assets.

(b) Acknowledgements. Duly executed notices and/or acknowledgements required to be provided to Third Parties in connection with the assignment of any Contributor Contracts, as listed in Schedule 4.2(f) attached hereto.

4.4 Closing Deliveries by Contributor and Company. At the Closing, Contributor and Company shall deliver the following items to one another, duly executed:

(a) Assignment and Assumption Agreement. Assignment and Assumption Agreement, covering all of the Assumed Liabilities (including assignment and assumption of the Contributor Contracts), substantially in the form attached hereto as Exhibit 4.4(a) (the “Assignment and Assumption”) and executed counterparts of the documents described in Sections 4.2(c) and 4.2(e) hereof.

4.5 Delivery of Contributed Assets. Subject to the terms and conditions hereof and of the Transition Services Agreement and to the extent that Contributor has the power to do so, Contributor shall, at the Closing, (i) take all steps necessary to place Company in actual possession and operating control of all Contributed Assets that are tangible assets, including original copies of the Assigned Books and Records and copies, certified as true and correct, of the Laboratory Notebooks that are Excluded Books and Records (including the portions of the Excluded Laboratory Notebook that relate to CTLA-4 Variants or the 4 Program but excluding any other portions of such Excluded Laboratory Notebook), and (ii) to deliver to Company such instruments as are necessary or desirable to document and to transfer title to all intangible Contributed Assets from Contributor to Company. To the extent that Contributor cannot grant possession of any Contributed Asset to Company as of the Closing, (A) those assets shall be held by Contributor for and on behalf of Company until such time as Company or its designee is granted possession thereof and (B) Contributor shall use its commercially reasonable efforts to deliver possession of such Contributed Asset to Company pursuant to a schedule to be agreed to by Contributor and Company or, except as otherwise agreed by the Parties, within thirty (30) days following the Closing. Each Party shall provide the other Party with reasonable access to Contributed Assets or Excluded Books and Records (including originals thereof and including originals of the Excluded Laboratory Notebook) to the extent reasonably necessary for use in connection with any actual or threatened action, suit, inquiry, investigation or proceeding involving such other Party (whether existing presently or in the future) before any arbitrator or Governmental Authority or by any Governmental Authority (provided that any originals are returned to the owning Party following such use and provided that the Parties will work in good faith to share access during any such time that the other Party is in possession of such asset(s) pursuant to this Section 4.5 to the extent necessary to permit the Party to comply with its other contractual obligations).

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4.6 Novation Agreement. Upon Contributor’s request, Company shall reasonably cooperate with Contributor to execute, and to obtain the applicable counterparty’s agreement to, any Novation Agreement in a form acceptable to the Parties which is submitted by Contributor to a counterparty to any Contributor Contract.

4.7 Employment Taxes. Contributor and the Company shall, if administratively feasible, use best reasonable efforts to, with respect to Transferred Employees who are employed by the Company for the tax year in which the Closing Date occurs, (i) treat the Company as a “successor employer” and Contributor as a “predecessor employer” for purposes of Sections 3121(a)(1) and 3306(b)(1) of the Code, and (ii) adopt the “alternative procedure” for preparing and filing IRS Forms W-2 (Wage and Tax Statements) as described in IRS Revenue Procedure 2004-53, 2004-2 C.B. 320 (2004).

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR

Except as set forth in the corresponding sections of the disclosure schedule of Contributor delivered to Company concurrently with the execution and delivery of this Agreement (the “Contributor Disclosure Schedule”) or as disclosed in the reports, schedules, forms, statements and other documents filed by Contributor with the SEC (and with respect to such reports, schedules, forms, statements and other documents filed prior to January 1, 2009 such items shall be and specifically cross referenced in the Contributor Disclosure Schedule), Contributor hereby represents and warrants to the Company that, as of the date hereof:

5.1 Incorporation by Reference. Subject to Section 9.7 of the Joint Venture Agreement, all representations and warranties of Contributor set forth in Section 4.1 of the Joint Venture Agreement are hereby incorporated by reference as if fully set forth herein, as qualified by the Maxygen JVA Schedule.

5.2 [Reserved]

5.3 Transactions with Affiliates. Except as set forth in the financial statements of Contributor included in Contributor’s Annual Report on Form 10-K for the period ended December 31, 2008, filed with the SEC on March 12, 2009, as amended on April 28, 2009 (the “Financial Statements”), no Affiliate of Contributor (a) has any direct or indirect interest in any asset (including the Contributed Assets), property or other right that are used (or have been used) in the conduct of or otherwise related to the Business; (b) has any claim or right against Contributor, and no event has occurred, and no condition or circumstance exists, that might (with or without notice or lapse of time) directly or indirectly give rise to or serve as a basis for any claim or right in favor of any Affiliate against the Business and/or the Contributed Assets; (c) is a party to any Contributor Contract or has had any direct or indirect interest in, any Contributor Contract, transaction or business dealing with Contributor that pertains to the Business; or (d) received from or furnished to Contributor any goods or services (with or without consideration) since December 31, 2008 in respect of the Business.

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5.4 Absence of Changes. Except as otherwise expressly contemplated by the Transaction Agreements, since December 31, 2008, (i) Contributor has conducted the Business in the ordinary course of business; (ii) no event or circumstance has occurred that would reasonably be expected to result in a Material Adverse Effect with respect to Contributor; and (iii) Contributor has not taken any action that would constitute a breach of Sections 5.1 and 5.2 of the Joint Venture Agreement such as would reasonably be expected to result in a Material Adverse Effect with respect to Contributor if such action or omission were taken between the date of the Joint Venture Agreement and the Closing Date (provided that for the purposes of this clause (iii), all references to “material,” “materially,” “Material Adverse Effect” and words of like import shall be deemed to be deleted in Sections 5.1 and 5.2 of the Joint Venture Agreement for this purpose).

5.5 Undisclosed Liabilities. Contributor has no Liability relating to the Business or the Contributed Assets (the “Contributor Liabilities”) other than (i) Contributor Liabilities reflected on the Financial Statements, (ii) Contributor Liabilities not required to be reflected on Contributor’s financial statements under GAAP, (iii) Contributor Liabilities that have arisen after December 31, 2008 in the ordinary course of business or (iv) Contributor Liabilities arising under the Transaction Agreements.

5.6 Tax Matters.

(a) To the extent that failure to do so would adversely impact the Business or the Company Business, the Contributed Assets or Contributor’s ownership of the Contributed Assets, Contributor (i) has timely paid all Taxes it is required to pay and (ii) has timely filed all required federal, state, local and foreign returns, estimates, information statements and reports (“Tax Returns”) relating to any and all Taxes concerning or attributable to the Contributed Assets and such Tax Returns are true and correct and completed in accordance with applicable law.

(b) Contributor has, in all material respects, timely paid or withheld with respect to the Transferred Employees (and timely paid over any withheld amounts to the appropriate Tax Authority) all federal and state income taxes, Federal Insurance Contribution Act, Federal Unemployment Tax Act and other Taxes required to be withheld or paid.

(c) Contributor does not have Knowledge of any basis for the assertion of any claim for any material liabilities for unpaid Taxes for which Company would become liable as a result of the transactions contemplated by this Agreement or that would result in any Encumbrance on any of the Contributed Assets.

(d) There are no Encumbrances with respect to any Taxes upon any of the Contributed Assets, other than with respect to Taxes not yet due and payable.

(e) To the extent applicable to the Business, the Contributed Assets or Company’s ownership of the Contributed Assets, Contributor has not been delinquent in the payment of any Tax, nor is there any Tax deficiency outstanding, assessed or proposed against Contributor, nor has Contributor executed any outstanding waiver of any statute of limitations on or extension of the period for the assessment or collection of any Tax.

(f) To the extent applicable to the Business, the Contributed Assets or Company’s ownership of the Contributed Assets, (i) no audit or other examination of any Tax

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Return of Contributor is presently in progress, nor has Contributor been notified of any request for such an audit or other examination; (ii) no adjustment relating to any Tax Return filed by Contributor has been proposed formally or, to the Knowledge of Contributor, informally by any tax authority to Contributor or any representative thereof; and (iii) no claim has ever been made by an authority in a jurisdiction where Contributor does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

(g) None of the Contributed Assets is “tax exempt use property” within the meaning of Section 168(h) of the Code.

5.7 Intellectual Property.

(a) Section 5.7(a) of the Contributor Disclosure Schedule lists all Registered Intellectual Property Rights within the Contributor Intellectual Property owned by, filed in the name of, or applied for, by Contributor (the “Contributor Registered Intellectual Property Rights”) and, to the Constructive Knowledge of Contributor, lists any proceedings or actions (other than ordinary prosecution activities related to pending patent applications listed in Section 5.7(a) of the Contributor Disclosure Schedule) pending before any court, tribunal (including the United States Patent and Trademark Office (the “PTO”) or equivalent authority anywhere in the world) related to any of Contributor Registered Intellectual Property Rights, which, for the avoidance of doubt, excludes any proceedings or actions where such Contributor Registered Intellectual Property is cited or mentioned but is not otherwise the subject of the proceeding or action.

(b) With respect to the Patents directed to the proteins or polypeptides listed in Section 5.7(b)(1) of the Contributor Disclosure Schedule, or variants of the foregoing, to nucleotides encoding the foregoing, and to methods of use of the foregoing, all necessary registration, maintenance and renewal fees in connection with each such Patent within the Contributor Registered Intellectual Property Rights have been paid and all necessary documents and certificates in connection with such Patent within the Contributor Registered Intellectual Property Rights have been filed with the relevant patent authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining such Patent within the Contributor Registered Intellectual Property Rights. With respect to other Patents (i.e., Patents directed to matters other than the proteins or polypeptides listed in Section 5.7(b)(1) of the Contributor Disclosure Schedule, or variants of the foregoing, to nucleotides encoding the foregoing, and to methods of use of the foregoing), all necessary registration, maintenance and renewal fees in connection with each such Patent within the Contributor Registered Intellectual Property Rights have been paid and all necessary documents and certificates in connection with such Patent within the Contributor Registered Intellectual Property Rights have been filed with the relevant patent authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining such Patent within the Contributor Registered Intellectual Property Rights, except with respect to (i) the Patents designated as having being abandoned or inactive on Section 5.7(a) of the Contributor Disclosure Schedule, and (ii) those Patents (if any) listed on Section 5.7(b)(2) of the Contributor Disclosure Schedule which Contributor elects to abandon between the date of execution of this Agreement and the Closing Date. To the Constructive Knowledge of Contributor, there are no actions that must be taken on or before December 31, 2009, including the payments of any registration, maintenance or renewal fees, or the filing of any

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responses to PTO office actions, documents, applications or certificates for the purposes of obtaining, maintaining, perfecting or preserving or renewing any Patent within the Contributor Registered Intellectual Property Rights. Contributor has obtained a valid and enforceable assignment sufficient to irrevocably transfer all rights in all Patents within the Contributor Registered Intellectual Property Rights (including the right to seek past and future damages with respect thereto) to Contributor. To the maximum extent provided for by, and in accordance with, applicable laws and regulations, Contributor has recorded each such assignment with the PTO and, to the Constructive Knowledge of Contributor, with the relevant Governmental Authority outside of the United States, as the case may be. Contributor has not claimed a particular status, including, “Small Business Status,” in the application for any Patent within the Contributor Intellectual Property, which claim of status was at the time made, or which has since become, inaccurate or false.

(c) Contributor has no Constructive Knowledge of any acts or omissions of Contributor that would (i) constitute inequitable conduct, fraud or misrepresentation with respect to any Patent application included within Contributor Registered Intellectual Property, or (ii) render any Patent within the Contributor Registered Intellectual Property invalid or unenforceable in whole or in part. Contributor has not received written notice that any Patent within the Contributor Registered Intellectual Property is invalid or unenforceable in whole or part. No Patent within the Contributor Registered Intellectual Property has been adjudged invalid or unenforceable in whole or part.

(d) Each Patent of Contributor Registered Intellectual Property is free and clear of any Encumbrances. Contributor is the exclusive owner of each Patent listed on Section 5.7(a) of the Contributor Disclosure Schedule and of the Materials listed on Schedules 2.1(a) and 2.1(b)(2) attached hereto, and all such Patents and Materials may be assigned to Company as provided hereunder without Encumbrances.

(e) No biological or other material that are used (or have been used) in or are in possession of Contributor and necessary for the conduct of Contributor’s Business as currently conducted, or as contemplated to be conducted by Contributor, is subject to any material transfer agreement or other agreement restricting, limiting or prohibiting the use, transfer, disclosure or commercial exploitation of such biological or other materials, or of any progeny, derivatives, modifications or improvements thereof (in each case in the manner that Contributor used or intended to use such material in the Business), that would prevent the transfer of such material to Company as contemplated hereunder or prohibit the use of such material by or for Company in the conduct of the Programs as currently conducted by Contributor, or as contemplated to be conducted by Contributor.

(f) All Contributor Intellectual Property to be contributed or assigned to Company (including licenses or sublicenses of Intellectual Property from Third Parties which are Contributor Contracts to be assigned to Company) pursuant to this Agreement, and the license to the Licensed Intellectual Property to be licensed or sublicensed to Company pursuant to the Technology License Agreement, will be fully transferable, alienable or licensable or sublicensable by Company to exploit, use and otherwise practice within the Field without restriction, limitation or other Encumbrance, in each case other than Permitted Encumbrances, and without payment of any kind to any Third Party except as provided under the Technology License Agreement, the

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Astellas Agreement, the Transaction Agreements or any Contributor Contract assigned to Company. Contributor has the full right to grant to Company the licenses (or sublicenses, as applicable) under the Licensed Intellectual Property Controlled by Contributor for the purpose of conducting the 4 Program and Other Programs, all as set forth in, and on the terms and conditions set forth in, the Technology License Agreement.

(g) To the extent that any Contributor Intellectual Property or any Licensed Intellectual Property has been developed or created by a Third Party for or on behalf of Contributor, Contributor has a written agreement with such Third Party with respect thereto and Contributor thereby either (i) has obtained ownership of or (ii) has obtained a license to, in each case sufficient for the conduct of the Business as conducted by Contributor as of or prior to the Closing Date and the Company Business as reasonably anticipated by Contributor to be conducted by Company, to all such Third Party’s Intellectual Property by operation of law, by valid license or by valid assignment.

(h) All existing employees and consultants of Contributor have entered into a valid and binding written agreement with Contributor sufficient to vest title in Contributor of all Contributor Intellectual Property created by such employee or consultant in the scope of his or her services or employment for Contributor. All former employees and consultants of Contributor have entered in a valid and binding written agreement with Contributor sufficient to vest title in Contributor of all Contributor Intellectual Property used in the conduct of (i) the 4 Program and (ii) the Other Programs with respect to the proteins or polypeptides identified in Section 5.7(h) of the Contributor Disclosure Schedule, in each case, created by such employee or consultant in the scope of his or her services or employment for Contributor.

(i) Contributor has taken reasonable steps to protect Contributor’s rights in Trade Secrets of Contributor that is material to Contributor’s conduct of the Business. Without limiting the foregoing, Contributor has, and reasonably enforces, a policy requiring each employee, consultant and contractor to execute a proprietary information, confidentiality and assignment agreement, substantially in the form(s) attached hereto as Section 5.7(i) of the Contributor Disclosure Schedule, and all current and former employees, consultants and contractors of Contributor that generated, or had access to, Trade Secrets of Contributor in connection with the conduct of (i) the 4 Program and (ii) the Other Programs with respect to the proteins or polypeptides identified in Section 5.7(i) of the Contributor Disclosure Schedule, have executed such an agreement.

(j) Except as may be expressly provided under the Contributor Contracts, no Person who has licensed Patents within the Contributor Intellectual Property to Contributor, or who developed or created materials or data (excluding, however, any commercially- or publicly-available materials) for Contributor in connection with the Programs has ownership rights or license rights to improvements made by Contributor in such Intellectual Property.

(k) Other than inbound “shrink-wrap” and similar publicly available commercial binary code end-user licenses and terms and conditions governing the order or supply of commercially- or publicly-available materials, the contracts, licenses and agreements listed in Section 5.7(k) of the Contributor Disclosure Schedule lists all Contracts to which Contributor is a party or third party beneficiary pursuant to which Contributor has (i) obtained, received or is

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granted licenses, options, rights of first refusal, covenants not to enforce or other rights (excluding in-licenses with no applicability within the Field), (ii) provided or granted any licenses, options, rights of first refusal, covenants not to enforce or other rights, or (iii) transferred or assigned ownership of, joint or sole, in each case with respect to any Contributor Intellectual Property or any Licensed Intellectual Property. Contributor is not in material breach of, nor has Contributor materially failed to perform under, any of the foregoing contracts, licenses or agreements which are Contributor Contracts or under which Contributor is granted any license or other rights under Licensed Intellectual Property to be licensed to Company under the Technology License Agreement and, to Contributor’s Knowledge, no other party to any such contract, license or agreement is in breach thereof or has failed to perform thereunder.

(l) To the Knowledge of Contributor, there are no Contracts between Contributor and any other person with respect to Contributor Intellectual Property under which there is any currently-pending dispute regarding the scope of such agreement, or performance under such agreement, including with respect to any payments to be made or received by Contributor thereunder. To the Knowledge of Contributor, there are no Contracts between Contributor and any other person with respect to Licensed Intellectual Property under which there is any currently-pending dispute regarding the rights of the parties thereto within the Field under such agreement or with respect to any breach by Contributor under such agreement.

(m) To Contributor’s Knowledge, no Person is infringing or misappropriating any Contributor Registered Intellectual Property that is owned by Contributor within the Field.

(n) No Contributor Intellectual Property owned by Contributor and, to the Knowledge of Contributor, no Contributor Intellectual Property that is licensed to Contributor by any Third Party, is subject to any action or Proceeding (excluding, however, any Patent prosecution proceedings) or outstanding decree, order, judgment or settlement agreement or stipulation that (i) restricts in any manner the use, transfer or licensing thereof by Contributor (ii) concerns the infringement or misappropriation thereof, or (iii) may affect the validity, use or enforceability of the Contributor Intellectual Property or the ownership of or license to such Contributor Intellectual Property. Contributor has not received any notice regarding any of the foregoing actions or Proceedings or threats thereof. To the Knowledge of Contributor, there is no material basis for any such action or Proceeding or any decree, order, or judgment related to any Contributor Intellectual Property. To the Knowledge of Contributor, there are no Third Parties infringing or misappropriating Enabling Technology as of or prior to the Closing Date relating to Shuffling on a protein or polypeptide identified in Section 5.7(n) of the Contributor Disclosure Schedule.

(o) The Contributor Intellectual Property to be contributed or assigned to Company pursuant to this Agreement or the Transaction Agreements can be contributed or assigned as provided for hereunder or thereunder and the Licensed Intellectual Property to be licensed or sublicensed to Company pursuant to the Technology License Agreement can be licensed or sublicensed in accordance with the Technology License Agreement, and such Contributor Intellectual Property and Licensed Intellectual Property constitute all the Technology and Intellectual Property used by Contributor in and/or, to the extent owned by or (sub)licensed to Contributor, necessary to the conduct of the Business as previously conducted over the past three (3) years by Contributor or the Company Business as reasonably anticipated by Contributor to be

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conducted by Company following the Closing Date, or which resulted from or was generated under the Programs as of or prior to the Closing Date. To the Contributor’s Knowledge, the conduct of the Business or the Company Business as reasonably anticipated by Contributor with respect to the practice of the Enabling Technology, the conduct of the 4 Program, and the proteins or polypeptides listed in Section 5.7(o) of the Contributor Disclosure Schedule, or variants of the foregoing, nucleotides encoding the foregoing, and methods of use of the foregoing does not infringe the Patents of a Third Party that are not licensed to Company under the Technology License Agreement or a Contributor Contract; provided, however, that Contributor makes no representation or warranty pursuant to this sentence with respect to Patents disclosed by Contributor within the three (3) month period prior to the date of this Agreement. Contributor has not received written notice or written claim of infringement from any Third Party alleging that the conduct of the Programs and the operation of the Business as currently conducted by Contributor infringe or misappropriate any Intellectual Property of any Person or violate any right of any Person (including any right to privacy or publicity). Without limiting the foregoing, all Intellectual Property licensed and sublicensed by Contributor to Astellas under the Astellas Agreement immediately prior to the Closing shall remain licensed and sublicensed by Company to Astellas after the Closing to the full extent provided for in the Astellas Agreement prior to Closing, without any diminishment, restriction or limitation of such license and sublicense. Furthermore, all Intellectual Property used by Contributor in the performance of the Astellas Agreement as of or prior to the Closing Date shall be available to the Company after the Closing Date to at least the same extent as available to Contributor as of the Closing Date for purposes of such performance; the Company’s ability to perform its obligations under the Astellas Agreement immediately after the Closing Date shall not be diminished, restricted or limited as compared to Contributor’s ability to perform its obligations under the Astellas Agreement immediately prior to the Closing Date owing to lack of contribution, assignment, license or sublicense by Contributor to Company of Intellectual Property under which Contributor had the right to practice as of or prior to the Closing Date; and the assignment of the Astellas Agreement from Contributor to the Company pursuant to this Agreement shall not result in any increase in the obligations or liabilities of Astellas under the Astellas Agreement.

(p) Except as expressly provided under any one or more of the Contributor Contracts, there are no royalties, fees, honoraria or other payments payable by Contributor to any Person by reason of the ownership, development, use, license, sale or disposition of the Contributor Intellectual Property, other than salaries and sales commissions paid to employees and sales agents in the ordinary course of business.

5.8 Insurance. Section 5.8 of the Contributor Disclosure Schedule sets forth an accurate and complete list of all material insurance policies, self-insurance arrangements and indemnity bonds, currently in effect, that insure the Business and/or the Contributed Assets (collectively, the “Insurance Policies”). Each of the Insurance Policies is legal, valid, binding, and enforceable in accordance with its terms and is in full force and effect and is being assigned hereunder as part of the Contributed Assets and Assumed Liabilities. Contributor is not in breach of any Insurance Policy, and, to the Knowledge of Contributor, no event has occurred which, with notice or the lapse of time, would constitute such a breach, or permit termination, modification, or acceleration, of any of the Insurance Policies. Contributor has not received any written notice of cancellation or non-renewal of any of the Insurance Policies. The consummation of the Transactions will not cause a breach or termination, modification or acceleration of any of the

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Insurance Policies. There is no claim under any of the Insurance Policies that has been improperly filed or as to which any insurer has questioned, disputed or denied liability. Contributor has not received any notice of, nor does Contributor have any Knowledge of any facts that might result in, a material increase in the premium for any of the Insurance Policies.

5.9 Title; All Material Assets; Condition of Assets.

(a) Contributor has, or will have as of the Closing, good and valid title to all of the Contributed Assets free and clear of any Encumbrances except for (i) Encumbrances disclosed on Section 5.9(a) of the Contributor Disclosure Schedule which will be removed and released at or prior to the Closing and (ii) the Permitted Encumbrances. None of the Permitted Encumbrances could reasonably be expected to materially impair the continued use and operation of the Contributed Assets to which it relates as such Contributed Asset is used (or has been used) and operated in the conduct of the Business as of or prior to the Closing Date or the Company Business as reasonably contemplated by Contributor to be conducted by Company after the Closing Date. Contributor has, or will have as of the Closing, full right and power to contribute, convey, assign, transfer and deliver to Company good and valid title to all of the Contributed Assets, free and clear of any and all Encumbrances other than the Permitted Encumbrances. The Contributed Assets are not subject to any preemptive right, right of first refusal, or other similar right or restriction pursuant to any Contract to which the Contributor is a party and any other Contract or other source of which Contributor has knowledge that would adversely affect Company’s rights in the Contributed Assets in any material respect.

(b) The contribution, transfer and assignment of the Contributed Assets as contemplated by this Agreement, together with the licenses and sublicenses granted to Company pursuant to the Technology License Agreement, will give Company possession of or license to, and the right to use, all the assets used by Contributor that are material for conducting the Business as presently conducted, in each case within the Field and except as otherwise provided in the Technology License Agreement or any Contributor Contract assigned to Company; provided, however, that the foregoing clause of this Section 5.9(b) shall not be construed as a representation or warranty of sufficiency of the Contributor Intellectual Property, nor of non-infringement of the intellectual property rights of any Third Party. Upon Closing, Company will acquire exclusive, good and marketable title or license to or a valid leasehold interest in (as the case may be) the Contributed Assets and no restrictions will exist on Contributor’s right to resell, license or sublicense any of the Contributed Assets or Assumed Liabilities or engage in the Company Business, except Permitted Encumbrances. Except for the Contributed Assets and the Licensed Intellectual Property, there are no other assets, properties or rights owned by or licensed to Contributor, including Intellectual Property Rights owned by or licensed to Contributor, that are used (or have been used) by Contributor or its Affiliates and that are material to conduct the Business as of or prior to the Closing Date and material to continued conduct of the Company Business by Company in the manner in which Contributor currently conducts the Business.

(c) The Contributed Assets as a whole (other than Contributor Intellectual Property), to the extent applicable to the Business, (i) are in good operating condition and repair, ordinary wear and tear excepted; (ii) are suitable and adequate for continued use in the ordinary course of business; and (iii) conform to all Legal Requirements applicable to Contributor’s use thereof prior to the Closing Date.

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5.10 Real Property Leases.

(a) Contributor does not currently own any real property. Contributor is in lawful possession of the premises covered by the Real Property Lease. Contributor has made available to Company accurate, correct and complete copies of the Real Property Lease (including all amendments, supplements, modifications and written waivers relating thereto) and copies of existing title insurance policies, title reports and real property surveys in Contributor’s possession, if any, for the real property subject to the Real Property Lease. The Real Property Lease is in full force and effect and is valid and effective in accordance with its terms, except (i) as enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws affecting the rights of creditors generally and general equitable principles (whether considered in a proceeding in equity or at law), and (ii) as the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of a court of competent jurisdiction before which any proceeding may be brought, and, to Contributor’s Knowledge, Contributor is not in default thereunder in any respect or as would permit the termination or cancellation of the Real Property Lease. No representation is made in this Section 5.10 with respect to any Intellectual Property.

(b) To Contributor’s Knowledge, there does not exist any actual, threatened or contemplated condemnation or eminent domain proceedings that may materially affect the Leased Real Property.

(c) Except with respect to activities of the Business performed at facilities of Third Party consultants, contractors or licensees of Contributor which are under Contributed Contracts, the Business is conducted only at the Leased Real Property and the Lab Facility and the Office Facility are the only facilities necessary to enable Company to conduct the Company Business in substantially the same manner in which the Business is currently being conducted.

5.11 Employees and Consultants.

(a) [Reserved.]

(b) Except for Contracts listed on Section 5.11(b) of the Contributor Disclosure Schedule or as required by applicable Legal Requirements, no Employee of Contributor has been granted the right to continued employment by Contributor. Contributor has no Knowledge that any Offeree intends to terminate his or her employment or other service-provider relationship with Contributor, nor, as of the date hereof, does Contributor have a present intention to terminate the employment or other service-provider relationship of any such Offeree.

(c) Employee and Contractor Lists. Section 5.11(c) of the Contributor Disclosure Schedule sets forth an accurate, correct and complete list of all:

(i) Employees, which provides their present title or position, present annual base compensation, present bonus and commission eligibility, accrued but unused vacation and other paid leave, and years of service with Contributor as of the date hereof,

(ii) individuals who are currently performing services for Contributor related to the Business who are classified as “consultants” or “independent contractors.”

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(d) No Employee is eligible for payments in connection with the Transactions that would constitute “parachute payments” under Section 280G of the Code.

(e) Compliance with Legal Requirements. Contributor has complied with all Legal Requirements in all material respects related to the employment of the Employees, including provisions related to wages, hours, leaves of absence, equal opportunity, occupational health and safety, workers’ compensation, severance, employee handbooks or manuals, collective bargaining and the payment of social security and other Taxes.

(f) Unions. Contributor is not a party to any collective bargaining agreement with respect to the Employees, and none of the Employees are represented by any labor union or other similar labor-relations entity or organization. There is no labor union organizing or election activity pending or, to the Knowledge of Contributor, threatened with respect to the Employees. To the Knowledge of Contributor, Contributor has not suffered or sustained any work stoppage in connection with any labor union or other similar labor-relations entity or organization, and no such work stoppage is threatened.

5.12 Contributor Benefit Plans.

(a) Section 5.12(a) of the Contributor Disclosure Schedule sets forth an accurate, correct and complete list of each of the Contributor Benefit Plans. With respect to each Contributor Benefit Plan, Contributor has provided or made available to Astellas true, current, complete and correct copies, to the extent applicable, of (i) each Contributor Benefit Plan (or, in the case of any unwritten Contributor Benefit Plan, an accurate description thereof), (ii) the most recent annual report on Form 5500 filed with the Internal Revenue Service with respect to each such Contributor Benefit Plan (if any such report was required), (iii) each trust agreement and group annuity contract relating to each such applicable Contributor Benefit Plan, (iv) the most recent summary plan description together with the summary or summaries of material modifications thereto, if any and (v) with respect to each such applicable Contributor Benefit Plan, the most recent financial statements (if any) that are required to be prepared pursuant to applicable Legal Requirements.

(b) Contributor has maintained, administered and funded each Contributor Benefit Plan, in accordance with its terms and all applicable laws. Neither Contributor nor any Member of the Controlled Group maintains or contributes to, or has ever had an obligation to maintain or contribute to, any Defined Benefit Plan or Multiemployer Plan. Nothing contained in any of the Contributor Benefit Plans, other than any Contributor Benefit Plan in which Company agrees to participate, will obligate Company to provide any benefits to employees, former employees or beneficiaries of employees or former employees, or to make any contributions to any employee benefit plans from and after the Closing.

(c) All Contributor Benefit Plans intended to be tax-qualified for United States Federal income tax purposes have been the subject of determination letters from the Internal Revenue Service to the effect that such Contributor Benefit Plans are qualified and exempt from Federal income taxes under Sections 401(a) and 501(a), respectively, of the Code, and no such determination letter has been revoked nor, to the Knowledge of Contributor, has revocation been threatened, nor has any such Contributor Benefit Plans been amended since the date of its most recent determination letter or application therefor in any respect that would reasonably be expected to adversely affect its qualification.

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(d) With respect to each Contributor Benefit Plan: (i) Contributor is not subject to any liability under Sections 4975 through 4980B of the Code or Title I of ERISA, (ii) Contributor has complied with all applicable health care continuation requirements in Section 4980B of the Code and in Part 6 of Title I of ERISA, and (iii) no “Prohibited Transaction,” within the meaning of Section 4975 of the Code or Sections 406 or 407 of ERISA and not otherwise exempt under Section 408 of ERISA, has occurred with respect to any Contributor Benefit Plan with respect to which Company would or could reasonably be expected to be subject to any Liability.

(e) No material Contributor Benefit Plan provides health benefits (whether or not insured) with respect to employees or former employees (or any of their beneficiaries) of the Contributor or any of its Subsidiaries after retirement or other termination of service (other than coverage or benefits (i) required to be provided under Part 6 of Title I of ERISA or any other similar applicable Law or (ii) the full cost of which is borne by the employee or former employee (or any of their beneficiaries)).

(f) No material action, suit or claim (excluding claims for benefits incurred in the ordinary course) has been brought or is pending or, to the Knowledge of Contributor, has been threatened in writing against or with respect to any Contributor Benefit Plan or the assets or any fiduciary thereof (in that person’s capacity as a fiduciary of such Contributor Benefit Plan). There are no audits, inquiries or proceedings pending or, to the Knowledge of Contributor, threatened in writing by the Internal Revenue Service, the Department of Labor, or other Governmental Authority with respect to any Contributor Benefit Plan.

(g) The execution of this Agreement and the consummation of the transactions contemplated by this Agreement or other Transaction Agreements (alone or together with any other event which, standing alone, would not by itself trigger such entitlement or acceleration) will not (i) entitle any Offeree to any payment, forgiveness of indebtedness, vesting, distribution, or increase in benefits under or with respect to any Contributor Benefit Plan, (ii) otherwise trigger any acceleration (of vesting or payment of benefits or otherwise) affecting any Offeree under or with respect to any Contributor Benefit Plan, or (iii) trigger any obligation to fund any Contributor Benefit Plan.

(h) No Offeree is reasonably expected to incur additional tax under Section 409A(a)(1)(B) of the Code as a result of participation in any Contributor Benefit Plan. Contributor is not a party to, or otherwise obligated under, any contract, agreement, plan or arrangement that provides for the gross-up of taxes imposed by Section 409A(a)(1)(B) of the Code with respect to Offerees.

5.13 Material Contracts.

(a) Section 5.13 of the Contributor Disclosure Schedule provides a true and complete list of each Contract in one or more of the following categories, to which Contributor is party and which relate primarily to (x) the operation of the Business, or (y) any of the Contributed Assets (collectively, the “Material Contracts”):

(i) All Real Property Leases, Personal Property Leases, Insurance Policies, Contracts required to be listed on Section 5.7(k) of the Contributor Disclosure Schedule and Governmental Approvals;

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(ii) Any Contract for capital expenditures or for the purchase of goods or services such as would require Company to make payment(s) in excess of $100,000 with respect to any twelve (12) month period following the Closing (excluding any Contributor Benefit Plan or other employment-related Contracts);

(iii) [Reserved];

(iv) Any Contract involving financing or borrowing of money, or evidencing indebtedness for borrowed money, any obligation for the deferred purchase price of property or guaranteeing in any way any Contract in connection with any Person, in each case such as would require Company to make payment(s) in excess of $100,000 with respect to any twelve (12) month period following the Closing (excluding normal trade payables);

(v) Any joint venture, partnership, cooperative arrangement or any other Contract involving a sharing of profits (except for the Transaction Agreements and the Astellas Agreement);

(vi) Any material Contract with any Governmental Authority;

(vii) Any Contract with respect to the discharge, storage or removal of effluent, waste or pollutants;

(viii) Any Contract relating to any license or royalty arrangement that provides for noncontingent annual payments by Contributor in excess of $100,000, except any such noncontingent payment(s) such as would not exceed $100,000 with respect to any twelve (12) month period following the Closing;

(ix) Any power of attorney, proxy or similar instrument;

(x) Any Contract with any Affiliate of Contributor (other than any Contributor Benefit Plan or other employment-related Contracts);

(xi) Any Contract for the manufacture, service or maintenance of any product of the Business including CROs, research agreements and finding agreements;

(xii) Any Contract for the purchase or sale of any amount of assets other than in the ordinary course of business or for the option or preferential rights to purchase or sell any material amount of assets other than in the ordinary course of business;

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(xiii) Any Contract to indemnify any Person or to share in or contribute to the liability of any Person other than standard non-material form indemnity agreements that have been entered into in the ordinary course of business;

(xiv) Any Contract containing covenants not to compete which materially restrict the Contributor from competing in any line of business or with any Person in any geographical area;

(xv) Any Contract related to the acquisition of a business or the equity of any other Entity to the extent that it relates to the Business;

(xvi) Any other Contract (other than any Contributor Benefit Plan or other employment-related Contracts) (A) such as would require Company to make payment(s) in excess of $100,000 with respect to any twelve (12) month period following the Closing; and (B) is not terminable without payment or penalty on thirty (30) days (or less) notice.

(xvii) Any other Contract (other than any Contributor Benefit Plan or other employment-related Contracts) that involves future payments, performance of services or delivery of goods or materials to or by Contributor such as would require the Company to make payment(s) in excess of $100,000 with respect to any twelve (12) month period following the Closing;

(xviii) Any Contract related to tools, machinery, equipment and personal property with ongoing performance obligations that is not already identified under clauses (ii), (xvi) or (xvii) and exceeds the dollar thresholds set forth therein;

(xix) Any Contact within or needed in the ordinary course of the Business not already identified in clauses (i) through (xviii) which would require Company to make non-contingent payment(s) in excess of $100,000 with respect to any twelve (12) month period following the Closing (other than any Contributor Benefit Plan or any other employment-related Contracts); and

(xx) Any proposed arrangement of a type that, if entered into, would be a Contract described in any of (i) through (xviii) above.

(b) Contributor has made available to Company accurate, correct and complete copies of all Material Contracts (or written summaries of the material terms thereof, if not in writing), including all material amendments, supplements, modifications and waivers thereof. All Material Contracts are in writing.

(c) Each Contributor Contract is currently valid and in full force and effect, and, is enforceable by Contributor in accordance with its terms, except (i) as enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws affecting the rights of creditors generally and general equitable principles (whether considered in a proceeding in equity or at law), and (ii) as the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of a court of competent jurisdiction before which any proceeding may be brought.

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(d) Contributor is not in material default, and no party has provided written notice to Contributor that it is in material default, under any Contributor Contract. No event has occurred that might (with or without notice or lapse of time) (i) result in any material violation or breach, by Contributor, of any of the provisions of any Contributor Contract; (ii) give any Person other than Contributor the right to declare a default or exercise any remedy under any Contributor Contract; (iii) give any Person the right to accelerate the maturity or performance of any Contributor Contract or to cancel, terminate or modify any Contributor Contract; or (iv) otherwise have a Material Adverse Effect on Contributor in connection with any Contributor Contract. Contributor has not waived any material rights which relate to the Business or Contributed Assets of the agreements described in Section 5.13(a)(i) through 5.13(a)(xx) hereof.

(e) To the Knowledge of Contributor, each Person against which Contributor has or may acquire any rights under any Contributor Contract is (i) not in material breach of, and has not threatened in writing to be in breach of, the Contributor Contract to which such Person is a party; (ii) solvent; and (iii) able to satisfy such Person’s material obligations and Liabilities to Contributor.

(f) The performance of the Contributor Contracts will not result in any violation of or failure by Contributor to comply with any Legal Requirement.

5.14 Restrictions on Business Activities. There is no agreement (not to compete or otherwise), commitment, judgment, injunction, order or decree to which Contributor is a party or, to Contributor’s Knowledge, which is otherwise binding upon Contributor which has the effect of prohibiting or restricting any Company’s use or exploitation of any Contributed Asset in the manner in which it is currently used or exploited (or has been used or exploited in the past), except as would not have a Material Adverse Effect on the Company. Without limiting the foregoing, Contributor has not entered into any agreement under which Contributor is restricted from selling, licensing or otherwise distributing any of its products for use in the Field to or providing services in the Field to, customers or any class of customers, in any geographic area, or in any segment of the market within the Field in connection with the Business or the Contributed Assets.

5.15 Compliance with Laws; Governmental Approvals.

(a) Contributor is now, and during the past five years has been, in full compliance with each Legal Requirement applicable to the Business or the Contributed Assets, and, to the Knowledge of Contributor, no event has occurred, and no condition or circumstance exists, that might (with or without notice or lapse of time) constitute, or result directly or indirectly in, a default under, a breach or violation of, or a failure comply with, any such Legal Requirement; except for any such non-compliance, failure, breach or violation which would not have a Material Adverse Effect on the Company. Contributor has not received any written notice from any Third Party regarding any actual, alleged or potential material violation of any such Legal Requirement applicable to the Business or the Contributed Assets except for any of the foregoing which would not have a Material Adverse Effect on the Company.

(b) Contributor has all Governmental Approvals that are necessary in connection with Contributor’s occupation and use of the Facility, the ownership and use of the Business or the Contributed Assets (collectively, the “Business Governmental Approvals”).

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Contributor has made all filings with, and given all notifications to, all Government Authorities with respect to the business as required by all applicable Legal Requirements except to the extent that the failure to make any such filings would not have a Material Adverse Effect on the Company. Each Business Governmental Approval is valid and in full force and effect, and there is not pending or, to the Knowledge of Contributor, threatened any Proceeding which could result in the suspension, termination, revocation, cancellation, limitation or impairment of any Business Governmental Approval. No material violations have been recorded in respect of any Business Governmental Approvals, and to the Knowledge of the Contributor, there are no meritorious basis therefor. No fines or penalties are due and payable in respect of any Business Governmental Approval or any violation thereof.

(c) Contributor has made available to Company accurate and complete copies of all of the Business Governmental Approvals, including all renewals thereof and all amendments thereto.

5.16 Proceedings and Orders.

(a) As of the date hereof, there is no material Proceeding pending or, to the Knowledge of Contributor, threatened in writing against or affecting the Business or the Contributed Assets or Contributor’s rights relating thereto. To Contributor’s Knowledge, no event has occurred, and no condition or circumstance exists, that might directly or indirectly give rise to or serve as a basis for the commencement of any such Proceeding. Contributor has made available to Company true, accurate and complete copies of all material pleadings, material correspondence with Third Parties and other material, non-privileged documents relating to any such Proceeding that are either (i) in its possession or (ii) reasonably accessible to it and of which it is has Knowledge. No insurance company has asserted in writing that any such Proceeding is not covered by the applicable policy of Contributor related thereto.

(b) As of the date hereof, neither Contributor, the Employees (in their capacities as employees or representatives of Contributor) nor any of the Contributed Assets or the Business, nor Contributor’s rights relating to any of the foregoing, is subject to any material Order.

5.17 Litigation. There is no Proceeding with respect to Contributor relating to the Business or the Contributed Assets (including any Proceeding involving the prior employment of any of Contributor’s employees relating to the Business or the Contributed Assets, their services provided in connection with such Business, or any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers) pending or to Contributor’s Knowledge, currently threatened (i) against Contributor or any officer, director or Employee of Contributor (in their capacities as such); or (ii) that questions the validity of the Transaction Agreements or the right of Contributor to enter into any of them, or to consummate the Transactions except those which would not have a Material Adverse Effect. Neither Contributor nor, to Contributor’s Knowledge, any of its officers, directors or Employees (in their capacities as such) is a party or is named as subject to the provisions of any order, writ, injunction, judgment, or decree of any court or government agency or instrumentality (in the case of officers, directors or Employees, such as would materially affect Contributor) relating to the Business or the Contributed Assets. There is no Proceeding with respect to Contributor by Contributor pending or which Contributor intends to initiate relating to the Business or the Contributed Assets except those which would not have a Material Adverse Effect.

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5.18 Environmental Matters.

(a) To Contributor’s Knowledge, the Business has been and is being conducted, and the Leased Real Property and the PP&E have been and are being operated, in compliance in all material respects with all Environmental Laws. The Contributor has not received, nor has Knowledge of the issuance of, any written notice of violation alleging any material non-compliance by Contributor, the Leased Real Property or the PP&E with any Environmental Law.

(b) The Contributor has obtained and currently maintains all Environmental Permits necessary for the conduct of the Business as presently conducted. To Contributor’s Knowledge, the Business has been and is being conducted, and the Leased Real Property and the PP&E have been and are being operated, in compliance in all material respects with all such Environmental Permits, and all such Environmental Permits remain in full force and effect. Contributor has not received any written notice that the Business lacks any such Environmental Permit and, to Contributor’s Knowledge, no such notice is threatened.

(c) There is no pending Environmental Claim arising out of the Business or the Contributor’s occupation, use or operation of the Leased Real Property or the PP&E, and, to Contributor’s Knowledge, no such Environmental Claim is threatened, including any Environmental Claims with respect to third party disposal sites.

(d) To Contributor’s Knowledge, there have been no past and are no present activities or practices of Contributor in violation of Environmental Law, including a Release of a Regulated Substance into or onto the Leased Real Property or any Third Party disposal sites which requires or is reasonably anticipated to require Remedial Action by the Contributor, or which would result in material liability to Contributor.

(e) Contributor has not operated any (i) underground storage tanks or surface tanks, dikes or impoundments, or (ii) equipment containing polychlorinated biphenyls on the Leased Real Property.

(f) Other than any Real Property Leases, Governmental Approvals, Environmental Permits, or contracts with third parties for emergency response to, and the collection, transportation and disposal of Regulated Substances, which have been made available to Company, there are no Contributor Contracts relating to the Business or Contributed Assets which would require the Contributor to indemnify, reimburse, defend, hold harmless or release any Third Party from any liability or obligation under or pursuant to any Environmental Law or relating to any Remedial Action.

(g) The Contributor has made available to Company all material written environmental assessments, audits, and environmental surveys, investigations or soil or groundwater sampling reports prepared by Contributor or for Contributor and provided to Contributor by Third Parties, relating to the Environment at the Facility or any Release or presence of or exposure to any Regulated Substances at the Facility in violation of Environmental Law or in a manner which would reasonably be expected to result in liability to Contributor.

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(h) The Parties agree that the only representations and warranties that relate to environmental matters, including Environmental Laws, Regulated Substances, Environmental Permits, and Environmental Claims are contained within Section 5.18 hereof.

5.19 Bulk Sales. There are no “bulk sales” Legal Requirements applicable to the contribution of the Contributed Assets pursuant to this Agreement.

5.20 No Other Agreement. Other than for sales of assets in the ordinary course of business, neither Contributor, nor any of its Representatives, has entered into any Contract with respect to the sale or other disposition of the Contributed Assets except as set forth in this Agreement.

5.21 Power of Attorney. There are no outstanding powers of attorney, proxy or similar instrument executed on behalf of Contributor relating to the Business or the Contributed Assets.

5.22 Export Controls; Foreign Corrupt Practices Act. To the extent relevant to the Business or the Contributed Assets, Contributor has at all times been in compliance with (a) all applicable U.S. Legal Requirements relating to export control requirements and U.S. trade embargoes (Cuba, Sudan, North Korea, Syria and Iran), (b) the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations promulgated thereunder, except in either case for any instance of non-compliance that would not reasonably be expected to result in a Material Adverse Effect with respect to Contributor.

5.23 Antiboycott Laws. To the extent relevant to the Business or the Contributed Assets, Contributor has not violated the antiboycott prohibitions contained in 50 U.S.C. § 2401 et seq. or taken any action that can be penalized under Section 999 of the Code, except in either case for any violation or action that would not reasonably be expected to result in a Material Adverse Effect with respect to Contributor.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF COMPANY

Company hereby represents and warrants to Contributor that, as of the date hereof:

6.1 Organization and Qualification. Company is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted.

6.2 Authority. Company has all necessary power and authority to execute and deliver this Agreement and the other Transaction Agreements and to perform its obligations hereunder. The execution and delivery of this Agreement and the other Transaction Agreements

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and the consummation by Company of the Transactions have been duly and validly authorized by all requisite corporate action on the part of Company and its directors and officers and no other corporate proceedings on the part of Company are necessary to authorize this Agreement or the other Transaction Agreements or to consummate the Transactions. This Agreement and the other Transaction Agreements (other than the Bridge Loan Agreement) have been duly and validly executed and delivered by Company. This Agreement and the other Transaction Agreements constitute the legal, valid and binding obligations of Company, enforceable against Company in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws and equitable principles related to or limiting creditors’ rights generally and, by the availability of equitable remedies and defenses and, to the extent the indemnification provisions contained in the Investors’ Rights Agreement may further be limited by applicable laws and principles of public policy.

ARTICLE 7

MISCELLANEOUS PROVISIONS

7.1 Governing Law. This Agreement and any dispute arising from the performance or breach hereof shall be governed by and construed and enforced in accordance with the substantive Laws of the State of Delaware, without reference to conflicts of Laws principles that would result in laws of a jurisdiction other then the State of Delaware governing. Notwithstanding the above, any dispute regarding validity or enforceability of any patent shall be governed by the patent laws of the jurisdiction in which such patent was issued solely for the purpose of resolution of the dispute as to validity and enforceability.

7.2 Assignment. Except as provided in this Section 7.2, this Agreement shall not be assignable or otherwise transferred, in whole or in part, by any Party to any Third Party without the written consent of the other Parties, provided that this Agreement may without requiring the consent of any other Party be assigned, transferred, delegated or sublicensed to (i) an entity that acquires all or substantially all of the business or assets of such Party, whether by merger, reorganization, acquisition, asset sale or otherwise, or (ii) a Related Entity of such Party, (including, for the avoidance of doubt and without limitation, a liquidating trust or similar entity), in each case subject to the agreement in writing of such transferee to be subject to the terms and conditions of this Agreement, the Joint Venture Agreement and the Purchase Agreement. Except as expressly provided in this Section 7.2, any attempted assignment or transfer of this Agreement shall be null and void. The terms and conditions of this Agreement shall be binding on and inure to the benefit of the permitted successors and assigns of the Parties.

7.3 Notices. Any notice, request, delivery, approval or consent required or permitted to be given under this Agreement shall be in English language, in writing, shall specifically refer to this Agreement and shall be deemed to have been sufficiently given if delivered in person, transmitted as a PDF attachment to an email (receipt verified)or by express courier service (signature required) or five (5) Business Days after it was sent by registered letter, return receipt requested (or its equivalent), provided that no postal strike or other disruption is then in effect or comes into effect within two (2) Business Days after such mailing, to the Party to which it is directed at its address or email address shown below or such other address or email address as such Party will have last given by notice to the other Party.

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If to Contributor,
addressed to:	Maxygen, Inc.
	515 Galveston Drive
	Redwood City, California 94063
	USA
	Attention: Chief Business Officer
	Telephone: (650) 298-5300
	Email address: corporatesecretary@maxygen.com
with copy to:	Maxygen, Inc.
	515 Galveston Drive
	Redwood City, California 94063
	USA
	Attention: General Counsel
	Telephone: (650) 298-5300
	Email address: corporatesecretary@maxygen.com
and a copy to:	Wilson Sonsini Goodrich & Rosati
	Professional Corporation
	650 Page Mill Road
	Palo Alto, CA 94304-1050
	USA
	Attention: Tony Jeffries
	Telephone: (650) 493-9300
	Email address: tjeffries@wsgr.com
If to Company, addressed to:	CPC
	515 Galveston Drive
	Redwood City, California 94063
	USA
	Attention: Chief Business Officer
	Telephone: (650) 298-5300
	Email address: corporatesecretary@maxygen.com
with a copy to:	3-11, Nihonbashi-Honcho 2-chome
	Chuo-ku, Tokyo 103-8411
	Japan
	Attention: Vice President, Business Development
	Telephone: (813) 3244-2500
	Email address: masaki.doi@jp.astellas.com

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with a copy to:	Astellas Pharma Inc.
	3-11, Nihonbashi-Honcho 2-chome
	Chuo-ku, Tokyo 103-8411
	Japan
	Attention: Vice President, Legal
	Telephone: (813) 3244-3231
	Email address: kazunori.okimura@jp.astellas.com
with a copy to:	Morrison & Foerster LLP 1290 Avenue of the Americas New York, NY 10104
	Attention: Michael O. Braun, Esq. Telephone: (212) 468-8000 Email address: mbraun@mofo.com

7.4 Waiver. No Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

7.5 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT.

7.6 Severability. If any provision hereof is held invalid, illegal or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the Parties as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction.

7.7 Entire Agreement/Modification. The Transaction Agreements (including Exhibits and Schedules hereto and thereto) set forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties with respect to the subject matter hereof and thereof, and supersede all prior agreements and understandings between the Parties with respect to such subject matter. Subject to Section 8.4 of the Joint Venture Agreement, no subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of each of the Parties.

7.8 Relationship of the Parties. The Parties agree that this Agreement does not, is not intended to, and shall not be construed to, establish an agency, partnership or any other relationship. Except as may be specifically provided herein, neither Party shall have any right, power or authority, nor shall they represent themselves as having any authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of the other Party, or otherwise act as an agent for the other Party for any purpose.

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7.9 Force Majeure. Except with respect to payment of money, no Party shall be liable or responsible to any other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfillment or the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by or results from fire, earthquake, tornado, embargo, prohibition or intervention, riot, civil commotion, war, act of war (whether war be declared or not), insurrection, terrorist act, strike, flood, governmental act or restriction (beyond the reasonably control of the respective Party), act of God, or other cause that is beyond the reasonable control and not caused by the negligence or misconduct of the affected Party. Any Party affected by such force majeure will provide the other Party with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and will use commercially reasonable efforts to overcome the difficulties created thereby and to resume performance of its obligations as soon as practicable. If the performance of any such obligation under this Agreement is delayed owing to such a force majeure for any continuous period of more than one hundred eighty (180) days, the Parties hereto will consult with respect to an equitable solution, including the possibility of the mutual termination of this Agreement.

7.10 Third Party Beneficiaries. Without limiting any rights or remedies of Astellas under the Joint Venture Agreement, all rights, benefits and remedies under this Agreement are solely intended for the benefit of Contributor and Company and, without limiting any rights or remedies of Astellas under the Joint Venture Agreement, no Third Party shall have any rights whatsoever to (a) enforce any obligation contained in this Agreement (b) seek a benefit or remedy for any breach of this Agreement, or (c) take any other action relating to this Agreement under any legal theory, including but not limited to, actions in contract, tort (including but not limited to negligence, gross negligence and strict liability), or as a defense, setoff or counterclaim to any action or claim brought or made by the Parties.

7.11 Expenses. Whether or not the Transactions contemplated herein are consummated, except as otherwise provided herein, all fees and expenses incurred in connection with this Agreement and the Transactions including, but not limited to, all legal, accounting, financial, advisory, consulting and all other fees and expenses of Third Parties incurred by a Party in connection with the negotiation and effectuation of the terms and conditions of this Agreement and the Transactions shall be the obligation of the respective Party incurring such fees and expenses.

7.12 Further Assurances. At any time or from time-to-time on and after the date hereof, any Party shall at the request of the other Party to the extent permitted by applicable Legal Requirements (a) deliver to the requesting Party such records, data or other documents consistent with the provisions of this Agreement, (b) execute, and deliver or cause to be delivered, all such consents, documents or further instruments of assignment, transfer or license consistent with the provisions of this Agreement, and (c) take or cause to be taken all such actions, as the requesting Party may reasonably deem necessary or desirable in order for the requesting Party to obtain the full benefits of this Agreement and the transactions contemplated hereby. Furthermore, upon Company’s request, Contributor shall reasonably cooperate to enforce provisions for the

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assignment of Intellectual Property to Contributor under any employment agreement, consulting agreement or other Contract not assigned to Company hereunder which provides for the assignment to Contributor of any Intellectual Property which is part of the Contributed Assets to be assigned to Company hereunder to the extent reasonably necessary for Company to secure, protect, enforce or assign to Company any such Intellectual Property, at Company’s expense.

7.13 Counterparts; Facsimile. This Agreement may be executed and delivered by facsimile or PDF signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

7.14 Interpretation. Unless otherwise indicated herein, with respect to any reference made in this Agreement to a Section (or Article, Subsection, Paragraph, Subparagraph or Clause), Exhibit or Schedule, such reference shall be to a section (or article, subsection, paragraph, subparagraph or clause) of, or an exhibit or schedule to, this Agreement. The table of contents and any article, section, subsection, paragraph or subparagraph headings contained in this Agreement and the recitals at the beginning of this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “but (is/are) not limited to.” Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context indicates is appropriate. Where specific language is used to clarify or illustrate by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict the construction of the general statement which is being clarified or illustrated. Unless otherwise specified, any reference to a time or date shall be with reference to the time or date, as the case may be, in Wilmington, Delaware.

7.15 Construction. The construction of this Agreement shall not take into consideration the Party who drafted or whose representative drafted any portion of this Agreement, and no canon of construction shall be applied that resolves ambiguities against the drafter of a document. Each Party acknowledges that: (a) it has read this Agreement; (b) it has been represented in the preparation, negotiation and execution of this Agreement by legal counsel of its own choice or has voluntarily declined to seek such counsel; and (c) it understands the terms and consequences of this Agreement and is fully aware of the legal and binding effect of this Agreement.

7.16 Provisional Relief; Specific Performance. Nothing in this Agreement shall limit the right of any Party to seek to obtain in any court of competent jurisdiction any interim relief or provisional remedy, including injunctive relief (but not, for the avoidance of doubt, any monetary damages or monetary relief under any equitable theory), pending resolution under Article 10 of the Joint Venture Agreement, as applicable, that may be necessary to protect the rights or property of that Party. Seeking or obtaining such equitable or interim relief or provisional remedy in a court shall not be deemed a waiver of the agreement to arbitrate. For clarity, any such interim relief or provisional remedies shall be cumulative and not exclusive and are in addition to any other remedies that any Party may have under this Agreement or applicable Legal Requirement.

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7.17 Confidentiality; Publicity. The Parties acknowledge that the transaction described herein and the terms of this Agreement are subject to the requirements of Section 8.7 of the Joint Venture Agreement.

7.18 Indemnification; Sole Remedy; Dispute Resolution. The Parties acknowledge and agree that their respective liabilities and obligations for breaches of the representations, warranties and covenants contained in this Agreement are governed by and subject to the terms and conditions of Article 9 of the Joint Venture Agreement. Further, the parties expressly acknowledge and agree that the remedy for breaches of representations, warranties and covenants under the Joint Venture Agreement are addressed solely in Article 9 of the Joint Venture Agreement, and any incorporation by reference of such representations, warranties and covenants in this Agreement shall not give rise to claims under this Agreement. For the avoidance of doubt, nothing in this Agreement nor any other Transaction Agreement is intended to nor shall be deemed to grant any party more than a single monetary damages remedy or recovery, in any given instance, for any other party’s breach of an individual representation or warranty with respect to any specific given event, fact or circumstance, even though such representation or warranty may be present in more than one Transaction Agreement or claimed by its incorporation by reference to be confirmed in more than one Transaction Agreement. Any dispute arising out of or in connection with this Agreement shall be submitted for resolution in accordance with Article 10 of the Joint Venture Agreement. The Parties shall be entitled to injunctive relief or specific performance to the extent provided for in Section 10.4 of the Joint Venture Agreement.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, each of the Parties has caused this Asset Contribution Agreement to be executed on its behalf by their respective officers thereunto duly authorized all as of the date first written above.

MAXYGEN, INC.:

By:

Name:

Title:

Signature Page to Asset Contribution Agreement

IN WITNESS WHEREOF, each of the Parties has caused this Asset Contribution Agreement to be executed on its behalf by their respective officers thereunto duly authorized all as of the date first written above.

CPC:

By:

Name:

Title:

Signature Page to Asset Contribution Agreement

EX-2.1.2

EXHIBIT 2.1.2

OTHER PRODUCTS COLLABORATION AGREEMENT

This Other Products Collaboration Agreement (this “Agreement”) is entered into as of the     ^th day of                 , 2009 (“Effective Date”) by and between Astellas Pharma Inc., a Japanese corporation, with its principal place of business at 3-11, Nihonbashi-Honcho 2-chome, Chuo-ku, Tokyo 103-8411 Japan (“Astellas”), and CPC, a Delaware limited liability company with its principal place of business at 515 Galveston Drive, Redwood City, California 94063 USA (“CPC”). Astellas and CPC are each referred to herein by name or, individually, as a “Party” or, collectively, as the “Parties.”

BACKGROUND

A. CPC owns or possesses certain Patents (as defined below) and Know-How (as defined below) with respect to certain proteins with potential therapeutic applications and has certain rights and expertise with respect to Enabling Technology (as defined below) as a result of an Asset Contribution Agreement and a Technology License Agreement (the “Technology License Agreement”) between Maxygen, Inc., a Delaware corporation with its principal place of business at 515 Galveston Drive, Redwood City, California, 94063 (“Maxygen”), and CPC of even date herewith;

B. CPC desires to collaborate with a pharmaceutical company with development, manufacturing and commercialization expertise with regard to pharmaceutical products, so as to pursue the therapeutic and commercial potential of such proteins, and Astellas desires to collaborate with CPC in the discovery, research, and preclinical development of such proteins for one or more indications in accordance with the terms and conditions of this Agreement;

C. Astellas possesses pharmaceutical development, manufacturing and commercialization capabilities; and

D. CPC and Astellas desire to collaborate in the discovery, research, and preclinical development of pharmaceutical products incorporating proteins, all on the terms and conditions set forth herein below.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

The following capitalized terms shall have the corresponding meanings as used in this Agreement:

1.1 “Accounting Standards” means generally accepted accounting principles applicable internationally or in a particular country (e.g., International Accounting Standards, Japanese Accounting Standards, U.S. Accounting Standards), as consistently applied by or on behalf of the relevant Party.

1.2 “Affiliate” means any corporation or other business entity that controls, is controlled by, or is under common control with a Party, for so long as such control exists. A corporation or other entity shall be regarded as in control of another corporation or entity if it owns or directly or indirectly controls at least fifty percent (50%) of the outstanding shares or other voting rights of the other corporation or entity having the right to elect directors or such lesser percentage that is the maximum permitted to be owned by a foreign entity in those jurisdictions where majority ownership by foreign entities is prohibited, or (i) in the absence of the ownership of at least fifty percent (50%) of the outstanding shares or other voting rights of a corporation, or (ii) in the case of a non-corporate business entity, if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or non-corporate business entity, as applicable, whether through the ownership or control of voting securities, by contract or otherwise. Notwithstanding a Party’s ownership interest in, or control over, the other Party, a Party hereunder shall not be deemed an Affiliate of the other Party under this Agreement.

1.3 “Astellas Technology” means (i) Astellas Know-How, (ii) Astellas Patents, and (iii) Astellas’ rights and interest in all Other Program Technology.

1.3.1 “Astellas Know-How” means any and all Know-How, and any and all non-Patent intellectual property rights therein, Controlled by Astellas or its Affiliates during the Term that is reasonably necessary or useful for the Preclinical Development, development, manufacture or commercialization of an Other Compound or Other Product within the Field in the Territory in accordance with this Agreement.

1.3.2 “Astellas Patents” means any and all Patents Controlled by Astellas or its Affiliates during the Term claiming or covering (specifically or generically) (i) compositions of matter of any Other Compound or Other Product (or any formulation of either), (ii) methods or processes for the manufacture or synthesis of any Other Compound or Other Product (or any formulation of either) or (iii) methods of use, administration or formulation of any Other Compound or Other Product (or any formulation of either), including Patents that claim Astellas Independent Inventions and Astellas’ interest in Patents claiming Joint Inventions.

1.4 “Budget” means the budget set forth in the Preclinical Development Plan, as may be modified from time-to-time as set forth herein.

1.5 “Business Day” means any day other than a Saturday, Sunday or any other day on which commercial banks in Tokyo, Japan or San Francisco, California (as applicable) are authorized or required by Law to remain closed.

1.6 “Buy-Out Option” shall have the meaning provided in the Investors’ Rights Agreement by and between CPC, Maxygen, Astellas Bio Inc., Astellas and Astellas US Holding, Inc. of even date herewith (the “Investors’ Rights Agreement”).

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1.7 “Co-Development Agreement” means the Co-Development and Commercialization Agreement by and between CPC (as successor-in-interest to Maxygen) and Astellas, dated September 18, 2008, as the same may be amended from time to time.

1.8 “Control” means, with respect to particular Know-How and any and all non-Patent intellectual property rights therein, or a particular Patent, possession by the Party granting the applicable right, license or sublicense to the other Party as provided herein, of the power and authority, whether arising by ownership, license, or other authorization, to disclose and, if applicable, to deliver the particular Know-How to the other Party, and to grant and to authorize under such Know-How or Patent the right, license or sublicense, as applicable, to such other Party in this Agreement without giving rise to a violation of the terms of any written agreement with any Third Party. “Controlled” and “Controlling” have their correlative meanings.

1.9 “CPC Technology” means (i) CPC Know-How, (ii) CPC Patents, and (iii) CPC’s rights and interest in all Other Program Technology; provided, however, CPC Technology shall only include CPC’s rights and interest in any Enabling Technology to the extent necessary to perform non-Shuffling preclinical development, development, manufacture, commercialization or other exploitation of any Other Protein Variant or Other Product.

1.9.1 “CPC Know-How” means any and all Know-How, and any and all non-Patent intellectual property rights therein, Controlled by CPC or its Affiliates during the Term, or by Maxygen and its Affiliates prior to the Effective Date in accordance with Section 3.5, that is reasonably necessary or useful for the Preclinical Development, development, manufacture or commercialization of an Other Compound or Other Product within the Field in the Territory in accordance with this Agreement.

1.9.2 “CPC Patents” means any and all Patents Controlled by CPC or its Affiliates during the Term, or by Maxygen and its Affiliates prior to the Effective Date in accordance with Section 3.5, claiming or covering (specifically or generically) (i) compositions of matter of any Other Compound or Other Product (or any formulation of either), (ii) methods or processes for the manufacture or synthesis of any Other Compound or Other Product (or any formulation of either), (iii) methods of use, administration or formulation of any Other Compound or Other Product (or any formulation of either), (iv) nucleic acid sequences encoding any Other Compound, or (v) cell lines expressing any Other Compound, including (A) those Patents set forth on Exhibit 1.9.2 as of the Effective Date, and (B) Patents that claim CPC Independent Inventions. For clarity, CPC Patents include CPC’s interest in Patents claiming Joint Inventions.

1.10 “CTLA-4 Program” means any and all activities performed by or on behalf of CPC pursuant to the Co-Development Agreement.

1.11 “CTLA-4 Variant” shall have the meaning provided in the Co-Development Agreement.

1.12 “Data” means any and all research data, results, pharmacology data, medicinal chemistry data, preclinical data, clinical data (including investigator reports (both preliminary and final), statistical analysis, expert opinions and reports, safety and other electronic databases), in any

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and all forms, including files, reports, raw data, source data (including patient medical records and original patient report forms (excluding patient-specific data to the extent required by applicable law) and the like, in each case directed to, or used in the Preclinical Development or development, manufacture or commercialization of an Other Product hereunder.

1.13 “Dollars” or “$” refers to United States dollars.

1.14 “EMEA” means the European Medicines Agency, or any successor entity thereto.

1.15 “Enabling Technology” means the Enabling Technology as defined under the Technology Licensed Agreement. For clarity, Enabling Technology excludes (i) any Patents listed on Schedules 2.1(a), 2.1(b)(2) or 2.1(e) of the Asset Contribution Agreement between CPC and Maxygen of even date herewith, and (ii) any CTLA-4 Variants and Other Protein Variants resulting from the use of the Enabling Technology, together with genetic materials encoding, and cell lines expressing, any such CTLA-4 Variant or Other Protein Variant.

1.16 “Excluded Protein Variant” means (i) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a (A) granulocyte colony stimulating factor (G-CSF), (B) Exclusively Out-Licensed Protein, (C) a protein from an infectious agent or a polynucleotide encoding such protein that in each case is intended to be used as a Vaccine (including infectious agents or other constructs incorporating a Vaccine and/or genetic material encoding a Vaccine (including live-attenuated or whole killed virus), but solely when such agent, construct or material is included with or otherwise incorporates a protein from an infectious agent (or variant, homolog, derivative, mutant or fragment of such protein as described in (D), below) or a polynucleotide encoding such protein (or such variant, homolog, derivative, mutant or fragment) and is intended to be used as a Vaccine), or (D) any variant, homolog, derivative, mutant, or fragment of subsection (A) or (B) or (C), which in the case of (C) is intended to be used as a vaccine (each, an “Excluded Protein Molecule”) and (ii) any Excluded Protein Molecule that is conjugated or otherwise coupled to any other molecule (e.g., polyethylene glycol, immunoglobulin domain, sialylation, pegylated, or glycosylation). In no event shall Excluded Protein Variants include any CTLA-4 Variants or (x) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a protein or polypeptide listed on Schedule 2.1(b)(1) of the Asset Contribution Agreement, or (y) any variant, homolog, derivative, mutant, or fragment of subsection of (x), provided that in the case of (y) such variant, homolog, derivative, mutant, or fragment has not been altered or modified in such a way as to cause such variant, homolog, derivative, mutant, or fragment to fall within (A), (B), or (C) of the definition of Excluded Protein Variant or Vaccine set forth in the first sentence of this Section 1.16, or to fall within (D) above such that a reasonable, independent expert knowledgeable and experienced in working with protein pharmaceuticals would primarily consider such variant, homolog, derivative, mutant, or fragment to be a variant of a protein or polypeptide within (A), (B) or (C) above or a material portion thereof (rather than as a variant of some other protein or material portion thereof). For purposes of this definition of Excluded Protein Variant or Vaccine:

1.16.1 “Exclusively Out-Licensed Protein” has the meaning set forth in Exhibit 1.16.1 attached hereto.

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1.17 “FDA” means the United States Food and Drug Administration, or any successor entity thereto.

1.18 “Field” means: (i) with respect to Other Compounds and Other Products that are Resulting Products derived in whole or part from Shuffling conducted prior to January 1, 2017, the Treatment of human diseases or conditions, and (ii) with respect to all other Other Compounds and Other Products, the Treatment or diagnosis of human diseases or conditions.

1.19 “Fiscal Year” means each twelve (12) month period beginning on 1 April of each year and ending on the following 31 March and so on year-by-year. “Fiscal Year 2010” means such period beginning on 1 April 2010 and ending on 31 March 2011; “Fiscal Year 2011” means such period beginning on 1 April 2011 and ending on 31 March 2012, and so on, year-by-year.

1.20 “FTE” shall mean a full-time equivalent person year, on or directly related to performing applicable activities hereunder. Notwithstanding the foregoing, CPC shall not charge more than one FTE (or pro-rata portion thereof for the applicable period) for the time worked by any individual.

1.21 “FTE Rate” shall be Three Hundred Thousand Dollars ($300,000) per FTE.

1.22 “G-CSF Program Support” means all activities, if any, performed by CPC scientific or technical personnel during the Term of this Agreement in support of Maxygen (or its successor-in-interest), or one or more of its licensees with respect to one or more G-CSF Variants or products containing a G-CSF Variant, related to the discovery, research, development, manufacture, commercialization or other exploitation of one or more G-CSF Variants or products containing a G-CSF Variant.

1.23 “G-CSF Variant” means (i) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a granulocyte colony stimulating factor (G-CSF) or any variant, homolog, derivative, mutant, or fragment thereof (each, a “G-CSF Molecule”) and (ii) any G-CSF Molecule that is conjugated or otherwise coupled to any other molecule (e.g., polyethylene glycol, immunoglobulin domain, sialylation, pegylated, or glycosylation).

1.24 “IND” means, with respect to the United States, an investigational new drug application filed with the FDA as more fully defined in 21 C.F.R. §312.3 or, with respect to a jurisdiction other than the United States, a corresponding filing with the applicable Regulatory Authority for purposes of obtaining permission to initiate human clinical testing in such jurisdiction (e.g., a clinical trial authorization in the United Kingdom or other countries within Europe).

1.25 “IND Enabling Studies” means, with respect to a particular Other Compound, any and all studies which in each case are reasonably necessary to support filing of an IND for such Other Compound, including pharmacokinetic, pharmacodynamic, preclinical safety, toxicology and any other studies (including studies relating to manufacturing, analytical methods and purity analysis, and formulation and process development studies) required for an IND filing.

1.26 “Know-How” means any and all data, information and tangible materials including (i) ideas, discoveries, inventions, improvements or trade secrets; (ii) research and development data,

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such as medicinal chemistry data, nonclinical data, preclinical data, pharmacology data, chemistry data (including analytical, product characterization, manufacturing, and stability data), toxicology data, clinical data (including investigator reports (both preliminary and final), statistical analyses, expert opinions and reports, safety and other electronic databases), analytical and quality control data and stability data, in each case together with supporting data; (iii) databases, specifications, formulations, formulae; (iv) practices, knowledge, techniques, methods, formulas, processes, manufacturing information; and (v) research materials, reagents and compositions of matter, including Other Compounds and biological material. Know-How excludes any Patent rights with respect thereto (but does include information in unpublished patent applications).

1.27 “Law” means, individually and collectively, any and all laws, ordinances, rules, directives and regulations of any kind whatsoever of any governmental or regulatory authority within the applicable jurisdiction.

1.28 “Licensed Technology” means, with respect to Astellas, Astellas Technology, and with respect to CPC, CPC Technology.

1.29 “Other Compound” means any Other Protein Variant that (i) is owned or Controlled by CPC as of the Effective Date, including those Other Protein Variants described on Exhibit 1.29 (each, an “Existing Compound”) or (ii) is discovered, conceived, or first reduced to practice by, for, or on behalf of CPC (solely or jointly with others) during the Term (each, a “New Compound”). For the avoidance of doubt, Other Compounds exclude Other Protein Variants proprietary to Astellas (e.g., for which Astellas owns or Controls Patents or Know-How that cover such Other Protein Variants or formulations thereof) (i) that are discovered, acquired, conceived, or first reduced to practice by, for, or on behalf of Astellas prior to the Effective Date, or (ii) that are discovered, acquired, conceived, or first reduced to practice by, for, or on behalf of Astellas, independently of CPC, during the Term (collectively, the “Astellas Compounds”), unless expressly added to the Agreement in writing in accordance with Section 5.4. For the avoidance of doubt, if any Existing Compound or New Compound is also a Astellas Compound, then such compound shall be included in this definition of Other Compound but any and all Know-How or Patents Controlled by Astellas independently of activities by or on behalf of Astellas under this Agreement with respect to such compound shall not be deemed included under Astellas Know-How or Astellas Patents for purposes of this Agreement, unless expressly added to the Agreement in writing in accordance with Section 5.4.

1.30 “Other Product” means any pharmaceutical product that contains an Other Compound as an active ingredient. For avoidance of doubt, Other Product shall include any formulation, delivery device, dispensing device or packaging required for effective use of the Other Product.

1.31 “Other Program Technology” means all Know-How and other subject matter conceived, generated or first reduced to practice by or on behalf of a Party (solely or jointly with the other Party) in the course of conducting the Other Programs, or by Maxygen and its Affiliates prior to the Effective Date in accordance with Section 3.5, together with any and all intellectual property rights (including Patents) therein.

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1.32 “Other Programs” means, individually and collectively, any and all of the activities performed (i) by or on behalf of either Party pursuant to the Preclinical Development Plan or (ii) by or on behalf of CPC otherwise directed to any Other Protein Variant for the discovery, research, development, manufacture, commercialization or other exploitation of any Other Protein Variant or Other Product for use in the Field during the Term.

1.33 “Other Protein Variant” means (i) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a human or animal protein, including, without limitation, any protein or polypeptide listed on Schedule 2.1(b)(1) of the Asset Contribution Agreement, or any variant, homolog, derivative, mutant or fragment of the foregoing subsection (i), including, without limitation, amino acid chains resulting from the use of Shuffling, in each case other than any (A) CTLA-4 Variant or (B) Excluded Protein Variant or Vaccine, (each such protein or variant, homolog, derivative, mutant or fragment thereof, an “Other Protein Molecule”) and (ii) any Other Protein Molecule that is conjugated or otherwise coupled to any other molecule (e.g., polyethylene glycol, immunoglobulin domain, sialylation, pegylated, or glycosylation).

1.34 “Patent” means any of the following, existing at any time in any country or other jurisdiction anywhere in the world: (i) any issued patent (including inventor’s certificates, utility model, petty patent and design patent), extensions, confirmations, reissues, re-examination, renewal, supplementary protection certificates or any like governmental grant for protection of inventions; and (ii) any pending application for any of the foregoing, including any request for continued examination (RCE), continuations, continuations-in-part, divisionals, provisionals, converted provisionals, continued prosecution applications, or substitute applications.

1.35 “Preclinical Development” means any and all processes and activities for the discovery and research of Other Protein Variants and development of Other Compounds and associated Other Products including those processes and activities, whether in vitro or in vivo conducted to: (i) discover, screen, optimize, clone, express, purify, formulate, characterize or enhance any Other Compound, including synthesis or Shuffling of any Other Compound, conjugation thereof, or similar activities; (ii) perform IND Enabling Studies with respect to an Other Compound and (iii) discover, develop, optimize, characterize or enhance technologies and tools including assays, screens, biological models, software and databases reasonably for the support of or in connection with any of the activities described in clauses (i) and (ii) above or development or manufacture.

1.36 “Preclinical Development Costs” means the (i) external out-of-pockets costs and expenses, and (ii) internal costs and expenses calculated on an FTE basis as the FTE Rate, in each case incurred after the Effective Date by CPC in accordance with the Preclinical Development Plan and Budget that are reasonably attributable and fairly allocable to Preclinical Development activities performed pertaining to any Other Protein Variants or Other Compounds, including the costs of (a) processes and activities, whether in vitro or in vivo, conducted to discover, screen, optimize, clone, express, purify, formulate, characterize or enhance any Other Compound, including synthesis or Shuffling of any Other Compound, conjugation thereof, or similar activities; (b) the conduct of IND Enabling Studies with respect to an Other Compound; (c) processes and activities conducted to discover, develop, optimize, characterize or enhance technologies and tools including assays, screens, biological models, software and databases reasonably necessary for the support of any of the

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activities described in clauses (a) and (b) above, or development or manufacture of Other Compounds, and (d) manufacture of Other Compounds or Other Products for such activities; and (iii) any other costs or expenses that are expressly included in the Preclinical Plan and Budget as approved by the JSC.

1.37 “Regulatory Authority” means any federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity with authority over the Preclinical Development, development, manufacture, commercialization or other exploitation (including the granting of Marketing Approvals) with respect to any Other Product in any jurisdiction, including the FDA, EMEA, and the Ministry of Health, Labor and Welfare in Japan.

1.38 “Resulting Product” means any of the following (i) any Resulting Genetic Material, (ii) any vector of any type (e.g., cosmid, plasmid, spore, phage, virus, and/or virus-like particle), and subunits of the foregoing, which contain any Resulting Genetic Material, (iii) any organism, including any prokaryotic and/or eukaryotic cell and/or animal containing any Resulting Genetic Materials; (iv) any Resulting Protein; (iv) any eukaryotic cell, prokaryotic cell and/or expression systems expressing, secreting and/or otherwise producing a Resulting Protein; and/or (v) any product containing in whole and/or part, and/or made with and/or using in whole and/or part, any of the foregoing, in each case, in purified or unpurified form, and alone and/or in combination with other substances, and including any modifications, derivatives, progeny (altered and/or unaltered) and/or fragments of any of the foregoing.

1.38.1 “Resulting Genetic Material” means any genetic material (including DNA and/or RNA) that is generated, created and/or otherwise results directly from exercise of the Shuffling Technology.

1.38.2 “Resulting Protein” means any protein, polypeptide, antibody and/or other molecule encoded in whole and/or part by any Resulting Genetic Material.

1.39 “Shuffle” means techniques, methodologies, processes, materials or instrumentation for performing recombination-based modification of genetic material for the creation of potentially useful variant nucleic acids or proteins. “Shuffled” and “Shuffling” have their correlative meanings.

1.40 “Shuffling Technology” means Know-How or Patents owned by or licensed to CPC directed to the use of or comprising or claiming compositions or methods for Shuffling.

1.41 “Territory” means all countries and territories of the world.

1.42 “Third Party” means any entity other than Astellas or CPC, or their respective Affiliates. For the avoidance of doubt, sublicensees which are not an Affiliate of Astellas or CPC shall be included in the definition of Third Party.

1.43 “Treatment” means, with respect to a particular indication, the prophylaxis, cure, reduction, mitigation, prevention, slowing or halting the progress of, or otherwise management of such indication. “Treat” and “Treating” means providing Treatment.

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1.44 “United States” means the United States of America and its possessions and territories.

1.45 “Vaccine” means a formulation intended to be administered in a formulation containing one or more Antigen(s) (and/or a nucleic acid sequence encoding an Antigen) in the form of (i) an infectious agent (e.g., bacteria, viruses, parasite, protozoa) whether live, attenuated or dead, (ii) protein(s), (iii) nucleic acid(s), (iv) cells, spores and vectors (i.e., viruses and/or virus-like particles, liposomes, beads and/or other substrates for Antigen presentation), (v) fragments of any of the foregoing, and/or (vi) a combination of any of the preceding, which formulation is administered for the purpose of inducing an Immune Response in the human and/or animal recipient specifically directed to at least one such Antigen for the prevention or treatment of a disease state, symptom and/or condition in humans and/or animals caused by an infectious agent. For the purposes of this definition of Vaccine:

1.45.1 “Antigen” means a molecule (i.e., protein, polypeptide, peptide, carbohydrate, glycoprotein, glycolipid and/or any combination of the foregoing that is, or is derived in whole or part from, a molecule associated with an infectious agent) that produces an Immune Response to such molecule in a human and/or animal recipient; and

1.45.2 “Immune Response” means an immune state directed to the applicable infectious agents (or a molecule associated with such infectious agent) resulting from the modulation of activity (i.e., an increase, decrease and/or qualitatively different activity) of one or more lymphoid cells (e.g., B cells, NK cells, T cells and/or professional antigen-presenting cells, such as monocytes, macrophages, Langerhans cells, dendritic cells) following the administration of a stimulus.

1.46 Additional Definitions. Each of the following definitions shall have the meaning defined in the corresponding sections of this Agreement indicated below:

Definitions	Section	Definitions	Section
Academic Programs	3.4.1	Losses	8.5.1(a)
Agreement	Preamble	Maxygen	Background
Astellas	Preamble	Maxygen Program Technology	3.5
Astellas Indemnitees	8.5.1(a)	Minimum Quarterly FTE Funding	3.2.2
Bayer Agreement	8.3.4(a)	Negotiation Period	5.3.3
Claims	8.5.1(a)	one Other Protein Variant	5.3.1
Co-Chair	2.3.2	Optioned Rights	5.3.1
Collared Amounts	3.2.2	Option	5.3.1
Confidential Information	7.1	Option Period	5.3.2
Controlling Party	6.2.3	Other Party	6.2.3
CPC	Preamble	Other Program License Agreement	5.3.3
CPC Indemnities	8.5.1(b)	Owning Party	6.2.1
Effective Date	Preamble	Parties	Preamble
Exclusively Out-Licensed Protein	Exhibit 1.16.1	Party	Preamble

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Definitions	Section	Definitions	Section
Existing Patents	6.2.2(b)	Preclinical Development Plan	3.2.1
Fault of Astellas	8.5.1(b)	Preclinical Funding Period	4.1.1
Fault of CPC	8.5.1(a)	Prior Maxygen Program Activities	3.5
HSR Expenses	5.3.4	Prosecution and Maintenance	6.2.4
ICC Rules	10.2	Publishing Party	7.3
Indemnified Party	8.6	Representing Party	8.1
Indemnifying Party	8.6	Reviewing Party	7.3
Independent Inventions	6.1.2(a)	SEC	7.4
Independent Patents	6.2.1	Shuffling Improvements	6.1.2(b)
Initial Preclinical Development Plan	3.2.1	Technology License Agreement	Background
JSC	2.2	Term	9.1
JSC Matter	2.5	Third Party Agreements	8.3
Joint Inventions	6.1.2(a)	Transfer Taxes	4.6
Joint Patents	6.2.3	Unassigned Maxygen Contractor Agreements	2.10
Joint Steering Committee	2.2	Unfunded Existing Patents	6.2.2(b)(iii)

1.47 Interpretation. The captions and headings to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless specified to the contrary, references to Articles, Sections or Exhibits mean the particular Articles, Sections or Exhibits to this Agreement and references to this Agreement include all Exhibits hereto. Each accounting term used herein that is not specifically defined herein shall have the meaning given to it under applicable Accounting Standards, but only to the extent consistent with its usage and the other definitions in this Agreement. Unless context otherwise clearly requires, whenever used in this Agreement: (i) the words “include” or “including” shall be construed as incorporating, also, “but not limited to” or “without limitation;” (ii) the word “day” or “year” means a calendar day or calendar year unless otherwise specified; (iii) the word “notice” means notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other communications contemplated under this Agreement; (iv) the words “hereof,” “herein,” “hereby” and derivative or similar words refer to this Agreement (including all Exhibits); (v) the word “or” shall be construed as the inclusive meaning identified with the phrase “and/or;” (vi) provisions that require that a Party, the Parties or any committee or team hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise; (vii) words of any gender include the other gender; and (viii) references to any specific Law or article, section or other division thereof shall be deemed to include the then-current amendments thereto or any replacement Law thereof. This Agreement was prepared in the English language, which language shall govern the interpretation of, and any dispute regarding, the terms of this Agreement.

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ARTICLE 2

SCOPE AND GOVERNANCE OF THE OTHER PROGRAMS

2.1 Scope and Conduct of the Other Programs; Diligence. Subject to the terms and conditions of this Agreement, CPC shall use commercially reasonable efforts to perform Preclinical Development of Other Compounds and Other Products. Accordingly, the Parties shall establish the Preclinical Development Plan in accordance with Section 3.2 to provide for a commitment of resources by CPC (and Astellas, to the extent provided in Section 3.2) so as to satisfy its diligence obligations described in the preceding sentence; provided, however, CPC’s obligation to commit resources shall take into account, and be subject to, its obligations to commit resources to the CTLA-4 Program and, in addition, subject to prior written consent of Astellas to the extent required in accordance with Section 3.4.2, CPC may make a reasonable number of its scientific and technical personnel reasonably available for G-CSF Program Support as long as such provision of personnel for the G-CSF Program does not impair its ability to, or the availability of its personnel to, perform the Preclinical Development Plan or the CTLA-4 Program or otherwise conflict with its obligations hereunder. CPC shall not be obligated hereunder to commit resources or incur expenses to perform Preclinical Development of Other Compounds or Other Products that are not required to be paid for or reimbursed by Astellas hereunder. Each Party shall make all decisions and conduct all of its obligations under the Other Programs in a manner, in its good faith determination, consistent with the terms of this Agreement. Each Party shall cooperate with and provide reasonable support to the other Party in the conduct of such activities. For the avoidance of doubt, a Party’s obligations to use commercially reasonable efforts in this Section 2.1 or anywhere else in this Agreement may be satisfied by such Party’s Affiliates and permitted contractors and sublicensees.

2.2 Joint Steering Committee. Promptly after the Effective Date, the Parties shall establish a joint steering committee (the “Joint Steering Committee” or “JSC”). The JSC shall be responsible for:

(a) establishing the direction and objectives for the Other Programs;

(b) reviewing the possibility of allocating additional resources of the Parties to perform Preclinical Development specifically directed to Other Compounds, and providing for such additional resources of the Parties as appropriate, consistent with the Preclinical Development Plan, in accordance with Section 3.2;

(c) preparing and approving the Preclinical Development Plan and associated Budget (the draft Initial Preclinical Development Plan and associated Budget, is attached hereto as Exhibit 3.2) including allocation of responsibilities between the Parties thereunder in accordance with the applicable terms and conditions of this Agreement;

(d) reviewing and monitoring the performance of each Party of activities assigned to it under the Preclinical Development Plan;

(e) monitoring and reporting CPC’s costs and expenditures with respect to Preclinical Development against the applicable Preclinical Development Plan and Budget for such activities;

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(f) evaluating the Preclinical Development Plan based on the results and progress of the activities thereunder, and preparing and approving draft Preclinical Development Plans and/or modifications to the Preclinical Development Plan in accordance with Section 3.2;

(g) reviewing and approving, to the extent provided in Section 2.10, any material agreements to be entered into by a Party with a Third Party contractor for the conduct on any activities under the Preclinical Development Plan;

(h) establishing subcommittees or joint project teams, as the JSC may from time to time agree is necessary or useful, to conduct activities within the scope of the JSC’s authority, and to oversee such subcommittees or joint project teams including, without limitation, establishing a JPT with substantially the same scope of activities as provided in the Co-Development Agreement; and

(i) undertaking or approving such other matters that pertain to the Preclinical Development Plan or Other Programs as are specifically provided for the JSC under this Agreement.

2.3 JSC Membership.

2.3.1 General. The JSC shall be comprised of two (2) representatives from each of CPC and Astellas. CPC’s and Astellas’ initial representatives to the JSC are set forth on Exhibit 2.3. Each Party shall appoint to the JSC at least one representative with relevant decision-making authority from such Party such that the JSC is able to effectuate all of its decisions within the scope of the JSC’s responsibilities. Subject to the foregoing, either CPC or Astellas may at any time replace or remove its respective JSC representatives upon prior written notice to the other Party, provided that any replacement shall be of comparable authority and scope of functional responsibility within that Party’s organization as the person he or she is replacing.

2.3.2 Co-Chairs. Each Party shall appoint one of its members to the JSC to co-chair the meetings for the JSC (each, a “Co-Chair”). The Co-Chairs shall (i) coordinate and prepare the agenda and ensure the orderly conduct of the JSC’s meetings, (ii) attend (subject to below) each meeting of the JSC, (iii) prepare and issue minutes of each meeting within thirty (30) days thereafter accurately reflecting the discussions and decisions of the JSC, and (iv) call ad hoc meetings if necessary to address pressing matters. Such minutes from each meeting shall not be finalized until the applicable Co-Chair from each Party has reviewed and confirmed the accuracy of such minutes in writing. The Co-Chairs shall solicit agenda items from its JSC members and provide an agenda along with appropriate information for such agenda reasonably in advance of any meeting. It is understood that such agenda will include all items requested by either Co-Chair for inclusion therein. In the event the Co-Chair or another JSC member from either Party is unable to attend or participate in a particular JSC meeting, the Party who designated such Co-Chair or member may designate a substitute Co-Chair or other representative for the meeting.

2.4 Committee Meetings. The JSC shall meet at least three (3) times during each year, or as more often as otherwise agreed by the Parties by telephone, videoconference or in person as determined by the JSC, provided that at least once annually such meeting shall be held in person.

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All in-person meetings of the JSC shall be held on an alternating basis between CPC’s and Astellas’ facilities, unless otherwise agreed by the Parties. As appropriate, other representatives of the Parties and their Affiliates may attend committee meetings as nonvoting observers, but no Third Party personnel may attend unless otherwise agreed by the Parties (such agreement not to be unreasonably withheld). Each Party may also call for special meetings on an ad hoc basis to resolve particular matters requested by such Party. Each Co-Chair shall provide the JSC members with no less than fifteen (15) Business Days notice of each regularly scheduled meeting, and no less than five (5) Business Days notice of any special meetings called by either Party. The first meeting of the JSC shall occur within thirty (30) days of the Effective Date and the last meeting of the JSC shall occur (unless this Agreement is otherwise earlier terminated) within sixty (60) days prior to the expiration of this Agreement.

2.5 Decision Making. Decisions of the JSC shall be made by unanimous vote of the members present in person or by other means (e.g., telephone or video) at any meeting, with each Party having one vote (regardless of the number of representatives such Party has appointed to the JSC). In order to make any decision, the JSC must have present (in person or telephonically) at least one representative of each Party. If the JSC does not reach consensus with respect to a particular matter within the scope of its authority as stated under Section 2.2 of the Agreement (a “JSC Matter”) after endeavoring for seven (7) days (or such other agreed upon period) to do so, then the JSC, at its determination based on the specific circumstances of the matter, shall refer such JSC Matter to (i) the CEOs (or an executive officer designated by the CEO) of the Parties for resolution as provided in Section 10.1.2 and then, if not resolved (ii) dispute resolution as provided in Section 10.2 or 10.3.

2.6 Reporting to the JSC. Each Party shall keep the JSC fully informed of progress and results of activities, including appropriate summaries of relevant Data generated therefrom, for which it is responsible under the Preclinical Development Plan, as well as progress and results of its other activities, including appropriate summaries of relevant Data generated therefrom, with respect to Preclinical Development of Other Compounds and Other Products, through its members on the JSC.

2.7 Performance of Representatives. CPC and Astellas shall cause each of their representatives on the JSC to vote, and shall otherwise perform their respective activities under this Agreement, in a good faith manner consistent with the terms and conditions of this Agreement and such Party’s respective obligation to use commercially reasonable efforts under Section 2.1.

2.8 Day-to-Day Decision Making Authority. Each Party (itself or through a designee) shall have decision making authority with respect to the day-to-day operations of the Preclinical Development of Other Compounds and Other Products in the Territory for which it is responsible under the Preclinical Development Plan, provided that such decisions are not inconsistent with the Preclinical Development Plan or the express terms and conditions of this Agreement (including the allocation of operation responsibility for various activities as set forth herein). Without limiting the foregoing, CPC shall, and, to the extent Astellas has agreed in accordance with Section 3.2 to perform activities hereunder, Astellas shall, in each such Party’s discretion, determine the allocation of its specific personnel and resources to perform the activities with respect to Preclinical Development of Other Compounds and Other Products for which it is responsible under the Preclinical Development Plan, provided that such decisions are not inconsistent with the Preclinical Development Plan and such Party’s obligations under this Agreement.

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2.9 Co-Development Agreement Separation. The JSC and other governance, planning and budgets provided herein are applicable only to the Other Programs and are separate from, and not applicable to, the governance and decision-making provisions under the Co-Development Agreement and will in no way override, supersede or limit such provisions or the control provided to Astellas or CPC under the Co-Development Agreement.

2.10 Use of Contractors. Each Party shall each have the right to use the services of Third Party contractors, including contract research organizations, contract manufacturing organizations and the like, to assist such Party in fulfilling its obligations and exercising its rights under this Agreement, provided that such Third Party is bound by a written agreement that is consistent with terms of this Agreement, including intellectual property ownership and confidentiality provisions consistent with those set forth in Article 6 and Article 7, and the terms of such written agreement is consistent with industry norms for payments, quality and in other material respects. When practicable, each Party shall use commercially reasonable efforts to compare the services available from multiple contractors for each task to optimize the time, cost and quality delivered to the Other Programs. Notwithstanding the foregoing, each Party shall consider the possibility of using the other Party’s resources to perform such activities as an alternative to utilizing the services of a contractor. Any such agreement with a Third Party contractor under which anticipated payments would reasonably be expected (as determined at the time of signing) to exceed Fifty Thousand Dollars ($50,000) in a given calendar quarter, or One Hundred Thousand Dollars ($100,000) in total, shall be submitted to the JSC for its review and approval, prior to the relevant Party entering in such agreement with the Third Party contractor. Each Party shall remain responsible for ensuring the compliance of its Affiliates with the applicable terms of this Agreement. Each Party shall contractually obligate its licensees, sublicensees and contractors that are performing activities by, for or on behalf of such Party under this Agreement or are otherwise licensed or sublicensed under the CPC Technology or the Astellas Technology to comply with all relevant restrictions, limitations and obligations in this Agreement applicable to such licensees, sublicensees and contractors, and agrees to reasonably enforce such contractual obligations in the event of material breach by one of its licensees, sublicensees and contractors of such obligations. CPC shall have the right (i) to continue to use the services of Third Party contractors that are (or whose affiliates are) parties to those written agreements set forth in Exhibit 2.10 that are already in effect as of the Effective Date and that have been assigned from Maxygen to CPC under the Asset Contribution Agreement (which agreements may relate to activities with respect to the CTLA-4 Program or the Other Programs), and to enter into additional work orders or otherwise extend or expand such contracts for additional services of a similar nature on substantially similar terms and conditions as provided in the corresponding written agreement (which, for clarity, may include services with respect to a Program that are of a similar nature to services previously provided by such Third Party with respect to another Program), and (ii) to enter into written agreements with Third Party contractors that are substantially identical to those written agreements between Maxygen and such Third Party contractors that are set forth in Exhibit 2.10 which are not assigned to CPC under the Asset Contribution Agreement (“Unassigned Maxygen Contractor Agreements”), for substantially similar services as were provided to Maxygen by such Third Party contractor (but for services with respect to the Projects, and with appropriate adjustments in payments to reflect the services to be provided) in each case to assist CPC

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in fulfilling its obligations and exercising its rights under this Agreement, and this Section 2.10 shall not be construed to require CPC to renegotiate or amend the terms of such contracts (or, in the case of Unassigned Maxygen Contractor Agreements, to negotiate terms that are substantially different from the terms set forth in the Unassigned Maxygen Contractor Agreements); provided, however, that CPC shall be required to obtain JSC approval as set forth above in this Section 2.10 with respect to additional anticipated expenses from any such amendment or modification (including new or modified work orders) of such an agreement in excess of Fifty Thousand Dollars ($50,000) in a given calendar quarter, or One Hundred Thousand Dollars ($100,000) in total.

ARTICLE 3

PRECLINICAL DEVELOPMENT

3.1 Preclinical Development. CPC shall conduct a research and discovery program directed toward Preclinical Development of Other Compounds in accordance with the Preclinical Development Plan (as defined below), subject to the JSC’s oversight, coordination, and/or direction with respect to matters within its purview pursuant to this Agreement. Each Party will be responsible for conducting, and shall use commercially reasonable efforts to conduct, the activities allocated to such Party, if any in the case of Astellas, under the Preclinical Development Plan and shall use commercially reasonable efforts to progress and complete such activities within the timeframes set forth therein, including by allocating such personnel as reasonably necessary to progress and complete the tasks assigned to it in the then-current Preclinical Development Plan within the timeframes as set forth therein, but no less than the number of personnel set forth for such Party in the then-current Preclinical Development Plan on a task-by-task basis; provided that CPC’s obligation to commit resources shall take into account, and be subject to, its obligations to commit resources to the CTLA-4 Program, and in addition, subject to prior written consent of Astellas to the extent required in accordance with Section 3.4.2, CPC may make a reasonable number of its scientific and technical personnel reasonably available for G-CSF Program Support as long as such provision of personnel for the G-CSF Program does not impair its ability to, or the availability of its personnel to, perform the Preclinical Development Plan or the CTLA-4 Program or otherwise conflict with its obligations hereunder.

3.2 Preclinical Development Plan.

3.2.1 Plan. The Other Programs shall be carried out in accordance with a detailed workplan and budget (“Preclinical Development Plan”) covering the Prior Maxygen Program Activities and the Preclinical Development activities to be conducted under this Agreement with respect to any Other Protein Variant. The initial Preclinical Development Plan is attached hereto as Exhibit 3.2. CPC hereby represents and warrants that the initial Preclinical Development Plan as attached hereto as Exhibit 3.2 does not include any activities that will be performed on or with an Excluded Protein Variant or Vaccine. The Parties shall use commercially reasonable efforts to have the JSC finalize and submit to the Parties for review and comment, and have the JSC approve, a mutually agreed final form of the initial Preclinical Development Plan based on the attached draft as soon as reasonably practicable, and no later than forty-five (45) days, following the Effective Date. Once finalized, reviewed and approved by the JSC, such plan shall become the Preclinical Development Plan hereunder (the “Initial Preclinical Development Plan”) and shall govern the performance of the Other Programs through the period beginning on the date of its approval and

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ending on March 31, 2010 (or such longer time as the JSC may decide). At least ninety (90) days prior to the end of the period covered by the Initial Preclinical Development Plan, and thereafter at each JSC meeting, the JSC shall review and revise the Preclinical Development Plan with respect to the period remaining in the Term, and the first twelve (12) months of such Preclinical Development Plan shall include a detailed description of the Preclinical Development activities to be conducted thereunder including a detailed Budget for all such activities. In the event a proposed draft or revision of the Preclinical Development Plan contemplates (i) Preclinical Development of Other Compounds or Other Products that are not already included under a previously approved Preclinical Development Plan or (ii) activities that would be materially different from the Preclinical Development activities contemplated under a previously approved Preclinical Development Plan, or upon request by a Party, the JSC shall discuss whether to conduct an assessment of intellectual property rights of Third Parties in connection with Preclinical Development, and include any such assessment agreed by the JSC in the applicable Preclinical Development Plan and associated Budget.

3.2.2 Budget Cap and Floor. The total Budget under the Preclinical Development Plan, excluding the Budget for activities, if any, provided under the Preclinical Development Plan to be conducted by Astellas or its subcontractors, and excluding amounts payable under Section 6.2 (Patent Matters), but including payments to CPC’s Third Party Contractors and amounts, if any, for assessment of intellectual property rights of Third Parties as described in Section 3.2.1, (such total Budget amounts referred to as the “Collared Amounts”) shall not exceed Fifteen Million Dollars ($15,000,000) in any eighteen (18) consecutive month period without the prior written consent of Astellas; provided, however, that if the Co-Development Agreement is terminated and Astellas’ representatives to the JSC agree to re-allocation of some or all of the CPC personnel used for the CTLA-4 Program to Other Programs as described in Section 3.4.3(b), then written consent from Astellas shall not be required to the extent that such re-allocation approved by Astellas’ JSC representatives causes the Collared Amounts to exceed Fifteen Million Dollars ($15,000,000) in an eighteen (18) consecutive month period. The Collared Amounts in the Budget under the Preclinical Development Plan shall not be below the Minimum Quarterly FTE Funding (as defined below) for any given calendar quarter without the prior written consent of CPC. For purposes of the foregoing, “Minimum Quarterly FTE Funding” means an amount equal to a quarterly allocation of forty-two (42) FTEs less the number of CPC FTEs allocated to the CTLA-4 Program (or, if the Co-Development Agreement is terminated, the number of FTEs that were allocated to the CTLA-4 Program in the last approved plan and budget under the Co-Development Agreement which Astellas does not agree to add to the Preclinical Development Plan as described in Section 3.4.3(b)) and less the FTEs, if any, utilized by CPC for G-CSF Program Support (each such set of FTEs adjusted for a single calendar quarter), multiplied by the FTE Rate; provided, however, that the Minimum Quarterly FTE Funding shall not exceed the Fifteen Million Dollars ($15,000,000) in any eighteen (18) consecutive month period without the prior written consent of Astellas described in the first sentence of this Section 3.2.2, except to the extent that the Co-Development Agreement is terminated, and re-allocation (with approval of Astellas’ representatives to the JSC) of some or all of the CPC personnel used for the CTLA-4 Program to Other Programs, as described in Section 3.4.3(b), causes the Minimum Quarterly FTE Funding to exceed such amounts.

3.2.3 JSC Review and Modification. The JSC shall review the Preclinical Development Plan on an ongoing basis and propose changes thereto for consideration at the next JSC meeting, any approval of such changes shall be reflected in agreed and approved minutes of JSC

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meetings or otherwise agreed in writing. For each Preclinical Development Plan provided to the JSC for review, (i) CPC’s members of the JSC shall confirm that none of the activities provided therein will be performed on or with an Excluded Protein Variant or Vaccine, and (ii) Astellas’ members of the JSC shall inform the JSC, prior to inclusion of any proposed new Other Protein Variant program in the Preclinical Development Plan, whether such proposed new Other Protein Variant program relates to a “Astellas Compound” and whether Astellas has Patents claiming compositions (including polypeptides or genetic materials encoding such polypeptides) that are relevant to such proposed new Other Protein Variant program considered for inclusion. The Parties acknowledge that the Preclinical Development Plan is intended to cover one or more research and preclinical development programs of Other Compounds or Other Products, with the goal of generating one or more sequence-optimized compound(s) for which proof-of-concept has been verified with in vitro data within two and one-half (2 ¹/2) years of the Effective Date; provided that the preceding acknowledgement of the Parties’ intent and goal shall not be construed an agreement or commitment by either Party that such intent or goal will be achieved. No Preclinical Development Plan shall assign obligations to Astellas unless Astellas so agrees in writing.

3.3 Other Programs Information and Reports. CPC and Astellas shall make available and disclose to each other all Other Program Technology, including all Patents and Know-How therein regarding Other Compounds and results of in vitro and in vivo studies, assay techniques and new assays arising from the Preclinical Development, with significant discoveries or advances being communicated as soon as reasonably practical after such Other Program Technology is discovered or its significance is appreciated; provided, however, that with respect to tangible research material within Other Program Technology, the Parties shall exchange such material as determined by the JSC in accordance with the applicable Preclinical Development Plan or as otherwise determined by agreement of both Parties’ representatives to the JSC. At each meeting of the JSC, CPC and, to the extent Astellas has agreed in accordance with Section 3.2 to perform activities hereunder, Astellas shall provide to the other Party’s representative on the JSC a detailed written report of its progress and activities under the Other Programs or other Preclinical Development activities performed hereunder since the last such report, including: (i) the experiments conducted, (ii) any Other Program Technology developed and (iii) conclusions and results, including summaries of Data generated. Each Party shall, subject to applicable confidentiality obligations set forth herein, provide the other Party with full access to, and the ability to copy, all Data generated by such other Party in conducting the Other Programs upon the other Party’s reasonable request.

3.4 Other Activities. During the period beginning upon the Effective Date and ending upon the second anniversary of the Effective Date, CPC shall only conduct such research, development (preclinical or otherwise), manufacture and commercialization activities that are set forth in the Preclinical Development Plan approved by the JSC hereunder or such activities as are provided under the Co-Development Agreement with respect to the CTLA-4 Program and shall not conduct or participate in any other such activities except as follows:

3.4.1 Academic work. CPC shall be permitted to assist academic or other non-profit institutes in the conduct of in vivo studies or other non-clinical research activities with respect to Other Protein Variants that are not the subject of any work under the Preclinical Development Plan (“Academic Programs”) provided that such activities do not affect in a material adverse manner CPC’s commitment of resources and allocation of personnel to conduct activities for which

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Astellas provides funding to CPC as set forth under the Preclinical Development Plan; provided, however, that CPC shall not utilize more than de minimis FTEs of CPC in connection with such activities without Astellas’ consent, not to be unreasonably withheld, and shall not provide funding for such activities at the academic or other non-profit institutes without Astellas’ consent, and the costs of such activities (and associated FTEs) shall not be included in the Preclinical Development Costs for which Astellas is obligated to reimburse CPC under Section 4.1.

3.4.2 G-CSF Support Work. CPC shall have the right, without requiring JSC approval, but subject to Astellas’ prior written consent to the extent required pursuant to this Section 3.4.2, to make a reasonable number of its scientific and technical personnel available for G-CSF Program Support as long as such provision of personnel for the G-CSF Program does not impair its ability to, or the availability of its personnel to, perform the Preclinical Development Plan or the CTLA-4 Program or otherwise conflict with its obligations hereunder and provided that all such G-CSF Program Support is fully funded by a Third Party. Prior to making any such scientific and technical personnel available for G-CSF Program Support, CPC shall provide Astellas with a reasonably detailed written plan identifying the personnel who shall be made available and the approximate time periods during which the personnel would be performing G-CSF Program Support; provided, however, that submission of a written plan to Astellas, and prior consent by Astellas, shall not be required for CPC to provide up to one (1) FTE for G-CSF Program Support within the first year following the Effective Date. If Astellas provides written notice approving such detailed written plan, such approval not to be unreasonably withheld, CPC shall thereafter have the right to make only the identified personnel available only for the approved identified time periods to perform G-CSF Program Support.

3.4.3 Other activities.

(a) Activities after Second Anniversary. Beginning upon the second anniversary of the Effective Date, CPC shall be able to conduct research, development (preclinical or otherwise), manufacture and commercialization activities of its own choosing without requiring approval of the JSC; provided, however, that CPC shall continue to conduct any ongoing Other Programs in a manner consistent with the Preclinical Development Plan and Budget therefor as may be amended by the JSC.

(b) Utilization of Personnel after Termination of CTLA-4 Program. If the Co-Development Agreement is terminated during the Term, then, notwithstanding the restrictions set forth above in this Section 3.4, CPC shall have the right to utilize any FTEs previously allocated to the CTLA-4 Program to conduct research, development (preclinical or otherwise), manufacturing and commercialization activities of its own choosing without requiring approval of the JSC or Astellas (in which case Astellas shall not be obligated to reimburse CPC for such activities and FTEs), except to the extent Astellas agrees (in its sole discretion) to add any such FTE’s to the Preclinical Development Plan and thereby fund such FTEs in accordance with this Agreement.

(c) Licensing of Unfunded Existing Patents. CPC may engage in activities reasonably related to efforts to out-license or sell Unfunded Existing Patents and Know-How specifically related to Unfunded Exiting Patents, provided that such activities do not impair its ability to, or the availability of its personnel to, perform the Preclinical Development Plan or the CTLA-4 Program or otherwise conflict with its obligations hereunder.

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3.5 Certain Activities of Maxygen prior to the Effective Date. With respect to activities conducted by Maxygen prior to the Effective Date pursuant to Section 5.15 of the Master Joint Venture Agreement between Maxygen, Astellas and Astellas Bio Inc. (“Prior Maxygen Program Activities”), CPC and Astellas agree that, for purposes of this Agreement, such Prior Maxygen Program Activities shall be deemed to have been conducted by CPC, and shall be deemed part of the Other Programs to the same extent as if all such Prior Maxygen Program Activities had been conducted by CPC under this Agreement. Without limiting the foregoing, CPC and Astellas agree that:

(a) all Know-How and Patents generated, created, or invented by Maxygen in the course of such Prior Maxygen Program Activities and assigned to CPC under the Asset Contribution Agreement (collectively, “Maxygen Program Technology”) shall be treated as CPC Technology, Enabling Technology, Independent Inventions and/or Shuffling Improvements hereunder to the same extent as would be the case if all such Prior Maxygen Program Activities had been conducted by CPC under this Agreement;

(b) the Maxygen Program Technology shall be subject to Astellas’ Option under this Agreement to the same extent as if all such Prior Maxygen Program Activities had been conducted by CPC under this Agreement;

(c) Section 3.3 of this Agreement shall apply with respect to the reporting and disclosure of data and results generated in the Prior Maxygen Program Activities as provided in Section 2.6 to the to the same extent as if all such Prior Maxygen Program Activities had been conducted by CPC under this Agreement; and

(d) the various provisions of this Agreement related to Prosecution and Maintenance of Patents, including provisions regarding the sharing of costs, shall apply with respect to the Maxygen Program Technology to the same extent as if all such Prior Maxygen Program Activities had been conducted by CPC under this Agreement.

ARTICLE 4

PRECLINICAL DEVELOPMENT FUNDING

4.1 Certain R&D Reimbursement Payments.

4.1.1 Payment of CPC’s Preclinical Development Costs. From the Effective Date until the third anniversary of the Effective Date (the “Preclinical Funding Period”), Astellas shall bear certain Preclinical Development Costs incurred by CPC in accordance with this Article 4.

4.1.2 Advance Payment. Prior to the beginning of each calendar quarter during the Preclinical Funding Period, Astellas shall pay CPC for CPC’s expected Preclinical Development Costs for such calendar quarter as provided in the Preclinical Development Plan and Budget for such calendar quarter. With respect to the period between the Effective Date and the beginning of the first full calendar quarter, Astellas shall pay CPC within ten (10) days of the Effective Date CPC’s expected Preclinical Development Costs for such period, as provided in the Initial Preclinical Development Plan and Budget, attached hereto.

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4.1.3 Reconciliation. Within forty-five (45) days of the end of each calendar quarter of the Preclinical Funding Period, CPC shall provide Astellas with a detailed accounting of its Preclinical Development Costs actually incurred or accrued in accordance with applicable Accounting Principles during such calendar quarter. If activities covered by the Preclinical Development Plan and associated budget are planned or anticipated to occur in a given calendar quarter, but are delayed (provided that any material or significant delay under the reasonable control of CPC, or due to the failure of Maxygen to provide CPC licenses, materials or software that were available to Maxygen for conduct of the Other Programs prior to the Effective Date, shall require review and approval by the JSC) or accelerated so that Preclinical Development Costs associated with such activities are actually incurred or accrue in a calendar quarter other than the calendar quarter originally planned or anticipated, the Budget under the Preclinical Development Plan with respect to Preclinical Development Costs for such activities shall be adjusted to reflect the actual timing of such activities and associated Preclinical Development Costs; provided, however, that unless otherwise agreed by the Parties the adjustment described in this sentence shall apply only with respect to timing (i.e., determining the calendar quarter in which or for which such amounts will be taken into account under the Budget), and not to increase or decrease the total amounts budgeted for such activities. If Astellas’ advance payment made in accordance with Section 4.1.2 for a quarter exceeds CPC’s Preclinical Development Costs actually incurred or accrued by CPC in such calendar quarter, Astellas shall have the right to credit such excess against the advance payment due in accordance with Section 4.1.2 for the upcoming calendar quarter; provided, however, that for the final two quarters of the Preclinical Funding Period, CPC shall provide reimbursement to Astellas for the amount of such excess with its detailed accounting. If Astellas’ advance payment made in accordance with Section 4.1.2 for a quarter falls short of CPC’s Preclinical Development Costs actually incurred or accrued by CPC in such calendar quarter, Astellas shall provide reimbursement to CPC for the amount of such shortfall; provided, however, that Astellas shall have no obligation to pay or reimburse CPC for any Preclinical Development Costs actually incurred or accrued by CPC in a calendar quarter in excess of one hundred ten percent (110%) of the amount set forth in the Budget for such quarter (as adjusted to account for actual timing of activities as described above in this Section 4.1.3) unless otherwise agreed by the Parties.

4.2 Payments; Foreign Exchange. All payments under this Agreement shall be made in Dollars by wire transfer to a bank and to an account designated by the Party receiving such payment. In the event that an underlying transaction giving rise to a payment hereunder is in currency other than Dollars, payments shall be calculated based on the closing exchange rates reported in The Wall Street Journal (Internet U.S. Edition) for the last Business Day of the applicable reporting period for the payment due.

4.3 Late Payments. Any payments or portions thereof due hereunder which are not paid when due shall accrue from the date payment is due until the date of payment simple interest equal to the lesser of (i) the prime rate as reported in The Wall Street Journal, Internet U.S. Edition, on the date such payment is due, plus an additional one percent (1%), or (ii) the maximum rate permitted by Law, calculated on the number of days such payment is delinquent. This Section 4.3 shall in no way limit any other remedies available to either Party.

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4.4 Books and Records. CPC shall keep complete, true and accurate books of account and detailed records (including financial and other records) reasonably sufficient to determine and establish the accuracy of such CPC’s reimbursements under this Article 4. Such books and records shall also document all costs and expenses incurred or paid in connection with the Preclinical Development conducted with regard to Other Compounds and Other Products under this Agreement. All such books and records shall be maintained until the later to occur of (a) five (5) years following the relevant Fiscal Year to which such records pertain, or (b) the expiration of any applicable period required by Law with respect thereto.

4.5 Audit Rights. Astellas shall have the right to inspect and audit CPC’s books and records, at the location(s) where the books and records are maintained by CPC, relating to the Other Programs for purposes of ascertaining the accuracy of Astellas’ payments to CPC under this Article 4, provided that any (i) such audit shall take place by (and no later than) one (1) year after the expiration or termination of this Agreement, (ii) once such an inspection and audit of the books and records of CPC for a given time period has been completed and any discrepancies or potential discrepancies identified in such audit with respect to payments, reimbursements or sharing under this Agreement have either been resolved or determined in reasonable detail in connection with such audit, the books and records for such time period will not be subject to re-audit under this Section 4.5 (for the avoidance of doubt, the books and records for a given time period may be reviewed more than once during an audit to verify the accuracy of the relevant payments), and (iii) such inspection and audits shall be performed on behalf of Astellas by an independent Third Party auditor selected by Astellas and reasonably acceptable to CPC. Such audits shall be conducted during the normal business hours of CPC upon at least thirty (30) days advance notice to CPC and shall be made no more than once each four consecutive calendar quarters. The auditor selected by Astellas shall be required to execute a reasonable confidentiality agreement prior to commencing any such audit and shall only disclose to Astellas (a) whether or not the relevant payments were accurate, or the reasons why the accuracy of the relevant payments could not be determined, and any recommended actions needed to ensure the accuracy of relevant future payments, and (b) if the payments were not accurate, the amount of any under- or over-payment, as well as detail concerning the nature, scope and circumstances of the discrepancy so that such discrepancy can be equitably resolved. With respect to audits of financial and accounting records, the results of such audits shall be delivered in writing to Astellas and CPC. Astellas shall bear the costs and expenses of audits conducted under this Section 4.5, unless a variation or error producing an overpayment exceeding five percent (5%) of the amount paid for the period covered by the audit, whereupon all reasonable out-of-pocket costs paid to Third Parties relating to such audit shall be paid by CPC.

4.6 Taxes. Each Party shall bear and, except as otherwise expressly provided in this Section 4.6, pay any and all taxes, duties, levies, and other similar charges (and any related interest and penalties), however designated, imposed on that Party as a result of any payment to the other Party hereunder. Any federal or state income or franchise tax deductions for payments made by either Party pursuant to the Agreement shall be for the benefit of the payer. All payments hereunder shall be made without deduction for such taxes except to the extent required by applicable Law. If any withholding or similar tax is due with respect to such a payment, such tax shall be deducted from amounts payable or otherwise due hereunder by the paying Party and paid to the applicable taxing authority. Upon request the paying Party shall furnish to the other Party appropriate evidence of payment of any such tax required by applicable Law. Furthermore, the Parties shall reasonably

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cooperate and assist each other in the preparation and filing of such forms with the applicable taxing authorities as may provide for relief from withholding and similar taxes with respect to payments hereunder and in accordance with applicable Laws. Notwithstanding the foregoing, Astellas shall bear and pay any and all federal, state, local or foreign sale, use, transfer, stamp duty, value-added or similar taxes (“Transfer Taxes”) arising out of the exercise of the Option (as defined below). To the extent permitted by applicable law, CPC and Astellas shall use commercially reasonable efforts to minimize such Transfer Taxes.

ARTICLE 5

LICENSE GRANTS; OPTION

5.1 Licenses To CPC. Subject to the terms and conditions of this Agreement, Astellas hereby grants to CPC the following licenses:

(a) a non-exclusive, royalty-free license in the Territory to make, use and otherwise exploit subject matter within the Astellas Technology (including the right to make, have made, use and import Other Products and Other Compounds) solely and solely for the purpose of conducting Preclinical Development hereunder with respect to Other Products and Other Compounds solely for use in the Field in accordance with the then-current Preclinical Development Plan. The license granted under this Section 5.1(a) excludes the right to grant sublicenses without the consent of Astellas, which consent shall not be unreasonably withheld, delayed or conditioned; provided, however, that CPC shall have the right to exercise such license through its Affiliates and Third Party contractors, which exercise shall not be construed as a sublicense; and

(b) a royalty-free license in the Territory (effective from the Effective Date, but exercisable on a Program-by-Program basis only after expiration of the Option Period or termination of Astellas’ Optioned Rights with respect to the applicable Program as provided in this Agreement), under Astellas’ rights in and to the Independent Inventions and Joint Inventions generated under this Agreement, with the right to grant and authorize sublicenses as provided in this Section 5.1(b), to research, develop, practice, make, have made, use, sell, offer for sale, import, and otherwise commercialize Other Compounds and Other Products containing Other Protein Variants, in each case exclusively for use in the Field. For clarity, the license granted under this Section 5.1(b) shall not be exercisable or sublicensable until after the end of the Option Period expires or is terminated and shall be subject to the Option as set forth in this Agreement, as well as the applicable Other Program License Agreement(s), if any, entered into by the Parties on Astellas’ exercise of the Option, and therefore CPC shall have no right to grant any sublicense, option, covenant not to sue or other right under the license provided in this Section 5.1(b) for any Other Protein Variant for which the Option has been exercised except as expressly provided under Section 5.3.2 or 5.3.3. Unless otherwise provided in a given Other Program License Agreement entered into by the Parties, the foregoing license grant will, upon execution of an Other Program License Agreement, and for the duration of such Other Program License Agreement, exclude any rights to Other Program Variants that are the subject of such Other Program License Agreement(s).

5.2 Licenses To Astellas. Subject to the terms and conditions of this Agreement, CPC hereby grants to Astellas a non-exclusive, royalty-free license in the Territory to make, use and otherwise exploit subject matter within the CPC Technology (including the right to make, have

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made, use and import Other Products and Other Compounds) solely for the purpose of conducting Preclinical Development hereunder with respect to Other Products and Other Compounds solely for use in the Field in accordance with the then-current Preclinical Development Plan. The license granted under this Section 5.2 excludes the right to grant sublicenses without the consent of CPC, which consent shall not be unreasonably withheld, delayed or conditioned; provided, however, that Astellas shall have the right to exercise such license through its Affiliates and Third Party contractors, which exercise shall not be construed as a sublicense.

5.3 Option To Astellas.

5.3.1 Option Grant. In consideration of the funding of the Other Programs provided under Article 4, CPC hereby grants to Astellas an exclusive option (the “Option”) to acquire an exclusive, sublicensable license within the Territory under CPC’s rights in and to the CPC Technology to research, develop, practice, make, have made, use, sell, offer for sale, import, and otherwise commercialize one Other Protein Variant including Other Compounds and Other Products containing such Other Protein Variant, in each case, for use in the Field; provided, however, such license shall not include any license to perform Shuffling (the “Optioned Rights”). Upon exercise of the Option, the Optioned Rights shall be conveyed pursuant to, and on the terms and conditions set forth in, a definitive written Other Program License Agreement (defined below) mutually agreed by the Parties or determined by the arbitrator, as applicable, in each case as set forth in Section 5.3.3, which shall contain reasonable terms addressing appropriate subject matter typically addressed in agreements of the type in the biopharmaceutical industry, including reasonable confidentiality provisions, indemnities, and the like. For purposes of this Section 5.3, “one Other Protein Variant” means any Other Protein Variant that is, or is derived from, either (i) a single, identified human or animal protein, or (ii) a group of related human or animal proteins if such group is expressly treated as a single project in the applicable Preclinical Development Plan or that Astellas can otherwise demonstrate that such group constituted part of the same Other Program, and any variants, homologs, derivatives, mutants or fragments of (i) and (ii) whether alone or conjugated or otherwise coupled to any other molecule (e.g., polyethylene glycol, immunoglobulin domain, sialylation, pegylated, or glycosylation).

5.3.2 Option Period. The Option shall exist for the period commencing upon the Effective Date and ending on the earlier to occur of: (a) termination (but not expiration) of the Buy-Out Option, (b) exercise by Astellas of the Buy-Out Option, or (c) forty-five (45) days after the expiration of the Buy-Out Option (the “Option Period”), but may only be exercised after expiration of the Buy-Out Option (and only if the Buy-Out Option has not been exercised or terminated prior to its expiration). In the event that Astellas decides in its sole discretion to exercise the Option as provided in this Section 5.3, Astellas shall exercise the Option by giving notice thereof in writing to CPC prior to the end of the Option Period setting forth the identity of the Other Protein Variant for which the Option is exercised. For the avoidance of doubt, with respect to any Other Protein Variants for which Astellas has not exercised the Option, CPC shall have the right, upon the earlier of expiration of the Option Period, to research, develop and commercialize, or license Third Parties to research, develop and commercialize, such Other Protein Variants, including Other Compounds and Other Products containing such Other Protein Variants and related subject matter of CPC resulting from the applicable Other Program, without the consent of, or further obligation to, Astellas.

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5.3.3 Negotiations. If Astellas exercises the Option as described in Section 5.3.2 prior to expiration of the Option Period, then following CPC’s receipt of Astellas’ notice of its exercise of the Option, CPC and Astellas shall negotiate in good faith, for a period of up to six (6) months from the date of such receipt, even if such period extends beyond the Option Period (or such longer period as may be agreed upon by the Parties) (the “Negotiation Period”), the commercially reasonable financial and other terms of an exclusive license agreement between them under which Astellas would be granted the Optioned Rights (the “Other Program License Agreement”); provided, however, that if, at the time Astellas exercises the Option, the cash and cash equivalents of CPC, less any debt held by CPC, is less than Twenty Million Dollars ($20,000,000), then Astellas shall only be required to pay a Twenty Million Dollar ($20,000,000) upfront payment under such Other Program License Agreement without any additional milestone, royalties or other financial consideration to CPC other than pass-through royalties and milestones owed by CPC to Third Parties for activities of Astellas under the Other Program License Agreement arising due to a sublicense of such Third Party rights by CPC under the Other Program License Agreement. Upon agreement of the terms of the Other Program License Agreement, the Parties shall forthwith execute the Other Program License Agreement. During the Negotiation Period, CPC agrees to negotiate exclusively with Astellas for the Optioned Rights, and accordingly, CPC agrees not to grant, or offer to grant, to any Third Party or Affiliate during the Option Period or the Negotiation Period any license, option, covenant not to sue or other right under the CPC Technology to any Other Protein Variant. If the Parties are unable to agree the terms of the Other Program License Agreement during the Negotiation Period, Astellas shall have the right, in its sole discretion, to refer the matter to dispute resolution under Section 10.3 by written notice sent within thirty (30) days of the end of the Negotiation Period. If Astellas does so refer the matter to dispute resolution under Section 10.3 within thirty (30) days after the end of the Negotiation Period, then the arbitrator shall determine commercially reasonable terms for any open issues from the negotiations in accordance with Section 10.3, and following the arbitrator’s determination of commercially reasonable terms for such open issues, Astellas may in its discretion elect, upon written notice to CPC within fifteen (15) days after the arbitrator’s decision, to accept and enter into the definitive Other Program License Agreement on the terms and conditions determined by the arbitrator (in which event CPC and Astellas shall enter into the Other Program License Agreement forthwith). If CPC and Astellas do not agree upon a definitive written Other Program License Agreement within the Negotiation Period and (i) Astellas does not so refer the matter to dispute resolution under Section 10.3 within thirty (30) days after the end of the Negotiation Period, the Option shall terminate at the end of such thirty (30) day period, or (ii) Astellas does not notify CPC in writing of Astellas’ election to accept and enter into the definitive Other Program License Agreement on the terms and conditions determined by the arbitrator within fifteen (15) days after the arbitrator’s decision, then Astellas’ option with respect to the applicable Optioned Rights shall terminate, and CPC shall thereafter have the right to research, develop and commercialize, or license Third Parties to research, develop and commercialize, such Other Protein Variants, including Other Compounds and Other Products containing such Other Protein Variants and related subject matter of CPC resulting from the applicable Other Program, without the consent of, or further obligation to, Astellas.

5.3.4 Regulatory Clearances. During the Negotiation Period, the Parties shall reasonably cooperate to determine whether any filings or government consents or approvals are required by any governmental agency or authority prior to (or in connection with) entering into the Other Program License Agreement (including any such filing or notification required under the Hart-Scott-Rodino

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Act in the United States). Each Party shall provide such information and documents, make such filings and take such other actions as are reasonably required to make or obtain any such required filings, consents or approvals (if any) prior to entering into the Other Program License Agreement, and each Party shall bear its own costs (including attorneys fees) and filing fees or other amounts payable to any governmental agency or authority in connection therewith (collectively, “HSR Expenses”); provided, however, that if CPC reasonably determines that CPC’s payment of CPC’s HSR Expenses would impair CPC’s ability to continue to conduct its operations in a reasonable manner, then CPC may request in writing that Astellas bear CPC’s HSR Expenses, in which event Astellas will bear CPC’s HSR Expenses and be entitled to credit amounts paid by Astellas (or its Affiliates) for CPC’s HSR Expenses against future payments under the Other Program License Agreement if and when such Other Program License Agreement becomes effective.

5.4 Astellas Compounds. At any time during the period commencing on the Effective Date and ending upon the expiration or termination of this Agreement, Astellas, in its discretion, may propose the addition of a Astellas Compound to the scope of the Other Compounds and Other Programs under this Agreement by providing written notice to CPC setting forth the Astellas Compound and Astellas’ initial valuation of such Astellas Compound and Astellas’ intellectual property rights thereto. Thereafter, CPC and Astellas shall discuss in good faith addition of such Astellas Compound to the Other Compounds and Other Programs hereunder and the valuation of CPC equity to be granted to Astellas as consideration for Astellas’ contribution of the Astellas Compound and Astellas’ intellectual property rights thereto under this Agreement. If CPC and Astellas agree to the addition of such Astellas Compound and upon such valuation, the Parties shall amend this Agreement to (i) add such Astellas Compound to the scope of the Other Compounds and Other Programs, (ii) grant such CPC equity to Astellas, and (iii) grant to CPC a license under Astellas’ intellectual property rights in such Astellas Compound, and related materials, processes and other subject matter (if any) provided by Astellas for use in the Other Programs with respect to such Astellas Compound, (x) to conduct Preclinical Development with respect to such Astellas Compound hereunder, and (y) subject to the option provided below (and any license agreement entered into as a result of exercise of such option), to conduct research and development, and commercialize, and to sublicense Third Parties to conduct research and development, and commercialize, such Astellas Compound. Unless the Parties mutually agree otherwise on a Astellas Compound-by-Astellas Compound basis, (i) any Astellas Compound added to this Agreement shall be subject to the an option granted to Astellas with substantially similar terms and conditions as the Option granted to Astellas under Section 5.3 (to be included in the amendment to this Agreement described above), which shall extend for the Option Period or such longer option period as mutually agreed by the Parties in writing, and (ii) Astellas will provide funding for the Preclinical Development of such Astellas Compound in accordance with Article 4.

5.5 No Other Rights. Each Party acknowledges that the rights and licenses granted under this Article 5 and elsewhere in this Agreement are limited to the scope expressly granted. Accordingly, except for the rights expressly granted under this Agreement or any other written agreement entered into by the applicable Parties, no right, title, or interest of any nature whatsoever is granted whether by implication, estoppel, reliance, or otherwise, by one Party to the other Party. All rights with respect to Know-How, Patents or other intellectual property rights that are not specifically granted herein are reserved to the owner thereof. In the absence of a written agreement,

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the Astellas Compounds are not part of this Agreement or the Other Programs and no rights are granted to CPC for the Astellas Compounds hereunder. For the avoidance of doubt, the terms and conditions, and rights and licenses granted to the Parties, hereunder are separate from any terms and conditions of, and rights granted to Astellas under, the Co-Development Agreement and therefore nothing in this Agreement shall limit, modify, or restrict any terms or conditions of, or any rights held by, or granted to, Astellas under, the Co-Development Agreement.

5.6 Licenses of “Intellectual Property”. The Parties acknowledge that the licenses granted hereunder are intended to be licenses of “Intellectual Property” as such term is used in Section 365(n) of the United States Bankruptcy Code and for other similar Laws.

ARTICLE 6

INTELLECTUAL PROPERTY

6.1 Ownership.

6.1.1 Outside the Other Programs. Each Party shall retain all of its rights, title and interest in and to subject matter (including Know-How) developed prior to the Effective Date or outside of its activities in performance of the Other Programs, including the right to transfer or license such intellectual property to others for any purpose, subject only to its obligations under this Agreement, including the licenses and options granted in Article 5. Any such transfer or license will be made expressly subject to the rights granted herein and the obligations provided for herein with respect thereto.

6.1.2 Other Program Technology.

(a) As between the Parties, title to all inventions and other subject matter conceived, generated or otherwise made in connection with the performance of the Other Programs (together with all intellectual property rights therein, including Patents) (i) solely by or under authority of one Party shall be owned by the Party under whose authority the invention or other subject matter was conceived, generated or otherwise made (“Independent Inventions”), and (ii) made jointly by or under authority of Astellas and CPC shall be jointly owned by the Parties (“Joint Inventions”). Except as expressly provided in this Agreement (including being subject to the licenses herein), it is understood that neither Party shall have an obligation to account to the other for profits, or to obtain any approval of the other Party to license, assign or otherwise exploit Joint Inventions, by reason of joint ownership thereof. Astellas’ Independent Inventions and Astellas’ interest in and to Joint Inventions and in each case any and all intellectual property rights thereto shall be included in the Astellas Technology, and CPC’s Independent Inventions and CPC’s interest in and to Joint Inventions and in each case any and all intellectual property rights thereto shall be included in the CPC Technology, provided that for purposes of the options and licenses hereunder (but not for purposes of determining ownership, nor with respect to Prosecution and Maintenance or enforcement), CPC Technology shall only include CPC’s rights and interest in any such Independent Inventions or Joint Inventions that fall within the Enabling Technology to the extent necessary to perform non-Shuffling preclinical development, development, manufacture, commercialization or other exploitation of any Other Protein Variant or Other Product.

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(b) Notwithstanding Section 6.1.2(a), title to all Shuffling Improvements conceived, generated or first reduced to practice by or under authority of either Party, whether solely or jointly with others, in connection with the performance of the Other Programs, shall be owned by, and are hereby assigned to, CPC. Accordingly, Astellas agrees to promptly disclose to CPC all Shuffling Improvements conceived, generated or first reduced to practice by or under authority of Astellas during the Term. As used herein, “Shuffling Improvement” means any invention or other subject matter comprising compositions or methods for Shuffling. For the avoidance of doubt, a Patent that does not specifically recite Shuffling in a claim is not a Shuffling Improvement.

(c) The inventorship of any subject matter developed or otherwise made in performing the Other Programs shall be determined in accordance with U.S. patent laws for the purpose of determining ownership under Section 6.1.2(a).

(d) The Parties recognize and agree that this Agreement is a “joint research agreement” under 35 U.S.C. 103(c)(3). The Parties further agree to cooperate to avail themselves and each other of the provisions of said section 35 U.S.C. 103(c) as amended through the CREATE Act on December 10, 2004.

For purposes of this Section 6.1.2 unless otherwise expressly agreed, neither Party nor its Affiliates or subcontractors shall be deemed to be “acting under authority of” the other Party by virtue of this Agreement.

6.2 Patent Matters.

6.2.1 Prosecution and Maintenance of Independent Patents. Each Party (an “Owning Party”) shall have the sole right to control the Prosecution and Maintenance of its Patents claiming its Independent Inventions (“Independent Patents”), in its discretion in the ordinary course. Each Party shall provide the other Party an opportunity to review and comment upon the text of the applications within its Independent Patents filed after the Effective Date at least thirty (30) Business Days before filing with any patent office and shall reasonably consider comments by the other Party for potential incorporation into such application. The Owning Party shall provide the other Party with an electronic copy of each patent application within the Independent Patents as filed, together with notice of its filing date and serial number. For clarity, the Owning Party may determine, in its sole discretion, to abandon, cease prosecution or not maintain or prepare and file (including filing of a priority patent application and filing of a patent application in any jurisdiction in the Territory claiming priority to a priority application) any Independent Patent anywhere in the Territory.

6.2.2 Costs. The Owning Party shall be responsible for all costs incurred by or for it regard to controlling of the Prosecution and Maintenance of its Independent Patents, except as follows:

(a) Certain CPC Independent Patents. For any CPC Independent Patent including a claim specifically related to an Other Protein Variant or Other Product (including a use or composition of matter claim, or a use or composition of matter claim directed to a genus encompassing the Other Protein Variant or a composition of matter claim directed to the nucleic acid

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sequences encoding such Other Protein Variant or to a genus encompassing such nucleic acid sequences), such CPC Independent Patent shall be treated as a Joint Patent for which CPC is the Controlling Party and subject to the terms of Section 6.2.3, except that (i) such CPC Independent Patent shall not be jointly owned (and therefore is considered a Joint Patent solely for the purposes of applying the terms of Section 6.2.3, below), and (ii) in the event that Astellas elects by written notice as provided in Section 6.2.3 not to share the internal costs and external out-of-pocket expenses of Prosecution and Maintenance of any such Patent(s) in any core patent country listed on Exhibit 6.2.2(a), such election shall also apply with respect to foreign counterparts of such Patent in all countries, and Astellas’ Option pursuant to Section 5.3 or Section 5.4, as applicable, shall terminate with respect to compounds covered by such Patent(s) as supported by working examples within the specification, and CPC shall thereafter have the right to research, develop and commercialize, or license Third Parties to research, develop and commercialize, such compounds, including Other Products containing such compounds, without the consent of, or further obligation to, Astellas.

(b) Existing Patents. With respect to those Patents assigned to CPC by Maxygen pursuant to the Asset Contribution Agreement between Maxygen and CPC of even date herewith (“Existing Patents”), the following shall apply:

(i) Existing Patents including a claim specifically related to an Other Protein Variant or Other Product that is the subject of research and development under the Preclinical Development Plan and Budget (including a use or composition of matter claim, or a use or composition of matter claim directed to a genus encompassing the Other Protein Variant or a composition of matter claim directed to the nucleic acid sequences encoding such Other Protein Variant or to a genus encompassing such nucleic acid sequences) shall be treated in the same manner as provided in Section 6.2.2(a) with respect to the CPC Independent Patents that are the subject of such Section;

(ii) During the term of this Agreement, CPC shall give Astellas thirty (30) days notice before abandoning any Existing Patent which includes a claim specifically related to an Other Protein Variant or Other Product that is not the subject of research and development under the Preclinical Development Plan and Budget (including a use or composition of matter claim, or a use or composition of matter claim directed to a genus encompassing the Other Protein Variant or a composition of matter claim directed to the nucleic acid sequences encoding such Other Protein Variant or to a genus encompassing such nucleic acid sequences) and, if Astellas notifies CPC within such thirty (30) day period that Astellas wishes to add a program under the Preclinical Development Plan with respect to Other Protein Variants or Other Products covered by such Patent, then the Parties shall negotiate in good faith, through their representatives on the JSC, appropriate amendments to the Preclinical Development Plan to include such a program and in such event CPC shall not abandon such Existing Patent unless and until such Other Protein Variants or Other Products are no longer the subject of research and development under the Preclinical Development Plan and Budget ; and

(iii) With respect to any Existing Patent for which Astellas is not sharing costs as set forth in Section 6.2.2(b)(i) (“Unfunded Existing Patents”), CPC shall have the right to out-license or sell such Unfunded Existing Patents, and Know-How specifically related to Unfunded Exiting Patents, for the research, development and commercialization of compositions claimed in such Unfunded Existing Patent without the consent of, or further obligation to, Astellas.

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6.2.3 Prosecution and Maintenance of Joint Patents. With respect to any potentially patentable Joint Invention, CPC shall have the first right to control the Prosecution and Maintenance of Patents covering such Joint Invention (“Joint Patents”). The Parties shall share equally in the internal costs and external out-of-pocket expenses of Prosecution and Maintenance of Joint Patents covering such Joint Invention; provided, however, that upon thirty (30) days written notice, either of CPC or Astellas may elect not to share the internal costs and external out-of-pocket expenses of Prosecution and Maintenance of any such Joint Patent in any country, and thereafter, the non-electing Party shall be free, in its discretion, to control the Prosecution and Maintenance of such Joint Patent in such country at its own expense and the electing Party shall not have any right to review and comment upon the Prosecution and Maintenance of such Joint Patent as described in this Section 6.2.3. For clarity, the election of CPC or Astellas not to share internal costs and external out of pocket expenses for Prosecution and Maintenance of any Joint Patent shall not affect ownership thereof. The Party (Astellas or CPC) controlling Prosecution and Maintenance of such Joint Patent (the “Controlling Party”) shall provide the other Party (the “Other Party”) an opportunity to review and comment upon the text of patent applications within such Joint Patents filed after the Effective Date at least thirty (30) Business Days before filing with any patent office. The Controlling Party shall provide the Other Party with an electronic copy of each patent application within such Joint Patents as filed, together with notice of its filing date and serial number. For so long as the Other Party is sharing the internal costs and external out-of-pocket expenses of Prosecution and Maintenance of any such Joint Patent in a given country, the Controlling Party shall keep the Other Party advised of the status of all material communications to and from applicable patent offices in such country, actual and prospective filings or submissions regarding such Joint Patent in such country, and shall give the Other Party an opportunity to review and comment in advance on any such communications, filing and submissions proposed to be sent to any patent office in such country and shall reasonably consider comments from the Other Party for potential incorporation into any such filings or submissions. If a Controlling Party determines in its sole discretion to abandon, cease prosecution or not maintain or prepare and file (including filing of a priority patent application, filing of a patent application claiming priority to a priority application, national phase filings of a PCT application, and national phase entry of granted a EPC patent) any Joint Patent controlled by it in any country in the Territory for which the Other Party is sharing internal costs and external out-of-pocket expenses of Prosecution and Maintenance, then the Controlling Party shall provide the Other Party written notice of such determination at least thirty (30) days before any deadline for taking action to avoid abandonment (or other loss of rights) and shall provide the Other Party with the opportunity to Prosecute and Maintain such Joint Patent as the Controlling Party as set forth in this Section.

6.2.4 Prosecution and Maintenance. For purposes of this Agreement, “Prosecution and Maintenance” means, with regard to a Patent, the preparing, filing, prosecuting and maintenance of such Patent, as well as re-examinations, reissues, requests for Patent term extensions and the like with respect to such Patent, together with the conduct of interferences and the defense of oppositions and other similar proceedings with respect to the particular Patent.

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ARTICLE 7

CONFIDENTIALITY

7.1 Confidentiality; Exceptions. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, the Parties agree that each Party shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than for the purpose of exercising its retained rights or rights under licenses granted hereunder, or performing obligations hereunder, or as otherwise provided for in this Agreement, any confidential and proprietary information and materials of the other Party pursuant to this Agreement (collectively, “Confidential Information”). Astellas Technology shall be deemed the Confidential Information of Astellas, and CPC Technology shall be deemed the Confidential Information of CPC. Notwithstanding the foregoing, Confidential Information shall not include any information to the extent that it can be established by written documentation by the receiving Party that such information:

7.1.1 was already known to the receiving Party, other than under an obligation of confidentiality (except to the extent such obligation has expired or an exception is applicable under the relevant agreement pursuant to which such obligation established), at the time of disclosure;

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

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

7.1.4 was independently discovered or developed by the receiving Party without reference to or use of Confidential Information of the disclosing Party as demonstrated by documented evidence; or

7.1.5 was disclosed to the receiving Party, other than under an obligation of confidentiality (except to the extent such obligation has expired or an exception is applicable under the relevant agreement pursuant to which such obligation established), by a Third Party who had no obligation to the disclosing Party not to disclose such information to others.

The obligations set forth in this Section 7.1 shall remain in effect during the Term of this Agreement and for five (5) years thereafter.

7.2 Authorized Disclosure. Except as expressly provided otherwise in this Agreement, each Party may use and disclose Confidential Information of the other Party as follows: (i) under appropriate confidentiality provisions substantially equivalent to those in this Agreement (except that the term of confidentiality may be shorter than the term of confidentiality herein, but in no event less than five (5) years after the termination of the agreement with the disclosee containing such confidentiality provisions) in connection with the performance of its obligations or as reasonably necessary or useful in the exercise of its rights under this Agreement, including the right to grant licenses or sublicenses or extension of the licenses and sublicenses to Affiliates and subcontractors as permitted hereunder; (ii) to the extent such disclosure is reasonably necessary in Prosecuting or

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Maintaining any Patent or other intellectual property right in accordance with this Agreement, prosecuting or defending litigation related to this Agreement, complying with applicable governmental regulations with respect to performance under this Agreement (including to comply with the applicable rules of any public stock exchange upon which the stock of such Party or its Affiliate is listed), or otherwise required by Law, provided, however, that if a Party is required by Law or court order to make any such disclosure of the other Party’s Confidential Information it will, except where impracticable for necessary disclosures (for example, in the event of medical emergency), give reasonable advance notice to the other Party of such disclosure requirement and, in each of the foregoing, (but not to the extent inappropriate in the case of Prosecution and Maintenance of Patents), will use its reasonable efforts to seek confidential treatment of such Confidential Information required to be disclosed; (iii) in communication with advisors (including financial advisors, lawyers and accountants) or actual or bona fide potential investors or acquirers, or actual or bona fide potential licensees or sublicensees related to Other Products, or approved or permitted contractors, service providers, vendors and the like used (or to be used) in connection with activities hereunder, each on a need to know basis, and in each case under standard confidentiality obligations (subject to the allowances for term of confidentiality provided in subsection (i) above, except with respect to disclosures to actual or bona fide potential investors and acquirers receiving any technical data related to Other Compounds or Other Products that is Confidential Information of the other Party shall be subject to obligations of confidentiality for a period of at least five (5) years after such disclosure, or (iv) to the extent mutually agreed to by the Parties. In addition to the foregoing, with respect to complying with the disclosure requirements of the SEC or similar regulatory bodies or the rules of an applicable public stock exchange, in connection with any required disclosure of material information related to this Agreement, the Parties shall consult with one another concerning the information to be disclosed where practicable.

7.3 Publications. Any publication or presentation of Other Program Technology, including preclinical studies carried out by a Party under this Agreement, shall be subject to the guidelines for publication set out herein. The Parties shall establish promptly after the Effective Date guidelines that (i) allow for each Party’s timely review of all publications or presentations of Other Program Technology, (ii) provide for protection of Confidential Information and ensure the possibility of filing appropriate patent applications prior to any disclosure of patentable subject matter, and (iii) ensure that all such publications and presentations are consistent with good scientific practice and accurately reflect work done and the contributions of the Parties. Unless otherwise mutually agreed upon by the Parties, (A) the Party desiring to publish or present any Data arising from its performance of the Other Programs or Other Program Technology (the “Publishing Party”) shall transmit to the other Party (the “Reviewing Party”) for review and comment a copy of the proposed publication or presentation, at least forty-five (45) days prior to the submission of the proposed publication or presentation to a Third Party; (B) the Publishing Party shall postpone the publication or presentation for up to an additional sixty (60) days upon request by the Reviewing Party in order to allow the Reviewing Party to consider appropriate patent applications or other protection to be filed on information contained in the publication or presentation; (C) upon request of the Reviewing Party, the Publishing Party shall remove all Confidential Information of the Reviewing Party (from the information intended to be published or presented except to the extent disclosure of such Confidential Information is required by Law); and (D) the Publishing Party shall consider all reasonable comments made by the Reviewing Party and attempt to address any significant commercial concern to the proposed publication or presentation.

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7.4 Confidential Terms. Each of the Parties agrees not to disclose to any Third Party the terms and conditions of this Agreement without the prior approval of the other Party, except: (i) to advisors (including financial advisors, attorneys and accountants), approved or permitted contractors, actual or bona fide potential investors or acquirers, or actual or bona fide potential licensees or sublicensees or others on a need to know basis, in each case under circumstances that reasonably ensure the confidentiality thereof; or (ii) under circumstances that reasonably ensure the confidentiality of the information, to the extent necessary to comply with the terms of agreements with Third Parties existing as of the Effective Date pursuant to which such Party first obtains rights to such Party’s Licensed Technology, which is (sub)licensed to the other Party hereunder, or (iii) to the extent previously made publicly available pursuant to this Section 7.4, or (iv) to the extent required by applicable Law or the applicable rules of any public stock exchange upon which the stock of such Party or its Affiliate is listed; provided, however, that if a Party is required by Law or the applicable rules of any public stock exchange to make any such disclosure of the terms or conditions of this Agreement, it will give reasonable advance notice to the other Party of such disclosure requirement and will use its reasonable efforts to seek confidential treatment of such terms and conditions. In addition to the foregoing, with respect to complying with the disclosure requirements of the Securities and Exchange Commission (“SEC”) or similar regulatory bodies or the rules of an applicable public stock exchange, in connection with any required filing of this Agreement, the Parties shall consult with one another concerning which terms of this Agreement shall be requested to be redacted in any public disclosure of the Agreement (including by allowing the other Party an opportunity to review and comment upon the proposed filing of this Agreement). If time does not permit such discussion, or if, after such discussion between counsel, the Party desiring to make the disclosure still believes such Party is required by applicable Law or applicable stock exchange rule to make such disclosure, it may do so, upon written notice to the other Party. For clarity, nothing in this Section 7.4 shall prevent any Party from making disclosures required by applicable Law.

7.5 Subsequent Disclosures. Once a publication or other disclosure has been made in accordance with Section 7.3 or 7.4 above, a Party may make subsequent disclosures of information contained therein without approval or prior review of the other Party; provided, however, that the requirements of Section 7.3 or 7.4 shall, to the extent applicable, apply with respect to new or additional information in any such subsequent disclosure.

ARTICLE 8

REPRESENTATIONS, WARRANTIES AND COVENANTS;

INDEMNIFICATION

8.1 Mutual Representations, Warranties and Covenants. Each Party (the “Representing Party”) hereby represents, warrants and covenants to the other Party, as a material inducement for such other Party’s entry into this Agreement, as follows:

8.1.1 The Representing Party is duly organized and validly existing under the Laws of its jurisdiction of incorporation and it has full corporate power and authority and has taken all corporate action necessary to enter into and perform this Agreement;

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8.1.2 This Agreement is a legal and valid obligation binding upon the Representing Party and enforceable against it in accordance with its terms, assuming due execution and delivery of the Agreement by the Parties, and subject to applicable laws regarding insolvency, bankruptcy, reorganization, moratorium and other Laws affecting creditors’ rights generally as from time to time in effect;

8.1.3 The execution, delivery and performance of the Agreement by the Representing Party does not conflict with any agreement, instrument or understanding, oral or written, by which it is bound, nor to its knowledge, violate any Law;

8.1.4 To its knowledge as of the Effective Date, no government authorization, consent, approval, license, exemption of or filing or registration with any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, under any applicable laws, rules or regulations currently in effect, is or will be necessary for, or in connection with, the transaction contemplated by this Agreement or any other agreement or instrument executed in connection herewith, or for the performance by the Representing Party of its obligations under this Agreement and such other agreements;

8.1.5 The Representing Party has not granted as of the Effective Date, and during the Term will not grant, any right to any Third Party relating to its respective Licensed Technology which conflicts with the rights granted to the other Party hereunder; and without limiting the foregoing, the Representing Party will not, during the Term, encumber the subject matter (including Patents and Know-How) within its respective Licensed Technology, as applicable, with liens, mortgages, security interests or another similar interest that would give the holder the right to convert the interest into ownership of such subject matter, unless the encumbrance is expressly subject to the licenses and rights granted to the other Party herein; and

8.1.6 The Representing Party has not been debarred or the subject of debarment proceedings by any Regulatory Authority and will not knowingly use in connection with the Preclinical Development hereunder any employee, consultant or investigator that has been debarred or the subject of debarment proceedings by any Regulatory Authority.

8.2 Representations, Warranties and Covenants by Astellas. Astellas hereby represents and warrants and covenants to CPC as follows:

8.2.1 It has sufficient legal and/or beneficial title, ownership or license, free and clear from any mortgages, pledges, liens, security interests, conditional and installment sale agreements, encumbrances, charges or claims of any kind, of the Astellas Technology to grant the licenses to CPC as required to be granted pursuant to this Agreement; and

8.2.2 During the Term of this Agreement, it shall not grant any assignment, license, covenant not to sue, or other similar interest or benefit, exclusive or otherwise, to any Third Party relating to any patent, know-how or other proprietary right that conflicts with the licenses required to be granted to CPC hereunder.

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8.3 Representations, Warranties and Covenants by CPC. CPC hereby represents and warrants and covenants to Astellas as follows:

8.3.1 As of the Effective Date (and, with respect to CPC Technology specifically related to programs other than programs for those proteins or polypeptides listed on Exhibit 1.16.1, to CPC’s Knowledge), it has sufficient legal and/or beneficial title, ownership or license, free and clear from any mortgages, pledges, liens, security interests, conditional and installment sale agreements, encumbrances, charges or claims of any kind, of the CPC Technology to grant the licenses and options to Astellas as required to be granted pursuant to this Agreement; provided, however, that the foregoing shall not be construed as a representation or warranty of sufficiency of the CPC Technology, nor of non-infringement of the intellectual property rights of any Third Party.

8.3.2 During the Term of this Agreement, it shall not grant any assignment, license, covenant not to sue, or other similar interest or benefit, exclusive or otherwise, to any Third Party relating to any patent, know-how or other proprietary right that conflicts with the licenses and options required to be granted to Astellas hereunder.

8.3.3 During the Term of this Agreement, it shall comply with the applicable terms and conditions under the Technology License Agreement and all other Third Party contracts to which it is a party that relate to the Other Programs (collectively the “Third Party Agreements”) and will not terminate, amend, or waive (or provide consent with respect to any termination, amendment or waiver by Maxygen of any right) any rights under any Third Party Agreement in any manner which diminishes the licenses or the Option granted to Astellas, requires any increase in obligations by Astellas hereunder with respect to the Other Programs or its exercise of the Option, or impairs CPC’s ability to perform its obligations hereunder without the prior written consent of Astellas (which consent Astellas agrees shall not be unreasonably withheld).

8.3.4 During the Term of this Agreement, CPC shall:

(a) confer with the JSC regarding the proteins to be removed from the list of proteins for which Maxygen has exclusive rights to utilize the Enabling Technology under Section 2.5(b) of the License Agreement between Maxygen and Bayer HealthCare LLC dated July 1, 2008 (the “Bayer Agreement”), and as directed by the JSC shall exercise its rights under Section 2.8.1 of the Technology License Agreement to direct Maxygen to select those proteins selected by the JSC for removal from Schedule 1.45 of the Bayer Agreement, as provided in Section 2.5(b) of the Bayer Agreement;

(b) as directed by the JSC, exercise its rights under Section 2.8.2 of the Technology License Agreement to direct Maxygen to seek substitution, pursuant to Section 2.5.6 of the Bayer Agreement, of a protein selected by the JSC (that the JSC reasonably believes to have application in the area of immunosuppression, including autoimmunity and/or transplant rejection) in place of a Maxygen Exclusive Protein (as defined under the Bayer Agreement) chosen for replacement by the JSC; provided, however, that if a dispute with Bayer arises with respect to such proposed substitution, CPC shall not be obligated to pursue such proposed substitution unless CPC and Astellas mutually agree upon allocation of costs (including attorneys fees) related to pursuing such substitution; and

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(c) promptly confer with the JSC in the event that CPC receives notice from Maxygen pursuant to Section 2.8.3 of the Technology License Agreement that Bayer has proposed substitution, pursuant to Section 2.5.6 of the Bayer Agreement, of a particular protein in place of a Bayer Exclusive Protein (as defined in the Bayer Agreement), and upon direction of the JSC shall exercise its rights under Section 2.8.3 of the Technology License Agreement to direct Maxygen to object to such substitution in accordance with the procedures of Section 2.8.3 of the Technology License Agreement; provided, however, that if a dispute with Bayer arises with respect to such proposed substitution by Bayer, CPC shall not be obligated to pursue the objection to such substitution unless CPC and Astellas mutually agree upon allocation of costs (including attorneys fees) related to pursuing such objection to Bayer’s proposed substitution.

8.4 Disclaimer of Warranties. EXCEPT EXPRESSLY AS SET FORTH IN THIS AGREEMENT, CPC AND ASTELLAS EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE OTHER PROGRAMS, CPC TECHNOLOGY, ASTELLAS TECHNOLOGY OR OTHER PROGRAM TECHNOLOGY, OR ANY OTHER SUBJECT MATTER OF THIS AGREEMENT, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NONINFRINGEMENT.

8.5 Indemnification.

8.5.1 Fault-Based.

(a) Subject to Sections 8.6 and 8.7, CPC shall defend, indemnify, and hold Astellas, its Affiliates, and their respective directors, officers, employees and agents (collectively, “Astellas Indemnitees”) harmless, at CPC’s cost and expense, from and against any and all liabilities, losses, costs, damages, fees or expenses (including reasonable legal expenses and attorneys’ fees incurred by any Astellas Indemnitees until such time as CPC has acknowledged and assumed its indemnification obligation hereunder with respect to a claim) payable to a Third Party (collectively, “Losses”) arising out of any claim, action, lawsuit, or other proceeding (collectively, “Claims”) brought against any Astellas Indemnitee by such Third Party to the extent such Losses result from (i) the gross negligence or willful misconduct of CPC, or its Affiliates or sublicensees hereunder, (ii) a breach by CPC of its representations or warranties set forth in Section 8.1 or 8.3, or (iii) violation of Law by or under authority of CPC, or its Affiliates or sublicensees, in performing its activities under the Other Programs, but only the Law of the country in or for which CPC, or its Affiliates or sublicensees, as applicable, is performing such activities (each of (i), (ii) or (iii), a “Fault of CPC” for purposes of this Section 8.5); but excluding such Losses to the extent they arise from the Fault of Astellas or arise from any Claim alleging infringement of intellectual property rights of a Third Party.

(b) Subject to Sections 8.6 and 8.7, Astellas shall defend, indemnify, and hold CPC, its Affiliates, and their respective directors, officers, employees and agents (collectively, “CPC Indemnitees”) harmless, at Astellas’ cost and expense, from and against any and all Losses

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(including reasonable legal expenses and attorneys’ fees incurred by any CPC Indemnitees until such time as Astellas has acknowledged and assumed its indemnification obligation hereunder with respect to a claim) arising out of any Claim brought against any CPC Indemnitee by such Third Party to the extent such Losses result from (i) the gross negligence or willful misconduct of Astellas, or its Affiliates or sublicensees hereunder, (ii) a breach by Astellas of its representations or warranties set forth in Section 8.1 or 8.2, or (iii) violation of Law by or under authority of Astellas, or its Affiliates or sublicensees, in performing its activities under the Other Programs, but only the Law of the country in or for which Astellas, or its Affiliates or sublicensees, as applicable, is performing such activities (each of (i), (ii) or (iii), a “Fault of Astellas” for purposes of this Section 8.5); but excluding such Losses to the extent they arise from the Fault of CPC or arise from any Claim alleging infringement of intellectual property rights of a Third Party.

8.5.2 Apportionment of Fault. If any Losses occur by reason of or result from the joint Fault of Astellas and Fault of CPC, liability for such Losses under Section 8.5.1(a) or Section 8.5.1(b) shall be apportioned between Astellas and CPC according to the percentage of Fault of Astellas and Fault of CPC. This Section 8.5.2 shall apply even under circumstances where a Third Party bears a percentage of the fault.

8.6 Claim for Indemnification. Whenever any Claim shall arise for indemnification under Section 8.5, the Astellas Indemnitees and the CPC Indemnitees entitled to indemnification (the “Indemnified Party”) shall promptly notify the other Party (the “Indemnifying Party”) of the Claim and, when known, the facts constituting the basis for the Claim. The Indemnifying Party shall promptly assume, and have the right to control, the defense and settlement thereof at its own expense. The Indemnified Party shall not settle or compromise any Claim by a Third Party for which it is entitled to indemnification without the prior written consent of the Indemnifying Party, unless the Indemnifying Party is in breach of its obligation to defend hereunder. In no event shall either the Indemnified Party or Indemnifying Party settle any Claim without the prior written consent of the Indemnified Party if such settlement does not include a release from liability on such Claim or if such settlement would involve undertaking an obligation other than the payment of money by the settling Party that would bind or impair the non-settling Party, or result in any Licensed Technology, Patent or trademark of the other Party being rendered invalid or unenforceable. The provisions of this Article 8 shall be subject to the dispute resolution procedures of Article 10.

8.7 Reduction of Indemnity Payments. Notwithstanding anything in this Article 8 to the contrary, an indemnity payment owed by one Party to the other Party pursuant to this Agreement shall be reduced by all amounts actually received by the Indemnified Party under insurance policies purchased and maintained by the Indemnifying Party in connection with the Claim for which the indemnification related (less all deductibles, costs of collection, and other expenses incurred in connection therewith).

ARTICLE 9

TERM AND TERMINATION

9.1 Term. This Agreement will commence upon the Effective Date and, except to the extent earlier terminated pursuant to this Article 9, shall continue in full force and effect until the expiration of the Buy-Out Option (the “Term”).

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9.2 Termination for Breach. Either Party may terminate this Agreement in the event the other Party materially breaches this Agreement, and such breach shall have continued for ninety (90) days after notice thereof was provided to the breaching Party by the non-breaching Party. Any such termination shall become effective at the end of such ninety (90) day period unless the breaching Party has cured any such breach prior to the expiration of the ninety (90) day period. Notwithstanding the foregoing, in the event the alleged breach in question is not reasonably capable of cure within the foregoing ninety (90) day period, but is otherwise capable of being cured, the breaching Party may submit a reasonable cure plan prior to the end of such initial ninety (90) day cure period, in which case, the other Party shall not have the right to terminate under this Section 9.2 with respect to such alleged breach for so long as the breaching Party is diligently implementing such cure plan. If the alleged breaching Party disputes in good faith the existence or materiality of a breach specified in a notice provided by the other Party in accordance with this Section 9.2, and such alleged breaching Party provides the other Party notice of such dispute within such ninety (90) day period, then the non-breaching Party shall not have the right to terminate this Agreement under this Section 9.2 unless and until an arbitrator, in accordance with Article 10, has determined that the alleged breaching Party has materially breached the Agreement and that such Party fails to cure such breach within ninety (90) days following such arbitrator’s decision. It is understood and agreed that during the pendency of such dispute, all of the terms and conditions of this Agreement shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder. Notwithstanding anything to the contrary in this Section 9.2, the Parties acknowledge that termination of this Agreement shall be a remedy of last resort and the breaching Party shall have the right to assert in the event of a dispute for resolution under Article 10, that some other remedy besides termination shall be adequate and appropriate in lieu of termination for the breach in question. If the breaching Party raises such issue for resolution under Article 10, the arbitrator shall reasonably consider non-termination remedies and, provided such material breach is confirmed, look first to impose any such non-termination remedies in lieu of allowing termination of this Agreement so long as such non-termination remedies are adequate, appropriate, and effectively make the non-breaching Party whole in light of all damages incurred including consequential damages (and no termination shall occur pending resolution of any such dispute and in the event such arbitrator finds such non-termination remedies adequate, appropriate, and effective in making the non-breaching Party whole).

9.3 General Effects of Expiration or Termination.

9.3.1 Accrued Obligations. Expiration or termination of this Agreement for any reason shall not release either Party from any obligation or liability which, at the time of such expiration or termination, has already accrued to the other Party or which is attributable to a period prior to such expiration or termination.

9.3.2 Non-Exclusive Remedy. Notwithstanding anything herein to the contrary, expiration or termination of this Agreement by a Party shall be without prejudice to other remedies such Party may have at law or equity.

9.3.3 General Survival. The following provisions of this Agreement shall survive expiration or termination of this Agreement for any reason (but solely for the time periods provided in such Articles and Sections, if applicable): Article 7 (other than Section 7.3), Article 10 and

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Article 11 (other than Section 11.13) of the Agreement, and Sections 4.3, 4.4, 4.5, 5.1(b), 5.5, 6.1, 6.2.3, 8.4, 8.5, 8.6, 8.7, and 9.3 of the Agreement. Section 5.3 shall survive the expiration, but not the termination, of this Agreement. Except as otherwise provided in this Article 9, all rights and obligations of the Parties under this Agreement, including any licenses granted hereunder, shall terminate upon expiration or termination of this Agreement in its entirety for any reason.

ARTICLE 10

DISPUTE RESOLUTION

10.1 Disputes.

10.1.1 JSC. Except as otherwise provided herein, any disputes relating to the Other Programs or arising out of or in connection with this Agreement shall be first submitted to the JSC for resolution. The JSC will hear the disputed matter and attempt to reach a decision with respect to such disputed matter in as timely a manner as possible, and in all cases within thirty (30) days after the submission by either Party of the disputed matter to the JSC. If the JSC is unable to resolve any dispute within such thirty (30) day period, such matter shall be subject to resolution under Section 10.1.2.

10.1.2 CEOs. If the JSC is unable to resolve any dispute relating to the Other Programs or arising out of or in connection with this Agreement, either Party may, by written notice to the other, have such dispute referred to the CEOs (or an executive officer designated by the CEO) of the Parties for attempted resolution by good faith negotiations within ten (10) Business Days. In such event, each Party shall cause its CEO or the CEO’s designated executive officer to meet and be available to attempt to resolve such issue. If the Parties should resolve such dispute or claim, a memorandum setting forth their agreement will be prepared and signed by both Parties if requested by either Party. The Parties shall cooperate in an effort to limit the issues for consideration in such manner as narrowly as reasonably practicable in order to resolve the dispute.

10.2 Arbitration. Except with respect to disputes involving the intellectual property rights of a Party under Section 10.4 or certain disputes under Section 10.3, the Parties agree that any dispute or controversy relating to the Other Programs or arising out of or in connection with this Agreement, or the validity, enforceability, construction, performance or breach hereof, which is not resolved under Section 10.1 or as otherwise expressly provided herein, shall be finally settled by binding arbitration under this Section 10.2 under the Rules of Conciliation and Arbitration of the International Chamber of Commerce (the “ICC Rules”) by one or more arbitrators appointed in accordance with the rules thereof and the decisions of the arbitrator shall be final and binding on the Parties hereto. The place of the arbitration proceeding shall be in San Francisco, California. The Parties agree that the decision shall be the sole, exclusive and binding remedy between them regarding determination of the matters presented to the arbitrator. The costs of such arbitration, including administrative and arbitrator’s fees, shall be shared equally by the Parties, and each Party shall bear its own expenses and attorney’s fees incurred in connection with the arbitration. The Parties shall use good faith efforts to complete arbitration under this Section 10.2 within ninety (90) days following the initiation of such arbitration. The arbitrator shall establish reasonable additional procedures to facilitate and complete such arbitration within such ninety (90) day period.

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10.3 Short Form Arbitration for Certain Disputes. In the event the Parties are unable to agree upon a definitive Other Program License Agreement pursuant to Section 5.3.3 and such matter is referred to arbitration for resolution under this Section 10.3, such matter shall, upon referral of the matter to arbitration by either Party, be resolved by final binding arbitration in accordance with the procedures set forth in Section 10.2, except that the procedures for the conduct of the arbitration shall be modified as follows:

10.3.1 Arbitration under this Section 10.3 shall be conducted by a single neutral arbitrator, selected in accordance with ICC Rules, or as otherwise agreed by the Parties. The arbitrator shall engage an independent expert with relevant experience in licensing and collaboration agreements governing pharmaceutical research and development to advise the arbitrator. Each Party shall provide the arbitrator and the other Party with a written report providing (i) the Party’s last draft of the Other Program License Agreement provided to the other Party, (ii) a detailed list of open issues in the Other Program License Agreement, and (iii) its position with respect to each open issue in the detailed list, and may submit a revised report and position to the arbitrator within fifteen (15) days of receiving the other Party’s report. If so requested by the arbitrator, each Party shall make oral or other written submissions to the arbitrator in accordance with procedures to be established by the arbitrator; provided that other Party shall have the right to be present during any oral submissions. The arbitrator shall then resolve each open issue to determine the final terms and conditions for the Other Program License Agreement, based on what is most reasonable and equitable to each of the Parties under the circumstances and reflective of reasonable and customary terms in the biopharmaceutical industry for agreements of this type (including the protection of the proprietary technology and intellectual property rights of each of the Parties that may be useful for other applications outside this Agreement and recognition of the respective contributions by the parties in terms of financial, intellectual property and other contributions) and most closely reflects the Parties’ intent as expressed in this Agreement (except that the proposed financial terms of a $20,000,000 upfront payment for the Other Program License Agreement in circumstances when CPC is below the $20,000,000 net cash threshold, as described in Section 5.3.3 above, is not, and shall not be deemed to be, reflective of the Parties’ intent regarding appropriate financial terms for such Other Program License Agreement in other circumstances, but shall be the financial terms when CPC is below the $20,000,000 net cash threshold, as described in Section 5.3.3 above), and shall not have the authority to (i) render any substantive decision on any open issue other than to so select the position of either Astellas or CPC, or a reasonable compromise thereof, as set forth in their respective written reports (as submitted by the applicable Party), or (ii) alter any term or condition that both of the Parties have indicated is not an open issue and for which the draft Other Program License Agreement provided by each Party has the same term or condition.

10.3.2 In any arbitration under this Section 10.3, the arbitrator and the Parties shall use their best efforts to resolve such matter within thirty (30) days after the selection of the arbitrator or as soon thereafter as is practicable.

10.4 Intellectual Property Disputes. Any disputes related to intellectual property rights of the Parties which are not resolved under Section 10.1 shall be brought to a court of competent jurisdiction in the country in which such intellectual property rights were granted.

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10.5 Provisional Remedies. Nothing in this Agreement shall limit the right of either Party to seek to obtain in any court of competent jurisdiction any equitable or interim relief or provisional remedy, including injunctive relief, pending resolution under Section 10.1, 10.2, 10.3 or 10.4 as applicable, that may be necessary to protect the rights or property of that Party. Seeking or obtaining such equitable or interim relief or provisional remedy in a court shall not be deemed a waiver of the agreement to arbitrate. For clarity, any such equitable remedies shall be cumulative and not exclusive and are in addition to any other remedies that either Party may have under this Agreement or applicable Law.

ARTICLE 11

MISCELLANEOUS

11.1 Governing Law. This Agreement and any dispute arising from the performance or breach hereof shall be governed by and construed and enforced in accordance with the substantive Laws of the State of New York, without reference to conflicts of laws principles. Notwithstanding the above, any dispute regarding validity or enforceability of any patent shall be governed by the patent laws of the jurisdiction in which such patent was issued solely for the purpose of resolution of the dispute as to validity and enforceability.

11.2 Assignment. This Agreement shall not be assignable or otherwise transferred, in whole or in part, by either Party to any Third Party without the written consent of the other Party and any such attempted assignment shall be void. Notwithstanding the foregoing, either Party may assign this Agreement, without the written consent of the other Party, to an entity that acquires all or substantially all of the business or assets of such Party to which this Agreement pertains (whether by merger, reorganization, acquisition, sale or otherwise), and agrees in writing to be bound by the terms and conditions of this Agreement. No assignment or transfer of this Agreement shall be valid and effective unless and until the assignee/transferee agrees in writing to be bound by the provisions of this Agreement. The terms and conditions of this Agreement shall be binding on and inure to the benefit of the permitted successors and assigns of the Parties. Except as expressly provided in this Section 11.2, any attempted assignment or transfer of this Agreement shall be null and void.

11.3 Limitation on Liability. EXCEPT FOR BREACH OF SECTION 7.1, IN NO EVENT SHALL EITHER PARTY OR ITS AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS OR INTERRUPTION OF BUSINESS, OR FOR ANY OTHER INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES. IN NO CASE SHALL EITHER PARTY BE LIABLE FOR ANY REPRESENTATION OR WARRANTY MADE BY THE OTHER PARTY TO ANY THIRD PARTY. NOTHING IN THIS SECTION 11.3 IS INTENDED TO LIMIT EITHER PARTY’S OBLIGATIONS UNDER SECTIONS 8.5 AND 8.6 IN RELATION TO AMOUNTS PAID TO A THIRD PARTY.

11.4 Notices. Any notice, request, delivery, approval or consent required or permitted to be given under this Agreement shall be in English language, in writing, shall specifically refer to this Agreement and shall be deemed to have been sufficiently given if delivered in person, transmitted by as a PDF attachment to an email (with response email confirming receipt) or by express courier

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service (signature required) or five (5) Business Days after it was sent by registered letter, return receipt requested (or its equivalent), provided that no postal strike or other disruption is then in effect or comes into effect within two (2) Business Days after such mailing, to the Party to which it is directed at its address or email address shown below or such other address or email address as such Party will have last given by notice to the other Party.

If to CPC,

addressed to:	CPC c/o Maxygen, Inc.
	515 Galveston Drive Redwood City, California 94063 USA Attention: Chief Business Officer Telephone: (650) 298-5300 Email address: corporatesecretary@maxygen.com
with a copy to:	Maxygen, Inc.
	515 Galveston Drive Redwood City, California 94063 USA Attention: General Counsel Telephone: (650) 298-5300 Email address: corporatesecretary@maxygen.com
and a copy to:	Wilson Sonsini Goodrich & Rosati
	Professional Corporation 650 Page Mill Road Palo Alto, CA 94304-1050 USA Attention: David W. Stevens Telephone: (650) 493-9300

If to Astellas,

addressed to:	Astellas Pharma Inc.
	2-3-11, Nihonbashi-Honcho Chuo-ku, Tokyo 103-8411 Japan Attention: Vice President, Business Development Telephone: (813) 3244-2500 Email address: masaki.doi@jp.astellas.com

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with a copy to:	Astellas Pharma Inc.
	2-3-11, Nihonbashi-Honcho 2-chome Chuo-ku, Tokyo 103-8411 Japan Attention: Vice President, Legal Telephone: (813) 3244-3231 Email address: kazunori.okimura@jp.astellas.com

11.5 Waiver. Neither Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

11.6 Severability. If any provision hereof is held invalid, illegal or unenforceable by any arbitrator or court of competent jurisdiction from which no appeal can be or is taken, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect in such tribunal or jurisdiction, as the case may be, and shall be liberally construed in order to carry out the intentions of the Parties as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other tribunal or jurisdiction.

11.7 Entire Agreement/Modification. This Agreement, including its Exhibits, and the Transaction Agreements set forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties with respect to the subject matter hereof and thereof, and supersede all prior agreements and understandings between the Parties with respect to such subject matter. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of each of the Parties.

11.8 Relationship of the Parties. The Parties agree that the relationship of CPC and Astellas established by this Agreement is that of independent contractors. Furthermore, the Parties agree that this Agreement does not, is not intended to, and shall not be construed to, establish an employment, agency, joint venture, partnership or any other relationship. Except as may be specifically provided herein, neither Party shall have any right, power or authority, nor shall they represent themselves as having any authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of the other Party, or otherwise act as an agent for the other Party for any purpose.

11.9 Force Majeure. Except with respect to payment of money, neither Party shall be liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfillment or the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by or results from fire,

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earthquake, tornado, embargo, prohibition or intervention, riot, civil commotion, war, act of war (whether war be declared or not), insurrection, terrorist act, strike, flood, governmental act or restriction (beyond the reasonably control of the respective Party), act of God, or other cause that is beyond the reasonable control and not caused by the negligence or misconduct of the affected Party. The Party affected by such force majeure will provide the other Party with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and will use commercially reasonable efforts to overcome the difficulties created thereby and to resume performance of its obligations as soon as practicable. If the performance of any such obligation under this Agreement is delayed owing to such a force majeure for any continuous period of more than one hundred eighty (180) days, the Parties hereto will consult with respect to an equitable solution, including the possibility of the mutual termination of this Agreement.

11.10 Third Party Beneficiaries. Except for the rights to indemnification provided for a Party’s Indemnitees pursuant to Section 8.5, all rights, benefits and remedies under this Agreement are solely intended for the benefit of CPC and Astellas, and except for such rights to indemnification expressly provided pursuant to Section 8.5, no Third Party shall have any rights whatsoever to (i) enforce any obligation contained in this Agreement (ii) seek a benefit or remedy for any breach of this Agreement, or (iii) take any other action relating to this Agreement under any legal theory, including but not limited to, actions in contract, tort (including but not limited to negligence, gross negligence and strict liability), or as a defense, setoff or counterclaim to any action or claim brought or made by the Parties.

11.11 Advice of Counsel. Astellas and CPC have each consulted counsel of their choice regarding this Agreement, and each acknowledges and agrees that this Agreement shall not be deemed to have been drafted by one Party or another and will be construed accordingly.

11.12 Other Obligations. Except as expressly provided in this Agreement or as separately agreed upon in writing between Astellas and CPC, each Party shall bear its own costs incurred in connection with the implementation of the obligations under this Agreement.

11.13 Further Assurances. At any time or from time-to-time on and after the Effective Date, a Party shall at the request of the other Party (i) deliver to the requesting Party such records, data or other documents as may be reasonably necessary to give effect to the provisions of this Agreement, (ii) execute, and deliver or cause to be delivered, all such consents, documents or further instruments of assignment, transfer or license as may be reasonably necessary to give effect to the provisions of this Agreement, and (iii) take or cause to be taken all such actions, as the requesting Party may reasonably deem necessary or desirable in order for the requesting Party to obtain the full benefits of this Agreement and the transactions contemplated hereby.

11.14 Compliance with Laws/Other. Notwithstanding anything to the contrary contained herein, each Party shall comply with, all applicable Laws in connection with its performance under this Agreement, including obtaining all necessary approvals required by the applicable agencies of the governments of the United States, Japan and other applicable jurisdictions. In addition, each Party shall conduct its activities under the Other Programs in accordance with good scientific and business practices.

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11.15 Governmental Matters. Subject to Section 7.4, to the extent, if any, that a Party concludes in good faith that it is required to file or register this Agreement or a notification thereof with any governmental authority, including without limitation the U.S. Securities and Exchange Commission and the Competition Directorate of the Commission of the European Communities, in accordance with applicable laws and regulations, such Party may do so, and the other Party shall cooperate in such filing or notification and shall execute all documents reasonable required in connection therewith, at the expense of the requesting Party. The Parties shall promptly notify each other as to the activities or inquires of any such governmental authority relating to this Agreement, and shall cooperate, to respond to any request for further information therefrom at the expense of the requesting Party.

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

[The remainder of this page intentionally left blank intentionally; the signature page follows.]

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

CPC	ASTELLAS PHARMA INC.
By:	By:
Name:	Name:
Title:	Title:

List of Exhibits:

• Exhibit 1.9.2—CPC Patents

• Exhibit 1.16.1—Exclusively Out-Licensed Protein

• Exhibit 1.29—Existing Compounds

• Exhibit 2.3—Initial Committee Membership

• Exhibit 2.10—Existing Third Party Contactor Agreements

• Exhibit 3.2—Draft Initial Preclinical Development Plan

• Exhibit 6.2.2(a)—Core Patent Countries

The registrant agrees to furnish to the Securities and Exchange Commission upon request a copy of any omitted schedule or exhibit.

[Signature page to Other Products Collaboration Agreement]

EX-2.1.3

EXHIBIT 2.1.3

TECHNOLOGY LICENSE AGREEMENT

This Technology License Agreement (this “Agreement”) is entered into as of the     ^th day of             , 2009 (“Effective Date”) by and between Maxygen, Inc., a Delaware corporation with its principal place of business at 515 Galveston Drive, Redwood City, California 94063 (“Maxygen”), and CPC, a Delaware limited liability company with its principal place of business at 515 Galveston Drive, Redwood City, California 94063 (“CPC”). Maxygen and CPC are each referred to herein by name or, individually, as a “Party” or, collectively, as the “Parties.”

BACKGROUND

A. Maxygen owns or possesses certain right, title and interest in Enabling Technology, Software, In-Licensed Project-Specific Technology, RR Technology and CMVP Technology, and related Patents and Know-How (all as defined below), which may have potential usefulness in the research, development, manufacture or commercialization of protein pharmaceutical products;

B. Concurrently with the execution of this Agreement, Maxygen and CPC have executed Asset Contribution Agreement between Maxygen and CPC (the “Asset Contribution Agreement”) pursuant to which CPC will acquire certain assets of Maxygen related to the research, development, manufacture or commercialization of protein pharmaceutical products;

C. CPC desires to obtain certain licenses with respect to the Enabling Technology, Software, In-Licensed Project-Specific Technology, RR Technology and CMVP Technology, and Maxygen is willing to grant such licenses, all on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and mutual covenants herein below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

The following capitalized terms shall have the corresponding meanings as used in this Agreement:

1.1 “4 Program” shall have the meaning provided in the Asset Contribution Agreement.

1.2 “Accounting Standards” means generally accepted accounting principles applicable internationally or in a particular country (e.g., International Accounting Standards, Japanese Accounting Standards, U.S. Accounting Standards), as consistently applied by or on behalf of the relevant Party.

1.3 “Adjuvant” means a nucleic acid, protein or polypeptide that, when administered in conjunction with one or more Antigens (simultaneously or in a phased manner), induces in a human or animal recipient an improved Immune Response to the one or more Antigens; in each case,

regardless of the formulation of such nucleic acid, protein or polypeptide (e.g., whether containing purified nucleic acid(s), protein(s) or polypeptide(s), a mixture of nucleic acid(s), protein(s) or polypeptide(s) or displayed on the surface of a cell, spore, virus or other delivery vehicle) or the mode of its delivery (e.g., via injection, ingestion, inhalation or ballistic device). For purposes of clarity, a therapeutic protein, polypeptide or nucleic acid that creates an Antigen Specific Response per se to such therapeutic protein, polypeptide or nucleic acid (or protein or polypeptide encoded by such nucleic acid) is not an Adjuvant for purposes of this Agreement. (“Antigen,” “Antigen-Specific Response,” and “Immune Response” are defined in Sections 1.48, 1.48.1, and 1.48.2 below.)

1.4 “Affiliate” means any corporation or other business entity that controls, is controlled by, or is under common control with a Party, for so long as such control exists. A corporation or other entity shall be regarded as in “control” of another corporation or entity if it owns or directly or indirectly controls at least fifty percent (50%) of the outstanding shares or other voting rights of the other corporation or entity having the right to elect directors or such lesser percentage that is the maximum permitted to be owned by a foreign entity in those jurisdictions where majority ownership by foreign entities is prohibited, or (i) in the absence of the ownership of at least fifty percent (50%) of the outstanding shares or other voting rights of a corporation, or (ii) in the case of a non-corporate business entity, if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or non-corporate business entity, as applicable, whether through the ownership or control of voting securities, by contract or otherwise. Notwithstanding a Party’s ownership interest in, or control over, the other Party, a Party hereunder shall not be deemed an Affiliate of the other Party under this Agreement. Furthermore, notwithstanding Astellas’ ownership interest in, or control over, CPC, CPC shall not be deemed an Affiliate of Astellas, nor vice versa, under this Agreement unless, and until such time as, Astellas acquires one hundred percent (100%) ownership of CPC through exercise of its Buy-Out Option or otherwise.

1.5 “Astellas Agreement” means the Co-Development and Commercialization Agreement by and between CPC (as successor-in-interest to Maxygen) and Astellas Pharma Inc., a Japanese corporation, (“Astellas”), dated September 18, 2008, as the same may be amended from time to time.

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

1.6.1 “Astellas Agreement Know-How” means Know-How and Materials, if any, that (i) is Controlled by Maxygen or an Affiliate as of the Effective Date or at any time during the Term prior to the Survival Date (subject to Section 2.5 with respect to New Third Party Agreements, if any, entered into by Maxygen after the Date of the Master Joint Venture Agreement), (ii) is not assigned to CPC under the Asset Contribution Agreement, and (iii) is (a) resulting from or generated under the 4 Program as conducted by or for Maxygen prior to the Effective Date (including all CTLA-4 Variants), or used (or has been used) in, or useful for, the 4 Program or both the 4 Program and the Other Programs in each case as conducted (or anticipated to be conducted) by or for Maxygen as of or prior to the Effective Date, (b) within the scope of Know-How licensed to Astellas under the Astellas Agreement (determined as if Maxygen remained a party thereto), or (c) was practiced by Maxygen in performance of its obligations or exercise of its rights under the Astellas Agreement prior to the Effective Date or are necessary or useful for CPC in performance of its

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obligations or exercise of its rights under the Astellas Agreement after the Effective Date. Notwithstanding the foregoing, the Astellas Agreement Know-How does not include any Know-How or Materials within the Excluded Technology or any Enabling Know-How or Enabling Materials.

1.6.2 “Astellas Agreement Patents” means (I) any Patents, if any, that (i) are Controlled by Maxygen or an Affiliate as of the Effective Date or during the Term of this Agreement (subject to Section 2.5 with respect to New Third Party Agreements, if any, entered into by Maxygen after the Date of the Master Joint Venture Agreement), (ii) are not assigned to CPC under the Asset Contribution Agreement, and (iii) are (a) resulting from or generated under the 4 Program as conducted by or for Maxygen prior to the Effective Date (including all CTLA-4 Variants), or used (or has been used) in, or useful for, the 4 Program or both the 4 Program and the Other Programs in each case as conducted (or anticipated to be conducted) by or for Maxygen as of or prior to the Effective Date, (b) within the scope of Patents licensed to Astellas under the Astellas Agreement (determined as if Maxygen remained a party thereto), or (c) were practiced by Maxygen in performance of its obligations or exercise of its rights under the Astellas Agreement or are necessary or useful for CPC to in performance of its obligations or exercise of its rights under the Astellas Agreement, and (II) any Patents whether filed or issued as of or after the Effective Date that claim priority to any Patent included within (I). Notwithstanding the foregoing, the Astellas Agreement Patents do not include any Patents within the Excluded Technology or any Enabling Patents.

1.7 “Bayer Agreement” means that certain License Agreement by and between Maxygen, Inc. and Bayer HealthCare LLC, dated July 1, 2008, as may be amended by the parties thereto from time to time.

1.8 “Business Day” means any day other than a Saturday, Sunday or any other day on which commercial banks in Tokyo, Japan or San Francisco, California (as applicable) are authorized or required by Law to remain closed.

1.9 “Buy-Out Option” shall have the meaning provided in the Investors’ Rights Agreement by and between Maxygen, CPC and Astellas of even date herewith.

1.10 “CMVP Technology” means the CMVP Patents, CMVP Materials and CMVP Know-How.

1.10.1 “CMVP Know-How” means Know-How Controlled by Maxygen or an Affiliate as of the Effective Date related to the cytomegalovirus (“CMV”) promoter, or variants thereof, that is reasonably necessary and/or useful for making or using CMVP Materials as research reagents.

1.10.2 “CMVP Materials” means the CMV promoter variants and related Materials listed on Exhibit 1.10.2.

1.10.3 “CMVP Patents” means (I) the Patents listed on Exhibit 1.10.3, (II) any other Patents, if any, that (i) are Controlled by Maxygen or an Affiliate as of the Effective Date and (ii) claim the composition, or are directed to the manufacture or use of, CMV promoter variants

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made or used by Maxygen prior to the Effective Date, and (III) any Patents whether filed or issued as of or after the Effective Date that claim priority to any Patent included within (I) or (II). CMVP Patents shall also include future patent applications and patents issuing thereon to the extent they have utility in the manufacture, use or sale of CMV immediate early promoter variants and claim priority to any Patents within the scope of the foregoing sentence (provided, however, that with respect to continuation-in-part applications, only those claims thereof which claim priority to a date on or before the Effective Date shall be included in the license hereunder). Notwithstanding the foregoing, the CMVP Patents do not include any Patents licensed to Maxygen by the University of Iowa Research Foundation or any other Patents within the Excluded Technology.

1.11 “Compound” means (i) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a human or humanized protein, or any variant, homolog, derivative, mutant or fragment thereof, in each case other than any Excluded Protein Variant or Vaccine, (each, a “Protein Molecule”) and (ii) any Protein Molecule that is conjugated or otherwise coupled to any other molecule (e.g., polyethylene glycol, immunoglobulin domain, sialylation, pegylated, or glycosylation). For the avoidance of doubt, Compounds include any CTLA-4 Variants and Other Protein Variants (as such terms are defined in the Asset Contribution Agreement).

1.12 “Contributor Technology” means the Contributor Patents and Contributor Know-How.

1.12.1 “Contributor Know-How” means Know-How within the Contributor Intellectual Property (as defined in the Asset Contribution Agreement) assigned to CPC under the Asset Contribution Agreement; provided, however, that Contributor Know-How shall exclude all such Know-How resulting from or generated under the 4 Program (as defined in the Asset Contribution Agreement) as conducted by or for Maxygen as of or prior to the Effective Date.

1.12.2 “Contributor Patents” means Patents within the Other Program Intellectual Property (but excluding those Patents listed on Schedule 2.1(b)(2) of the Asset Contribution Agreement) and Other Contributor Intellectual Property (as those terms are defined in the Asset Contribution Agreement) assigned to CPC under the Asset Contribution Agreement; provided, however, that Contributor Patents shall exclude all such Patents resulting from or generated under the 4 Program (as defined in the Asset Contribution Agreement) as conducted by or for Maxygen as of or prior to the Effective Date, and shall for the avoidance of doubt exclude all Patents listed on Schedule 2.1(a) of the Asset Contribution Agreement.

1.13 “Control” means, with respect to particular Know-How and any and all non-Patent intellectual property rights therein, or a particular Patent, possession by the Party granting the applicable right, license or sublicense to the other Party as provided herein, of the power and authority, whether arising by ownership, license, or other authorization, to disclose and, if applicable, to deliver the particular Know-How to the other Party, and to grant and to authorize under such Know-How or Patent the right, license or sublicense, as applicable, to such other Party in this Agreement (i) without giving rise to a violation of the terms of any written agreement with any Third Party, and (ii) subject to the provisions of Section 2.5, below, with respect to rights, licenses or sublicenses conveyed to Maxygen under Third Party Agreements or New Third Party Agreements that are subject to payment obligations to such Third Parties. “Controlled” and “Controlling” have their correlative meanings.

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1.14 “CTLA-4 Variants” shall have the meaning provided in the Asset Contribution Agreement.

1.15 “Dollars” or “$” refers to United States dollars.

1.16 “Enabling Technology” means the Enabling Patents, Enabling Materials, and Enabling Know-How.

1.16.1 “Enabling Know-How” means Know-How Controlled by Maxygen or an Affiliate as of the Effective Date directed to (a) methods of performing Shuffling (whether using tangible materials or in silico), or (b) generally applicable screening techniques, methodologies or processes for identifying genetic variants of interest, in each case that are reasonably necessary or useful for using or practicing the Enabling Patents and/or the Enabling Materials in and for the research, development, manufacture or commercialization of Compounds and Products in the Field.

1.16.2 “Enabling Materials” means the Materials listed on Exhibit 1.16.2.

1.16.3 “Enabling Patents” means (I) the Patents listed on Exhibit 1.16.3, (II) all other Patents that (i) are Controlled by Maxygen or an Affiliate as of the Effective Date and (ii) claim (a) methods of performing Shuffling (whether using tangible materials or in silico), or (b) generally applicable screening techniques, methodologies or processes for identifying genetic variants of interest, or (c) Software useful for the performance of Shuffling or analysis of resulting Shuffled proteins, and (III) any Patents whether filed or issued as of or after the Effective Date that claim priority to any Patent included within (I) or (II). Enabling Patents shall include future patent applications and patents issuing thereon to the extent they have utility in the performance of Shuffling or generally applicable screening techniques, methodologies or process for identifying genetic variants of interest and claim priority to any Patents within the scope of the foregoing sentence (provided, however, that with respect to continuation-in-part applications, only those claims thereof which claim priority to a date on or before the Effective Date shall be included in the license hereunder). Notwithstanding the foregoing, Enabling Patents shall exclude all Patents within the Excluded Technology.

1.17 “Excluded Protein Variant or Vaccine” means (i) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is an (A) Exclusively Out-Licensed Protein, (B) granulocyte colony stimulating factor (G-CSF), (C) a protein from an infectious agent or a polynucleotide encoding such protein that in each case is intended to be used as a Vaccine (including infectious agents or other constructs incorporating a Vaccine and/or genetic material encoding a Vaccine (including live-attenuated or whole killed virus), but solely when such agent, construct or material is included with or otherwise incorporates a protein from an infectious agent (or variant, homolog, derivative, mutant or fragment of such protein as described in (D), below) or a polynucleotide encoding such protein (or such variant, homolog, derivative, mutant or fragment) and is intended to be used as a Vaccine), or (D) any variant, homolog, derivative, mutant, or fragment of the amino acid chains described in the foregoing subsections (A), (B) or (C), which in

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the case of (C) is intended to be used as a Vaccine (each, an “Excluded Protein Molecule”) and (ii) any Excluded Protein Molecule that is conjugated or otherwise coupled to any other molecule (e.g., polyethylene glycol, immunoglobulin domain, sialylation, pegylated, or glycosylation). In no event shall Excluded Protein Variant or Vaccines include any CTLA-4 Variants or (x) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a protein or polypeptide listed on Schedule 2.1(b)(1) of the Asset Contribution Agreement, or (y) any variant, homolog, derivative, mutant, or fragment of subsection of (x), provided that in the case of (y) such variant, homolog, derivative, mutant, or fragment has not been altered or modified in such a way as to cause such variant, homolog, derivative, mutant, or fragment to fall within (A), (B), or (C) of the definition of Excluded Protein Variant or Vaccine set forth in the first sentence of this Section 1.17 or to fall within (D) above such that a reasonable, independent expert knowledgeable and experienced in working with protein pharmaceuticals would primarily consider such variant, homolog, derivative, mutant, or fragment to be a variant of a protein or polypeptide within (A), (B) or (C) above or a material portion thereof (rather than as a variant of some other protein or material portion thereof).

1.18 “Excluded Technology” means the Patents, Materials and Know-How of Third Parties (sub)licensed to Maxygen under the agreements specified in Exhibit 1.18 (or, where indicated on Exhibit 1.18 as only partially excluded agreements, the rights of Maxygen with respect to specific Patents indicated as “excluded” that are licensed to Maxygen under such agreement and, for the avoidance of doubt, Patents not so indicated as excluded or otherwise not licensed under any agreements specified in Exhibit 1.18 are not within Excluded Technology).

1.19 “Exclusively Out-Licensed Protein” has the meaning set forth in Exhibit 1.19 attached hereto.

1.20 “Field” means: (i) with respect to Compounds and Products that are Resulting Products derived in whole or part from Shuffling conducted prior to January 1, 2017, the Treatment of human diseases or conditions, and (ii) with respect to all other Compounds and Products, the Treatment or diagnosis of human diseases or conditions. For the avoidance of doubt, the Field includes discovery, research, development and/or commercialization of (x) such Compounds and Products that are Resulting Products for such Treatment, and (y) such other Compounds and Products for such Treatment and diagnosis, and the Field excludes discovery, research, development and/or commercialization of any Excluded Protein Variant or Vaccine.

1.21 “G-CSF Variant” means (i) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is a granulocyte colony stimulating factor (G-CSF) or any variant, homolog, derivative, mutant, or fragment thereof (each, a “G-CSF Molecule”) and (ii) any G-CSF Molecule that is conjugated or otherwise coupled to any other molecule (e.g., polyethylene glycol, immunoglobulin domain, sialylation, pegylated, or glycosylation).

1.22 “Governmental Authority” means any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, unit, or body and any court or other legal tribunal); or (d) any governmental multinational organization or body.

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1.23 “In-Licensed Project-Specific Technology” means the Patents, Materials and Know-How licensed to Maxygen pursuant to the Letter Agreement between InterMune, Inc. and Maxygen Holdings Ltd., dated July 27, 2007.

1.24 “Know-How” means any and all data and information including (i) ideas, discoveries, inventions (whether or not patentable and whether or not reduced to practice), technology, improvements or trade secrets; (ii) research and development data, such as medicinal chemistry data, nonclinical data, preclinical data, pharmacology data, chemistry data (including analytical, product characterization, manufacturing, and stability data), toxicology data, clinical data (including investigator reports (both preliminary and final), statistical analyses, expert opinions and reports, safety and other electronic databases), analytical and quality control data and stability data, in each case together with supporting data; (iii) databases, data compilations and collections, specifications, formulations, formulae; (iv) practices, knowledge, techniques, methods, formulas, processes, manufacturing information, including technical data and customer and supplier lists; (v) information regarding research materials, reagents and compositions of matter; (vi) works of authorship including, without limitation, computer programs, source code and executable code, whether embodied in software, firmware or otherwise, documentation, designs, files, net lists, records, data and mask works; and (vii) copies of the foregoing in any form and embodied in any media. Know-How excludes any Patent rights with respect thereto (but does include information in unpublished patent applications).

1.25 “Law” means, individually and collectively, any and all laws, ordinances, rules, directives and regulations of any kind whatsoever of any governmental or regulatory authority within the applicable jurisdiction.

1.26 “Licensed Technology” means the Enabling Technology, the Software, the In-Licensed Project-Specific Technology, the RR Technology, the Other Program Technology, the Astellas Agreement Technology, and the CMVP Technology; provided, however, that “Licensed Technology” excludes the Excluded Technology.

1.27 “Material” means any chemical or biological substances including any: (i) organic or inorganic chemical element or compound; (ii) nucleic acid; (iii) vector of any type (e.g., cosmid, plasmid, spore, phage, virus, or virus-like particle), and subunits of the foregoing; (iv) host organism, including prokaryotic cells, eukaryotic cells or animals; (v) eukaryotic cell line, prokaryotic cell line or expression system; (vi) protein, including any peptide or amino acid sequence, enzyme, antibody or protein conferring targeting properties and any fragment of any of the foregoing; (vii) genetic material, including any genetic nucleic acid construct, marker gene and genetic control element (e.g., promoter, termination signal), gene, genome or variant of any of the foregoing; or (viii) assay or reagent, including compounds, clinical candidates, compound libraries, animal models, and other physical, biological or chemical material, in each case which exist and are Controlled by Maxygen or an Affiliate prior to the Effective Date.

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1.28 “Maxygen Change of Control” means (a) the acquisition of Maxygen by a Third Party by means of any transaction or series of related transactions to which the Maxygen is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any bona fide sale of stock for capital raising purposes) other than a transaction or series of transactions in which the holders of the voting securities of the Maxygen outstanding immediately prior to such transaction continue to retain (either by such voting securities remaining outstanding or by such voting securities being converted into voting securities of the surviving entity), as a result of shares in the Maxygen held by such holders prior to such transaction, at least fifty percent (50%) of the total voting power represented by the voting securities of Maxygen or such surviving entity outstanding immediately after such transaction or series of transactions; or (b) a sale, lease, exclusive license or other conveyance of all or substantially all of the assets of Maxygen.

1.29 “MaxyBody” shall have the meaning set forth on Exhibit 1.29.

1.30 “CPC Change of Control” means (a) the acquisition of CPC by an entity other than Maxygen or an Affiliate of Maxygen by means of any transaction or series of related transactions to which the CPC is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any bona fide sale of stock for capital raising purposes) other than a transaction or series of transactions in which the holders of the voting securities of the CPC outstanding immediately prior to such transaction continue to retain (either by such voting securities remaining outstanding or by such voting securities being converted into voting securities of the surviving entity), as a result of shares in the CPC held by such holders prior to such transaction, at least fifty percent (50%) of the total voting power represented by the voting securities of CPC or such surviving entity outstanding immediately after such transaction or series of transactions; (b) a sale, lease, exclusive license or other conveyance of all or substantially all of the assets of CPC; or (c) the Option Closing.

1.31 “Option Closing” shall have the meaning assigned to in Section 5.1 of the Investors’ Rights Agreement by and between Maxygen, CPC and Astellas of even date herewith.

1.32 “Other Program Technology” means the Other Program Patents and Other Program Know-How.

1.32.1 “Other Program Know-How” means Know-How and Materials, if any, Controlled by Maxygen or an Affiliate as of the Effective Date and not assigned to CPC under the Asset Contribution Agreement, that are (a) resulting from or generated under the Other Programs as conducted by or for Maxygen prior to the Effective Date (including any Other Protein Variants), or used (or have been used) in, or useful for, a particular Other Program as conducted (or anticipated to be conducted) by or for Maxygen as of or prior to the Effective Date, or (b) used in, or useful for, more than one particular Program that is not otherwise included in (a). Notwithstanding the foregoing, Other Program Know-How does not include any Know-How or Materials within the Excluded Technology, the Enabling Know-How, or the Enabling Materials.

1.32.2 “Other Program Patents” means (I) Patents, if any, Controlled by Maxygen or an Affiliate as of the Effective Date and not assigned to CPC under the Asset Contribution Agreement that are (a) resulting from or generated under the Other Programs as

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conducted by or for Maxygen prior to the Effective Date (including any Other Protein Variants), or used (or have been used) in, or useful for, a particular Other Program as conducted (or anticipated to be conducted) by or for Maxygen as of or prior to the Effective Date, or (b) used in, or useful for, more than one particular Program that is not otherwise included in (a); and (II) any Patents whether filed or issued as of or after the Effective Date that claim priority to any Patent included within (I). Notwithstanding the foregoing, Other Program Patents do not include any Patents within the Excluded Technology or the Enabling Patents.

1.33 “Other Programs” shall have the meaning provided in the Asset Contribution Agreement.

1.34 “Other Protein Variants” shall have the meaning provided in the Asset Contribution Agreement.

1.35 “Patent” means any of the following, existing at any time in any country or other jurisdiction anywhere in the world: (i) any issued patent (including inventor’s certificates, utility model, petty patent and design patent), extensions, confirmations, reissues, re-examination, renewal, supplementary protection certificates or any like governmental grant for protection of inventions; and (ii) any pending application for any of the foregoing, including any request for continued examination (RCE), continuations, continuations-in-part, divisionals, provisionals, converted provisionals, continued prosecution applications, or substitute applications.

1.36 “Programs” shall have the meaning provided in the Asset Contribution Agreement.

1.37 “Product” means any pharmaceutical product that contains a Compound as an ingredient. For avoidance of doubt, Product shall include any formulation, delivery device, dispensing device or packaging required for effective use of the Product.

1.38 “Resulting Product” means any of the following (i) any Resulting Genetic Material, (ii) any vector of any type (e.g., cosmid, plasmid, spore, phage, virus, or virus-like particle), and subunits of the foregoing, which contain any Resulting Genetic Material, (iii) any organism, including any prokaryotic or eukaryotic cell or animal containing any Resulting Genetic Materials; (iv) any Resulting Protein; (iv) any eukaryotic cell, prokaryotic cell or expression systems expressing, secreting or otherwise producing a Resulting Protein; or (v) any product containing in whole or part, or made with or using in whole or part, any of the foregoing, in each case, in purified or unpurified form, and alone or in combination with other substances, and including any modifications, derivatives, progeny (altered or unaltered) or fragments of any of the foregoing.

1.38.1 “Resulting Genetic Material” means any genetic material (including DNA or RNA) that is generated, created or otherwise results directly from Shuffling.

1.38.2 “Resulting Protein” means any protein, polypeptide, antibody or other molecule encoded in whole or part by any Resulting Genetic Material.

1.39 “RR Technology” means the RR Patents, RR Materials, and RR Know-How, in each case Controlled by Maxygen or an Affiliate as of the Effective Date; provided, however, that RR Technology shall not include any Excluded Technology.

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1.39.1 “RR Know-How” means Know-How Controlled by Maxygen or an Affiliate as of the Effective Date related to methods of cell selection related to selective suppression of stop codons during protein translation that is reasonably necessary or useful for using the RR Patents and RR Materials in or for research, development, manufacture, or use of Compounds and Products in the Field. Notwithstanding the foregoing, the RR Know-How does not include any Know-How within the Excluded Technology.

1.39.2 “RR Materials” means the Materials listed on Exhibit 1.39.2.

1.39.3 “RR Patents” means (I) the Patents listed on Exhibit 1.39.3, (II) any other Patents, if any, that (i) are Controlled by Maxygen or an Affiliate as of the Effective Date and (ii) claim methods of cell selection related to selective suppression of stop codons during protein translation, and (III) any Patents whether filed or issued as of or after the Effective Date that claim priority to any Patent included within (I) or (II). RR Patents shall also include future patent applications and patents issuing thereon to the extent they have utility in the methods of cell selection related to selective suppression of stop codons during protein translation and claim priority to any Patents within the scope of the foregoing sentence (provided, however, that with respect to continuation-in-part applications, only those claims thereof which claim priority to a date on or before the Effective Date shall be included in the license hereunder). Notwithstanding the foregoing, the RR Patents do not include any Patents within the Excluded Technology.

1.40 “Software” means, individually and collectively, the software programs for use with the Enabling Technology that are listed on Exhibit 1.40.

1.41 “Shuffle” means techniques, methodologies, processes, materials or instrumentation for performing recombination-based modification of genetic material for the creation of potentially useful variant nucleic acids or proteins. “Shuffled” and “Shuffling” have their correlative meanings.

1.42 “Subsidiary” shall mean an Affiliate of CPC that is “controlled” by CPC (as the word “control” is defined in the definition of Affiliate, above) directly or indirectly through one or more intermediaries.

1.43 “Survival Date” shall have the meaning assigned to it in the Master Joint Venture Agreement by and between Maxygen, CPC and Astellas of even date herewith.

1.44 “Territory” means all countries and territories of the world.

1.45 “Third Party” means any entity other than Maxygen or CPC, or their respective Affiliates. For the avoidance of doubt, sublicensees which are not an Affiliate of Maxygen or CPC shall be included in the definition of Third Party.

1.46 “Third Party Agreement” means the agreements listed on Exhibit 1.46, and any other written license or agreement entered into by Maxygen or any of its Affiliates and a Third Party prior to the date of the Master Joint Venture Agreement, but not terminated or expired prior to such date with no license or other rights granted to Maxygen surviving after such termination or expiration, and pursuant to which Maxygen or any of its Affiliates obtained a license under Patents or Know-How within the Licensed Technology. Notwithstanding the foregoing, Third Party Agreements do not include any agreements with Third Parties that are within the Excluded Technology.

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1.47 “Treatment” means, with respect to a particular indication, the prophylaxis, cure, reduction, mitigation, prevention, slowing or halting the progress of, or otherwise management of such indication. “Treat” and “Treating” means providing Treatment.

1.48 “Vaccine” means a formulation intended to be administered in a formulation containing one or more Antigen(s) (and/or a nucleic acid sequence encoding an Antigen) in the form of (i) an infectious agent (e.g., bacteria, viruses, parasite, protozoa) whether live, attenuated or dead, (ii) protein(s), (iii) nucleic acid(s), (iv) cells, spores and vectors (i.e., viruses and/or virus-like particles, liposomes, beads and/or other substrates for Antigen presentation), (v) fragments of any of the foregoing, and/or (vi) a combination of any of the preceding, which formulation is administered for the purpose of inducing an Immune Response in the human and/or animal recipient specifically directed to at least one such Antigen for the prevention or treatment of a disease state, symptom and/or condition in humans and/or animals caused by an infectious agent. For the purposes of this definition of Vaccine:

1.48.1 “Antigen” means a molecule (i.e., protein, polypeptide, peptide, carbohydrate, glycoprotein, glycolipid and/or any combination of the foregoing that is, or is derived in whole or part from, a molecule associated with an infectious agent) that produces an Immune Response to such molecule in a human and/or animal recipient; and

1.48.2 “Immune Response” means an immune state directed to the applicable infectious agents (or a molecule associated with such infectious agent) resulting from the modulation of activity (i.e., an increase, decrease and/or qualitatively different activity) of one or more lymphoid cells (e.g., B cells, NK cells, T cells and/or professional antigen-presenting cells, such as monocytes, macrophages, Langerhans cells, dendritic cells) following the administration of a stimulus.

1.49 Additional Definitions. Each of the following definitions shall have the meaning defined in the corresponding sections of this Agreement indicated below:

Definitions	Section	Definitions	Section
Agreement	Preamble	Fault of Maxygen	7.1.1(b)
AME	2.7	ICC Rules	9.2
AME License Agreement	2.7	Indemnified Party	7.2
Asset Contribution Agreement	Background	Indemnifying Party	7.2
Avidia	2.4.2	Losses	7.1.1(a)
Claims	7.1.1(a)	Master Joint Venture Agreement	10.7
Coagulation Factor Variant	6.3.10	Maxygen	Preamble
Confidential Information	5.1	Maxygen Indemnitees	7.1.1(a)
CPC	Preamble	New Third Party Agreement	2.5.2
CPC Improvements	6.3.5	Parties	Preamble

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Definitions	Section	Definitions	Section
CPC Indemnitees	7.1.1(b)	Party	Preamble
CPC Other Improvements	4.5.2	Representing Party	6.1
Dispute	9.1	SEC	5.2
Effective Date	Preamble	Term	8.1
Fault of CPC	7.1.1(a)

1.50 Interpretation. The captions and headings to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless specified to the contrary, references to Articles, Sections or Exhibits mean the particular Articles, Sections or Exhibits to this Agreement and references to this Agreement include all Exhibits hereto. Each accounting term used herein that is not specifically defined herein shall have the meaning given to it under applicable Accounting Standards, but only to the extent consistent with its usage and the other definitions in this Agreement. Unless context otherwise clearly requires, whenever used in this Agreement: (i) the words “include” or “including” shall be construed as incorporating, also, “but not limited to” or “without limitation;” (ii) the word “day” or “year” means a calendar day or calendar year unless otherwise specified; (iii) the word “notice” means notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other communications contemplated under this Agreement; (iv) the words “hereof,” “herein,” “hereby” and derivative or similar words refer to this Agreement (including all Exhibits); (v) the word “or” shall be construed as the inclusive meaning identified with the phrase “and/or;” (vi) provisions that require that a Party, the Parties or any committee or team hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise; (vii) words of any gender include the other gender; and (viii) references to any specific Law or article, section or other division thereof shall be deemed to include the then-current amendments thereto or any replacement Law thereof. This Agreement was prepared in the English language, which language shall govern the interpretation of, and any dispute regarding, the terms of this Agreement.

ARTICLE 2

LICENSES TO CPC

2.1 License Grants.

2.1.1 Enabling Technology.

(a) License Grant. Subject to the terms and conditions herein (including Sections 2.3, 2.4, and 2.5), effective as of the Effective Date, Maxygen hereby grants to CPC, and CPC hereby accepts, an irrevocable (except, and solely to the extent, as set forth in Sections 4.3 and 8.3), license under the Enabling Technology to research, develop, make, have made, use, sell, offer for sale, import, and otherwise commercialize Compounds and Products in the Territory (including, for the avoidance of doubt, making and using Enabling Technology to discover, research and develop Compounds and Products in the Territory and otherwise conduct the Programs), solely for use in the Field, which license shall be (i) non-exclusive with respect to Adjuvants and Products

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containing such Adjuvants, and (ii) exclusive (but subject to the licenses granted by Maxygen prior to the Effective Date which are listed on Exhibit 2.1.1, and a non-exclusive license, if any, granted by Maxygen to the Third Party involved in the litigation disclosed in Exhibit 6.2.6 in settlement of such litigation, but in the case of such settlement solely with respect to the Patents that are the subject of such litigation, foreign counterparts of such Patents, and Patents that claim priority to such Patents or foreign counterparts) with respect to all other Compounds and related Products.

(b) No License Outside the Field. It is understood and agreed that the licenses set forth above do not convey any license to practice the Enabling Technology in or for any purpose outside the Field, and without limitation specifically excludes any use of the Enabling Technology to generate, identify or create Resulting Products intended for use outside the Field (e.g., for diagnostic purposes). For clarity, the license with respect to Adjuvants set forth above includes the right to develop and commercialize Adjuvants in Products containing Vaccines, but does not include any right or license to practice Shuffling for the purpose of researching, developing, generating or creating Resulting Products which are Vaccines.

2.1.2 In-Licensed Project-Specific Technology. Subject to the terms and conditions herein (including Sections 2.3, 2.4, and 2.5), effective as of the Effective Date, Maxygen hereby grants to CPC, and CPC hereby accepts, an irrevocable (except, and solely to the extent, as set forth in Section 8.3) exclusive license under the In-Licensed Project-Specific Technology to research, develop, make, have made, use, sell, offer for sale, import, and otherwise commercialize Compounds and Products in the Territory, solely for use in the Field (including, for the avoidance of doubt, the right to make and use the In-Licensed Project-Specific Technology itself in connection therewith).

2.1.3 RR Technology. Subject to the terms and conditions herein (including Sections 2.3, 2.4, and 2.5), effective as of the Effective Date, Maxygen hereby grants to CPC, and CPC hereby accepts, an irrevocable (except, and solely to the extent, as set forth in Section 8.3) non-exclusive license under the RR Technology to research, develop, make, have made, use, sell, offer for sale, import, and otherwise commercialize Compounds and Products in the Territory, solely for use in the Field (including, for the avoidance of doubt, the right to make and use the RR Technology itself in connection therewith).

2.1.4 CMVP Technology. Subject to the terms and conditions herein (including Sections 2.3, 2.4, and 2.5), effective as of the Effective Date, Maxygen hereby grants to CPC, and CPC hereby accepts, an irrevocable (except, and solely to the extent, as set forth in Section 8.3) non-exclusive license under the CMVP Technology to use the CMVP Materials (and materials derived therefrom) as research reagents in the Territory. CPC acknowledges that (i) the license from Maxygen to use the CMVP Materials does not include any sublicense or right under the Patents licensed by University of Iowa Research Foundation to Maxygen or its Affiliates, and (ii) the CMVP Materials are subject to restriction on their use for any purpose other than as research reagents.

2.1.5 Software. Subject to the terms and conditions herein (including Sections 2.3, 2.4, and 2.5), effective as of the Effective Date, Maxygen hereby grants to CPC, and CPC hereby accepts, an irrevocable (except, and solely to the extent, as set forth in Section 8.3) non-exclusive license with respect to the Software in the Territory, to use, modify, reproduce, copy,

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maintain, fix, improve enhance, display, or create derivative works of the Software in the Territory in connection with the exercise of the license to Enabling Technology provided in Section 2.1.1 above or otherwise to research, develop, make and have made, use, import, sell, offer for sale and otherwise commercially exploit any Compound or Product in the Field; provided, however, that no license is granted with respect to uses of the Software (or modifications, improvements, enhancements or derivative works thereof) in connection with the practice of Shuffling (whether with tangible materials or in silico) for uses outside of the Field or in connection with Shuffling of any Excluded Protein Variant or Vaccine. CPC acknowledges that Maxygen has informed CPC that the Software is designed and intended to function with, and may not function properly or to its full extent without, the Third Party software listed on Exhibit 2.1.5. A list of such Third Party software used by Maxygen in connection with its use of the Software as of the Effective Date is set forth in Exhibit 2.1.5. CPC or its Affiliates shall be responsible, in its discretion and at its expense, for obtaining any Third Party software (and appropriate licenses therefor) that CPC or its Affiliates may want or require for use in connection with the Software, other than such Third Party software and licenses as may be included within the Contributed Assets under the Asset Contribution Agreement.

2.1.6 Other Program Technology. Subject to the terms and conditions herein (including Sections 2.3, 2.4, and 2.5), effective as of the Effective Date, Maxygen hereby grants to CPC, and CPC hereby accepts, an irrevocable (except, and solely to the extent, as set forth in Section 8.3) license under the Other Program Technology to research, develop, make, have made, use, sell, offer for sale, import, and otherwise commercialize Compounds and Products in the Territory, solely for use in the Field (including, for the avoidance of doubt, the right to make and use the Other Program Technology itself in connection therewith), which license shall be (i) non-exclusive with respect to Adjuvants and Products containing such Adjuvants, and (ii) exclusive with respect to all other Compounds and related Products.

2.1.7 Astellas Agreement Technology License Grant. Subject to the terms and conditions herein, effective as of the Effective Date, Maxygen hereby grants to CPC, and CPC hereby accepts, an irrevocable, perpetual, exclusive license under the Astellas Agreement Technology (i) to research, develop, make, have made, use, sell, offer for sale, import, and otherwise commercialize Compounds and Products in the Territory, solely for use in the Field (including, for the avoidance of doubt, the right to make and use the Astellas Agreement Technology itself in connection therewith), (ii) to perform its obligations and exercise its rights under the Astellas Agreement, and (iii) to grant sublicenses of the Astellas Agreement Technology to Astellas to the extent of the license grants to Astellas under the Astellas Agreement.

2.1.8 Royalty-Free Licenses. Except with respect to CPC’s obligation to pay Maxygen amounts due to Third Parties as set forth in Section 2.5, the licenses granted to CPC under this Section 2.1 shall be fully paid up and royalty-free.

2.1.9 Development and Improvement of Licensed Technology. Maxygen and CPC agree that that the licenses set forth above include the right to develop and improve each of the Enabling Technology, Astellas Agreement Technology, In-Licensed Project-Specific Technology, Other Program Technology, RR Technology, CMVP Technology and Software in or for the purpose of exercise of the applicable license above.

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2.2 Sublicensing; Subcontractors. Subject to Section 2.3, CPC shall have the right to grant and authorize sublicenses within the scope the licenses set forth in Section 2.1; provided, however, that CPC may not grant or authorize sublicenses under the licenses set forth in Sections 2.1.1 or 2.1.5 prior to a CPC Change of Control without the prior written consent of Maxygen, which shall not be unreasonably withheld, until such time as a CPC Change of Control occurs at which point such consent shall no longer be required. For clarity, it is understood and agreed that the foregoing limitations shall not be construed to prohibit CPC or its Affiliates from granting licenses (including sublicenses) to Third Parties with respect to any Compounds or Products for uses in the Field (and no consent of Maxygen shall be required therefore), so long as such license to a Third Party does not include a license to practice the Enabling Technology per se or any license with respect to the Software (or in each case, modifications, improvements, enhancements or derivative works thereof). Notwithstanding the foregoing limitation on sublicensing with respect to the licenses under Sections 2.1.1 or 2.1.5 above, CPC may use consultants, temporary employees or other Third Party service providers to perform activities on behalf of CPC in the practice of the Enabling Technology or Software (or in each case, modifications, improvements, enhancements or derivative works thereof), under a written contract containing reasonable confidentiality provisions and containing a covenant from such Third Party not to practice the Enabling Technology, Software or improvements thereto other than on behalf of CPC until expiration, on a patent-by-patent basis, of applicable Patents within the Enabling Patents; provided, however, that all Shuffling, if any, is conducted at CPC’s facilities. CPC shall obligate any and all such Third Party service providers to comply with applicable confidentiality terms set forth herein (including the restrictions both on disclosure and on use).

2.3 Limitation on Licenses.

2.3.1 Limited Maxygen Rights. It is understood and agreed that with respect to any aspect of the Enabling Technology, In-Licensed Project-Specific Technology, Other Program Technology, RR Technology, CMVP Technology or Software for which Maxygen has less than fully exclusive, worldwide rights (i.e., co-exclusive, non-exclusive, limited territorial or otherwise restricted rights) as of the Effective Date (as provided under any Third Party Agreement listed on Exhibit 1.46 or under any New Third Party Agreement pursuant to which CPC obtains rights under Section 2.5.2), the licenses provided in Section 2.1 shall be limited to the scope of those rights that Maxygen Controls and has the right to license or sublicense to CPC to the extent provided under such Third Party Agreement or New Third Party Agreement.

2.3.2 Maxygen Exercise of Retained Rights. CPC acknowledges and agrees that Maxygen retains the right, without violating any term of this Agreement, to practice the Enabling Technology, In-Licensed Project-Specific Technology, Other Program Technology, RR Technology or CMVP Technology, and to use, modify, reproduce, copy, maintain, fix, improve or enhance, display, or create derivative works of the Software (and to grant to Maxygen’s Affiliates or to any Third Parties any or all such rights), in all such cases for any use other than to conduct activities or practice Know-How, Patents or Materials within the scope of the exclusive license to CPC set forth herein. Maxygen and its Affiliates shall have the right to sell or otherwise dispose of the Enabling Technology, In-Licensed Project-Specific Technology, Astellas Agreement Technology, Other Program Technology, RR Technology, CMVP Technology or Software, subject to the licenses and associated rights to enforce granted to CPC hereunder with regard thereto, provided that (i) prior to

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any sale or disposition of any Patents, or proprietary rights in Know-How or Materials, owned by Maxygen or its Affiliates and licensed to CPC hereunder, Maxygen shall obtain written agreement from the person or entity acquiring such Patents and/or such proprietary rights in Know-How or Materials that all such Patents and/or proprietary rights in Know-How or Materials are subject to the licenses (and any applicable associated enforcement rights) granted to CPC hereunder, and (ii) prior to assignment of any Third Party Agreement or New Third Party Agreement conveying to Maxygen rights which are sublicensed to CPC hereunder, Maxygen shall obtain written agreement from the person or entity to which such Third Party Agreement or New Third Party Agreement is assigned that such assignment is subject to the sublicense to CPC (and, if such Third Party Agreement or New Third Party Agreement conveys Maxygen enforcement rights within the Field with respect to Patents within the Enabling Technology, any applicable associated enforcement rights granted to CPC hereunder). Within thirty (30) days of any such sale or disposition, Maxygen shall provide written notice to CPC identifying the Patents, Materials and/or Know-How sold or disposed of and the person or entity acquiring such Patents, Materials and/or Know-How. Without limiting the foregoing, Maxygen specifically retains the right under the Licensed Technology to research, develop, practice, make, have made, use, sell, offer for sale, import, and otherwise commercialize Adjuvants in the Territory, and to license Third Parties to do so. At all times during and after this Agreement, nothing herein shall restrict, or be construed to restrict, Maxygen’s or its Affiliates’ right to practice and grant licenses to practice the Enabling Technology or use related Know-How, outside the Field or with respect to research, development, manufacture and commercial exploitation of molecules that are not Compounds or Products.

2.3.3 U.S. Government Rights. CPC acknowledges that certain of the inventions claimed in the Patents within the Enabling Technology listed on Exhibit 2.3.3 have been made with funds provided by the U.S. Government, and that with respect thereto the U.S. government retains a non-exclusive license as set forth in 35 U.S.C. §202. In addition, CPC acknowledges that 35 U.S.C. §200 et seq. sets forth additional obligations with regard to inventions made with U.S. government funds (with respect to Patents listed on Exhibit 2.3.3 and products based thereon), including a preference for manufacture in the United States pursuant to 35 U.S.C. §204.

2.3.4 Reporting. From the Effective Date until the earlier of a Maxygen Change of Control or CPC Change of Control, up to once per year, upon Maxygen’s request, CPC shall provided to Maxygen a summary report regarding activities of CPC, its Subsidiaries and sublicensees under the licenses granted hereunder in sufficient detail for Maxygen to determine compliance by CPC, its Subsidiaries and sublicensees with Section 6.3.4, including a general description of the type of proteins Shuffled by CPC and Compounds and Products derived in whole or in part from the practice of the Enabling Technology. After a Maxygen Change of Control or CPC Change of Control has occurred, up to once per year, upon Maxygen’s request, CPC shall provide to Maxygen a certificate of compliance indicating that CPC, its Subsidiaries and sublicensees are in compliance with Section 6.3.4. The Parties acknowledge that reports provided to CPC’s representatives of the JSC under the Other Products Collaboration Agreement between CPC and Astellas Pharma Inc. of even date herewith, may, to the extent they include such information, satisfy the reporting requirement set forth in this Section 2.3.4 until a Maxygen Change of Control or CPC Change of Control.

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2.4 Third Party Rights. CPC hereby acknowledges that Maxygen has informed CPC prior to the Effective Date that:

2.4.1 In connection with the initial establishment of Maxygen, Maxygen entered into the Affymax/Maxygen Technology Transfer Agreement, effective February 1, 1997, entered by and among Affymax Technologies N.V., Glaxo Group Limited and Maxygen, as amended on March 1, 1998, subject to the letter agreements dated January 14, 2000 and December 17, 2001, pursuant to which Maxygen has granted perpetual, worldwide, non-exclusive licenses to certain entities associated with Glaxo Wellcome Companies (as defined in that agreement) to use certain Enabling Technology for internal research purposes only, and CPC hereby agrees that the rights and licenses granted CPC in Section 2.1 with respect to Enabling Technology are subject to such licenses.

2.4.2 Pursuant to that certain Cross-License Agreement between Maxygen and Avidia Research Institute (“Avidia”) dated as of July 16, 2003, subject to the letter agreement dated March 29, 2005, Maxygen has granted a non-exclusive license to practice certain claims of Patents within the Enabling Technology with respect to MaxyBodies. In addition, Maxygen assigned to Avidia certain Patents related to MaxyBodies that do not claim methods of Shuffling, and CPC acknowledges that the Licensed Technology does not include such Patents.

2.4.3 Third Parties granting or conveying rights to Maxygen or its Affiliates under the Third Party Agreements listed on Exhibit 1.46 have retained rights with respect to some of the Enabling Technology pursuant to those agreements all in accordance with the terms and conditions thereof, and in some cases such Third Parties’ rights are subject to retained rights of their Third Party licensors.

2.4.4 Prior to the Effective Date, Maxygen or its Affiliates have granted to the Third Parties listed on Exhibit 2.4.4 under the agreements specified on such exhibit, licenses or rights with respect to Enabling Technology for uses outside the Field or to research, develop, manufacture ands commercialize molecules that are not Compounds, and that after the Effective Date, Maxygen or its Affiliates may grant licenses under the Enabling Technology and related Know-How to other Third Parties (including to Affiliates or former Affiliates of Maxygen) for uses outside the Field to research, develop, manufacture and commercialize molecules that are not Compounds or Products.

2.4.5 Prior to the Effective Date, Maxygen and its Affiliates have granted to Bayer HealthCare LLC and its Affiliates under the Bayer Agreement licenses and rights under the Enabling Technology (and Software) to practice the Enabling Technology and use the Software to, among other things, Shuffle any and all proteins, except any of the Maxygen Exclusive Proteins (as defined in the Bayer Agreement) during the applicable Exclusivity Period (as defined in the Bayer Agreement) for such Maxygen Exclusive Protein, with the right to develop, make, have made, use, import, sell, offer for sale, market and otherwise commercially exploit the Resulting Products in the Field as defined in this Agreement (as well as certain uses outside the Field), which license (i) is exclusive with respect to Shuffling of certain Bayer Exclusive Proteins (as defined in the Bayer Agreement) and corresponding Resulting Products for the applicable Exclusivity Period (as defined in the Bayer Agreement) and (ii) is otherwise non-exclusive.

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2.5 Third Party Agreements; New Third Party Agreements.

2.5.1 Existing Third Party Agreements. CPC acknowledges that, with respect to Patents, Know-How and Materials licensed to Maxygen pursuant to a Third Party Agreement listed on Exhibit 1.46, the sublicense by Maxygen to CPC is subject and subordinate to all applicable restrictions, and all obligations expressly applicable to sublicensees, set forth in such Third Party Agreement, and both CPC and Maxygen acknowledge that any breach of such restrictions and obligations under such Third Party Agreements by CPC or its Affiliates, or a breach of such Third Party Agreements by Maxygen, may result in damage to Maxygen, CPC or other licensees of either Party with respect to the subject Licensed Technology, which may include loss of license rights to such Licensed Technology or monetary damages. CPC acknowledges that, with respect to Patents, Know-How and Materials licensed to Maxygen as of the Effective Date pursuant to the Third Party Agreements listed on Exhibit 1.46, the sublicense by Maxygen to CPC (or the exercise by CPC or its Affiliates of such sublicense) may result in payment obligations to the Third Party under such Third Party Agreements, which payment obligations that may arise are those annual payments, milestone payments, royalties on product sales, or other similar payments provided under the sections of such Third Party Agreements indicated on Exhibit 2.5.1, and those provided in Third Party Agreements listed on Exhibit 1.46 with respect to indemnity obligations or the sharing of costs and/or recoveries in connection with enforcement or defense of Patents to the extent expressly provided to be extended to, or shared with, sublicensees such as CPC. CPC agrees to pay any such amounts due by Maxygen to such Third Parties with respect to payment obligations indicated in Exhibit 2.5.1, or with respect to indemnity obligations or the sharing of costs and/or recoveries in connection with enforcement or defense of Patents under Third Party Agreements listed on Exhibit 1.46, unless and until CPC elects to forego its rights under such Third Party Agreement as provided below.

2.5.2 Future Agreements with Third Parties. For any written license or agreement entered into by Maxygen or any of its Affiliates and a Third Party after the date of the Master Joint Venture Agreement pursuant to which Maxygen or any of its Affiliates first obtains a license with respect to Patents or Know-How within the Licensed Technology subject to the sublicense to CPC hereunder (a “New Third Party Agreement”) and for which the sublicense from Maxygen to CPC (or exercise thereof by CPC or its Affiliates) may result in payment obligations to the Third Party, or which would impose obligations on CPC as a sublicensee, Maxygen shall provide written notice to CPC of the applicable New Third Party Agreement, including a copy thereof containing all provisions applicable to sublicensees and all provisions describing such payment obligations. If CPC notifies Maxygen in writing within thirty (30) days of such notification from Maxygen that CPC agrees to undertake such payment obligations attributable to the grant of the sublicense to CPC (or exercise thereof by CPC or its Affiliates) and to comply with all provisions of such New Third Party Agreement applicable to sublicensees, the applicable Licensed Technology under such New Third Party Agreement shall be sublicensed under the license grants hereunder. If CPC fails to so notify Maxygen of its agreement to undertake such payment obligations within such thirty (30) day period, the applicable Licensed Technology under such New Third Party Agreement shall not be sublicensed to CPC hereunder (and CPC shall have no obligation to make any payments with respect to such New Third Party Agreement).

2.5.3 CPC Election to Forego Sublicense(s). At any time, CPC shall have the right, in its sole discretion, to terminate its sublicense rights hereunder under a given Third Party

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Agreement or a given New Third Party Agreement under which CPC obtains a sublicense pursuant to Section 2.5.2, on an agreement-by-agreement basis, by providing written notice indicating that it no longer desires a sublicense to Licensed Technology under such Third Party Agreement or New Third Party Agreement. Following the provision of such written notice: (i) CPC shall thereafter have no sublicense under this Agreement with respect to the Licensed Technology under the applicable Third Party Agreement or New Third Party Agreement; (ii) CPC shall have no further obligation to make any payments hereunder with respect to such Third Party Agreement or New Third Party Agreement (but, for the avoidance of doubt, shall remain responsible for payments thereunder attributable to activities by or under authority of CPC prior to CPC’s written notice under this Section 2.5.3); and (iii) CPC shall, as between the Parties hereto, thereafter no longer be subject to the applicable terms and conditions thereof (provided, however, that CPC shall remain responsible to comply with applicable confidentiality obligations and indemnity obligations under such Third Party Agreement or New Third Party Agreement, and applicable restrictions, if any, on the use of tangible materials provided subject to the sublicense under such Third Party Agreement or New Third Party Agreement, in each case to the extent reasonably considered as required to survive termination of CPC’s rights thereunder).

2.6 No Future IP; No Implied Rights. CPC acknowledges and agrees that (i) no rights or licenses are conveyed to CPC hereunder with respect to Patents, Know-How, Materials or other materials, know-how or intellectual property rights that are invented, created, first acquired, licensed to or otherwise obtained by Maxygen or any of its Affiliates after the Effective Date, and (ii) no rights or licenses are conveyed to CPC hereunder with respect to any Patents, Know-How, Materials or other materials, know-how or intellectual property rights owned or Controlled by any Third Party that becomes an Affiliate of Maxygen after the Effective Date that are not already licensed hereunder prior to such entity becoming an Affiliate. Accordingly, except for the rights and licenses expressly granted under this Agreement and without limiting any right granted under any written agreement entered into by the Parties, no right, title, or interest of any nature whatsoever is granted whether by implication, estoppel, reliance, or otherwise, by Maxygen to CPC hereunder. All rights with respect to Materials, Know-How, Patents or other intellectual property rights that are not expressly granted herein are reserved to the owner thereof. Notwithstanding the foregoing, (a) the Patents licensed hereunder to CPC shall include Patents filed or issued after the Effective Date that claim priority to any Patent within the Licensed Technology as of the Effective Date (in the case of Patents owned by Third Parties, to the extent Controlled by Maxygen), and (b) the Astellas Agreement Technology and the licenses granted to CPC hereunder with respect thereto shall include such future Patents and Know-How as are expressly provided for under the definition of Astellas Agreement Technology.

2.7 AME License upon CPC Change of Control. Under the License Agreement between Applied Molecular Evolution, Inc. (“AME”) and Maxygen, effective January 13, 2004 (the “AME License Agreement”), AME granted a nonexclusive sublicense under certain Patents within the Enabling Technology in Section 2.1.1 of the AME License Agreement to Maxygen and its Affiliates (as defined in the AME License Agreement), which Affiliates include CPC as of the Effective Date. This nonexclusive sublicense granted in Section 2.1.1 of the AME License Agreement may be assigned in connection with the sale or transfer of all or substantially all of the business or assets of such Affiliate (as defined in the AME License Agreement) pursuant to Section 10.2.2 of the AME License Agreement. In the event of a CPC Change of Control including, without limitation, the

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Option Closing, Maxygen and CPC agree that the nonexclusive sublicense granted to Maxygen and its Affiliates (as defined in the AME License Agreement) in Section 2.1.1 of the AME License Agreement will hereby be automatically assigned to CPC (or the successor, purchaser or transferee of CPC with respect to such CPC Change of Control, as applicable) upon the consummation of such CPC Change of Control, pursuant to Section 10.2.2 of the AME License Agreement whereby the sublicense to an Affiliate (as defined in the AME License Agreement) of Maxygen may be assigned. In the event of such CPC Change of Control upon reasonable request of CPC, Maxygen shall, and shall cause its Affiliates and its and their employees and agents, to provide CPC with such execution, acknowledgement and recordation of specific assignments, oaths, declarations and other documents and other instruments of sale, transfer, conveyance, and assignment as CPC may reasonably request to effectuate such assignment of the sublicense to CPC under the AME License Agreement in accordance with Section 10.2.2 of the AME License Agreement.

2.8 Bayer Agreement Coordination. The Parties acknowledge and agrees that the Bayer Agreement requires the number of Maxygen Exclusive Proteins (as defined in the Bayer Agreement) to be reduced on the first, second, and third anniversaries of the Closing Date (as defined in the Bayer Agreement) of the Bayer Agreement. The initial list of Maxygen Exclusive Proteins contains thirty (30) proteins. Maxygen and CPC agree that CTLA-4 shall never be removed from the list of Maxygen Exclusive Proteins. Maxygen and CPC agree that CPC shall have the right to elect which proteins shall be removed the Maxygen Exclusive Proteins list upon each anniversary where there is a reduction in the number of proteins on such the Maxygen Exclusive Proteins list.

2.8.1 At least five (5) days prior to the second, and third anniversaries of the Closing Date of the Bayer Agreement, CPC shall submit to Maxygen a list of the proteins to remove from the Maxygen Exclusive Proteins list. Before the first anniversary, CPC shall have the right to submit to Maxygen a list of seven (7) proteins to remove from the Maxygen Exclusive Proteins list. Before the second anniversary, CPC shall have the right to submit to Maxygen a list of five (5) proteins to remove from the Maxygen Exclusive Proteins list. Before the third anniversary, CPC shall have the right to submit to Maxygen a list of three (3) proteins to remove from the Maxygen Exclusive Proteins list. Upon timely receipt of such list by Maxygen, Maxygen shall timely provide written notice to Bayer of the proteins to remove in accordance with Section 2.5.5(b) of the Bayer Agreement. If Bayer provides Maxygen notice requesting that Maxygen identify the proteins to be removed in accordance with Section 2.5.5(b) of the Bayer Agreement, Maxygen shall forward such notice to CPC within five (5) days of receipt of such notice and shall thereafter provide Bayer any list of proteins to be removed provided to Maxygen by CPC. Maxygen shall in no event submit a list of proteins to be removed in accordance with Section 2.5.5(b) of the Bayer Agreement which includes a protein that CPC has not requested be removed without the prior written approval of CPC, which approval is in CPC’s sole discretion.

2.8.2 If CPC desires to substitute any of the Maxygen Exclusive Proteins with a protein that CPC reasonably believes has application in the area of immunosuppression (including autoimmunity and/or transplant rejection), Maxygen shall inform CPC of the number of substitutions that are allowed and use commercially reasonable efforts in order to accomplish the requested substitution in accordance with the procedures of Section 2.5.6 of the Bayer Agreement. Maxygen and CPC acknowledge that such substitutions may only be made by written notice within thirty (30) days of the first, second and/or third anniversary of the Closing Date of the Bayer Agreement and

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that Bayer has a right of consent to such substitutions that will not be unreasonably withheld. Maxygen and CPC further acknowledge that Maxygen may not substitute one of its Maxygen Exclusive Proteins with a protein that is at the time a Bayer Exclusive Protein (as defined in the Bayer Agreement) and that Maxygen shall only identify proposed substitution proteins that are in Maxygen’s Area of Interest (as defined in the Bayer Agreement) in the area of immunosuppression, including autoimmunity and/or transplant rejection. If CPC desires to substitute any of the Maxygen Exclusive Proteins, CPC shall provide Maxygen with a list of the proteins to be substituted to Maxygen no later than twenty-five (25) days following the applicable anniversary of the Closing Date of the Bayer Agreement. After timely receipt by Maxygen of a list of proposed proteins to be added and the corresponding proteins to be replaced, Maxygen shall provide a Substitution Notice (as defined in the Bayer Agreement) to Bayer as soon as reasonably possible, but in no event later than within thirty (30) days of the relevant anniversary of the Closing Date of the Bayer Agreement. If Bayer provides Maxygen with an Objection Notice of the proposed substitution proteins, Maxygen shall promptly provide CPC with a copy of such notice and shall cooperate and use reasonable efforts to include CPC in all discussions regarding such objection (and if Bayer is unwilling to include CPC in such discussions, shall consult with and take all reasonable direction from CPC with respect to such discussions). If so requested by CPC, Maxygen shall take any legal actions available to Maxygen reasonably requested by CPC to contest Bayer’s opposition to the substitution, at CPC’s expense. If Bayer consents to the substitution or otherwise does not object to the proposed substitution protein within thirty (30) days after receiving the Substitution Notice, the proposed substitution protein shall become a Maxygen Exclusive Protein and Maxygen shall provide notice thereof to CPC. Maxygen shall in no event request a substitution of a protein in accordance with Section 2.5.6 of the Bayer Agreement without the prior written approval of CPC, which approval is in CPC sole discretion.

2.8.3 If Bayer provides a Substitution Notice to Maxygen proposing substitution proteins, Maxygen shall promptly provide a copy of such notice to CPC. CPC shall, within twenty-five (25) days following Maxygen’s receipt of such Substitution Notice from Bayer, either provide to Maxygen its written consent to such substitution or a draft Objection Notice if CPC reasonably objects to such substitution. After timely receipt by Maxygen of CPC’s written consent to such substitution or a draft Objection Notice, Maxygen shall provide a copy of such written consent or Objection Notice to Bayer within thirty (30) days of Maxygen’s receipt of Bayer’s Substitution Notice. Maxygen shall cooperate and use reasonable efforts to include CPC in all discussions related to an Objection Notice provided to Bayer (and if Bayer is unwilling to include CPC in such discussions, shall consult with and take all reasonable direction from CPC with respect to such discussions). If so requested by CPC, Maxygen shall take any legal actions available to Maxygen reasonably requested by CPC to oppose Bayer’s proposed substitution, at CPC’s expense.

2.8.4 The Parties acknowledge that the exclusivity provisions of the Bayer Agreement expire at the expiration of the “Exclusivity Period” as defined in the Bayer Agreement, and agree that the obligations of Maxygen under this Section 2.8 shall expire on July 1, 2013. In the event that Maxygen assigns the Bayer Agreement to any Third Party prior to July 1, 2013, Maxygen shall obtain written agreement from such Third Party to comply with the foregoing obligations set forth in this Section 2.8.

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ARTICLE 3

LICENSES TO MAXYGEN

3.1 License Grants.

3.1.1 Contributor Technology.

(a) License Grant. Subject to the terms and conditions herein (including Sections 3.3 and 3.4), effective as of the Effective Date, CPC hereby grants to Maxygen, and Maxygen hereby accepts, an irrevocable (except, and solely to the extent, as set forth in Section 8.3), license under the Contributor Technology (i) to research, develop, make, have made, use, sell, offer for sale, import, and otherwise commercialize compounds and products that are neither Compounds nor Products, in the Territory, solely for use in the outside of the Field (including, for the avoidance of doubt, the right to make and use the Contributor Technology itself in connection therewith), which license shall be exclusive, and (ii) to research, develop, make, have made, use, sell, offer for sale, import, and otherwise commercialize Adjuvants and products containing such Adjuvants (but such license shall not extend to other Compounds, if any, that are not Adjuvants but are contained in such products), which license shall be non-exclusive, in each case subject to all licenses under such Contributor Technology granted by Maxygen prior to the Effective Date.

(b) No License Inside the Field. It is understood and agreed that the licenses set forth above do not convey any license to practice the Contributor Technology in or for any purpose within the Field or otherwise with respect to Compounds or Products (and CPC retains all such rights), except with respect to the non-exclusive license with respect to Adjuvants. For clarity, the license with respect to Adjuvants set forth above includes the right to develop and commercialize Adjuvants in the Field in or with products containing Vaccines, but does not include any right or license to practice Shuffling for the purpose of researching, developing, generating or creating Adjuvants for use in the Field independent of Vaccines.

3.1.2 Royalty-Free Licenses. Except with respect to Maxygen’s obligation to pay CPC amounts due to Third Parties as set forth in Section 3.4, the licenses granted to Maxygen under this Section 3.1 shall be royalty-free and fully paid up.

3.2 Sublicensing. Subject to Section 3.3, Maxygen shall have the right to grant and authorize sublicenses within the scope the licenses set forth in Section 3.1. Maxygen shall obligate all such sublicensees to which Maxygen conveys Confidential Information within the Contributor Technology to comply with applicable confidentiality terms set forth herein (including the restrictions both on disclosure and on use) with respect to such Contributor Technology.

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3.3 Limitation on Licenses. It is understood and agreed that with respect to any aspect of the Contributor Technology for which CPC has less than fully exclusive, worldwide rights (i.e., co-exclusive, non-exclusive, limited territorial or otherwise restricted rights) as of the Effective Date, the licenses provided in Section 3.1 shall be limited to the scope of those rights that CPC Controls and has the right to license or sublicense to Maxygen.

3.4 Third Party Agreements. The Parties acknowledge that, with respect to Patents, Know-How and Materials in the Contributor Technology licensed to Maxygen pursuant to a Third Party agreement assigned to CPC under the Asset Contribution Agreement, the sublicense by CPC to Maxygen is subject and subordinate to all restrictions and obligations applicable to sublicensees set forth in such Third Party agreement, and that any breach of such restrictions and obligations under such Third Party agreements by a Party or its Affiliates may result in damage to the other Party or other licensees of CPC with respect to the subject Contributor Technology, which may include loss of license rights to such Contributor Technology or monetary damages. Maxygen acknowledges that, with respect to Patents, Know-How and Materials licensed to CPC pursuant to any such Third Party agreement, the sublicense by CPC to Maxygen (or the exercise by Maxygen or its Affiliates of such sublicense) may result in payment obligations to the Third Party under such Third Party agreements. Maxygen agrees to pay any such amounts due by CPC to such Third Parties for the grant of the sublicense to Maxygen hereunder (or the exercise thereof by Maxygen or its Affiliates), unless and until Maxygen elects to forego its rights under such Third Party agreement as provided below. At any time, Maxygen shall have the right, in its sole discretion, to terminate its sublicense rights from CPC hereunder under a given Third Party agreement, on an agreement-by-agreement basis, by providing written notice indicating that it no longer desires a sublicense to Contributor Technology under such Third Party agreement. Following the provision of such written notice: (i) Maxygen shall thereafter have no sublicense under this Agreement with respect to the Contributor Technology under the applicable Third Party agreement; (ii) Maxygen shall have no further obligation to make any payments hereunder with respect to such Third Party agreement (but, for the avoidance of doubt, shall remain responsible for payments thereunder attributable to activities by or under authority of Maxygen prior to Maxygen’s written notice under this Section 3.4); and (iii) Maxygen shall, as between the Parties hereto, thereafter no longer be subject to the applicable terms and conditions thereof (provided, however, that Maxygen shall remain responsible to comply with applicable confidentiality obligations and indemnity obligations under such Third Party agreement, and applicable restrictions, if any, on the use of tangible materials provided subject to the sublicense under such Third Party agreement, in each case to the extent reasonably considered as required to survive termination of Maxygen’s rights thereunder).

3.5 No Future IP; No Implied Rights. Maxygen acknowledges and agrees that (i) no rights or licenses are conveyed to Maxygen hereunder with respect to Patents, Know-How, Materials or other materials, know-how or intellectual property rights that are invented, created, first acquired, licensed to or otherwise obtained by CPC or any of its Affiliates after the Effective Date, and (ii) no rights or licenses are conveyed to Maxygen hereunder with respect to any Patents, Know-How, Materials or other materials, know-how or intellectual property rights owned or Controlled by any Third Party that becomes an Affiliate of CPC after the Effective Date that are not already licensed hereunder prior to such entity becoming an Affiliate. Accordingly, except for the rights expressly granted under this Agreement and without limiting any right granted under any written agreement entered into by the Parties, no right, title, or interest of any nature whatsoever is granted whether by

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implication, estoppel, reliance, or otherwise, by CPC to Maxygen hereunder. All rights with respect to Materials, Know-How, Patents or other intellectual property rights that are not expressly granted herein are reserved to the owner thereof. Notwithstanding the foregoing, the Patents licensed hereunder to Maxygen shall include Patents filed or issued after the Effective Date that claim priority to any Patent within the Contributor Technology (in the case of Patents owned by Third Parties, to the extent Controlled by CPC).

ARTICLE 4

INTELLECTUAL PROPERTY

4.1 Ownership. The ownership of any intellectual property right in subject matter developed or otherwise made by a Party in connection with this Agreement shall be determined in accordance with the applicable Law of the jurisdiction in which such subject matter was developed or otherwise made.

4.2 Prosecution. As between the Parties, Maxygen shall have sole responsibility for deciding, in its sole discretion, on behalf of Maxygen or its Affiliates or licensees, whether to file U.S., PCT or foreign patent applications, copyrights, the contents and subject matter of any such filing, whether (and in what manner) to continue prosecution of any patent applications or to maintain any Patent or copyright, or whether (and in what manner) to defend any oppositions and interferences, reissues or reexaminations regarding the Licensed Technology at its sole expense. As between the Parties, CPC shall have sole responsibility for deciding, in its sole discretion, on behalf of CPC or its Affiliates or licensees, whether to file U.S., PCT or foreign patent applications, copyrights, the contents and subject matter of any such filing, whether (and in what manner) to continue prosecution of any patent applications or to maintain any Patent or copyright, or whether (and in what manner) to defend any oppositions and interferences, reissues or reexaminations regarding the Contributor Technology at its sole expense.

4.3 Patent Challenges.

4.3.1 If CPC or any of its Affiliates challenges the validity or enforceability of any Patent within the Enabling Patents listed on Exhibit 1.16.3 in any court or before any Governmental Authority with authority to determine the validity or enforceability of such Patent and CPC or its Affiliate fails to dismiss or otherwise withdraw from such court or Governmental Authority proceeding within forty-five (45) days of Maxygen’s providing notice setting forth the identity of the Patent so challenged and the proceeding in which such Patent is challenged with a request for CPC or its Affiliate to dismiss or otherwise withdraw from such proceeding, Maxygen shall have the right to terminate the license granted to CPC hereunder with respect to such challenged Patent upon written notice to CPC.

4.3.2 CPC agrees that it shall provide reasonable assistance requested by Maxygen at Maxygen’s expense in connection with any litigation between Maxygen or any of its Affiliates with any Third Parties, where such Third Party challenges the validity or enforceability of any Patent Right within the Licensed Technology, including the pending litigation with Alligator Biosciences AB. CPC agrees not to provide knowingly any voluntary assistance to any such Third Party with respect to such challenge, and shall not provide any Confidential Information of Maxygen to such

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Third Party without Maxygen’s express prior written consent unless, and solely to the extent, required by applicable Law or pursuant to agreements entered into prior to such litigation. CPC and its Affiliates shall notify Maxygen if they receive a subpoena, request or demand for any such Maxygen Confidential information from or on behalf of any such Third Party, and shall reasonably cooperate, as requested by Maxygen, to resist or limit the scope of such disclosure.

4.4 Improvements to Enabling Technology.

4.4.1 Maxygen Improvements. Maxygen and its Affiliates and licensees shall be entitled to make improvements, modifications, enhancements and changes to the Enabling Technology and shall have no obligation to assign or license any such improvements, modifications, enhancements or changes to CPC.

4.4.2 CPC Improvements. CPC and its Subsidiaries and permitted sublicensees shall be entitled to make improvements, modifications, enhancements and changes to the Enabling Technology and In-Licensed Program-Specific Technology and shall have no obligation to assign or license any such improvements, modifications, enhancements or changes to Maxygen or any of its Affiliates.

4.5 RR Technology, CMVP Technology and Software.

4.5.1 Maxygen Other Improvements. Maxygen and its Affiliates and licensees shall be entitled to make improvements, modifications, enhancements and changes to the RR Technology, CMVP Technology and Software and shall have no obligation to assign or license any such improvements, modifications, enhancements or changes to CPC. Notwithstanding the foregoing, to the extent Maxygen obtains, during the period from the Effective Date until July 1, 2012, a license, with the right to sublicense, under any Patents owned or controlled by Bayer HealthCare LLC (or its successor-in-interest under Bayer Agreement or its affiliate) claiming any Bayer Other Improvements (as defined in the Bayer Agreement) pursuant to Section 5.3 of the Bayer Agreement, Maxygen agrees to grant to CPC a non-exclusive sublicense thereunder, with the right to further sublicense, under such Patents of the same scope as the licenses granted under Sections 2.1.3, 2.1.4, and 2.1.5, as applicable, in each case, only to the extent Maxygen is able to grant such sublicense under the applicable license from Bayer; provided that such license from Bayer HealthCare LLC to Maxygen shall be deemed a Third Party Agreement for all purposes of this Agreement, and accordingly, to the extent provided under Section 2.5, CPC agrees to pay to Maxygen all amounts due from Maxygen to Bayer for the grant of such sublicense(s) to CPC or the practice of such sublicense(s) by CPC or its Affiliates of their licensees and to otherwise comply with the applicable terms of such license. Notwithstanding the foregoing, this Section 4.5.1 shall not be deemed to be an obligation upon Maxygen, or a right of CPC, to obtain a license or sublicense under Section 5.3 of the Bayer Agreement, or the right to sublicense to CPC, under any Patent owned or controlled by Bayer HealthCare LLC (or its successor-in-interest under Bayer Agreement or its affiliate) claiming improvements, modifications, enhancements or changes to the RR Technology, CMVP Technology or Software.

4.5.2 CPC Other Improvements. CPC and its Subsidiaries shall be entitled to make improvements, modifications, enhancements and changes to the RR Technology, CMVP

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Technology and to make modifications, improvements, enhancements or derivative works from the Software (individually or collectively, the “CPC Other Improvements”). With respect to CPC Other Improvements made by CPC or its Subsidiary prior to a CPC Change of Control, CPC agrees to grant, and to cause its Subsidiaries to grant, to Bayer HealthCare LLC (or its successor-in-interest under Bayer Agreement or its affiliate) a non-exclusive license, with the right to sublicense, under Patents owned or controlled by CPC or any of its Subsidiaries claiming any CPC Other Improvement, for any use by Bayer in the Territory, as provided in Section 5.2.2 of the Bayer Agreement, and to comply with the provisions and procedures described in Section 5.3 of the Bayer Agreement for purposes of determining financial terms of such license.

4.6 Third Party Infringement.

4.6.1 Notice. If a Party or any of its Affiliates becomes aware of any actual or potential infringement of any Patents in the Licensed Technology or Contributor Technology, or if either Party becomes aware of any declaratory judgment action or similar proceeding with respect to any Patents within the Licensed Technology or Contributor Technology, then such Party shall promptly notify the other Party in writing. Upon request of either Party, the Parties shall discuss such actual or potential infringement in the Licensed Technology or Contributor Technology, as well as whether and how to enforce such Patents within the Licensed Technology or Contributor Technology with respect to such infringement, and allocation of costs and expenses related thereto.

4.6.2 Interest of Various Parties. CPC hereby acknowledges that there are and will be multiple licensees of the Licensed Technology and that Maxygen has the responsibility to determine how to best enforce and defend the Patents within the Licensed Technology for the benefit of all licensees, including Third Parties other than CPC, and CPC further acknowledges that such responsibility may affect Maxygen’s determination whether to enforce or defend particular Patents within the Licensed Technology in any particular instance. CPC acknowledges that (i) certain Patents within the Licensed Technology are and will be owned by Third Parties and, that in some cases, such Third Parties may retain or have retained the first right, or the sole right, to enforce or defend such Patents, and (ii) prior to the Effective Date, Maxygen has granted to Third Parties under the Third Party Agreements listed on Exhibit 1.46 rights to conduct or participate in the enforcement or defense of Patents within the Licensed Technology owned by Maxygen.

4.6.3 Infringement in Field. For any infringement, declaratory action or similar proceeding with respect to the Patents within the Enabling Patents, Astellas Agreement Patents or Other Program Patents, which infringement occurs in the Field (or declaratory judgment action is brought by a Third Party alleging threat of enforcement of such Patent with respect to activities in the Field), CPC shall have the right to request in writing that Maxygen enforce such Patents within the Enabling Patents against such infringement, describing CPC’s information and knowledge with respect to such actual or suspected infringement and basis for its belief how such infringement, action or proceeding involved the use of Enabling Patents, Astellas Agreement Patents or Other Program Patents within the Field. Upon receiving such a written request, Maxygen shall have one hundred and eighty (180) days after receipt of such request to examine and evaluate the facts and circumstances regarding such infringement, action or proceeding, as well as the interests of Maxygen and its Affiliates and Third Parties with respect to the Enabling Patents, Astellas Agreement Patents or Other Program Patents and to determine in Maxygen’s discretion whether to

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institute suit or take other action to abate such infringement, action or proceeding, at Maxygen’s expense. If Maxygen or its Affiliate does not institute suit or take other action to abate such infringement, action or proceeding within such 180-day period or if Maxygen institutes but does not maintain or continue through resolution, then CPC may, at CPC’s expense, institute suit to enforce the Enabling Patents, Astellas Agreement Patents or Other Program Patents against such infringement, action or proceeding in the Field with respect to a Compound or Product that is a Resulting Product, subject to the consent of the owner of the applicable Patents if such Patents are not owned by Maxygen or its Affiliates, and subject to any rights granted to a Third Party prior to the Effective Date pursuant to a Third Party Agreement listed on Exhibit 1.46; provided that until the expiration of such 180-day period, CPC shall not take any action to enforce, or threaten to enforce, such Patent against such infringement, action or proceeding. Any recoveries from such enforcement attributable to infringement, action or proceeding of the Enabling Patents, Astellas Agreement Patents or Other Program Patents within the Field with respect to a Compound or Product shall first be used to reimburse the expenses of the Parties (including amounts paid by the Party controlling such action for the expenses of the other Party) with the remainder shared (as between the Parties) as follows: (i) sixty percent (60%) to the Party controlling such action; and (ii) forty percent (40%) to the other Party. Any recoveries from such enforcement attributable to outside the Field or compounds or products other than Compounds or Products shall belong exclusively to Maxygen.

4.6.4 Cooperation. In connection with any such claim, suit or proceeding subject to Section 4.6.3, the Parties shall reasonably cooperate with each other and shall keep each other reasonably informed of all material developments in connection with any such claim, suit or proceeding. At the request and expense of the Party initiating any such claim, suit or proceeding, the other Party agrees to join in any such claim, suit or proceeding in the event that the other Party is necessary or indispensable to such proceedings, or such joinder of such Party is otherwise required, by applicable Law.

4.7 Defense of Third Party Action. If a Third Party institutes any action to have any patent within the Patents within the Licensed Technology other than Enabling Technology held invalid, non-infringed or unenforceable, the Parties agree to discuss, in good faith with each other (and with the owner of the applicable Patents if these are not owned by Maxygen or its Affiliates, and any Third Parties to whom Maxygen or its Affiliates has granted rights regarding enforcement or defense of such Patents prior to the Effective Date), which Party (or Third Party) should control the defense of such action. All of the out-of-pocket costs and legal fees relative to such defense shall be shared if and to the extent agreed by the Parties (and applicable Third Parties). If there is any recovery of out-of-pocket costs and legal fees, the recovery shall, unless otherwise agreed, be used to reimburse the Parties (and applicable Third Parties) according to the proportion of out-of-pocket costs and legal fees each Party (or applicable Third Party) paid, and the remaining recovery will be split according to the proportion of out-of-pocket costs and legal fees each Party (or applicable Third Party) paid. If the Parties cannot agree on which Party will prosecute a suit or the sharing of the costs, then as between the Parties, (i) Maxygen shall have the right to determine whether and, if so, how to prosecute or defend such suit and will be entitled to name CPC as a party in such suit if CPC is a necessary or indispensable party, and (ii) Maxygen shall be responsible for all of the out-of-pocket costs and legal fees of Maxygen and CPC relative to such suit Maxygen prosecutes or defends, and any recoveries from such suit shall belong exclusively to Maxygen.

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4.8 Settlement. No Party shall enter into an agreement to settle any action with respect to Licensed Technology covered by this Article 4 which agreement would conflict with, or materially diminish, the rights granted to or retained by the other Party with respect to the Licensed Technology, nor enter into any such agreement which makes any admission of wrongdoing by the other Party or any admission of the invalidity, unenforceability or absence of infringement of any Patents licensed hereunder, in each case without first obtaining the written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed.

ARTICLE 5

CONFIDENTIALITY

5.1 Confidentiality; Exceptions. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, the Parties agree that each Party shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than for the purpose of exercising its retained rights or rights under licenses granted hereunder, or performing obligations hereunder, or as otherwise provided for in this Agreement or in any Transaction Agreements (as that term is defined in the Master Joint Venture Agreement) or the Astellas Agreement, any confidential and proprietary information and materials of the other Party (collectively, “Confidential Information”). Licensed Technology shall be deemed the Confidential Information of Maxygen for purposes of this Agreement. Contributor Technology shall be deemed the Confidential Information of CPC for purposes of this Agreement. Notwithstanding the foregoing, Confidential Information shall not include any information to the extent that it can be established by written documentation by the receiving Party that such information:

5.1.1 was already known to the receiving Party, at the time of disclosure, other than under an obligation of confidentiality (except to the extent such obligation has expired or an exception is applicable under the relevant agreement pursuant to which such obligation established), and except or to the extent such information was already known to the receiving Party solely because or as a result of any employee of the receiving Party previously obtaining such information while an employee of the disclosing Party;

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

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

5.1.4 was independently discovered or developed by the receiving Party without reference to or use of Confidential Information of the disclosing Party as demonstrated by documented evidence; or

5.1.5 was disclosed to the receiving Party, other than under an obligation of confidentiality (except to the extent such obligation has expired or an exception is applicable under the relevant agreement pursuant to which such obligation established), by a Third Party who had no obligation to the disclosing Party not to disclose such information to others.

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The obligations set forth in this Section 5.1 shall remain in effect during the Term of this Agreement and for five (5) years thereafter.

5.2 Authorized Disclosure. Except as expressly provided otherwise in this Agreement, each Party may use and disclose Confidential Information of the other Party as follows: (i) under appropriate confidentiality provisions substantially equivalent to those in this Agreement (but for a confidentiality period that is reasonable and customary under the applicable circumstances) in connection with the performance of its obligations or as reasonably necessary or useful in the exercise of its rights under this Agreement, including the right to grant licenses or sublicenses or extension of the licenses and sublicenses to Affiliates and subcontractors as permitted hereunder; (ii) to the extent such disclosure is reasonably necessary in prosecuting or maintaining any Patent or other intellectual property right in accordance with this Agreement, prosecuting or defending litigation related to this Agreement, complying with applicable governmental regulations with respect to performance under this Agreement (including to comply with the applicable rules of any public stock exchange upon which the stock of such Party or its Affiliate is listed), provided that the Party seeking to disclose Confidential Information of the other Party uses commercially reasonable efforts, consistent with typical practice in the biopharmaceutical industry, to secure confidential treatment thereof, as applicable; (iii) to the extent such disclosure is otherwise required by Law, provided, however, that if a Party is required by Law or court order to make any such disclosure of the other Party’s Confidential Information it will, except where impracticable for necessary disclosures (for example, in the event of medical emergency), give reasonable advance notice to the other Party of such disclosure requirement and, in each of the foregoing, (but not to the extent inappropriate in the case of Prosecution and Maintenance of Patents), will use its reasonable efforts to seek confidential treatment of such Confidential Information required to be disclosed and limit disclosure of the Confidential Information to only that part necessary to comply with the request; any disclosure of Confidential Information as permitted in the foregoing sentence shall not alter the confidential nature of such Confidential Information for all other purposes; (iv) in communication with advisors (including financial advisors, lawyers and accountants) or actual or bona fide potential investors or acquirers, or actual or bona fide potential licensees or sublicensees related to Products, or approved or permitted contractors, service providers, vendors and the like used (or to be used) in connection with activities hereunder, each on a need to know basis, and in each case under standard confidentiality obligations (subject to the allowances for term of confidentiality provided in subsection (i) above, except with respect to disclosures to actual or bona fide potential investors and acquirers receiving any technical data or information related to Compounds or Products or the Licensed Technology that is Confidential Information of the other Party shall be subject to obligations of confidentiality for a period of at least five (5) years after such disclosure, or (v) to the extent mutually agreed to by the Parties. In addition to the foregoing, with respect to complying with the disclosure requirements of the U.S. Securities and Exchange Commission (“SEC”) or similar regulatory bodies or the rules of an applicable public stock exchange, in connection with any required disclosure of material information related to this Agreement, the Parties shall consult with one another concerning the information to be disclosed and secure confidential treatment thereof where practicable. If time does not permit such discussion, or if after such discussion between counsel, the Party desiring to make the disclosure still believes such Party is required by applicable Law or applicable stock exchange rule to make such disclosure, it may do so, upon written notice to the other Party. For clarity, nothing in this Section 5.2 shall prevent any Party from making disclosures required by applicable Law.

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5.3 Confidential Terms. Each of the Parties agrees not to disclose to any Third Party the terms and conditions of this Agreement without the prior approval of the other Party, except: (i) to advisors (including financial advisors, attorneys and accountants), approved or permitted contractors, actual or bona fide potential investors or acquirers, or actual or bona fide potential licensees or sublicensees or others on a need to know basis, in each case under circumstances that reasonably ensure the confidentiality thereof; or (ii) under circumstances that reasonably ensure the confidentiality of the information, to the extent necessary to comply with the terms of agreements with Third Parties existing as of the Effective Date pursuant to which such Party first obtains rights to such Party’s Licensed Technology, which is (sub)licensed to the other Party hereunder, or (iii) to the extent previously made publicly available pursuant to this Section 5.3, or (iv) to the extent required by applicable Law or the applicable rules of any public stock exchange upon which the stock of such Party or its Affiliate is listed; provided, however, that if a Party is required by Law or the applicable rules of any public stock exchange to make any such disclosure of the terms or conditions of this Agreement, it will give reasonable advance notice to the other Party of such disclosure requirement and will use its reasonable efforts to seek confidential treatment of such terms and conditions. In addition to the foregoing, with respect to complying with the disclosure requirements of the SEC or similar regulatory bodies or the rules of an applicable public stock exchange, in connection with any required filing of this Agreement, the Parties shall consult with one another concerning which terms of this Agreement shall be requested to be redacted in any public disclosure of the Agreement (including by allowing the other Party an opportunity to review and comment upon the proposed filing of this Agreement). If time does not permit such discussion, or if after such discussion between counsel, the Party desiring to make the disclosure still believes such Party is required by applicable Law or applicable stock exchange rule to make such disclosure, it may do so, upon written notice to the other Party. For clarity, nothing in this Section 5.3 shall prevent any Party from making disclosures required by applicable Law.

5.4 Subsequent Disclosures. Once a publication or other disclosure has been made in accordance with Section 5.3 above, a Party may make subsequent disclosures of information contained therein without approval or prior review of the other Party; provided, however, that the requirements of Section or 5.3 shall, to the extent applicable, apply with respect to new or additional information in any such subsequent disclosure.

ARTICLE 6

REPRESENTATIONS, WARRANTIES AND COVENANTS

6.1 Mutual Representations, Warranties and Covenants. Each Party (the “Representing Party”) hereby represents, warrants and covenants to the other Party, as a material inducement for such other Party’s entry into this Agreement, as follows:

6.1.1 The Representing Party is duly organized and validly existing under the Laws of its jurisdiction of incorporation and it has full corporate power and authority and has taken all corporate action necessary to enter into and perform this Agreement;

6.1.2 This Agreement is a legal and valid obligation binding upon the Representing Party and enforceable against it in accordance with its terms, assuming due execution and delivery of the Agreement by the Parties, and subject to applicable laws regarding insolvency, bankruptcy, reorganization, moratorium and other Laws affecting creditors’ rights generally as from time to time in effect;

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6.1.3 The execution, delivery and performance of the Agreement by the Representing Party does not conflict with any agreement, instrument or understanding, oral or written, by which it is bound, nor to its knowledge, violate any Law;

6.1.4 To its knowledge as of the Effective Date, no government authorization, consent, approval, license, exemption of or filing or registration with any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, under any applicable laws, rules or regulations currently in effect, is or will be necessary for the granting of the licenses set forth in this Agreement, or for the performance by the Representing Party of its obligations under this Agreement; and

6.1.5 The Representing Party has not granted as of the Effective Date, and during the Term will not grant, any right to any Third Party relating to its respective Patents, Know-How or Materials licensed hereunder which conflicts with the rights granted to the other Party hereunder; and without limiting the foregoing, the Representing Party will not, during the Term, encumber the Patents, Know-How and Materials licensed to the other Party hereunder, with liens, mortgages, security interests or another similar interest that would give the holder the right to convert the interest into ownership of such Patents, Know-How and//or Materials, unless the encumbrance is subject to the licenses and rights granted to the other Party herein.

6.2 Representations, Warranties and Covenants by Maxygen. Maxygen hereby represents and warrants and covenants to CPC as follows:

6.2.1 It has sufficient legal and/or beneficial title, ownership or license, free and clear from any Encumbrances (as defined in the Master Joint Venture Agreement), of the Licensed Technology to grant the licenses to CPC set forth in this Agreement on the terms and conditions herein. For clarification purposes, the representation and warranty in this Section 6.2.1 applies to the ownership or licensure of the Licensed Technology and shall have no effect as to the “AS IS” disclaimer, and disclaimers regarding validity, enforceability or non-infringement, with respect to the Licensed Technology in Section 6.4;

6.2.2 During the Term of this Agreement, it shall not enter into any agreement with any Third Party, nor grant any license or covenant not to sue, or other similar interest or benefit, exclusive or otherwise, to any Third Party, relating to any Licensed Technology that conflicts with the licenses to CPC set forth in this Agreement on the terms and conditions herein;

6.2.3 As of the Effective Date, (i) Exhibits 1.10.3, 1.16.3, 1.39.3, collectively, are a complete and accurate list of all Patents within the Licensed Technology which are either (A) owned by Maxygen, or (B) to the extent such information is available in the records of Maxygen without duty of inquiry, licensed to Maxygen under the Third Party Agreements;

6.2.4 As of the Effective Date, (i) Maxygen is not in material breach of any of its Third Party Agreements and no Third Party has notified Maxygen of any material breach of such

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Third Party Agreements, in each case that remains uncured and which would result in a material adverse effect on the ability of Maxygen to perform its obligations hereunder, and (ii) Maxygen has not received written notice from any licensor under a Third Party Agreement purporting to terminate, or restrict the scope of, Maxygen’s rights under such Third Party Agreement with respect to the scope of the rights licensed to CPC hereunder by reason of any action or omission of Maxygen;

6.2.5 As of the Effective Date, except as set forth on Exhibit 6.2.5, neither Maxygen nor any of its Affiliates has received written notice or written claim of infringement from any Third Party alleging that the activities of Maxygen or any of its Affiliates in practicing the Licensed Technology infringe, misappropriate, or otherwise unlawfully use proprietary rights, including Patents, copyrights or trade secrets (but excluding trademark rights);

6.2.6 Except as set forth on Exhibit 6.2.6, to the Knowledge (as defined in the Master Joint Venture Agreement) of Maxygen as of the Effective Date, (i) no written claim by any Third Party contesting the validity or enforceability of the Patents within the Licensed Technology, or use or ownership of the Licensed Technology, has been received by Maxygen, and (ii) there is no pending (i.e., filed or requested) interference or litigation that involves any of the Patents within the Licensed Technology;

6.2.7 During the Term of the Agreement, Maxygen will comply with all applicable terms and conditions under the Third Party Agreements and the New Third Party Agreements and will not terminate, amend, or waive any rights under any Third Party Agreement or any New Third Party Agreement in any manner (a) which diminishes the licenses to CPC or requires any increase in obligations by CPC hereunder with respect to the Licensed Technology that is subject to such Third Party Agreement or New Third Party Agreement, as applicable, (b) that requires any increase in obligations by Astellas under the Astellas Agreement, or (c) impairs CPC’s ability to perform its obligations under, or grant the licenses to Astellas under, the Astellas Agreement;

6.2.8 The list of Third Party software set forth in Exhibit 2.1.5 (x) is a complete list of Third Party software (i) needed to run the Software, or (ii) used by Maxygen in the conduct of the scientific and technical activities of the Business (as defined under the Asset Contribution Agreement); (y) is generally available for license by CPC as of the Effective Date, and (z) can be licensed by CPC at an aggregate cost (based on prices as of the Effective Date) that does not exceed one hundred thousand dollars ($100,000);

6.2.9 Except as may be expressly provided under the Third Party Agreements listed on Exhibit 1.46, no Person who has licensed Patents within the Licensed Technology to Maxygen, has ownership rights or license rights to improvements made by Maxygen in such Licensed Technology;

6.2.10 Maxygen has the full right to grant the licenses and sublicenses to be granted to CPC in accordance with Section 2.1 and the terms and conditions hereof, and there exist no restrictions on sublicensing any intellectual property licensed to Maxygen which would otherwise fall within the full scope of such license and sublicense to CPC as set forth and in accordance with the terms and conditions of this Agreement in the absence of such restriction; and

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6.2.11 Except with respect to annual payments, milestone payments, royalties on product sales, or other similar payments under Third Party Agreements indicated on Exhibit 2.5.1, or as provided in Third Party Agreements listed on Exhibit 1.46 with respect to indemnity obligations or the sharing of costs and/or recoveries in connection with enforcement or defense of Patents, there are no royalties, fees, honoraria or similar payments payable by Maxygen to any Third Person arising from the grant or practice of a sublicense to CPC.

6.3 Representations, Warranties and Covenants by CPC. CPC hereby represents and warrants and covenants to Maxygen as follows:

6.3.1 It has sufficient legal and/or beneficial title, ownership or license, free and clear from any Encumbrances (as defined in the Master JVA) other than applicable terms and conditions of Contributor Contracts assigned to CPC pursuant to the Asset Contribution Agreement, of the CPC Improvements and CPC Other Improvements to grant the licenses and covenants not to sue set forth in Sections 4.5.2 and 6.3.5 of this Agreement on the terms and conditions herein. For clarification purposes, the representation and warranty in this Section 6.3.1 applies to the ownership or licensure of the CPC Improvements and CPC Other Improvements and shall have no effect as to the “AS IS” disclaimer, and disclaimers regarding validity, enforceability or non-infringement, with respect to the CPC Improvements and CPC Other Improvements in Section 6.4;

6.3.2 During the Term of this Agreement, it shall not grant any assignment, license, covenant not to sue, or other similar interest or benefit, exclusive or otherwise, to any Third Party relating to any Patent, Material, Know-How or other proprietary right that conflicts with the licenses and covenants not to sue with respect to the CPC Improvements and CPC Other Improvements in Sections 4.5.2 and 6.3.5 of this Agreement on the terms and conditions herein;

6.3.3 CPC and its Affiliates shall not purport to sublicense, or otherwise facilitate any Third Party’s use of, the Enabling Technology or Software prior to consummation of a CPC Change of Control without the prior written consent of Maxygen except as expressly provided for under Section 2.2.

6.3.4 Until the expiration of the Enabling Patents in the Territory, on a patent-by-patent and country by country basis, CPC shall not, and shall cause its Affiliates not to, practice the Enabling Technology in or for any use outside the Field, and CPC shall not develop, commercialize or otherwise exploit any Resulting Products in or for any use outside the Field, except in each case to the extent that CPC has received a license or sublicense under the Enabling Technology from a Third Party capable of granting such license or sublicense covering such practice or development, commercialization or other exploitation outside the Field. CPC acknowledges that practice of the Enabling Technology for any use outside the Field without such license or sublicense, may result in damage to Maxygen or its Affiliates, which may include loss of license rights to Enabling Technology under Third Party Agreements or monetary damages.

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6.3.5 For so long as CPC remains an Affiliate (as defined under the Bayer Agreement) of Maxygen, CPC will not, and shall cause each of its Affiliates not to, sue Bayer HealthCare LLC (or its successor in interest), or its Affiliate for use of the Enabling Technology (substantially as such Enabling Technology was practiced by Maxygen prior to the Effective Date of the Bayer Agreement) under any Patents that issue to (as “issued to” is construed under the Bayer Agreement) CPC or its Affiliates after the Effective Date claiming any improvements, modifications, enhancements or changes to the Enabling Technology which are directed to the practice of the Enabling Technology per se, but excluding without limitation any Patents directed to any specific Resulting Products (“CPC Improvements”).

6.3.6 CPC covenants that it and its Affiliates shall not, and shall not permit any Third Party to which CPC or its Affiliate transfers any CMVP Materials or materials derived therefrom to, use the CMVP Materials or other materials derived therefrom for any use other than as research reagents. The covenant in this Section 6.3.6 shall not be construed to prohibit other uses by CPC or its Affiliates of CMV promoter variants separately synthesized by CPC or its Affiliates or Third Parties without use of the tangible CMVP Materials provided by Maxygen or other tangible materials directly derived therefrom.

6.3.7 CPC acknowledges that certain Patents, Know-How and Materials within the Licensed Technology have been or may be licensed to Maxygen or its Affiliates pursuant to the Third Party Agreement(s) listed on Exhibit 1.46, and that the sublicenses granted by Maxygen or its Affiliates to CPC with respect thereto are subject and subordinate to the terms of any such Third Party Agreement. CPC hereby covenants that CPC shall, for the lesser of the term of each such Third Party Agreement or any New Third Party Agreement and the term of this Agreement, comply with all applicable restrictions and obligations applicable to sublicensees set forth in the terms of each such Third Party Agreement in the form provided as of the Effective Date and any such New Third Party Agreement in the form provided pursuant to Section 2.5.2 regarding the use of the Licensed Technology to which such Third Party Agreement or such New Third Party Agreement, as applicable, relates, and all applicable restrictions (if any) with respect to Resulting Products; provided, however, it shall not be considered a breach of this covenant by CPC to the extent any failure to comply by CPC arises from Maxygen’s breach of its covenants in Section 6.2.7.

6.3.8 For so long as CPC remains an Affiliate (as defined under the Bayer Agreement) of Maxygen, CPC shall comply, and shall ensure that its Affiliates comply, with applicable terms and conditions set forth in the Third Party Agreements listed on Exhibit 1.46. For so long as CPC remains an Affiliate (as defined under the Bayer Agreement) of Maxygen, CPC shall not purport to terminate or amend any Third Party Agreement in any manner which would diminish the license to Bayer, or require any increase in obligations of Bayer, under the Bayer Agreement with respect to the Licensed Technology that is subject to such Third Party Agreement without Maxygen’s prior written consent.

6.3.9 For so long as CPC remains an Affiliate (as defined under the Bayer Agreement) of Maxygen, CPC shall notify both Maxygen and Bayer HealthCare LLC promptly if CPC receives notice, whether or not there is a cure period, from a Third Party that CPC, or Maxygen or any other licensee of Maxygen, is in material breach of any Third Party Agreement, or notice from any Third Party which purports to modify or terminate any Third Party Agreement in any manner. CPC shall take prompt and commercially reasonable steps to cure any such breach by CPC or its Affiliate.

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6.3.10 Until the earlier of (a) the Option Closing and (b) July 2, 2013, CPC shall ensure that it and its Subsidiaries do not (1) themselves or on behalf of others, acquire, develop, make, use, sell, import, offer to sell or commercialize any Coagulation Factor Variant, nor (2) grant or attempt to grant any Third Party a license to do so. As used herein, “Coagulation Factor Variant” means (i) any amino acid (including any natural, synthetic, modified or other amino acid analogue) chain that is any of coagulation Factor VII, coagulation Factor VIII or coagulation Factor IX, or any variant, homolog, derivative, mutant, or fragment of Factor VII, Factor VIII or Factor IX, or any of the foregoing that is conjugated or otherwise coupled to any other molecule (e.g., polyethylene glycol, immunoglobulin domain, sialylation, pegylated, or glycosylation).

6.3.11 For so long as CPC remains an Affiliate (as defined under the Bayer Agreement) of Maxygen, CPC shall comply, and shall ensure that its Subsidiaries comply, with the applicable terms and conditions set forth in the various agreements entered into by and between Maxygen, Inc. and Bayer HealthCare LLC, on or about July 1, 2008, that (i) apply by their terms to Affiliates of Maxygen or (ii) provide that Maxygen shall cause, require, ensure or otherwise procure performance or compliance by its Affiliates, including the following provisions: Sections 3.1, 4.4(c)(i), 4.4(d)(i), 4.4(d)(ii), 4.4(d)(iii), 4.4(d)(v), 4.4(d)(vii), 6.3 and 11.5 of the Technology Transfer Agreement; Section 7.1.1 of the License Agreement (also referred to in this Agreement as the “Bayer Agreement”); and Sections 6.2 and 8.3 of the Intellectual Property Cross License Agreement.

6.4 Disclaimer of Warranties. EXCEPT EXPRESSLY AS SET FORTH IN THIS AGREEMENT, THE ENABLING TECHNOLOGY, SOFTWARE, IN-LICENSED PROGRAM-SPECIFIC TECHNOLOGY, RR TECHNOLOGY, CMVP TECHNOLOGY, ASTELLAS AGREEMENT TECHNOLOGY, OTHER PROGRAM TECHNOLOGY, CONTRIBUTOR TECHNOLOGY, CPC IMPROVEMENTS OR CPC OTHER IMPROVEMENTS HEREUNDER, AND ALL PATENTS, KNOW-HOW AND MATERIALS WITHIN THE FOREGOING, ARE PROVIDED AND LICENSED TO CPC OR MAXYGEN, AS APPLICABLE, “AS IS.” EXCEPT EXPRESSLY AS SET FORTH IN THIS AGREEMENT, MAXYGEN AND CPC EXPRESSLY DISCLAIM ANY AND ALL WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO ANY OF THE ENABLING TECHNOLOGY, SOFTWARE, IN-LICENSED PROGRAM-SPECIFIC TECHNOLOGY, RR TECHNOLOGY, CMVP TECHNOLOGY, ASTELLAS AGREEMENT TECHNOLOGY, OTHER PROGRAM TECHNOLOGY, OR CPC IMPROVEMENTS, CPC OTHER IMPROVEMENTS OR CONTRIBUTOR TECHNOLOGY, OR RESULTS OBTAINED, OR COMPOUNDS OR PRODUCTS, IF ANY, DEVELOPED, CREATED OR PRODUCED IN WHOLE OR PART THROUGH APPLICATION OF THE LICENSED TECHNOLOGY OR ANY OTHER SUBJECT MATTER OF THIS AGREEMENT, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NONINFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BOTH PARTIES ACKNOWLEDGE AND DISCLAIM ANY WARRANTY AS TO THE USEFULNESS OR COMMERCIAL SUCCESS OF ANY RESULTING PRODUCT, COMPOUND OR OTHER PRODUCT OR THE ACHIEVEMENT OF DESIRED GOALS THROUGH USE OF THE LICENSED TECHNOLOGY.

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ARTICLE 7

INDEMNIFICATION

7.1 Indemnification.

7.1.1 Fault-Based.

(a) Subject to Sections 7.2 and 7.3, CPC shall defend, indemnify, and hold Maxygen, its Affiliates, and their respective directors, officers, employees and agents (collectively, “Maxygen Indemnitees”) harmless, at CPC’s cost and expense, from and against any and all liabilities, losses, costs, damages, fees or expenses (including reasonable legal expenses and attorneys’ fees incurred by any Maxygen Indemnitees until such time as CPC has acknowledged and assumed its indemnification obligation hereunder with respect to a claim) payable to a Third Party (collectively, “Losses”) arising out of any claim, action, lawsuit, or other proceeding (collectively, “Claims”) brought against any Maxygen Indemnitee by such Third Party to the extent such Losses result from (i) the breach by CPC of any covenant set forth in Sections 6.3.4, 6.3.5, 6.3.6, 6.3.8, 6.3.9, 6.3.10 or (ii) CPC’s, or any of its Affiliates’ or licensees’ or sublicensees’, use, testing, operation, sale, manufacture or other exploitation of the Licensed Technology or any Compounds or Products that CPC or any of its Affiliates discovers, develops, creates, modifies or manufactures using any Licensed Technology, including the Resulting Products (each of (i) or (ii), a “Fault of CPC” for purposes of this Article 7); but excluding such Losses to the extent they arise from the Fault of Maxygen, arise from any Claim alleging infringement of intellectual property rights of a Third Party or arise from the gross negligence, recklessness or willful misconduct of Maxygen or any of its Affiliates.

(b) Subject to Sections 7.2 and 7.3, Maxygen shall defend, indemnify, and hold CPC, its Affiliates, and their respective directors, officers, employees and agents (collectively, “CPC Indemnitees”) harmless, at Maxygen’s cost and expense, from and against any and all Losses (including reasonable legal expenses and attorneys’ fees incurred by any CPC Indemnitees until such time as Maxygen has acknowledged and assumed its indemnification obligation hereunder with respect to a claim) arising out of any Claim brought against any CPC Indemnitee by such Third Party to the extent such Losses result from (i) a breach by CPC of its representations or warranties set forth in Section 6.1 or 6.2, or (ii) claims that any exclusive license under the Enabling Technology previously granted to such Third Party by Maxygen or its Affiliates prevents the grant of the license to CPC under Enabling Technology for the research, development, manufacture or commercialization of Compounds and Products in the Field on the terms and conditions set forth herein or, (iii) Maxygen’s, or any of its Affiliates’ or licensee’s or sublicensees’, use, testing, operation, sale manufacture or other exploitation of the Licensed Technology or Contributor Technology or products or technology that Maxygen or any of its Affiliates discovers, develops, creates, modifies or manufactures using the Licensed Technology or Contributor Technology, including the Resulting Products (each of (i), (ii) or (iii), a “Fault of Maxygen” for purposes of this Article 7); but excluding such Losses to the extent they arise from the Fault of CPC, arise from any Claim alleging infringement of intellectual property rights of a Third Party or arise from the gross negligence, recklessness or willful misconduct of CPC or any of its Affiliates.

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7.1.2 Apportionment of Fault. If any Losses occur by reason of or result from the joint Fault of CPC and Fault of Maxygen, liability for such Losses under Section 7.1.1(a) or Section 7.1.1(b) shall be apportioned between CPC and Maxygen according to the percentage of Fault of CPC and Maxygen. This Section 7.1.2 shall apply even under circumstances where a Third Party bears a percentage of the fault.

7.2 Claim for Indemnification. Whenever any Claim shall arise for indemnification under Article 7, the Maxygen Indemnitees and the CPC Indemnitees entitled to indemnification (the “Indemnified Party”) shall promptly notify the other Party (the “Indemnifying Party”) in writing of the Claim and, when known, the facts constituting the basis for the Claim. The Indemnified Party’s failure to notify the Indemnifying Party will not relieve the Indemnifying Party from any liability to such Indemnified Party except to the extent any liability results from the failure to timely notify the Indemnifying Party. The Indemnifying Party shall promptly assume, and have the right to control, the defense and settlement thereof at its own expense. The Indemnified Party shall not settle or compromise any Claim by a Third Party for which it is entitled to indemnification without the prior written consent of the Indemnifying Party, unless the Indemnifying Party is in breach of its obligation to defend hereunder. In no event shall either the Indemnified Party or Indemnifying Party settle any Claim without the prior written consent of the Indemnified Party if such settlement does not include a release from liability on such Claim or if such settlement would involve undertaking an obligation other than the payment of money by the settling Party that would bind or impair the non-settling Party, or result in any Licensed Technology, Patent or trademark of the other Party being rendered invalid or unenforceable, or if such settlement contains an admission that any Licensed Technology, Patent or trademark of the other Party is invalid or unenforceable. The provisions of this Article 7 shall be subject to the dispute resolution procedures of Article 9.

7.3 Reduction of Indemnity Payments. Notwithstanding anything in this Article 7 to the contrary, an indemnity payment owed by one Party to the other Party pursuant to this Agreement shall be reduced by all amounts actually received by the Indemnified Party under insurance policies purchased and maintained by the Indemnifying Party in connection with the Claim for which the indemnification related (less all deductibles, costs of collection, and other expenses incurred in connection therewith).

ARTICLE 8

TERM AND TERMINATION

8.1 Term. This Agreement will commence upon the Effective Date and shall be perpetual thereafter (the “Term”).

8.2 Expiration of Patents. On the expiration of each Patent within the Licensed Technology, on a Patent-by-Patent and country-by-country basis, the license set forth herein to the invention claimed in such Patent shall become non-exclusive in such country.

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8.3 CPC Breach of Obligations With Respect to a Third Party Agreement. If CPC or any of its Affiliates materially breaches or materially fails to comply with any of the obligations or requirements expressly provided for hereunder with respect to any Third Party Agreement or New Third Party Agreement pursuant to which Maxygen obtains rights or licenses to Patents, Know-How or Material (provided that the substance of such obligation or requirement, and/or the applicable terms and conditions of such agreement setting forth such obligation or requirement, have been disclosed to CPC), and after notice to CPC from the licensor or Maxygen of such breach CPC fails to cure such breach within the period for cure provided in the applicable Third Party Agreement or New Third Party Agreement, then Maxygen shall have the right upon written notice to CPC to terminate CPC’s sublicense granted hereunder with respect to the Patents, Know-How or Materials sublicensed under such Third Party Agreement or New Third Party Agreement, as applicable; provided, however, that that the foregoing shall not apply to the extent the material breach or material failure to comply is attributable to a breach by Maxygen of Section 6.2.7 with respect to the applicable term or condition of such Third Party Agreement or such New Third Party Agreement, as applicable.

8.4 Cooperation Following Certain Terminations of Third Party Agreements.

8.4.1 Third Party Termination for Cause. In the event that the rights of Maxygen under any Third Party Agreement are terminated by the Third Party for cause thereunder in a manner which would diminish the licenses to CPC hereunder with respect to the Licensed Technology that is subject to such Third Party Agreement, and provided that CPC and its Affiliates are not in material breach of this Agreement, and have not failed to comply with any material obligations under such Third Party Agreement, then Maxygen shall use its reasonable efforts to cooperate with efforts of CPC to assure that CPC can maintain its sublicense to such Third Party Agreement.

8.4.2 Express Survival of Sublicenses. In the event that the rights of Maxygen under any Third Party Agreement are terminated by the Third Party thereunder in a manner which would diminish the licenses to CPC hereunder with respect to the Licensed Technology that is subject to such Third Party Agreement and such Third Party Agreement provides the express right for the sublicense granted to CPC hereunder to survive such termination, Maxygen shall use its reasonable efforts to take such actions required by such Third Party Agreement as may be required to ensure that the sublicense granted hereunder shall survive, unless the rights of Maxygen under such Third Party Agreement were terminated as a result of CPC’s, or its Affiliate’s or sublicensee’s, breach or failure to comply with the terms and conditions of such Third Party Agreement.

ARTICLE 9

DISPUTE RESOLUTION

9.1 Negotiation of CEOs. If any dispute arises between the Parties out of or in connection with this Agreement, or the validity, enforceability, construction, performance or breach (or alleged breach) thereof (a “Dispute”), either Party may, by written notice to the other, have such dispute referred to the CEOs (or an executive officer designated by the CEO with authority to settle such dispute) of the Parties for attempted resolution by good faith negotiations within ten (10) Business Days. In such event, each Party shall cause its CEO or the CEO’s designated executive officer to meet and be available to attempt to resolve such issue. If the Parties should resolve such

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dispute or claim, a memorandum setting forth their agreement will be prepared and signed by both Parties if requested by either Party. The Parties shall cooperate in an effort to limit the issues for consideration in such manner as narrowly as reasonably practicable in order to resolve the dispute. The Parties agree first to try in good faith to settle or resolve Disputes through the procedure described in this Section 9.1 before initiating arbitration pursuant to Section 9.2 or resorting to other legal action pursuant to Section 9.3 or 9.4.

9.2 Arbitration. Except with respect to Disputes involving the intellectual property rights of a Party under Section 9.3, the Parties agree that any Dispute which is not resolved under Section 9.1, or as otherwise expressly provided herein, shall be finally settled by binding arbitration under this Section 9.2 under the Rules of Conciliation and Arbitration of the International Chamber of Commerce (the “ICC Rules”) by one or more arbitrators appointed in accordance with the rules thereof and the decisions of the arbitrator shall be final and binding on the Parties hereto. The place of the arbitration proceeding shall be in San Francisco, California. The Parties agree that the decision shall be the sole, exclusive and binding remedy between them regarding determination of the matters presented to the arbitrator. The costs of such arbitration, including administrative and arbitrator’s fees, shall be shared equally by the Parties, and each Party shall bear its own expenses and attorney’s fees incurred in connection with the arbitration. The Parties shall use good faith efforts to complete arbitration under this Section 9.2 within ninety (90) days following the initiation of such arbitration. The arbitrator shall establish reasonable additional procedures to facilitate and complete such arbitration within such ninety (90) day period.

9.3 Intellectual Property Disputes. Any disputes related to intellectual property rights of the Parties which are not resolved under Section 9.1 shall be brought to a court of competent jurisdiction in the country in which such intellectual property rights were granted.

9.4 Provisional Remedies. Nothing in this Agreement shall limit the right of either Party to seek to obtain in any court of competent jurisdiction any equitable or interim relief or provisional remedy, including injunctive relief, pending resolution under Section 9.1, 9.2 or 9.3 as applicable, that may be necessary to protect the rights or property of that Party. Seeking or obtaining such equitable or interim relief or provisional remedy in a court shall not be deemed a waiver of the agreement to arbitrate. For clarity, any such equitable remedies shall be cumulative and not exclusive and are in addition to any other remedies that either Party may have under this Agreement or applicable Law.

ARTICLE 10

MISCELLANEOUS

10.1 Governing Law. This Agreement and any dispute arising from the performance or breach hereof shall be governed by and construed and enforced in accordance with the substantive Laws of the State of New York, without reference to conflicts of laws principles. Notwithstanding the above, any dispute regarding validity or enforceability of any Patent shall be governed by the patent laws of the jurisdiction in which such Patent was issued solely for the purpose of resolution of the dispute as to validity and enforceability.

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10.2 Assignment. This Agreement shall not be assignable or otherwise transferred, in whole or in part, by either Party to any Third Party without the written consent of the other Party. Notwithstanding the foregoing, (i) CPC may assign this Agreement, without the written consent of Maxygen, to (a) an entity that acquires all or substantially all of the assets and business of CPC to which this Agreement relates in connection with a CPC Change of Control, or (b) if Astellas has exercised the Buy-Out Option, to an Affiliate of CPC or Astellas, in each case provided that the assignee promptly agrees in writing to be bound by the terms and conditions of this Agreement (including the licenses to Maxygen hereunder with respect to the Contributor Technology, if any, acquired by such entity); and (ii) Maxygen may assign this Agreement, without the written consent of CPC, to an entity that acquires (x) all or substantially all of the business or assets (which shall in each case shall include the Licensed Technology) of Maxygen to which this Agreement pertains (whether by merger, reorganization, acquisition, sale or otherwise), or (y) all or substantially all of the Enabling Technology, in each case provided that the assignee promptly agrees in writing to be bound by the terms and conditions of this Agreement (including the licenses to CPC hereunder with respect to the Licensed Technology, if any, acquired by such entity). No assignment or transfer of this Agreement shall be valid and effective unless and until the assignee/transferee agrees in writing to be bound by the provisions of this Agreement. The terms and conditions of this Agreement shall be binding on and inure to the benefit of the permitted successors and assigns of the Parties. Except as expressly provided in this Section 10.2, any attempted assignment or transfer of this Agreement shall be null and void.

10.3 Limitation on Liability. EXCEPT FOR BREACH OF ARTICLE 5, IN NO EVENT SHALL EITHER PARTY OR ITS AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS OR INTERRUPTION OF BUSINESS, OR FOR ANY OTHER INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES. IN NO CASE SHALL EITHER PARTY BE LIABLE FOR ANY REPRESENTATION OR WARRANTY MADE BY THE OTHER PARTY TO ANY THIRD PARTY. NOTHING IN THIS SECTION 10.3 IS INTENDED TO LIMIT EITHER PARTY’S OBLIGATIONS UNDER ARTICLE 7 IN RELATION TO AMOUNTS PAID TO A THIRD PARTY.

10.4 Notices. Any notice, request, delivery, approval or consent required or permitted to be given under this Agreement shall be in English language, in writing, shall specifically refer to this Agreement and shall be deemed to have been sufficiently given if delivered in person, transmitted by as a PDF attachment to an email (with response email confirming receipt) or by express courier service (signature required) or five (5) Business Days after it was sent by registered letter, return receipt requested (or its equivalent), provided that no postal strike or other disruption is then in effect or comes into effect within two (2) Business Days after such mailing, to the Party to which it is directed at its address or email address shown below or such other address or email address as such Party will have last given by notice to the other Party.

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If to Maxygen,
addressed to:	Maxygen, Inc.
	515 Galveston Drive
	Redwood City, California 94063
	USA
	Attention: Chief Business Officer
	Telephone: (650) 298-5300
	Email address: corporatesecretary@maxygen.com
with a copy to:	Maxygen, Inc.
	515 Galveston Drive
	Redwood City, California 94063
	USA
	Attention: General Counsel
	Telephone: (650) 298-5300
	Email address: corporatesecretary@maxygen.com
and a copy to:	Wilson Sonsini Goodrich & Rosati
	Professional Corporation
	650 Page Mill Road
	Palo Alto, CA 94304-1050
	USA
	Attention: David W. Stevens
	Telephone: (650) 493-9300
If to CPC, addressed to:	CPC c/o Maxygen, Inc.
	515 Galveston Drive
	Redwood City, California 94063
	USA
	Attention: Chief Business Officer
	Telephone: (650) 298-5300
	Email address: corporatesecretary@maxygen.com
with a copy to:	Maxygen, Inc.
	515 Galveston Drive
	Redwood City, California 94063
	USA
	Attention: General Counsel
	Telephone: (650) 298-5300
	Email address: corporatesecretary@maxygen.com
and a copy to:	Wilson Sonsini Goodrich & Rosati
	Professional Corporation
	650 Page Mill Road
	Palo Alto, CA 94304-1050
	USA
	Attention: David W. Stevens
	Telephone: (650) 493-9300

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10.5 Waiver. Neither Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

10.6 Severability. If any provision hereof is held invalid, illegal or unenforceable by any arbitrator or court of competent jurisdiction from which no appeal can be or is taken, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect in such tribunal or jurisdiction, as the case may be, and shall be liberally construed in order to carry out the intentions of the Parties as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other tribunal or jurisdiction.

10.7 Entire Agreement/Modification. This Agreement, including its Exhibits, and the Transaction Agreements (as defined in the Master Joint Venture Agreement by and between Maxygen, CPC and Astellas of even date herewith (the “Master Joint Venture Agreement”) set forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties with respect to the subject matter hereof and thereof, and supersede all prior agreements and understandings between the Parties with respect to such subject matter. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of each of the Parties.

10.8 Relationship of the Parties. The Parties agree that the relationship of CPC and Maxygen established by this Agreement is that of independent contractors. Furthermore, the Parties agree that this Agreement does not, is not intended to, and shall not be construed to, establish an employment, agency, joint venture, partnership or any other relationship. Except as may be specifically provided herein, neither Party shall have any right, power or authority, nor shall they represent themselves as having any authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of the other Party, or otherwise act as an agent for the other Party for any purpose.

10.9 Force Majeure. Except with respect to payment of money, neither Party shall be liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfillment or the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by or results from fire, earthquake, tornado, embargo, prohibition or intervention, riot, civil commotion, war, act of war (whether war be declared or not), insurrection, terrorist act, strike, flood, governmental act or restriction (beyond the reasonably control of the respective Party), act of God, or other cause that is beyond the reasonable control and not caused by the negligence or misconduct of the affected Party. The Party affected by such force majeure will provide the other Party with full particulars thereof as

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soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and will use commercially reasonable efforts to overcome the difficulties created thereby and to resume performance of its obligations as soon as practicable. If the performance of any such obligation under this Agreement is delayed owing to such a force majeure for any continuous period of more than one hundred eighty (180) days, the Parties hereto will consult with respect to an equitable solution, including the possibility of the mutual termination of this Agreement.

10.10 Third Party Beneficiaries. Except for the rights to indemnification provided for a Party’s indemnitees pursuant to Article 7, all rights, benefits and remedies under this Agreement are solely intended for the benefit of CPC and Maxygen, and except for such rights to indemnification expressly provided pursuant to Article 7, no Third Party shall have any rights whatsoever to (i) enforce any obligation contained in this Agreement (ii) seek a benefit or remedy for any breach of this Agreement, or (iii) take any other action relating to this Agreement under any legal theory, including but not limited to, actions in contract, tort (including but not limited to negligence, gross negligence and strict liability), or as a defense, setoff or counterclaim to any action or claim brought or made by the Parties.

10.11 Advice of Counsel. Maxygen and CPC each acknowledge that this Agreement is the result of informed negotiation as part of a larger transaction between sophisticated parties, and each expressly agree that any rule of contract construction which might otherwise apply to cause ambiguities to be resolved against the drafting Party shall not apply to this Agreement, nor to any exhibits or attachments to this Agreement.

10.12 Other Obligations. Except as expressly provided in this Agreement or as separately agreed upon in writing between Maxygen and CPC, each Party shall bear its own costs incurred in connection with the implementation of the obligations under this Agreement.

10.13 Further Assurances. At any time or from time-to-time on and after the Effective Date, a Party shall at the request of the other Party (i) deliver to the requesting Party such records, data or other documents as may be reasonably necessary to give effect to the provisions of this Agreement, (ii) execute, and deliver or cause to be delivered, all such consents, documents or further instruments of assignment, transfer or license as may be reasonably necessary to give effect to the provisions of this Agreement, and (iii) take or cause to be taken all such actions, as the requesting Party may reasonably deem necessary or desirable in order for the requesting Party to obtain the full benefits of this Agreement and the transactions contemplated hereby.

10.14 Governmental Matters.

10.14.1 Governmental Filings. Subject to Section 5.3, to the extent, if any, that a Party concludes in good faith that it is required to file or register this Agreement or a notification thereof with any governmental authority, including without limitation the SEC and the Competition Directorate of the Commission of the European Communities, in accordance with applicable Laws and regulations, such Party may do so, and the other Party shall cooperate in such filing or notification and shall execute all documents reasonable required in connection therewith, at the expense of the requesting Party. The Parties shall promptly notify each other as to the activities or inquires of any such governmental authority relating to this Agreement, and shall cooperate, to respond to any request for further information therefrom at the expense of the requesting Party.

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10.14.2 License Registrations. CPC may, at its expense, register the licenses granted under this Agreement in any country of, or community or association of countries in, the Territory. Maxygen shall reasonably cooperate in such registration at CPC’s expense. Upon request by CPC, Maxygen agrees promptly to execute any “short form” licenses developed in a form reasonably acceptable to both Maxygen and CPC and reasonably submitted to it by CPC from time to time in order to effect the foregoing registration in such country. No such “short form” license shall be deemed to amend or be used to interpret this Agreement. If there is any conflict between such a license or other recordation document and this Agreement, this Agreement shall control.

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

10.16 Licenses of “Intellectual Property”. The Parties agree that the licenses granted hereunder are rights in “intellectual property” within the scope of Section 101 (or its successors) of the United States Bankruptcy Code and for other similar laws. In addition, each Party, as a licensee of intellectual property rights hereunder, shall have and may fully exercise all rights available to a licensee under the United States Bankruptcy Code, including, without limitation, under Section 365(n) or its successors.

[The remainder of this page intentionally left blank intentionally; the signature page follows.]

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

MAXYGEN, INC.	CPC
By:	By:
Name:	Name:
Title:	Title:

EXHIBITS

Exhibit 1.10.2	CMVP Materials
Exhibit 1.10.3	CMVP Patents
Exhibit 1.16.2	Enabling Materials
Exhibit 1.16.3	Enabling Patents
Exhibit 1.18	Excluded Technology
Exhibit 1.19	Exclusively Out-Licensed Protein
Exhibit 1.29	MaxyBody
Exhibit 1.39.2	RR Materials
Exhibit 1.39.3	RR Patents
Exhibit 1.40	Software
Exhibit 1.46	Third Party Agreements
Exhibit 2.1.1	Prior Maxygen Licenses
Exhibit 2.1.5	Third Party Software
Exhibit 2.3.3	U.S. Government Rights
Exhibit 2.4.4	Third Party Rights
Exhibit 2.5.1	Payment Obligations
Exhibit 6.2.5	Claims
Exhibit 6.2.6	Suits

The registrant agrees to furnish to the Securities and Exchange Commission upon request a copy of any omitted schedule or exhibit.

[Signature page to Technology License Agreement]

EX-2.1.4

EXHIBIT 2.1.4

LIMITED LIABILITY COMPANY AGREEMENT

OF

CPC

TABLE OF CONTENTS

		Page
ARTICLE 1. DEFINED TERMS		1
Section 1.02	Interpretation	9
ARTICLE 2. GENERAL MATTERS		9
Section 2.01	Formation	9
Section 2.02	Name	10
Section 2.03	Term	10
Section 2.04	Registered Agent and Registered Office	10
Section 2.05	Principal Place of Business	10
Section 2.06	Purposes and Powers	10
Section 2.07	Books and Records	10
ARTICLE 3. MEMBERS		11
Section 3.01	Members	11
Section 3.02	Powers of Members	11
Section 3.03	Voting Rights	11
Section 3.04	Meetings and Written Consents of Members	12
Section 3.05	Liability of Members, Managers, Etc.	13
Section 3.06	Resignation	17
ARTICLE 4. NEW ISSUANCES; UNITS; CONVERSION		17
Section 4.01	New Issuances of Equity Capital	17
Section 4.02	Units	18
Section 4.03	Conversion	19
ARTICLE 5. GOVERNANCE		27
Section 5.01	Board of Managers	27
Section 5.02	Meetings and Written Consents of Board of Managers	28
Section 5.03	Committees	28
Section 5.04	Officers	29
Section 5.05	Series A Preferred Unit Protective Provisions	29
Section 5.06	Series B Preferred Unit Protective Provisions	32
ARTICLE 6. CAPITAL ACCOUNTS		34
Section 6.01	Capital Contributions	34
Section 6.02	Interest on Capital	35
Section 6.03	Limitation of Liability; Return or Withholding of Certain Distributions	35
ARTICLE 7. PROFITS AND LOSSES		35
Section 7.01	Allocations of Profits and Losses of the Company	35
Section 7.02	Allocation Adjustments to Comply with Section 704(b) of the Code	36

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TABLE OF CONTENTS

(Continued)

		Page
Section 7.03	General Provisions Regarding Allocations and Capital Account Maintenance	37
Section 7.04	Nonallocation of Distributions to Increases in Minimum Gain	38
Section 7.05	Allocation of Liabilities	38
Section 7.06	Modifications to Preserve Underlying Economic Objectives	39
Section 7.07	Withholding Taxes	39
Section 7.08	Intent of Allocations	39
ARTICLE 8. DISTRIBUTIONS; ASSETS SALES		40
Section 8.01	Distributions	40
Section 8.02	Liquidity Event Distributions	40
ARTICLE 9. DISSOLUTION; TAX MATTERS; CONVERSION TO CORPORATION		41
Section 9.01	Dissolution	41
Section 9.02	Liquidation	42
Section 9.03	Tax Matters	42
Section 9.04	Conversion to a Corporation	43
ARTICLE 10. MISCELLANEOUS		44
Section 10.01	Notices	44
Section 10.02	Delays or Omissions	46
Section 10.03	Successors and Assigns	46
Section 10.04	Severability	47
Section 10.05	Counterparts	47
Section 10.06	Entire Agreement	47
Section 10.07	Governing Law	47
Section 10.08	Jurisdiction; Venue	47
Section 10.09	Amendments	47
Section 10.10	Construction	48

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This LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of CPC, a Delaware limited liability company (the “Company”), is dated as of [                    ], 2009, by and between Maxygen, Inc., a Delaware corporation (“Maxygen”) and Astellas Bio Inc., a Delaware corporation (“Bio”).

WHEREAS, the Company has been formed as a limited liability company under the Delaware Limited Liability Company Act (6 Del. C. § 18 101, et seq.), as amended from time to time (the “Delaware Act”), pursuant to the Certificate of Formation, as filed in the office of the Secretary of State of the State of Delaware; and

WHEREAS, the Initial Members desire to enter into this Agreement to set forth certain agreements relating to the ownership, management and operation of the Company.

NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members hereby agree as follows:

ARTICLE 1.

DEFINED TERMS

Unless the context otherwise requires, the terms defined in this Article 1 shall, for the purposes of this Agreement, have the meanings herein specified. All capitalized terms used and not defined herein shall have the meanings set forth in that certain Master Joint Venture Agreement (the “Joint Venture Agreement”) dated as of June 30, 2009 by and among Maxygen, Bio and Astellas Pharma Inc., a Japanese corporation.

“Additional Common Units” shall have the meaning set forth in Section 4.03(d)(i).

“Additional Member” shall have the meaning set forth in Section 3.01(b).

“Adjusted Capital Account Deficit” shall mean, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments:

(a) the Capital Account shall be increased by any amounts that such Member is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the penultimate sentence of each of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

(b) the Capital Account shall be decreased by the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

“Adoption Agreement” shall mean an agreement confirming the agreement of a Person to be bound by the terms and provisions of this Agreement.

“Agreement” shall have the meaning set forth in the preamble hereof.

“Annual Distribution Rate” shall mean an annual rate of $0.08 per Series A Preferred Unit and $0.08 per Series B Preferred Unit (in each case subject to adjustment from time to time for Recapitalizations as set forth elsewhere herein).

“Automatic Conversion Event” shall have the meaning set forth in Section 4.03(b).

“Bio” shall have the meaning set forth in the preamble hereof.

“Bio Manager” shall have the meaning set forth in Section 4.03(d)(i)(2).

“Board of Managers” shall have the meaning set forth in Section 5.01(a).

“Buy-Out Units” has the meaning defined in the Investors’ Rights Agreement.

“Capital Account” shall mean, for each Member, a separate account that is:

(a) increased by: (i) the amount of such Member’s Capital Contribution and (ii) allocations of Profits and other items in the nature of income and gain to such Member pursuant to Article 7;

(b) decreased by: (i) the amount of cash distributed to such Member by the Company; (ii) the fair market value as of the time of Distribution, and net of liabilities secured by such property that the Member assumes or to which the Member’s ownership of the property is subject, of any other property distributed to such Member by the Company; and (iii) allocations of Losses and other items in the nature of expenses or losses to such Member pursuant to Article 7;

(c) otherwise adjusted in accordance with the provisions of this Agreement; and

(d) revalued in connection with any event described in paragraph (a) of the definition of “Gross Asset Value” to the extent it is determined in the discretion of the Managing Member in consultation with Bio prior to the Option Expiration Date that a revaluation is necessary to preserve the economic arrangement of the Members. In determining the amount of any liability for purposes of subparagraphs (a) and (b) above, there shall be taken into account Section 752(c) of the Code and any other applicable provisions of the Code and Treasury Regulations.

Capital Accounts shall be maintained in accordance with Treasury Regulations Section 1.704-1(b) and specifically in a manner consistent with the Member’s interest in the Company, and the provisions of this Agreement shall be interpreted and applied in a manner consistent with such regulations and intent.

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“Capital Contribution” shall mean, for any Member, the sum of the net amount of cash and the fair market value as of the time of contribution, and net of liabilities secured by such property that the Company assumes or to which the Company’s ownership of the property is subject, of any other property contributed by such Member to the capital of the Company. For purposes of this Agreement, each Capital Contribution shall be deemed to have been made at the later of: (a) the Close of Business on the due date of such Capital Contribution as determined in accordance with this Agreement; or (b) the Close of Business on the date on which such Capital Contribution is actually received by the Company.

“Certificate of Formation” shall mean the Certificate of Formation of the Company and any and all amendments thereto and restatements thereof filed on behalf of the Company with the office of the Secretary of State of the State of Delaware pursuant to the Delaware Act.

“Company” shall have the meaning set forth in the preamble hereof.

“Conversion Price” shall mean $1.00 per Series A Preferred Unit and $1.00 per Series B Preferred Unit (in each case subject to adjustment from time to time for Recapitalizations and as otherwise set forth elsewhere herein).

“Conversion Rate” shall have the meaning set forth in Section 4.03(a).

“Convertible Securities” shall mean any evidences of indebtedness, shares, membership units, or other securities convertible into or exchangeable for Common Units (as such term is defined in the Voting Agreement).

“Delaware Act” shall have the meaning set forth in the preamble hereof.

“Depreciation” means, for each Fiscal Year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such Fiscal Year or other period; provided, however, that if the Gross Asset Value of an asset differs from its adjusted basis for U.S. federal income tax purposes at the beginning of such Fiscal Year or other period, Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset Value as the U.S. federal income tax depreciation, amortization or other cost recovery deduction with respect to such asset for such Fiscal Year or other period bears to such beginning adjusted tax basis; and provided further, that if the U.S. federal income tax depreciation, amortization or other cost recovery deduction for such Fiscal Year or other period is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Managing Member and in consultation with Bio prior to the Option Expiration Date.

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“Distribution” shall mean the transfer of cash or other property without consideration whether by way of dividend or otherwise (other than dividends on Common Units payable in Common Units), or the purchase or redemption of Units by the Company for cash or property.

“Distribution Threshold” shall have the meaning set forth in Section 4.02(c).

“Equity Incentive Plan” shall mean the Company 2009 Equity Incentive Plan under which Common Units shall be reserved for current or future grant for issuance to Managers, officers, employees, and other service providers as provided therein.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Excluded Opportunity” shall mean any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of, (i) any Manager of the Company who is not an employee of the Company or any of its Subsidiaries, or (ii) any Member holding Preferred Units or any Affiliate, partner, member, director, stockholder, employee, agent or other related person of any such Member, other than someone who is an employee of the Company or any of its Subsidiaries (collectively, “Excluded Opportunity Persons”), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, an Excluded Opportunity Person expressly in such Excluded Opportunity Person’s capacity as a Manager of the Company.

“Exercise Price” has the meaning defined in the Investors’ Rights Agreement.

“Fair Market Value” shall mean, as of any date prior to the expiration of the Buy-Out Option, the value of Profits Interest Units derived from the deemed value of the Company in light of the applicable Exercise Price for the Buy-Out Units, the applicable Distribution Threshold for the Profits Interest Units, the then fully-diluted capitalization of the Company, and the then liquidation preferences, participation rights and other terms and conditions of the Company’s Units and, as of the expiration of the Buy-Out Option and any date following such expiration, the fair market value of the Profits Interest Units determined in good faith by the Administrator (as defined in the Company’s 2009 Equity Incentive Plan).

“Fiscal Period” shall mean the Fiscal Year or such shorter period as necessary to take into account the Members’ varying interests in the Company.

“Fiscal Year” shall mean the fiscal year of the Company, initially the period commencing on January 1 in any calendar year and ending on December 31 in that calendar year, except as otherwise required by law, including the Code or Treasury Regulations.

“Gross Asset Value” shall mean, with respect to any asset, such asset’s adjusted basis for U.S. federal income tax purposes, except as follows:

(a) the Gross Asset Value of all Company assets shall be adjusted to equal their respective fair market values, taking Section 7701(g) of the Code into account, immediately prior to

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the following times: (i) the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Company to a Member of more than a de minimis amount of Company assets as consideration for an interest in the Company; (iii) the grant of an interest in the Company (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Company by an existing Member acting in a Member capacity, or by a new Member acting in a Member capacity or in anticipation of becoming a Member; and (iv) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clause (i), (ii) and (iii) of this sentence shall be made only if it reasonably determined by the Managing Member in consultation with Bio prior to the Option Expiration Date that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company; and

(b) the Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the fair market value, taking Section 7701(g) of the Code into account, of such asset on the date of Distribution.

If the Gross Asset Value of an asset has been determined or adjusted pursuant to paragraph (a) or paragraph (b) above, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.

“Initial Members” shall mean Maxygen and Bio.

“Lender” shall have the meaning set forth in the Bridge Loan Agreement.

“Liquidity Event” shall be deemed to be occasioned by, or to include, (a) the acquisition of the Company by another entity by means of any transaction or series of related transactions to which the Company is party (including, without limitation, any acquisition of Units reorganization, merger or consolidation but excluding any sale of Units solely for capital raising purposes) other than (i) a transaction or series of related transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, as a result of Units held by such holders prior to such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of the Company or such other surviving or resulting entity (or if the Company or such other surviving or resulting entity is a wholly-owned Subsidiary immediately following such acquisition, its parent) or (ii) the consummation of the purchase of Units pursuant to the Buy-Out Option, as such term is defined in the Investors’ Rights Agreement; (b) a sale, lease or other disposition of all or substantially all of the assets of the Company and its subsidiaries taken as a whole by means of any transaction or series of related transactions, except where such sale, lease or other disposition is to a wholly-owned Subsidiary of the Company; or (c) any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary.

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“Liquidation Preference” shall mean $1.00 per Series A Preferred Unit and $1.00 per Series B Preferred Unit (in each case subject to adjustment from time to time for Recapitalizations as set forth elsewhere herein).

“Liquidation Rights” shall have the meaning set forth in Section 4.03(g).

“Loan” shall have the meaning set forth in the Bridge Loan Agreement.

“Manager” shall have the meaning set forth in Section 5.01(b).

“Managing Member” shall mean Maxygen, or its successor or assign.

“Maxygen” shall have the meaning set forth in the preamble hereof.

“Maxygen Manager” shall have the meaning set forth in Section 4.03(d)(i)(2).

“Member” shall mean any of the Initial Members and any Additional Member until such Person ceases to be a Member of the Company in accordance with the terms of this Agreement.

“Member Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a nonrecourse liability, determined in accordance with Treasury Regulations Section 1.704-2(i)(3).

“Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” in Treasury Regulations Section 1.704-2(b)(4).

“Member Nonrecourse Deduction” shall mean an item of loss, expense or deduction attributable to a nonrecourse liability of the Company for which a Member bears the economic risk of loss within the meaning of Treasury Regulations Section 1.704-2(i).

“Minimum Gain” of the Company or “Company Minimum Gain” shall, as provided in Treasury Regulations Section 1.704-2, mean the total amount of gain the Company would realize for federal income tax purposes if it disposed of all assets subject to nonrecourse liability for no consideration other than full satisfaction thereof.

“Option Expiration Date” shall have the meaning set forth in the Investors’ Rights Agreement.

“Options” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Units or Convertible Securities.

“Original Issue Price” shall mean $1.00 per Series A Preferred Unit and $1.00 per Series B Preferred Unit (in each case subject to adjustment from time to time for Recapitalizations as set forth elsewhere herein).

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“Percentage Interest” of any Member shall mean the product of (x) the quotient of the number of Common Units held by such Member (with the Preferred Units held by such Member being treated for this purpose as if they had been converted to Common Units at the then applicable Conversion Rate) divided by the total number of outstanding Units multiplied by (y) 100.

“Permitted Equity Offering” shall mean any offering of Units, securities linked to Units or any other equity security (including any security convertible into or exercisable for any equity security) of the Company that (a) are offered and sold to Maxygen or its Affiliates, (b) are offered and sold to any Person other than Maxygen or its Affiliates, provided that Maxygen and its Affiliates hold a majority of the outstanding Units immediately following such offering and sale or (c) are junior to the Series B Preferred Units.

“Permitted Indebtedness” shall mean (a) accounts payable to trade creditors for goods and services and current operating liabilities (not the result of the borrowing of money) incurred in the ordinary course of the Company’s or such Subsidiary’s business in accordance with customary terms and paid within the specified time, unless contested in good faith by appropriate proceedings and reserved for in accordance with GAAP; (b) indebtedness consisting of guarantees resulting from endorsement of negotiable instruments for collection by the Company or any such Subsidiary in the ordinary course of business; (c) interest rate swaps, currency swaps and similar financial products entered into or obtained in the ordinary course of business; (d) capital leases or other indebtedness incurred solely to acquire and secure the purchase price of equipment, computers, software or implement tenant improvements and is not in excess of the lesser of the purchase price or the fair market value of such equipment, computers, software or tenant improvements on the date of acquisition; and (e) unsecured indebtedness of the Company to any of its wholly owned Subsidiaries or of any of its wholly owned Subsidiaries to another of its wholly owned Subsidiaries that is not senior to any indebtedness outstanding under the Bridge Loan Agreement.

“Person” shall mean any individual, corporation, association, partnership (general or limited), joint venture, trust, estate, limited liability company or other legal entity or organization.

“Profits Interest Unit” shall have the meaning set forth in Section 4.02(c).

“Profits and Losses” shall mean, for each Fiscal Year or other Fiscal Period, an amount equal to the Company’s taxable income or loss for such Fiscal Year or other Fiscal Period, as applicable, determined in accordance with Section 703(a) of the Code (but including in taxable income or loss, for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code), with the following adjustments:

(a) any income of the Company exempt from U.S. federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss;

(b) any expenditures of the Company described in Section 705(a)(2)(B) of the Code (or treated as expenditures described in Section 705(a)(2)(B) of the Code pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be subtracted from such taxable income or loss;

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(c) in the event that the Gross Asset Value of any Company asset is adjusted in accordance with paragraphs (a) or (b) of the definition of “Gross Asset Value,” the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses;

(d) gain or loss resulting from any disposition of any asset of the Company with respect to which gain or loss is recognized for U.S. federal income tax purposes shall be computed by reference to the Gross Asset Value of the asset disposed of, notwithstanding that the adjusted tax basis of such asset differs from its Gross Asset Value;

(e) in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year or other Fiscal Period, computed in accordance with the definition of “Depreciation” above; and

(f) to the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Treasury Regulations Section 1.704 1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in complete liquidation of a Member’s interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Profits and Losses; and

(g) notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 7.02(b) through Section 7.02(g) shall not be taken into account in computing Profits or Losses, but the amount thereof shall be determined under principles analogous to those set forth in clauses (a) through (f) of this definition.

“Proposed Treasury Regulation” shall have the meaning set forth in Section 4.02(d).

“Qualified Public Offering” shall have the meaning set forth in Section 4.03(b).

“Recapitalization” shall mean any Unit dividend, Unit split, combination of Units, reorganization, recapitalization, reclassification or other similar event.

“Related Entity” shall mean, with respect to any Member, (i) any corporation, trust, limited liability company, association or other entity in which such Member holds an 80% or greater equity interest, (ii) any parent corporation, trust, limited liability company or association, or other parent entity, of such Member or (iii) any liquidating trust or similar entity established for the benefit of such Member’s equityholders.

“Safe Harbor” shall have the meaning set forth in Section 4.02(d).

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“Sarbanes-Oxley Act” shall mean the Sarbanes-Oxley Act of 2002, as amended.

“Securities Act” shall mean the United States Securities Act of 1933, as amended.

“Subsidiary” shall have the meaning set forth in the Bridge Loan Agreement.

“Treasury Regulations” shall mean the regulations issued by the United States Treasury Department and relating to a matter arising under the Code.

“Unit” shall mean a unit of limited liability company interest in the Company and includes, without limitation, the Common Units and the Preferred Units.

“Updated Capital Account” shall mean, with respect to a Member, such Member’s Capital Account determined as if, immediately prior to the time of determination, all of the Company’s assets had been sold for fair market value and any previously unallocated Profits and Losses had been allocated pursuant to Article 7.

SECTION 1.02 Interpretation. Unless otherwise indicated herein, with respect to any reference made in this Agreement to a Section (or Article, Subsection, Paragraph, Subparagraph or Clause), Exhibit or Schedule, such reference shall be to a section (or article, subsection, paragraph, subparagraph or clause) of, or an exhibit or schedule to, this Agreement. The table of contents and any article, section, subsection, paragraph or subparagraph headings contained in this Agreement and the recitals at the beginning of this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed, as the context indicates, to be followed by the words “but (is/are) not limited to.” Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context indicates is appropriate. Where specific language is used to clarify or illustrate by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict the construction of the general statement which is being clarified or illustrated. Unless otherwise specified, any reference to a time or date shall be with reference to the time or date, as the case may be, in Wilmington, Delaware.

ARTICLE 2.

GENERAL MATTERS

SECTION 2.01 Formation.

(a) Pursuant to the provisions of the Delaware Act, the Company was formed on [                    ], 2009, by the filing in the Office of the Secretary of State of the State of Delaware of a Certificate of Formation (which filing is hereby approved and ratified in all respects). The sole organizer of the Company is hereby designated as an “authorized person,” within the meaning of Section 18-201 of the Delaware Act, and all acts of such sole organizer in forming and organizing the Corporation are hereby approved, ratified, and adopted as valid and binding acts of the Company.

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(b) Each officer of the Company appointed by the Board of Managers pursuant to Section 5.04 is hereby designated as an “authorized person,” within the meaning of Section 18-201 of the Delaware Act, to execute, deliver and file, or cause the execution, delivery and filing of, all certificates, notices or other instruments (and any amendments and/or restatements thereof) required or permitted by the Delaware Act to be filed in the office of the Secretary of State of the State of Delaware and any other certificates, notices or other instruments (and any amendments or restatements thereof) necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business.

SECTION 2.02 Name. The name of the Company shall be “CPC”. Without the need to amend this Agreement, the Board of Managers may change the name of the Company from time to time in its sole discretion.

SECTION 2.03 Term. The term of the Company commenced with the filing of the Certificate of Formation in the office of the Secretary of State of the State of Delaware, and shall continue perpetually unless the Company is dissolved pursuant to Section 9.01.

SECTION 2.04 Registered Agent and Registered Office. The Company’s registered agent for service of process is The Corporation Trust Company, and the address of the registered agent and the address of the registered office of the Company in the State of Delaware shall be The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, DE 19801. Such registered agent and such registered office may be changed from time to time by the Board of Managers.

SECTION 2.05 Principal Place of Business. As of the date of this Agreement, the principal place of business of the Company is located in Redwood City, California. Thereafter, the principal place of business of the Company shall be in such location as the Board of Managers may designate from time to time.

SECTION 2.06 Purposes and Powers. The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any act or activity for which limited liability companies may be formed under the Delaware Act. The Company shall have the power and authority to take any and all actions necessary, appropriate, proper, advisable, incidental or convenient to or for the furtherance of the purposes set forth in this Section 2.06.

SECTION 2.07 Books and Records. At all times during the continuance of the Company, the Company shall maintain or cause to be maintained proper and complete books and records in which shall be entered fully and accurately all transactions and other matters relating to the Company’s business in the detail and completeness customary and usual for businesses of the type engaged in by the Company.

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ARTICLE 3.

MEMBERS

SECTION 3.01 Members.

(a) Upon the execution of this Agreement, the sole Members of the Company shall be the Initial Members. Following the execution of this Agreement, no Person shall be admitted as a Member and no Units shall be issued by the Company except as expressly provided in this Agreement.

(b) After the date of this Agreement, a Person shall only be admitted as a Member (such Person, an “Additional Member”) if such Person is issued any Units in accordance with Section 4.02 or is a valid assignee or transferee of any then outstanding Units in accordance with the relevant provisions of the Investors’ Rights Agreement and the Co-Sale Agreement, as applicable. Nothing in this Agreement shall require the consent or approval of any Member for the admission of any Additional Member.

(c) The name and mailing address of each Member and the number of Units held by such Member shall be listed on Schedule A. An officer designated by the Board of Managers pursuant to Section 5.04 shall update Schedule A from time to time as necessary to accurately reflect changes in the Units of any Member to reflect the consummation of any action taken in accordance with this Agreement. Any amendment or revision to Schedule A made to reflect an action taken in accordance with this Agreement shall not be deemed an amendment to this Agreement. Any reference in this Agreement to Schedule A shall be deemed to be a reference to Schedule A as amended and in effect from time to time. The Company shall provide the Members with any amendment or revision of Schedule A (including any subsequent amendments or revisions thereto) within three (3) days of such amendment or revision.

SECTION 3.02 Powers of Members. Members shall not have the authority to transact any business in the Company’s name or bind the Company by virtue of their status as Members.

SECTION 3.03 Voting Rights.

(a) The Members hereby delegate the management of the Company to the Managers except with respect to (i) the automatic conversion of the Preferred Units in accordance with Section 4.03(b), (ii) the waiver of adjustments to the Conversion Price in accordance with Section 4.03(i), (iii) the shortening or waiver of certain notice provisions pursuant to Section 4.03(j), (iv) the designation and removal of Managers in accordance with Section 5.01(b), (v) the approval of those matters specified in Section 5.05 and Section 5.06, (vi) the approval of certain matters in connection with a Liquidity Event in accordance with Section 8.02, (vii) the dissolution of the Company in accordance with Section 9.01 and (viii) any amendment of this Agreement in accordance with Section 10.09.

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(b) Other than as provided herein, the Members shall vote together as a single class on all matters on which they are specifically entitled to vote pursuant to this Agreement. Each Member holding Preferred Units shall be entitled to the number of votes equal to the number of Common Units into which such Preferred Units could be converted as of the record date. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all Common Units into which Preferred Units held by each Member could be converted), shall be disregarded.

(c) Notwithstanding anything in this Agreement to the contrary, the Profits Interest Units shall be non-voting and shall not entitle the holders of Profits Interest Units, as such, to act for the Company or vote upon or approve any matter submitted to the Members for approval.

SECTION 3.04 Meetings and Written Consents of Members.

(a) The Company shall provide written notice to all Members of any meeting at which a vote will be held not less than ten (10) nor more than sixty (60) calendar days at prior thereto, which notice shall describe the business to be considered, the actions to be taken and the matters to be voted on at the meeting in reasonable detail. At any meeting of the Members, the presence, in person or by proxy, of Members holding a majority of the votes which could be cast by the holders of all Units entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum, subject in each case to the provisions of Section 5.05 and Section 5.06. Any action permitted or required to be taken by the Members may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of Units having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Units entitled to vote thereon were present and voted. Within five (5) calendar days of taking of action by Members without a meeting by less than unanimous written consent, the Company shall provide written notice of the taking of such action to those Members who have not consented in writing to the taking of such action, which notice shall describe the actions taken in reasonable detail.

(b) In order that the Company may determine the Members entitled to notice of or to vote at any meeting of Members or any adjournment thereof, or entitled to express consent to Company action in writing without a meeting, or entitled to receive payment of any dividend or other Distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of Units or for the purpose of any other lawful action, the Board of Managers may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Managers and which record date:

(i) in the case of determination of Members entitled to notice of or to vote at any meeting of Members or adjournment thereof, shall, unless otherwise required by law, not be more than sixty nor less than ten days before the date of such meeting;

(ii) in the case of determination of Members entitled to express consent to Company action in writing without a meeting, shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Managers; and

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(iii) in the case of determination of Members for any other action, shall not be more than sixty (60) days prior to such other action.

If no record date is fixed by the Board:

(i) the record date for determining Members entitled to notice of or to vote at a meeting of Members shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;

(ii) the record date for determining Members entitled to express consent to Company action in writing without a meeting when no prior action of the Board of Managers is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Company in accordance with applicable law, or, if prior action by the Board of Managers is required by law, shall be at the close of business on the day on which the Board of Managers adopts the resolution taking such prior action; and

(iii) the record date for determining Members for any other purpose shall be at the close of business on the day on which the Board of Managers adopts the resolution relating thereto.

A determination of Members of record entitled to notice of or to vote at a meeting of Members shall apply to any adjournment of the meeting, provided that the Board of Managers may fix a new record date for the adjourned meeting.

(c) Each Member entitled to vote at a meeting of Members or to express consent or dissent to Company action in writing without a meeting may authorize another Person or Persons to act for such Member by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period.

SECTION 3.05 Liability of Members, Managers, Etc.

(a) Except to the extent provided in the Delaware Act, none of the Members or any Manager shall have any personal liability for the debts, obligations or liabilities of the Company.

(b) To the fullest extent permitted by applicable law (including Section 18-1101 of the Delaware Act), notwithstanding any other provision of this Agreement or otherwise of applicable law, including any in equity or at law, no Member, Manager, officer or employee of the Company (collectively, the “Covered Persons”), shall have any fiduciary duty to the Company, the Members or the Managers (or any other person or entity bound by this Agreement) by reason of this Agreement or the Company or in its capacity as a Covered Person, except that a Covered Person shall be subject to the implied contractual covenant of good faith and fair dealing and (to the extent expressly specified herein or therein) to the covenants and express obligations set forth in this

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Agreement and the Transaction Agreements. To the fullest extent permitted by applicable law (including Section 18-1101 of the Delaware Act), no Member or Manager shall be liable, including under any legal or equitable theory of fiduciary duty or other theory of liability, to the Company, any Member, any Manager or any other person or entity bound by this Agreement for any losses, claims, damages or liabilities incurred by reason of any act or omission performed or omitted by such Member or Manager in its capacity as a Member or Manager, except that (i) a Member or Manager shall be liable for any act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing and (ii) a Member shall be liable for any breach by such Member of the covenants and express obligations set forth in this Agreement or the Transaction Agreements. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities of a Member or Manager otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Member or Manager. Without limitation to the foregoing, the Company renounces any interest, right or expectancy of the Company in, or in being offered an opportunity to participate in, or in being informed about, any Excluded Opportunity. A Member or Manager shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters which such Member or Manager reasonably believes are within such Person’s professional or expert competence.

(c) (i) Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a Manager or officer of the Company or is or was serving at the request of the Company as a Manager, officer, employee or agent of another limited liability company or of a corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “Indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a Manager, officer, employee or agent or in any other capacity while serving as a Manager, officer, employee or agent, shall be indemnified and held harmless by the Company if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful, against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise taxes under the Employee Retirement and Income Security Act of 1974 or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that except as provided in Section 3.05(f) with respect to proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a proceeding (or part thereof) initiated by such Indemnitee only if such proceeding (or part thereof) was authorized by the Board of Managers. This Section 3.05(c)(i) shall not apply to any action by or in the right of the Company.

(ii) The Company shall indemnify any Indemnitee who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that the Indemnitee is or was an Indemnitee, against expenses (including attorneys’ fees) actually and reasonably incurred by the Indemnitee in connection with the defense or settlement of such action or suit if the

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Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, except that no indemnification shall be made in respect of any claim, issue or matter as to which the Indemnitee shall have been adjudged to be liable to the Company unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such Indemnitee is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

(d) To the extent that a present or former Manager or officer of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding described in Section 3.05(c), or in defense of any claim, issue or matter therein, such Indemnitee shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such Indemnitee in connection therewith.

(e) The Company shall pay the expenses (including attorneys’ fees) incurred by a Manager in defending any Proceeding in advance of its final disposition; provided, however, that such payment of expenses incurred by an Indemnitee shall be made only upon receipt of an undertaking by such Manager to repay all amounts so advanced if it should be ultimately determined that such Indemnitee is not entitled to be indemnified under this Section 3.05(e) or otherwise. Such expenses (including attorneys’ fees) incurred by former Managers, officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Company deems appropriate. The right to advancement of expenses shall not apply where indemnity is excluded pursuant to this Agreement. Notwithstanding the foregoing, unless otherwise determined pursuant to Section 3.05(j), no advance shall be made by the Company to an officer of the Company (except by reason of the fact that such officer is or was a Manager of the Company, in which event this sentence shall not apply) in any proceeding if a determination is reasonably and promptly made (i) by a majority vote of the Managers who are not parties to such proceeding, even though less than a quorum, or (ii) by a committee of such Managers designated by majority vote of such Managers, even though less than a quorum, or (iii) if there are no such Managers, or if such Managers so direct, by independent legal counsel in a written opinion, that facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Company.

(f) Subject to the requirements in this Section 3.05, the Company shall not be obligated to indemnify any person in connection with any proceeding (or any part of any proceeding):

(i) for which payment has actually been made to or on behalf of such person under any statute, insurance policy, indemnity provision, vote or otherwise, except with respect to any excess beyond the amount paid;

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(ii) for an accounting or disgorgement of profits pursuant to Section 16(b) of the Exchange Act, or similar provisions of federal, state or local statutory law or common law, if such person is held liable therefor (including pursuant to any settlement arrangements);

(iii) for any reimbursement of the Company by such person of any bonus or other incentive-based or equity-based compensation or of any profits realized by such person from the sale of securities of the Company, as required in each case under the Exchange Act, as amended (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act, or the payment to the Company of profits arising from the purchase and sale by such person of securities in violation of Section 306 of the Sarbanes-Oxley Act), if such person is held liable therefor (including pursuant to any settlement arrangements);

(iv) initiated by such person, including any proceeding (or any part of any proceeding) initiated by such person against the Company or its directors, officers, employees, agents or other indemnitees, unless (a) the Board authorized the Proceeding (or the relevant part of the Proceeding) prior to its initiation, (b) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law, (c) otherwise required to be made under SECTION 3.05(g) or otherwise required by applicable law; or

(v) if prohibited by applicable law.

(g) If a claim under Section 3.05(c) or Section 3.05(d) is not paid in full by the Company within ninety (90) calendar days after a written claim has been received by the Company, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall also be entitled to be paid the expenses of prosecuting or defending such suit. In (i) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) any suit brought by the Company to recover an advancement of expenses pursuant to the terms of an undertaking, the Company shall be entitled to recover such expenses upon a final adjudication that, the Indemnitee has not met the applicable standard for indemnification set forth in Section 3.05(c) and Section 3.05(d). Neither the failure of the Company (including its Board of Managers, independent legal counsel, or its Members) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the standard of conduct for entitlement to indemnification, nor an actual determination by the Company (including its Board of Managers, independent legal counsel, or its Members) that the Indemnitee has not met the standard of conduct for entitlement to indemnification, shall create a presumption that the Indemnitee has not met such standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Company to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not

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entitled to be indemnified, or to such advancement of expenses, under this Section 3.05 or otherwise shall be on the Company. The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that a Manager or officer acted in such a manner as to make him or her ineligible for indemnification.

(h) The rights to indemnification and to the advancement of expenses conferred in this Section 3.05 shall not be exclusive of any other right which any Person may have or hereafter acquire under any statute, this Agreement, any other agreement, any vote of Managers or otherwise.

(i) The Company may maintain insurance, at its expense, to protect itself and any Member, Manager, officer, employee or agent of the Company or another limited liability company, corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such Person against such expense, liability or loss under the Delaware Act.

(j) The Company may, to the extent authorized from time to time by the Board of Managers, grant rights to indemnification and to the advancement of expenses to any person or entity not mandatorily entitled to indemnification under this Section 3.05 and grant rights to indemnification and to the advancement of expenses in addition to those granted in this Section 3.05 to any person or entity mandatorily entitled to indemnification under this Section 3.05, in each case as long as such person or entity has met the standard of conduct set forth in the first sentence of Section 3.05(b).

(k) The rights to indemnification and advancement of expenses conferred by this Section 3.05 shall continue as to a person who has ceased to be a Manager, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. Any amendment, alteration or repeal of this Section 3.05 shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to such amendment, alteration or repeal.

SECTION 3.06 Resignation. Other than by transferring all of its Units, a Member may not resign from the Company.

ARTICLE 4.

NEW ISSUANCES; UNITS; CONVERSION

SECTION 4.01 New Issuances of Equity Capital. Subject to the terms of this Agreement (including Section 5.05 and Section 5.06), the Board of Managers may determine the form, timing and terms of any new issuance of equity capital (including Units) of the Company to any Person and, other than with respect to issuances of Common Units to eligible Persons pursuant to the terms of the Equity Incentive Plan, will notify the Members of such decision. Any such Person shall be required to become a party to this Agreement as a Member, and shall have all the rights and obligations of a Member hereunder, by executing an Adoption Agreement in form satisfactory to the Board of Managers.

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SECTION 4.02 Units.

(a) Interests in the Company are represented by one or more classes of Units. The Units shall for all purposes be personal property in accordance with Section 18-701 of the Delaware Act. No holder of a Unit or Member shall have any interest in specific Company assets, including any assets contributed to the Company by such Member as part of any capital contribution. Each Member waives any and all rights that it may have to maintain an action for partition of the Company’s property.

(b) The Units initially will be divided into Preferred Units and Common Units. The first series of Preferred Units will be designated as Series A Preferred Units and the second series of Preferred Units will be designated as Series B Preferred Units. Each Unit shall have the rights and privileges set forth in this Agreement.

(c) Subject to Section 5.05 and Section 5.06, upon the issuance of any Common Units to Managers, officers, employees or other service providers, the Board of Managers may specify a “Distribution Threshold,” if any, applicable to such Common Units, which shall be equal to the minimum amount determined by the Board of Managers in its reasonable discretion to be necessary to cause such Common Unit to constitute a “profits interest” for U.S. federal income tax purposes (a “Profits Interest Unit”) or such greater amount as the Board of Managers, in its reasonable discretion, may determine. All vested Profits Interest Units shall terminate no later than the Option Closing (as such term is defined in the Investors’ Rights Agreement), with the unvested Profits Interest Units to terminate subsequently in accordance with the Equity Incentive Plan, and in each case all such terminated Profits Interest Units shall be exchanged for a cash payment as provided for under the Investors’ Rights Agreement and the Equity Incentive Plan. Immediately upon receipt of a Profits Interest Unit, the recipient will have no initial Capital Account balance and the Profits Interest Unit received shall not entitle such Person to any portion of the capital of the Company at the time of such Person’s admission to the Company as a Member, such that if the Company’s assets were sold at fair market value immediately after the grant to such Member of a Profits Interest Unit and the proceeds distributed in complete liquidation of the Company, the Profits Interest Unit so received would entitle such Member to receive no share of those proceeds. The grant of a Profits Interest Unit to a Member is intended to comply with Rev. Proc. 93-27, 1993-2 C.B. 343 (1993) and Rev. Proc. 2001-43, 2001-2 C.B. 191 (2001) and shall be interpreted consistently therewith.

(d) Each Member authorizes the Managing Member to elect to apply the safe harbor (the “Safe Harbor”) set forth in proposed Treasury Regulation Section 1.83-3(l) and proposed IRS Revenue Procedure published in Notice 2005-43 (together, the “Proposed Treasury Regulation”) (under which the fair market value of an interest in an entity taxable as a partnership that is transferred in connection with the performance of services is treated as being equal to the liquidation value of the interest) if such Proposed Treasury Regulation or a similar Treasury Regulation is promulgated as a final or temporary Treasury Regulation. If the Managing Member determines that

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the Company should make such election, the Managing Member is hereby authorized to amend this Agreement without the consent of any Member or other Person to provide that (i) the Company is authorized and directed to elect the Safe Harbor, (ii) the Company and each Member (including any Person to whom an Unit is transferred in connection with the performance of services) will comply with all requirements of the Safe Harbor with respect to all Units transferred in connection with the performance of services while such election remains in effect and (iii) the Company and each Member will take all actions necessary, including providing the Company with any required information, to permit the Company to comply with the requirements set forth or referred to in the applicable Treasury Regulations for such election to be effective such time (if any) as the Managing Member determines, in his sole discretion, that the Company should terminate such election. Notwithstanding anything to the contrary in this Agreement, each Member expressly confirms and agrees that it will be legally bound by any such amendment. Notwithstanding the preceding sentences, no election or amendment shall be made pursuant to this Section 4.02(d) if the Safe Harbor, when finalized, is substantially different from the one included in the Proposed Treasury Regulation, unless the Managing Member has determined that the application of the Safe Harbor would not result in materially adverse tax consequences to the Members.

(e) All Units other than the Profits Interest Units shall be evidenced by certificates in accordance with Section 18-702 of the Delaware Act, in form approved by the Board of Managers.

(f) Except as provided in this Section 4.02(f), no new certificates for Units shall be issued to replace a previously issued certificate unless the latter is surrendered to the Company and cancelled at the same time. The Company may issue a new certificate of Units or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Company may require the owner of the lost, stolen or destroyed Unit, or such owner’s legal representative, to give the Company a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated Units.

(g) Subject to the restrictions on transfer set forth in the Investors’ Rights Agreement, transfers of record of Units shall be made only upon its books by the holders thereof, in person or by an attorney duly authorized, and, if such stock is certificated, upon the surrender of a certificate or certificates for a like number of Units, properly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer.

SECTION 4.03 Conversion. The holders of the Preferred Units shall have conversion rights as follows:

(a) Right to Convert. Each Preferred Unit shall be convertible, at the option of the Member holding such Preferred Unit and at any time after the date of issuance of such Preferred Unit at the office of the Company or any transfer agent for the Preferred Units, into that number of Common Units determined by dividing the Original Issue Price for the relevant series of Preferred Units by the Conversion Price for such series. The rate at which each series of Preferred Units may be converted into Common Units is hereinafter referred to as the “Conversion Rate” for each such

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series. Upon any decrease or increase in the Conversion Price for any series of Preferred Units, as described in this Section 4.03, the Conversion Rate for such series shall be appropriately increased or decreased. In the event of a liquidation, dissolution or winding up of the Company, the option of the Member holding Preferred Units to convert such Preferred Units into Common Units pursuant to this Section 4.03(a) shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the Members holding Preferred Units.

(b) Automatic Conversion. Each Preferred Unit as specified hereafter shall automatically be converted into Common Units at the then effective Conversion Rate for such share (i) with respect to Preferred Units, immediately prior to the closing of a firm commitment underwritten initial public offering pursuant to an effective registration statement filed under the Securities Act covering the offer and sale of the Common Units of the Company (following conversion of the Company to a corporation pursuant to the terms of Section 9.04), provided that the pre-offering valuation is at least $200,000,000 and the aggregate gross proceeds to the Company are more than $50,000,000 (a “Qualified Public Offering”), (ii) with respect to Series A Preferred Units only, upon the receipt by the Company of a written request for such conversion from the Members holding a majority of the Series A Preferred Units then outstanding (voting as a separate class), or (iii) with respect to Series B Preferred Units only, upon the receipt by the Company of a written request for such conversion from the Members holding a majority of the Series B Preferred Units then outstanding (voting as a separate class), or, if later, the effective date for conversion specified in such requests (each of the events referred to in (i), (ii) and (iii) is referred to herein as an “Automatic Conversion Event”).

(c) Mechanics of Conversion. No fractional Common Units shall be issued upon conversion of Preferred Units. In lieu of any fractional Common Units to which the holder would otherwise be entitled, the Company shall pay cash equal to such fraction multiplied by the then fair market value of a Common Unit as determined by the Board of Managers. For such purpose, all Preferred Units held by each Member holding Preferred Units shall be aggregated, and any resulting fractional Common Units shall be paid in cash. Before any Member holding Preferred Units shall be entitled to convert the same into full Common Units, and to receive certificates therefor, he shall either (A) surrender the certificate or certificates therefor, duly endorsed, at the office of the Company or of any transfer agent for the Preferred Units or (B) notify the Company or its transfer agent that such certificates have been lost, stolen or destroyed and execute an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates, and shall give written notice to the Company at such office that he elects to convert the same; provided, however, that on the date of an Automatic Conversion Event, the outstanding Preferred Units or series thereof, as applicable, shall be converted automatically without any further action by the holders of such Preferred Units and whether or not the certificates representing such Preferred Units are surrendered to the Company or its transfer agent; provided further, however, that the Company shall not be obligated to issue certificates evidencing the Common Units issuable upon such Automatic Conversion Event unless either the certificates evidencing such Preferred Units or series thereof, as applicable, are delivered to the Company or its transfer agent as provided above, or the Member holding such Preferred Units notifies the Company or its transfer agent that such

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certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. On the date of the occurrence of an Automatic Conversion Event, each holder of record of Preferred Units shall be deemed to be the holder of record of the Common Units issuable upon such conversion, notwithstanding that the certificates representing such Preferred Units shall not have been surrendered at the office of the Company, that notice from the Company shall not have been received by any holder of record of Preferred Units, or that the certificates evidencing such Common Units shall not then be actually delivered to such holder.

The Company shall, as soon as practicable after such delivery, or after such agreement and indemnification, issue and deliver at such office to such Member holding Preferred Units, a certificate or certificates for the number of Common Units to which such Member shall be entitled as aforesaid and a check payable to the Member in the amount of any cash amounts payable as the result of a conversion into fractional Common Units, plus any declared and unpaid Distributions on the converted Preferred Stock. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the Preferred Units to be converted, and the person or persons entitled to receive the Common Units issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Units on such date; provided, however, that if the conversion is in connection with an underwritten offer of securities registered pursuant to the Securities Act or a merger, sale, financing, or liquidation of the Company or other event, the conversion may, at the option of any Member tendering Preferred Units for conversion, be conditioned upon the closing of such transaction or upon the occurrence of such event, in which case the person(s) entitled to receive the Common Units issuable upon such conversion of the Preferred Units shall not be deemed to have converted such Preferred Units until immediately prior to the closing of such transaction or the occurrence of such event.

(d) Adjustments to Conversion Price for Diluting Issues.

(i) Special Definition. For purposes of this Section 4.03(d), “Additional Common Units” shall mean all Common Units issued (or, pursuant to Section 4.03(d)(iii), deemed to be issued) by the Company after the date of this Agreement, other than issuances or deemed issuances of:

(1) Common Units upon the conversion of the Preferred Units;

(2) Common Units (including Profits Interest Units) and Options issued or issuable to Managers, officers, employees, consultants, placement agents or other service providers of the Company (or any Subsidiary) pursuant to Unit grants, profit interest plans, restricted unit purchase agreements, option plans, purchase plans, agreements or other employee equity incentive programs or similar arrangements approved by the Board of Managers, which, prior to the later of the termination of the Buy-Out Option and such time as no amounts are outstanding under the Bridge Loan Agreement, shall include at least one Manager chosen by Bio (an “Bio Manager”) and at least one Manager chosen by Maxygen (a “Maxygen Manager”), in each case pursuant to the Voting Agreement, if applicable; provided that the approval of at least one Bio Manager and one Maxygen Manager (if applicable) shall only be required with respect to the issuance of greater than

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an aggregate of 15,000,000 Common Units (including Profits Interest Units and the number of Common Units for or into which all Options and Convertible Securities are exercisable or convertible);

(3) Common Units issued or issuable pursuant to the acquisition of another company by the Company by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement, provided, that such issuances are approved by the Board of Managers, which, prior to the later of the termination of the Buy-Out Option and such time as no amounts are outstanding under the Bridge Loan Agreement, shall include at least one Bio Manager and one Maxygen Manager;

(4) Common Units issued or issuable to banks, equipment lessors or other financial institutions pursuant to a debt financing or commercial leasing transaction approved by the Board of Managers, which, prior to the later of the termination of the Buy-Out Option and such time as no amounts are outstanding under the Bridge Loan Agreement, shall include at least one Bio Manager and one Maxygen Manager;

(5) Common Units issued or issuable in connection with any settlement of any action, suit, proceeding or litigation approved by the Board of Managers, which, prior to the later of the termination of the Buy-Out Option and such time as no amounts are outstanding under the Bridge Loan Agreement, shall include at least one Bio Manager and one Maxygen Manager;

(6) Common Units issued or issuable in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships approved by the Board of Managers, which, prior to the later of the termination of the Buy-Out Option and such time as no amounts are outstanding under the Bridge Loan Agreement, shall include at least one Bio Manager and one Maxygen Manager;

(7) Common Units issued or issuable to suppliers or third party service providers in connection with the provision of goods or services pursuant to transactions approved by the Board of Managers, which, prior to the later of the termination of the Buy-Out Option and such time as no amounts are outstanding under the Bridge Loan Agreement, shall include at least one Bio Manager and one Maxygen Manager;

(8) Common Units actually issued upon the exercise or conversion of Options or Convertible Securities, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security;

(9) Common Units issued or issuable as a dividend or distribution on Preferred Units or pursuant to any event for which adjustment is made pursuant to Sections 4.03(e), 4.03(f) or 4.03(g) hereof;

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(10) any security that the Members holding the majority of Series A Preferred Units, voting as a separate class, and Members holding the majority of Series B Preferred Units, voting as a separate class, designate as not constituting Additional Common Units; and

(11) following conversion of the Company to a corporation pursuant to the terms of Section 9.04, Common Units of the Company issued or issuable in a registered public offering under the Securities Act.

(ii) No Adjustment of Conversion Price. No adjustment in the Conversion Price of a particular series of Preferred Units shall be made in respect of the issuance of Additional Common Units unless the consideration per Preferred Unit (as determined pursuant to Section 4.03(d)(v)) for an Additional Common Unit issued or deemed to be issued by the Company is less than the Conversion Price in effect on the date of, and immediately prior to such issue, for such series of Preferred Units.

(iii) Deemed Issue of Additional Common Units. In the event the Company at any time or from time to time after the date of the date of this Agreement shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of Common Units (as set forth in the instrument relating thereto without regard to any provisions contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities, the conversion or exchange of such Convertible Securities or, in the case of Options for Convertible Securities, the exercise of such Options and the conversion or exchange of the underlying securities, shall be deemed to have been issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that in any such case in which Units are deemed to be issued:

(1) no further adjustment in the Conversion Price of any series of Preferred Units shall be made upon the subsequent issue of Convertible Securities or Common Units in connection with the exercise of such Options or conversion or exchange of such Convertible Securities;

(2) if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any change in the consideration payable to the Company or in the number of Common Units issuable upon the exercise, conversion or exchange thereof (other than a change pursuant to the anti-dilution provisions of such Options or Convertible Securities such as this Section 4.03(d) or pursuant to Recapitalization provisions of such Options or Convertible Securities such as Section 4.03(e), Section 4.03(f) and Section 4.03(g) hereof), the Conversion Price of each series of Preferred Units and any subsequent adjustments based thereon shall be recomputed to reflect such change as if such change had been in effect as of the original issue thereof (or upon the occurrence of the record date with respect thereto);

(3) no readjustment pursuant to clause (2) above shall have the effect of increasing the Conversion Price of a series of Preferred Units to an amount above the

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Conversion Price that would have resulted from any other issuances of Additional Common Units and any other adjustments provided for herein between the original adjustment date and such readjustment date;

(4) upon the expiration of any such Options or any rights of conversion or exchange under such Convertible Securities which shall not have been exercised, the Conversion Price of each series of Preferred Units computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto) and any subsequent adjustments based thereon shall, upon such expiration, be recomputed as if:

a) in the case of Convertible Securities or Options for Common Units, the only Additional Common Units issued were the Common Units, if any, actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Company for the issue of such exercised Options plus the consideration actually received by the Company upon such exercise or for the issue of all such Convertible Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the Company upon such conversion or exchange, and

b) in the case of Options for Convertible Securities, only the Convertible Securities, if any, actually issued upon the exercise thereof were issued at the time of issue of such Options, and the consideration received by the Company for the Additional Common Units deemed to have been then issued was the consideration actually received by the Company for the issue of such exercised Options, plus the consideration deemed to have been received by the Company (determined pursuant to Section 4.03(d)(v)) upon the issue of the Convertible Securities with respect to which such Options were actually exercised; and

(5) if such record date shall have been fixed and such Options or Convertible Securities are not issued on the date fixed therefor, the adjustment previously made in the Conversion Price which became effective on such record date shall be canceled as of the close of business on such record date, and thereafter the Conversion Price shall be adjusted pursuant to this Section 4.03(d)(iii) as of the actual date of their issuance.

(iv) Adjustment of Conversion Price Upon Issuance of Additional Common Units. In the event this Company shall issue Additional Common Units (including Additional Common Units deemed to be issued pursuant to Section 4.03(d)(iii)) without consideration or for a consideration per Unit less than the applicable Conversion Price of a series of Preferred Units in effect on the date of and immediately prior to such issue, then, the Conversion Price of the affected series of Preferred Units shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) determined by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of Common Units outstanding immediately prior to such issue plus the number of Common Units which the aggregate consideration received by the Company for the total number of Additional Common Units so issued would purchase at such Conversion Price, and the denominator of which shall be the number of Common Units outstanding immediately prior to such issue plus the number of such Additional Common Units so issued.

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Notwithstanding the foregoing, the Conversion Price shall not be reduced at such time if the amount of such reduction would be less than $0.01, but any such amount shall be carried forward, and a reduction will be made with respect to such amount at the time of, and together with, any subsequent reduction which, together with such amount and any other amounts so carried forward, equal $0.01 or more in the aggregate. For the purposes of this Section 4.03(d)(iv), all Common Units issuable upon conversion of all outstanding Preferred Units and the exercise and/or conversion of any other outstanding Convertible Securities and all outstanding Options shall be deemed to be outstanding.

(v) Determination of Consideration. For purposes of this Section 4.03(d) , the consideration received by the Company for the issue (or deemed issue) of any Additional Common Units shall be computed as follows:

(1) Cash and Property. Such consideration shall:

a) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Company before deducting any reasonable discounts, commissions or other expenses allowed, paid or incurred by the Company for any underwriting or otherwise in connection with such issuance;

b) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Managers; and

c) in the event Additional Common Units are issued together with other Units or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (a) and (b) above, as reasonably determined in good faith by the Board of Managers.

(2) Options and Convertible Securities. The consideration per Unit received by the Company for Additional Common Units deemed to have been issued pursuant to Section 4.03(d)(iii) shall be determined by dividing:

(x) the total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities by

(y) the maximum number of Common Units (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities.

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(e) Adjustments for Subdivisions or Combinations of Common Units. In the event the outstanding Common Units shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of Common Units, the Conversion Price of each series of Preferred Units in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding Common Units shall be combined (by reclassification or otherwise) into a lesser number of Common Units, the Conversion Prices in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately increased.

(f) Adjustments for Subdivisions or Combinations of Preferred Units. In the event the outstanding Preferred Units or a series of Preferred Units shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of Preferred Units, the Annual Distribution Rate, Original Issue Price and Liquidation Preference of the affected series of Preferred Units in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding Preferred Units or a series of Preferred Units shall be combined (by reclassification or otherwise) into a lesser number of Preferred Units, the Annual Distribution Rate, Original Issue Price and Liquidation Preference of the affected series of Preferred Units in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately increased.

(g) Adjustments for Reclassification, Exchange and Substitution. Subject to Section 8.02 (“Liquidation Rights”), if the Common Units issuable upon conversion of the Preferred Units shall be changed into the same or a different number of Units of any other class or classes of Units, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of Units provided for above), then, in any such event, in lieu of the number of Common Units which the holders would otherwise have been entitled to receive, each holder of such Preferred Units shall have the right thereafter to convert such Preferred Units into a number of such other class or classes of Units which a holder of the number of Common Units deliverable upon conversion of such series of Preferred Units immediately before that change would have been entitled to receive in such reorganization or reclassification, all subject to further adjustment as provided herein with respect to such other Units.

(h) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 4.03, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Preferred Units a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of any holder of Preferred Units, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Price at the time in effect and (iii) the number of Common Units and the amount, if any, of other property which at the time would be received upon the conversion of Preferred Units.

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(i) Waiver of Adjustment of Conversion Price. Notwithstanding anything herein to the contrary, any downward adjustment of the Conversion Price of any series of Preferred Units may be waived by the consent or vote of the holders of the majority of the outstanding Preferred Units of such series either before or after the issuance causing the adjustment. Any such waiver shall bind all future holders of such series of Preferred Units.

(j) Notices of Record Date. In the event that this Company shall propose at any time:

(i) to declare any Distribution upon its Common Units, whether in cash, property, stock or other securities, whether or not a regular cash dividend and whether or not out of earnings or earned surplus;

(ii) to effect any reclassification or recapitalization of its Common Units outstanding involving a change in the Common Units; or

(iii) to voluntarily liquidate or dissolve or to enter into any transaction or series of related transactions deemed to be a Liquidity Event;

then, in connection with each such event, this Company shall send to the holders of the Preferred Units at least twenty (20) days’ prior written notice of the date on which a record shall be taken for such Distribution (and specifying the date on which the holders of Common Units shall be entitled thereto and, if applicable, the amount and character of such Distribution) or for determining rights to vote in respect of the matters referred to in (ii) and (iii) above.

Such written notice shall be given by first class mail (or express courier), postage prepaid, addressed to the holders of Preferred Units at the address for each such holder as shown on the books of the Company and shall be deemed given on the date such notice is mailed.

The notice provisions set forth in this section may be shortened or waived prospectively or retrospectively by the consent or vote of the holders of a majority of Series A Preferred Units, voting as a separate class, and of a majority of Series B Preferred Units, voting as a separate class.

ARTICLE 5.

GOVERNANCE

SECTION 5.01 Board of Managers.

(a) The Company shall have a board of managers (the “Board of Managers”). The Members hereby designate the Board of Managers as the managers (within the meaning of the Delaware Act) of the Company, with exclusive rights and responsibilities to direct the business of the Company. The Board of Managers shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by managers under the laws of the State of Delaware. Without limitation to the foregoing, the Board of Managers shall have the authority to fix the compensation of Managers.

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(b) The Board of Managers shall consist of five (5) members (each, a “Manager”). So long as at least six million (6,000,000) Preferred Units (as adjusted for Recapitalizations) remain outstanding, the holders of Preferred Units, voting as a separate class, shall be entitled to elect five (5) members of the Board of Managers at each meeting or pursuant to each consent of the Members. Any members of the Board of Managers not elected pursuant to the immediately preceding sentence shall be elected by the holders of Common Units and Preferred Units, voting together as a single class. If a vacancy on the Board of Managers is to be filled by the Board of Managers, only Managers elected by the same class or classes of Members as those who would be entitled to vote to fill such vacancy shall vote to fill such vacancy. A Manager shall hold office until his or her successor is designated or until his or her earlier death, resignation or removal.

SECTION 5.02 Meetings and Written Consents of Board of Managers.

(a) Any Manager may attend a meeting of the Board of Managers in person, by telephone or any other electronic communication device. At any meeting of the Board of Managers, the presence, in person or by proxy, of a majority of the Managers shall constitute a quorum. A Manager entitled to vote at any meeting of the Board of Managers may authorize another Person, including another Manager, to act in place of that Manager by proxy. The Board of Managers may act by unanimous written consent in lieu of a meeting in accordance with Section 18-404 of the Delaware Act.

(b) At any meeting of the Board of Managers, any action taken by the Board of Managers shall require the approval of a majority of the Managers present, in person or by proxy, at such meeting. Each Manager shall be entitled to one vote.

SECTION 5.03 Committees. The Board of Managers may designate by unanimous action, one or more committees, each committee to consist of one or more of the Managers of the Company. The Board of Managers may designate one or more Managers as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Managers to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Managers or in this Agreement, shall have and may exercise all the powers and authority of the Board of Managers in the management of the business and affairs of the Company; provided, however, that no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the Members, any action or matter expressly required by this Agreement to be submitted to Members for approval or (ii) adopting, amending or repealing this Agreement. To the extent that any committee does not include the Minority Preferred Designee (as defined in the Voting Agreement), then the Minority Preferred Designee shall be entitled to attend in a non-voting, observer capacity all meetings of such committee and to receive all notices and other communications (including, without limitation,

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Actions by Written Consent Without a Meeting) that are sent to members of such committee in their capacity as such. Meetings and actions of committees shall be governed by, and held and taken in accordance with, Section 5.02.

SECTION 5.04 Officers.

(a) The Board of Managers may from time to time appoint (and subsequently remove) individuals to act on behalf of the Company as “officers” or “agents” of the Company within the meaning of Section 18-407 of the Delaware Act to conduct the day-to-day management of the Company with such general or specific authority as the Board of Managers may specify. Such officers may include a Chief Executive Officer, a President, one or more Vice Presidents, a Chief Financial Officer, a Treasurer, one or more Assistant Treasurers, a Secretary and one or more Assistant Secretaries. Any number of offices may be held by the same person.

(b) The Board of Managers may appoint, or empower the Chief Executive Officer or, in the absence of a Chief Executive Officer, the President, to appoint, such other officers and agents as the business of the Company may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in this Agreement or as the Board of Managers may from time to time determine.

(c) Unless otherwise directed by the Board of Managers, the Chief Executive Officer or President or any other person authorized by the Board of Managers, the Chief Executive Officer or the President is authorized to vote, represent and exercise on behalf of the Company all rights incident to any and all shares of any other corporation or corporations standing in the name of the Company. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.

(d) Except as otherwise provided in this Agreement, the officers of the Company shall have such powers and duties in the management of the Company as may be designated from time to time by the Board of Managers and, to the extent not so provided, as generally pertain to their respective offices in the context of a Delaware corporation, subject to the control of the Board of Managers.

SECTION 5.05 Series A Preferred Unit Protective Provisions.

(a) Prior to the Option Expiration Date and as long as at least twenty five million (25,000,000) Series A Preferred Units (as adjusted for Recapitalizations) shall be issued and outstanding, the Company shall not, without first obtaining the approval (by vote or written consent as provided by law) of the holders of more than fifty percent (50%) of the outstanding Series A Preferred Units:

(i) amend, alter or repeal any provision of this Agreement (including pursuant to a merger other than in connection with a bona fide sale of the Company) if such action would adversely alter the rights, preferences, privileges or powers of, or restrictions provided for the benefit of the Series A Preferred Units;

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(ii) approve any offering of Units or securities linked to Units, other than Profits Interest Units granted in accordance with this Agreement and the Equity Incentive Plan;

(iii) authorize or create (by reclassification, merger or otherwise) or issue or obligate itself to issue any new class or series of equity security (including any security convertible into or exercisable for any equity security) having rights, preferences or privileges with respect to distributions, redemption or payments upon liquidation senior to or on a parity with the Series A Preferred Units;

(iv) effect any sale of substantially all of the assets of the Company or any of its subsidiaries, or any merger or acquisition, unless, in the case of such merger or acquisition, the Company would not be required to increase its Units by more than twenty percent (20%) or use more than twenty percent (20%) of its assets in such merger or acquisition;

(v) increase the size of the Board of Managers to a number greater than five (5) Managers;

(vi) repurchase Common Units, other than from Managers, officers, employees, consultants, placement agents or other service providers of the Company or its subsidiaries upon termination of their employment or services;

(vii) except as expressly provided herein, declare or pay any Distribution with respect to the Preferred Units or Common Units;

(viii) incur any indebtedness for borrowed money in excess of $10,000,000 other than Permitted Indebtedness;

(ix) authorize the conversion of the legal form of the Company to a corporation or to elect to cause the Company to be treated as a corporation for U.S. tax purposes;

(x) voluntarily liquidate or dissolve; or

(xi) amend this Section 5.05(a).

(b) Following the Option Expiration Date and during such time as (x) any Loan under the Bridge Loan Agreement shall be outstanding and (y) at least twenty five million (25,000,000) Series A Preferred Units (as adjusted for Recapitalizations) shall be issued and outstanding, the Company shall not, without first obtaining the approval (by vote or written consent as provided by law) of the holders of more than fifty percent (50%) of the Series A Preferred Units:

(i) amend, alter or repeal any provision of this Agreement (including pursuant to a merger other than in connection with a bona fide sale of the Company) if such action

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would adversely alter the rights, preferences, privileges or powers of, or restrictions provided for the benefit of the Series A Preferred Units, provided, however, that the authorization or creation (by reclassification, merger or otherwise) or issuance or the incurrence of an obligation to issue any new class or series of equity security (including any security convertible into or exercisable for any equity security), whether senior or junior to, or on a parity with, the Series A Preferred Units, in each case, which complies with the restrictions set forth in clause (ii) of this Section 5.05(b), shall not require such approval of the holders of Series A Preferred Units;

(ii) approve any offering of Units or securities linked to Units, other than (A) any Permitted Equity Offering or (B) Profits Interest Units granted in accordance with this Agreement and the Equity Incentive Plan;

(iii) authorize any sale of substantially all of the assets of the Company or any of its subsidiaries, or any merger or acquisition, unless, (A) in the case of such merger or acquisition, the Company would not be required to increase its outstanding stock by more than 20% or use more than 20% of its assets in such merger or acquisition, or (B) such sale, merger or acquisition would result in the full payment of amounts then owed by the Company under the Bridge Loan Agreement concurrently with the closing of such merger or acquisition;

(iv) repurchase Common Units, other than from Managers, officers, employees, consultants, placement agents or other service providers of the Company or its subsidiaries upon termination of their employment or services;

(v) except as expressly provided herein, declare or pay any Distribution with respect to the Preferred Units or Common Units;

(vi) incur any indebtedness in excess of $10,000,000 in the aggregate outstanding at any time (other than indebtedness under the Bridge Loan Agreement), other than the following types of indebtedness that may exceed such an amount: (A) unsecured indebtedness of the Company to Maxygen that is not senior to any indebtedness outstanding under the Bridge Loan Agreement; (B) Permitted Indebtedness; and (C) indebtedness which would result in the full payment of amounts then owed by the Company under the Bridge Loan Agreement concurrently with the closing of the transaction or series of transactions in which the Company incurs such indebtedness; or

(vii) amend this Section 5.05(b).

(c) Following the Option Expiration Date and during such time as (x) no Loan under the Bridge Loan Agreement shall be outstanding or (y) less than twenty five million (25,000,000) Series A Preferred Units (as adjusted for Recapitalizations) shall be issued and outstanding, the Company shall not, without first obtaining the approval (by vote or written consent as provided by law) of the holders of more than fifty percent (50%) of the Series A Preferred Units:

(i) amend, alter or repeal any provision of this Agreement (including pursuant to a merger other than in connection with a bona fide sale of the Company) if such action

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would adversely alter the rights, preferences, privileges or powers of, or restrictions provided for the benefit of the Series A Preferred Units, provided, however, that the authorization or creation (by reclassification, merger or otherwise) or issuance or the incurrence of an obligation to issue any new class or series of equity security (including any security convertible into or exercisable for any equity security), whether senior or junior to, or on a parity with, the Series A Preferred Units, shall not require such approval of the holders of Series A Preferred Units; or

(ii) amend this Section 5.05(c).

SECTION 5.06 Series B Preferred Unit Protective Provisions.

(a) Prior to the Option Expiration Date as long as at least five million (5,000,000) Series B Preferred Units (as adjusted for Recapitalizations) shall be issued and outstanding, the Company shall not, without first obtaining the approval (by vote or written consent as provided by law) of the holders of more than fifty percent (50%) of the Series B Preferred Units:

(i) amend, alter or repeal any provision of this Agreement (including pursuant to a merger other than in connection with a bona fide sale of the Company) if such action would adversely alter the rights, preferences, privileges or powers of, or restrictions provided for the benefit of the Series B Preferred Units;

(ii) approve any offering of Units or securities linked to Units, other than Profits Interest Units granted in accordance with this Agreement and the Equity Incentive Plan;

(iii) authorize or create (by reclassification, merger or otherwise) or issue or obligate itself to issue any new class or series of equity security (including any security convertible into or exercisable for any equity security) having rights, preferences or privileges with respect to distributions, redemption or payments upon liquidation senior to or on a parity with the Series B Preferred Units;

(iv) authorize any sale of substantially all of the assets of the Company or any of its subsidiaries, or any merger or acquisition, unless, in the case of such merger or acquisition, the Company would not be required to increase its outstanding Units by more than twenty percent (20%) or use more than twenty percent (20%) of its assets in such merger or acquisition;

(v) increase the size of the Board of Managers to a number greater than five (5) Managers;

(vi) repurchase Common Units, other than from Managers, officers, employees, consultants, placement agents or other service providers of the Company or its subsidiaries upon termination of their employment or services;

(vii) except as expressly provided herein, declare or pay any Distribution with respect to the Preferred Units or Common Units;

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(viii) incur any indebtedness for borrowed money in excess of $10,000,000 other than Permitted Indebtedness;

(ix) authorize the conversion of the legal form of the Company to a corporation or to elect to cause the Company to be treated as a corporation for U.S. tax purposes;

(x) voluntarily liquidate or dissolve; or

(xi) amend this Section 5.06(a).

(b) Following the Option Expiration Date and during such time as (x) any Loan under the Bridge Loan Agreement shall be outstanding and (y) at least five million (5,000,000) Series B Preferred Units (as adjusted for Recapitalizations) shall be issued and outstanding, the Company shall not, without first obtaining the approval (by vote or written consent as provided by law) of the holders of more than fifty percent (50%) of the outstanding Series B Preferred Units:

(i) amend, alter or repeal any provision of this Agreement (including pursuant to a merger other than in connection with a bona fide sale of the Company) if such action would adversely alter the rights, preferences, privileges or powers of, or restrictions provided for the benefit of the Series B Preferred Units, provided, however, that the authorization or creation (by reclassification, merger or otherwise) or issuance or the incurrence of an obligation to issue any new class or series of equity security (including any security convertible into or exercisable for any equity security), whether senior or junior to, or on a parity with, Series B Preferred Units, in each case, which complies with the restrictions ser forth in clause (ii) of this Section 5.06(b), shall not require such approval of the holders of Series B Preferred Units;

(ii) approve any offering of Units or securities linked to Units, other than (A) any Permitted Equity Offering or (B) Profits Interest Units granted in accordance with this Agreement and the Equity Incentive Plan;

(iii) authorize any sale of substantially all of the assets of the Company or any of its subsidiaries, or any merger or acquisition, unless, (A) in the case of such merger or acquisition, the Company would not be required to increase its outstanding Units by more than twenty percent (20%) or use more than twenty percent (20%) of its assets in such merger or acquisition, or (B) such sale, merger or acquisition would result in the full payment of amounts then owed by the Company under the Bridge Loan Agreement concurrently with the closing of such merger or acquisition;

(iv) repurchase Common Units, other than from Managers, officers, employees, directors, consultants, placement agents or other service providers of the Company or its subsidiaries upon termination of their employment or services;

(v) except as expressly provided herein, declare or pay any Distribution with respect to the Preferred Units or Common Units;

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(vi) incur any indebtedness in excess of $10,000,000 in the aggregate outstanding at any time (other than indebtedness under the Bridge Loan Agreement), other than the following types of indebtedness that may exceed such an amount: (A) unsecured indebtedness of the Company to Maxygen that is not senior to any indebtedness outstanding under the Bridge Loan Agreement; (B) Permitted Indebtedness; and (C) indebtedness which would result in the full payment of amounts then owed by the Company under the Bridge Loan Agreement concurrently with the closing of the transaction or series of transactions in which the Company incurs such indebtedness; or

(vii) amend this Section 5.06(b).

(c) Following the Option Expiration Date and during such time as (x) no Loan under the Bridge Loan Agreement shall be outstanding or (y) less than five million (5,000,000) Series B Preferred Units (as adjusted for Recapitalizations) shall be issued and outstanding, the Company shall not, without first obtaining the approval (by vote or written consent as provided by law) of the holders of more than fifty percent (50%) of the Series B Preferred Units:

(i) amend, alter or repeal any provision of this Agreement (including pursuant to a merger other than in connection with a bona fide sale of the Company) if such action would adversely alter the rights, preferences, privileges or powers of, or restrictions provided for the benefit of the Series B Preferred Units, provided, however, that the authorization or creation (by reclassification, merger or otherwise) or issuance or the incurrence of an obligation to issue any new class or series of equity security (including any security convertible into or exercisable for any equity security), whether senior or junior to, or on a parity with, Series B Preferred Units, shall not require such approval of the holders of Series B Preferred Units; or

(ii) amend this Section 5.06(c).

ARTICLE 6.

CAPITAL ACCOUNTS

SECTION 6.01 Capital Contributions.

(a) Initial Capital Accounts. Each Member shall have an initial Capital Account balance equal to the amount set forth as such Member’s Initial Capital Account Balance on Schedule A. Such initial Capital Account balances are a result of the following transactions: in the case of Maxygen, the contribution by Maxygen to the Company of certain assets, properties, rights, claims, liabilities and obligations on the terms and conditions set forth in the Asset Contribution Agreement followed by a cash investment by Maxygen in the Company; and, in the case of Bio, a cash investment by Maxygen in the Company. Except as specifically provided in this Agreement, no Person shall be permitted or required to make a Capital Contribution to the Company.

(b) Withdrawal and Return of Capital. Except as provided in Article VIII and Section 9.02, no Member shall be entitled to the return of such Member’s Capital Contribution, a Distribution in respect of such Member’s Capital Account balance, or any other Distribution in respect of such Member’s Unit.

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(c) Adjustment of Percentage Interests. Upon (i) the addition of a Member following the date hereof or (ii) the acceptance of Capital Contributions by the Company from a Member following contribution of such Member’s initial Capital Contribution, the Managing Member shall adjust the Percentage Interests of each Member, and shall accordingly update Schedule A hereto, so that the Percentage Interests of the Members take into account any such new Member or Capital Contributions.

SECTION 6.02 Interest on Capital. No Member shall be entitled to interest on such Member’s Capital Contribution, Capital Account balance, or share of unallocated Profits.

SECTION 6.03 Limitation of Liability; Return or Withholding of Certain Distributions. Except as otherwise required by applicable law, a Member shall have no obligation to restore a negative balance in such Member’s Capital Account and no personal liability for the debts and obligations of the Company. A Member shall have no liability to the Company or to any other Member in respect of a negative balance in such Member’s Capital Account during the term of the Company or at the conclusion of the Company’s winding up, and such negative balance shall not be considered a debt owed to the Company or to any other Person for any purpose whatsoever. A Member that receives a Distribution (a) in violation of this Agreement or (b) that is required to be returned to the Company under applicable law shall return such Distribution within thirty (30) days after demand therefor by any Member. Nothing in this Section 6.03 shall be applied to release any Member from (i) its obligation to make payments specifically required pursuant to this Agreement or (ii) its obligations pursuant to any relationship between the Company and such Member acting in a capacity other than as a Member (including, for example, as a borrower, employee or independent contractor).

ARTICLE 7.

PROFITS AND LOSSES

SECTION 7.01 Allocations of Profits and Losses of the Company . Except as otherwise provided in this Article 7, the items of Profits and Losses for each Fiscal Period shall be allocated as follows:

(a) Non-liquidity Events. Profits and Losses other than from a Liquidity Event shall be allocated among the Members in proportion to their Percentage Interests, assuming for purposes of this Section 7.01(a) as if no Common Units are outstanding.

(b) Liquidity Events. Profits and Losses from a Liquidity Event shall be allocated among the Members in proportion to their Percentage Interests after taking into account the Distribution Threshold for each Common Unit that is a Profits Interest Unit.

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SECTION 7.02 Allocation Adjustments to Comply with Section 704(b) of the Code.

(a) Limitation on Allocation of Losses. If an item of Losses otherwise allocable to a Member under Section 7.01 would cause such Member to have an Adjusted Capital Account Deficit at the end of any Fiscal Year (or increase the amount of such Member’s Adjusted Capital Account Deficit), the item shall not be allocated to such Member, but shall instead be specially allocated as follows:

(i) to the Members in proportion to their respective positive Capital Account balances, until the Capital Account balance of each Member has been reduced to (but not less than) zero; and

(ii) next, to the Members in proportion to their respective Percentage Interests.

(b) Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations or Distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be specially allocated to each such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible, provided that an allocation pursuant to this Section 7.02(b) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article VII been tentatively made as if this Section 7.02(b) were not in this Agreement.

(c) Gross Income Allocation. In the event any Member has an Adjusted Capital Account Deficit at the end of any Fiscal Year, that Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 7.02(c) shall be made only if and to the extent that the Member would have an Adjusted Capital Account Deficit in excess of such sum after all other allocations provided for in this Article VII have been made, as if Section 7.02(b) and this Section 7.02(c) were not in the Agreement.

(d) Member Nonrecourse Deductions. In accordance with the provisions of Treasury Regulation Section 1.704-2(i), each item of Member Nonrecourse Deduction shall be allocated among the Members in proportion to the economic risk of loss that the Members bear with respect to the nonrecourse liability of the Company to which such item of Member Nonrecourse Deduction is attributable.

(e) Minimum Gain Chargeback. This Section 7.02(e) hereby incorporates by reference the “minimum gain chargeback” provisions of Treasury Regulations Section 1.704-2. In general, upon a reduction of the Company’s Minimum Gain, the preceding sentence shall require that items of income and gain be allocated among the Members in a manner that reverses prior allocations of Member Nonrecourse Deductions as well as reductions in the Members’ Capital Account balances resulting from Distributions that, notwithstanding Section 7.04, are allocable to increases in the Company’s Minimum Gain. Subject to the provisions of Section 704 of the Code

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and the Treasury Regulations thereunder, if it is determined at any time in the reasonable discretion of the Managing Member in consultation with Bio prior to the Option Exercise Date that operation of such “minimum gain chargeback” provisions likely will not achieve such a reversal by the conclusion of the liquidation of the Company, such Members shall adjust the allocation provisions of this Article 7 as necessary to accomplish that result.

(f) Section 754 Adjustment. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) relating to the asset and such gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Treasury Regulations Section.

(g) Regulatory Allocations. The allocations set forth in Section 7.02(a) through Section 7.02(f) are intended to comply with certain regulatory requirements under the Code. The Members intend that, to the extent possible, all allocations made pursuant to such Sections will, over the term of the Company, be offset either with other allocations pursuant to Section 7.02(a) through Section 7.02(f) or with special allocations of other items of Company income, gain, loss or deduction pursuant to this Section 7.02(g) Accordingly, the Managing Member is hereby authorized and directed to make offsetting allocations of Company income, gain, loss or deduction under this Section 7.02(g) in whatever manner the Managing Member determines is appropriate so that, after such offsetting special allocations are made, the Capital Accounts of the Members are, to the extent possible, equal to the Capital Accounts each would have if the provisions of Section 7.02(a) through Section 7.02(f) were not contained in this Agreement and all Company income, gain, loss, and deduction were instead allocated in accordance with the provisions of Section 7.01.

SECTION 7.03 General Provisions Regarding Allocations and Capital Account Maintenance.

(a) Book – Tax Accounting Disparities. Solely for U.S. federal income tax purposes, if Company property is reflected in the Capital Accounts of the Members at a value that differs from the adjusted tax basis of such property (whether because such property was contributed or treated as contributed by a Member or because of a revaluation of the Members’ Capital Accounts under Treasury Regulations Section 1.704-1(b)), allocations of depreciation, amortization, income, gain or loss with respect to such property shall be made among the Members in a manner which takes such difference into account in accordance with Code Section 704(c) and the Treasury Regulations issued thereunder using the traditional allocation method set forth in Treasury Regulations Section 1.704-3(b); provided that, curative allocations of gain recognized on a disposition by the Company of assets, properties, rights and claims contributed by Maxygen pursuant to the Asset Contribution Agreement shall be made to the extent permitted in Treasury Regulations Section 1.704-3(c).

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(b) Allocations in Event of Transfer. If an interest in the Company is Transferred in accordance with this Agreement, allocations of Profits and Losses as between the transferor and transferee shall be made using any method selected by the Managing Member and permitted under Section 706 of the Code.

(c) Adjustments to Capital Accounts for Distributions of Property. If property distributed in kind is reflected in the Capital Accounts of the Members at a value that differs from the fair market value of the property at the time of Distribution, the difference shall be treated as Profits or Losses on the sale of the property and shall be allocated among the Members, as of the time immediately prior to such Distribution, in accordance with the provisions of this Article 7.

(d) Tax Credits and Similar Items. Any tax credits or similar items not allocable pursuant to Section 7.01, Section 7.02 and Section 7.03(a) through Section 7.03(c) shall be allocated to the Members in proportion to their respective Percentage Interests. Notwithstanding the preceding sentence, if Company expenditures that give rise to tax credits also give rise to Member Nonrecourse Deductions, the tax credits attributable to such expenditures shall be allocated in accordance with Treasury Regulations Section 1.704-1(b)(4)(ii).

(e) Reallocation of Certain Losses. To the extent that: (i) Losses that otherwise would have been allocated to a Member under this Section 7.03 were allocated to one or more other Members under Section 7.02(a) or any other provision of this Agreement that prohibits the allocation to a Member of Losses which would reduce such Member’s Capital Account (or Updated Capital Account) balance below a specified amount; (ii) such allocation has not been reversed pursuant to the subsequent operation of Section 7.02(a) or this Section 7.03(e); and (iii) the Member makes a Capital Contribution to the Company, the Capital Accounts of the Members shall be adjusted in connection with such return or Capital Contribution (to the extent of the value thereof) to effect a reallocation, in reverse order, of such Losses to the Member.

(f) Tax Allocations. Taking into account the requirements of this Article 7, items of Company income, gain, loss, deduction or credit recognized for U.S. federal income tax purposes shall be allocated among the Members for U.S. federal income tax purposes in a manner that is consistent with the requirements of the Code and the Treasury Regulations.

SECTION 7.04 Nonallocation of Distributions to Increases in Minimum Gain. To the extent permitted under Treasury Regulations Section 1.704-2(h), distributions to Members shall not be allocable to increases in the Company’s Minimum Gain. In general, and except as provided in such Treasury Regulation, the preceding sentence is intended to ensure that reductions in a Member’s Capital Account balance resulting from distributions of money or other property to that Member are not reversed by the minimum gain chargeback provisions of Section 7.02(e).

SECTION 7.05 Allocation of Liabilities. Solely for purposes of determining the Members’ respective shares of the nonrecourse liabilities of the Company within the meaning of Treasury Regulations Section 1.752-3(a)(3), each Member’s interest in Company Profits shall be equal to the ratio that such Member’s Percentage Interest bears to the aggregate Percentage Interests of all of the Members.

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SECTION 7.06 Modifications to Preserve Underlying Economic Objectives. In the event that (a) there is a change in the U.S. federal income tax law or (b) the Company borrows money or property, the Board of Managers, after consultation with the Company’s tax advisors, shall make the minimum modifications to the allocation provisions of this Agreement necessary to preserve the underlying economic objectives of the Members as reflected in this Agreement and, in the case of a borrowing, to properly allocate the tax items relating to such borrowing in accordance with the Code and the Treasury Regulations.

SECTION 7.07 Withholding Taxes.

(a) The Company shall withhold taxes from Distributions to, and allocations among, the Members to the extent required by law (as determined by the Managing Member in its reasonable discretion). Except as otherwise provided in this Section 7.07, any amount so withheld by the Company with regard to a Member shall be treated for purposes of this Agreement as an amount actually distributed to such Member pursuant to Article 8. An amount shall be considered withheld by the Company if, and at the time, remitted to a governmental agency, without regard to whether such remittance occurs at the same time as the distribution or allocation to which it relates; provided, however, that an amount actually withheld from a specific distribution, or designated by the Managing Member as withheld from a specific allocation, shall be treated as if distributed at the time such distribution or allocation occurs. Nothing in this Section 7.07(a) shall have any bearing on amounts withheld from a Member in respect of compensation paid or payable to such Member in such Member’s capacity as an employee of the Company or pursuant to a bona fide written employment agreement between such Member and the Company.

(b) If, pursuant to Section 7.07(a), an amount withheld with regard to a Member is treated for purposes of this Agreement as an amount distributed to such Member pursuant to Article 8, subsequent actual Distributions to such Member pursuant to Article 8 shall be reduced as necessary to, as quickly as possible, cause the aggregate Distributions to such Member over the term of the Company (including actual Distributions and Distributions deemed to have occurred pursuant to Section 7.07(a)) to equal the actual Distributions that would have been made to such Member if Section 7.07(a) were not part of this Agreement.

(c) Each Member hereby agrees to indemnify the Company and the other Members for any liability they may incur for failure to properly withhold taxes in respect of such Member; moreover, each Member hereby agrees that neither the Company nor any other Member shall be liable for any excess taxes withheld in respect of such Member’s Membership Interest and that, in the event of overwithholding otherwise permitted by this Agreement, a Member’s sole recourse shall be to apply for a refund from the appropriate governmental authority.

SECTION 7.08 Intent of Allocations. The parties intend that the foregoing allocation provisions of this Article 7 shall produce final Capital Account balances of the Members that will permit liquidating Distributions made in accordance with final Capital Account balances to be made in a manner identical to the order of priorities set forth in Section 8.02. To the extent that the allocation provisions of this Article 7 would fail to produce such final Capital Account balances, (a) such provisions shall be amended by the Board of Managers if and to the extent necessary to

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produce such result and (b) income and loss of the Company for prior open years (including items of gross income and deduction of the Company for such years) shall be reallocated by the Board of Managers among the Members to the extent it is not possible to achieve such result with allocations of items of income (including gross income) and deduction for the current year and future years, as approved by the Board of Managers. This Section 7.08 shall control notwithstanding any reallocation or adjustment of taxable income, taxable loss, or items thereof by the Internal Revenue Service or any other taxing authority. The Board of Managers shall have the power to amend this Agreement without the consent of the other Members, as it reasonably considers advisable, to make the allocations and adjustments described in this Section 7.08.

ARTICLE 8.

DISTRIBUTIONS; ASSETS SALES

SECTION 8.01 Distributions. The Board of Managers may declare Distributions to the Members holding Preferred Units or Common Units that are not Profits Interest Units other than upon the occurrence of a Liquidity Event in proportion to their respective Percentage Interests annually; provided that such Distributions may only be declared in an amount sufficient for each Member to pay any taxes owed with respect to the taxable income allocated to any Units held by such Member in accordance with Article 7 as reasonably determined by the Board of Managers.

SECTION 8.02 Liquidity Event Distributions.

(a) Upon the occurrence of a Liquidity Event and subject to Sections 18-607 and 18-804 of the Delaware Act, either voluntary or involuntary, the Members holding Preferred Units shall be entitled to receive, on a pari passu basis and prior and in preference to any Distribution of any of the assets of the Company to the holders of Common Units by reason of their ownership of such Common Units, an amount per Preferred Unit held by them equal to the sum of (x) the Liquidation Preference for such Preferred Unit and (y) all declared but unpaid Distributions (if any) on such Preferred Unit (including all accrued but unpaid Distributions on such Preferred Unit at the Annual Distribution Rate) or, with respect to any series of Preferred Units, such lesser amount as may be approved by the consent or vote of the holders of a majority of the outstanding Preferred Units of such series. If upon the occurrence of the Liquidity Event, the assets of the Company legally available for distribution to the holders of Preferred Units are insufficient to permit the payment to such holders of the full amounts specified in this Section 8.02(a), then all assets of the Company legally available for distribution to Members shall be distributed with equal priority and pro rata among each of the of Preferred Units in proportion to the full amounts the Members would otherwise be entitled to receive pursuant to this Section 8.02(a). With respect to each series of Preferred Units, the treatment of any transaction or series of related transactions as a Liquidity Event pursuant to clause (a) or (b) of definition of “Liquidity Event” may be waived by the consent or vote of the holders of a majority of such series of Preferred Units. After the payment to the holders of Preferred Units of the full preferential amounts specified above, the remaining assets of the Company legally available for distribution to the Members by the Company shall be distributed with equal priority and pro rata among the holders of the Preferred Units and Common Units in

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proportion to the number of Common Units held by them, with the Preferred Units being treated for this purpose as if they had been converted to Common Units at the then applicable Conversion Rate; provided, however, that notwithstanding the foregoing, Profits Interest Units shall be entitled to and receive distributions in connection with any Liquidity Event only if and to the extent provided for in, and subject to the terms of, the Equity Incentive Plan. For the avoidance of doubt, Distributions made in connection with any Liquidity Event that consists of or results in the liquidation and winding up of the Company shall be subject to Section 9.02.

(b) If any assets of the Company distributed to Members in connection with any Liquidity Event are other than cash, then the value of such assets shall be their fair market value as determined in good faith by the Board of Managers, except that any publicly-traded securities to be distributed to Members in a Liquidity Event shall be valued as follows:

(i) if the securities are then traded on a national securities exchange, then the value of the securities shall be deemed to be the average of the closing prices of the securities on such exchange over the ten (10) trading day period ending five (5) trading days prior to the Distribution;

(ii) if the securities are actively traded over-the-counter, then the value of the securities shall be deemed to be the average of the closing bid prices of the securities over the ten (10) trading day period ending five (5) trading days prior to the Distribution.

In the event of a merger or other acquisition of the Company by another entity, the Distribution date shall be deemed to be the date such transaction closes.

For the purposes of this Section 8.02(b), “trading day” shall mean any day which the exchange or system on which the securities to be distributed are traded is open and “closing prices” or “closing bid prices” shall be deemed to be: (i) for securities traded primarily on the New York Stock Exchange, the American Stock Exchange or a Nasdaq market, the last reported trade price or sale price, as the case may be, at 4:00 p.m., New York time, on that day and (ii) for securities listed or traded on other exchanges, markets and systems, the market price as of the end of the regular hours trading period that is generally accepted as such for such exchange, market or system. If, after the date hereof, the benchmark times generally accepted in the securities industry for determining the market price of a stock as of a given trading day shall change from those set forth above, the fair market value shall be determined as of such other generally accepted benchmark times.

ARTICLE 9.

DISSOLUTION; TAX MATTERS; CONVERSION TO CORPORATION

SECTION 9.01 Dissolution. The Company shall dissolve upon the first to occur of the following:

(a) subject to Section 5.05(a)(x) and Section 5.06(a)(x), the approval of the Members then holding a majority of the outstanding Common Units (with the Preferred Units being treated for this purpose as if they had been converted to Common Units at the then applicable Conversion Rate) to dissolve the Company;

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(b) at any time there are no Members unless the Company is continued without dissolution in accordance with the Delaware Act; and

(c) the entry of a decree of dissolution under Section 18-802 of the Delaware Act.

The Company shall terminate when all its assets, after payment of or due provision for all debts, liabilities and obligations of the Company, shall have been distributed to the Members in the manner provided for in Article 7 and the Certificate of Formation shall have been canceled in the manner required by the Delaware Act.

SECTION 9.02 Liquidation.

(a) Following dissolution pursuant to Section 9.01, all the business and affairs of the Company shall be liquidated and wound up. The Board of Managers shall act as liquidating trustee and wind up the affairs of the Company pursuant to this Agreement.

(b) The proceeds of the liquidation of the Company will be distributed:

(i) first, to creditors of the Company (including Members who are creditors), to the extent otherwise permitted by law in satisfaction of all the Company’s debts and liabilities (whether by payment or by making reasonable provision for payment thereof), and

(ii) second, to the Members in accordance with the principles of Section 8.02(a).

SECTION 9.03 Tax Matters.

(a) Tax Matters Partner. The Managing Member is hereby designated the “tax matters partner” of the Company within the meaning of Section 6231(a)(7) of the Code. Except to the extent specifically provided in the Code or the Treasury Regulations (or the laws of relevant non-U.S. federal taxing jurisdictions), the Managing Member shall have exclusive authority to act for or on behalf of the Company with regard to tax matters, including the authority to make (or decline to make) any available tax elections; provided that, notwithstanding the preceding clause, the Company shall make an election under Section 754 of the Code with respect to its first taxable year. Notwithstanding the foregoing and the authority generally granted to the tax matters partner by the provisions of the Code, the tax matters partner shall not, without the consent of Bio (such consent not to be unreasonably withheld or delayed) (i) enter into a settlement of a partnership administrative adjustment binding on Bio; (ii) agree to an extension of the period of limitations on the assessment of tax; or (iii) request an administrative adjustment within the meaning of Code Section 6227. At the request of Bio, the tax matters partner shall file and prosecute on behalf, and at the expense, of Bio, a petition for judicial review of a final partnership administrative adjustment or a petition for judicial review of an administrative adjustment request not fully allowed. In the case of a judicial review of

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a final partnership administrative adjustment or an administrative adjustment request not fully allowed, such petition shall be filed in such applicable court as Bio shall select, or if Bio shall fail to so elect, in the United States Tax Court.

(b) Partnership for Tax Purposes. Except to the extent otherwise required by applicable law (disregarding for this purpose any requirement that can be avoided through the filing of an election or similar administrative procedure), the Managing Member shall cause the Company to take the position that the Company is a “partnership” for U.S. federal, state and local income tax purposes and shall cause to be filed with the appropriate tax authorities any elections or other documents necessary to give due legal effect to such position. A Member shall not file (and each Member hereby represents that it has not filed) any income tax election or other document that is inconsistent with the Company’s position regarding its classification as a “partnership” for applicable federal, state and local income tax purposes. The Members expressly do not intend hereby to form a partnership except insofar as the Company may be treated as a partnership solely for tax purposes.

(c) Notice of Inconsistent Treatment of Company Item; Notice of Settlement. No Member shall file a notice with the U.S. Internal Revenue Service under Section 6222(b) of the Code in connection with such Member’s intention to treat an item on such Member’s U.S. federal income tax return in a manner which is inconsistent with the treatment of such item on the Company’s U.S. federal income tax return unless such Member has, at least thirty (30) days prior to the filing of such notice (or such shorter period as is approved by the Managing Member in its sole and absolute discretion), provided the Managing Member with a copy of the notice and thereafter in a timely manner provides such other information related thereto as the Managing Member shall reasonably request. Any Member entering into a settlement agreement with the U.S. Department of the Treasury or the U.S. Internal Revenue Service that concerns a Company item shall notify the Managing Member of such settlement agreement and its terms within sixty (60) days after the date thereof.

(d) Tax Return Information. Within ninety (90) days after the end of each Fiscal Year, the Company shall supply all information reasonably necessary to enable the Members to prepare their U.S. federal income tax returns including, without limitation, Schedules K-1, and (upon request therefor) to comply with other reporting requirements imposed by law.

SECTION 9.04 Conversion to a Corporation. Following the Option Expiration Date, the Board of Managers shall have the right to authorize the conversion of the legal form of the Company to a corporation in accordance with Section 18-216 of the Delaware Act without the need for any action or consent of any Member. Upon such conversion, each Unit will be converted into one share of common stock or preferred stock (which may be divided into one or more series or subseries) which shall have rights that are equivalent in all material respects to the rights of the respective Units and which shall be subject to no additional restrictions or limitations other than those applicable to such Units prior to such conversion, in each case as determined reasonably and in good faith by the Board of Managers. Notwithstanding anything to the contrary in the foregoing sentence, if the Board of Managers authorizes the conversion of the legal form of the Company to a corporation, at

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the option of Bio, the Members and the Board of Managers agree to use commercially reasonable good faith efforts to structure any transaction to incorporate the Company (or to take such other action as the Board of Managers may deem advisable) as a tax-deferred transaction for U.S. federal income tax purposes and will cooperate in good faith and in a commercially reasonable manner in attempting to achieve a resulting corporate structure that is tax efficient for the parties, for example, a structure in which Bio and/or Maxygen (or its shareholders) own direct interests in the newly-created corporation upon the completion of any transaction.

ARTICLE 10.

MISCELLANEOUS

SECTION 10.01 Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by electronic mail or otherwise delivered by hand, messenger or courier service addressed:

If to Maxygen or the Company
addressed to:	Maxygen, Inc.
	515 Galveston Drive
	Redwood City, California 94063
	USA
	Attention: Chief Business Officer
	Telephone: (650) 298-5300
	Email: corporatesecretary@maxygen.com
with copy to:	Maxygen, Inc.
	515 Galveston Drive
	Redwood City, California 94063
	USA
	Attention: General Counsel
	Telephone: (650) 298-5300
	Email: corporatesecretary@maxygen.com
and a copy to:	Wilson Sonsini Goodrich & Rosati
	Professional Corporation
	650 Page Mill Road
	Palo Alto, CA 94304-1050
	USA
	Attention: Tony Jeffries
	Telephone: (650) 493-9300
	Email: tjeffries@wsgr.com

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If to the Bio,
addressed to:	Astellas Pharma Inc.
	3-11, Nihonbashi-Honcho 2-chome
	Chuo-ku, Tokyo 103-8411
	Japan
	Attention: Vice President, Business Development
	Telephone: (813) 3244-2500
	Email: masaki.doi@jp.astellas.com
with a copy to:	Astellas Pharma Inc.
	3-11, Nihonbashi-Honcho 2-chome
	Chuo-ku, Tokyo 103-8411
	Japan
	Attention: Vice President, Legal
	Telephone: (813) 3244-3231
	Email: kazunori.okimura@jp.astellas.com
with a copy to:	Morrison & Foerster LLP
	1290 Avenue of the Americas
	New York, NY 10104
	Attention: Michael O. Braun, Esq.
	Telephone: (212) 468-8000
	Email: mbraun@mofo.com

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier service, freight prepaid, specifying next-business-day delivery, one Business Day after deposit with the courier), (ii) if sent via registered or certified mail, at the earlier of its receipt or five days after the same has been deposited in a regularly-maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent via electronic mail, when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient’s next Business Day.

(b) Whenever notice is required to be given, under the Delaware Act or this Agreement, to any Person with whom communication is unlawful, the giving of such notice to such Person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such Person. Any action or meeting which shall be taken or held without notice to any such Person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given.

(c) Whenever notice is required to be given under any provision of the Delaware Act or this Agreement, a written waiver, signed by the Person entitled to notice, or a waiver by electronic transmission by the Person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a Person at a

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meeting shall constitute a waiver of notice of such meeting, except when the Person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any meeting of the Members need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by this Agreement.

(d) Each Member hereby consents to the delivery of any notice to Members given by the Company under this Agreement, the Delaware Act, or the Certificate of Formation by (i) electronic mail to the electronic mail address set forth above (or to any other electronic mail address for the Member in the Company’s records), (ii) posting on an electronic network together with separate notice to the Member of such specific posting, or (iii) any other form of electronic transmission (as defined in § 18-302 of the Delaware Act) directed to the Member. This consent shall be revocable by a Member by written notice to the Company. This consent shall be deemed revoked if (i) the Company is unable to deliver by electronic transmission two (2) consecutive notices given by the Company in accordance with this consent, and (ii) such inability becomes known to the secretary or assistant secretary of the Company or to the transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

SECTION 10.02 Delays or Omissions. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party upon any breach or default of any other party shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative.

SECTION 10.03 Successors and Assigns. This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by any Member without the prior written consent of the other Members, provided that this Agreement may without requiring the consent of any other Member be assigned, transferred, delegated or sublicensed in connection with a transfer of the Units to (i) an entity that acquires all or substantially all of the business or assets of such Member, whether by merger, reorganization, acquisition, asset sale or otherwise, or (ii) a Related Entity of such Member, in each case subject to the agreement in writing of such transferee to be subject to the terms and conditions of this Agreement and, prior to the Option Expiration Date, the Preferred Unit Agreements. Any attempt by a Member without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing and except as otherwise provided herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties.

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SECTION 10.04 Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms.

SECTION 10.05 Counterparts. This Agreement may be executed and delivered by facsimile (including by .pdf signature) and in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

SECTION 10.06 Entire Agreement. This Agreement and the exhibits and schedules hereto and the Transaction Agreements constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. No party hereto shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein or therein.

SECTION 10.07 Governing Law. This Agreement shall be governed in all respects by the internal laws of the State of Delaware as applied to agreements entered into among Delaware residents to be performed entirely within Delaware, without regard to principles of conflicts of law that would result in the law of a jurisdiction other than the State of Delaware governing. In the event of a conflict between any provision of this Agreement and any non-mandatory provision of the Delaware Act, the provisions of this Agreement shall control and take precedence.

SECTION 10.08 Jurisdiction; Venue. With respect to any disputes arising out of or related to this Agreement, the parties consent to the exclusive jurisdiction of, and venue in, any court in the State of Delaware having subject matter jurisdiction (or in the event of exclusive federal jurisdiction, the courts of the District of Delaware).

SECTION 10.09 Amendments. Subject to Section 5.05 and Section 5.06, this Agreement and any term hereof may be amended, waived, discharged or terminated only by a written instrument referencing this Agreement and signed by the Members holding a majority of the outstanding units voting together (with Profits Interest Units not voting); provided, however, that Members purchasing Units on or after the Option Expiration Date and Additional Members who acquire Units (including Profits Interest Units) in accordance with Section 3.01(b) may become parties to this Agreement by executing a counterpart of this Agreement (or, in the case of recipients of Profits Interest Units, the applicable Profits Interest Unit Agreement) without any amendment of this Agreement pursuant to this paragraph or any consent or approval of any other Member. Any such amendment, waiver, discharge or termination effected in accordance with this paragraph shall be binding upon each Member and each future holder of all such securities of such Member. Each Member acknowledges that by the operation of this paragraph, the Members will have the right and power to diminish or eliminate all rights of such Member under this Agreement.

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SECTION 10.10 Construction. The construction of this Agreement shall not take into consideration the Party who drafted or whose representative drafted any portion of this Agreement, and no canon of construction shall be applied that resolves ambiguities against the drafter of a document. Each Party acknowledges that: (a) it has read this Agreement; (b) it has been represented in the preparation, negotiation and execution of this Agreement by legal counsel of its own choice or has voluntarily declined to seek such counsel; and (c) it understands the terms and consequences of this Agreement and is fully aware of the legal and binding effect of this Agreement.

[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first stated above.

CPC

By

Name:

Title:

ASTELLAS BIO INC.

By

Name:

Title:

MAXYGEN, INC.

By

Name:

Title:

[Signature page to Limited Liability Company Agreement of CPC)

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Schedule A

Members, Units and Initial Capital Account Balance

Name	Series A Preferred Units	Series B Preferred Units	Initial Capital Account Balance
Astellas Bio Inc.	—	10,000,000	$	10,000,000.00
Maxygen, Inc.	50,000,000	—	$	50,000,000.00

EX-2.1.5

EXHIBIT 2.1.5

CPC

INVESTORS’ RIGHTS AGREEMENT

[                    ], 2009

TABLE OF CONTENTS

	Page
SECTION 1 DEFINITIONS	1
1.1      Certain Definitions	1
SECTION 2 REGISTRATION RIGHTS	5
2.1      Requested Registration	5
2.2      Company Registration	7
2.3      Registration on Form S-3	9
2.4      Expenses of Registration	10
2.5      Registration Procedures	10
2.6      Indemnification	12
2.7      Information by Holder	14
2.8      Restrictions on Transfer	14
2.9      Rule 144 Reporting	15
2.10    Market Stand-Off Agreement	16
2.11    Delay of Registration	16
2.12    Transfer or Assignment of Registration Rights	16
2.13    Limitations on Subsequent Registration Rights	17
2.14    Termination of Registration Rights	17
SECTION 3 COVENANTS OF THE COMPANY	17
3.1      Basic Financial Information and Inspection Rights	17
3.2      Confidentiality	19
3.3      Termination of Covenants	19
SECTION 4 RIGHT OF FIRST REFUSAL	19
4.1      Right of First Refusal to Investors	19
SECTION 5 COVENANTS OF THE INVESTORS	20
5.1      Buy-Out Option	20
SECTION 6 MISCELLANEOUS	23
6.1      Amendment	23
6.2      Notices	24
6.3      Governing Law	25
6.4      Successors and Assigns	25
6.5      [Reserved]	25
6.6      Entire Agreement	25
6.7      Delays or Omissions	25
6.8      Severability	26
6.9      Titles and Subtitles	26

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TABLE OF CONTENTS

(Continued)

	Page
6.10    Counterparts	26
6.11    Jurisdiction; Venue	26
6.12    Further Assurances	26
6.13    Specific Performance	26
6.14    Termination upon Change of Control	26
6.15    Conflict	27
6.16    Attorneys’ Fees	27
6.17    Aggregation of Company Securities	27
6.18    Jury Trial	27

The registrant agrees to furnish to the Securities and Exchange Commission upon request a copy of any omitted schedule or exhibit.

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CPC

INVESTORS’ RIGHTS AGREEMENT

This Investors’ Rights Agreement (this “Agreement”) is dated as of [                    ], 2009, and is between CPC, a Delaware limited liability company (the “Company”), and the persons and entities listed on Exhibit A (each, an “Investor” and collectively, the “Investors”). Astellas Pharma Inc. (“Astellas”), for purposes of Sections 5.1(h) and 5.1(i) only, and Astellas US Holding, Inc. (“Astellas US”), for the purposes of Section 5.1(g) only, shall also be parties herein. All capitalized terms used and not defined herein shall have such meanings as set forth in the Master Joint Venture Agreement by and between Maxygen, Inc. (“Maxygen”), Astellas, and Astellas Bio Inc. (“Bio”) dated as of June 30, 2009 (the “Joint Venture Agreement”).

RECITALS

The Investors and the Company are parties to the Series A and Series B Preferred Unit Purchase Agreement of even date herewith (the “Purchase Agreement”), and it is a condition to the closing of the sale of the Series A Preferred Units and Series B Preferred Units to the Investors that the Investors and the Company execute and deliver this Agreement.

The parties therefore agree as follows:

SECTION 1 DEFINITIONS

1.1 Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

(a) “Buy-Out Option” shall have the meaning set forth in Section 5.1(a).

(b) “Buy-Out Units” shall have the meaning set forth in Section 5.1(a).

(c) “Certificate” shall mean the Company’s Certificate of formation as filed [                    ], 2009 and as amended from time to time.

(d) “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

(e) “Common Units” shall mean the common units of the Company.

(f) “Company Indemnified Party” shall have the meaning set forth in Section 2.6(b).

(g) “Company Securities” shall mean Units or Registrable Securities.

(h) “Company” shall mean CPC, provided that following the Entity Conversion, “Company” shall mean the Conversion Entity.

(i) “Contributed Assets” shall have the meaning set forth in Section 2.1 of the Asset Contribution Agreement.

(j) “Conversion Entity” shall mean the corporation resulting from the Entity Conversion.

(k) “Conversion Stock” shall mean the Common Stock of the Conversion Entity issued in exchange for the membership interests of CPC upon the Entity Conversion.

(l) “Conversion Units” shall mean the Common Units issued upon conversion of the Preferred Units.

(m) “DGCL” shall mean the General Corporation Law of the State of Delaware.

(n) “DLLCA” shall mean the Limited Liability Company Act of the State of Delaware.

(o) “Entity Conversion” shall mean the conversion of CPC from a limited liability company to a corporation pursuant to Section 9.04 of the LLC Agreement.

(p) “Equity Plan” shall mean the Company’s 2009 Equity Incentive Plan.

(q) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

(r) “Exercise Price” shall have the meaning set forth in Section 5.1(a).

(s) “Governmental Entity” shall mean any U.S. federal, state or local or any foreign government or any court of competent jurisdiction, administrative or regulatory agency or commission or other governmental authority or agency, domestic or foreign.

(t) “Holder Indemnified Party” shall have the meaning set forth in Section 2.6(a).

(u) “Holder” shall mean any Investor who holds Registrable Securities and any holder of Registrable Securities to whom the registration rights conferred by this Agreement have been duly and validly transferred in accordance with Section 2.12 of this Agreement.

(v) “Indemnified Party” shall have the meaning set forth in Section 2.6(c).

(w) “Indemnifying Party” shall have the meaning set forth in Section 2.6(c).

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(x) “Initial Public Offering” shall mean the closing of the Conversion Entity’s first firm commitment underwritten public offering of its Common Stock registered under the Securities Act.

(y) “Initiating Holders” shall mean any Holder or Holders who in the aggregate hold a majority of the outstanding Registrable Securities.

(z) “Investors” shall have the meaning set forth in the Preamble.

(aa) “Loan Agreement” shall have the meaning set forth in Section 5.1(g).

(bb) “Loan Conditions” shall have the meaning set forth in Section 5.1(g).

(cc) “Loan Option” shall have the meaning set forth in Section 5.1(g).

(dd) “Maximum Loan Amount” shall have the meaning set forth in the Loan Agreement.

(ee) “New Securities” shall have the meaning set forth in Section 4.1(a).

(ff) “Option Closing” shall have the meaning set forth in Section 5.1(d).

(gg) “Option Expiration Date” shall have the meaning set forth in Section 5.1(a).

(hh) “Option Notice” shall have the meaning set forth in Section 5.1(a).

(ii) “Other Products Option” shall mean the Option defined in the Other Products Collaboration Agreement.

(jj) “Preferred Unit” shall mean the Series A Preferred Units and Series B Preferred Units of the Company.

(kk) “Purchase Agreement” shall have the meaning set forth in the Recitals.

(ll) “Qualified Public Offering” shall mean a firm commitment underwritten initial public offering by the Company pursuant to an effective registration statement filed under the Securities Act, covering the offer and sale of the Common Units, provided that the pre-offering valuation of the Company is at least $200,000,000 and the aggregate gross proceeds to the Company are more than $50,000,000.

(mm) “Registrable Securities” shall mean (i) shares of Common Stock issued or issuable pursuant to the conversion of the Units upon the Entity Conversion and (ii) any Common Stock issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in (i) above; provided, however, that Registrable Securities shall not include any securities described in clause (i) or (ii) above which have previously been registered or which

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have been sold to the public either pursuant to a registration statement or Rule 144, or which have been sold in a private transaction in which the transferor’s rights under this Agreement are not validly assigned in accordance with this Agreement.

(nn) The terms “register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.

(oo) “Registration Expenses” shall mean all expenses incurred in effecting any registration pursuant to this Agreement, which shall be paid in any event by the Company, including, without limitation, all registration and qualification fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company, blue sky fees and expenses, and expenses of any regular or special audits incident to or required by any such registration, but shall not include Selling Expenses and the compensation of regular employees of the Company.

(pp) “Related Entity” means, with respect to any party hereto, (i) any corporation, trust, limited liability company, association or other entity in which such party holds an 80% or greater equity interest, (ii) any parent corporation, trust, limited liability company or association, or other parent entity, of such party or (iii) any liquidating trust or similar entity established for the benefit of such party’s equityholders.

(qq) “Restricted Securities” shall mean any Registrable Securities required to bear the first paragraph of the legend described in Section 2.8(c).

(rr) “Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

(ss) “Rule 145” shall mean Rule 145 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission

(tt) “Rule 415” shall mean Rule 415 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

(uu) “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

(vv) “Securityholder” shall mean a holder of Units or Registrable Securities.

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(ww) “Selling Expenses” shall mean all underwriting discounts, filing fees, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel for any Holder.

(xx) “Series A Preferred Units” shall mean the Series A Preferred Units issued pursuant to the Purchase Agreement.

(yy) “Series B Preferred Units” shall mean the Series B Preferred Units issued pursuant to the Purchase Agreement.

(zz) “Units” shall mean the Series A Preferred Units and Series B Preferred Units.

(aaa) “Transfer” shall have such meaning as set forth in Section 1.1 of the Co-Sale Agreement dated [                    ], 2009 by and among the Company and the Investors.

(bbb) “Withdrawn Registration” shall mean a forfeited demand or S-3 registration under Section 2.1 or Section 2.3, respectively, in accordance with the terms and conditions of Section 2.4.

SECTION 2 REGISTRATION RIGHTS

2.1 Requested Registration.

(a) Request for Registration. Subject to the conditions set forth in this Section 2.1, if the Company shall receive from Initiating Holders a written request signed by such Initiating Holders that the Company effect any registration with respect to all or a part of the Registrable Securities (such request shall state the number of Registrable Securities to be disposed of and the intended methods of disposition of such securities by such Initiating Holders), the Company will:

(i) within ten (10) days give written notice of the proposed registration to all other Holders, who shall then have the right to request inclusion in such registration of all or a part of their Registrable Securities; and

(ii) as soon as practicable, file and use its commercially reasonable efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and to permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request received by the Company within twenty (20) days after such written notice from the Company is mailed or delivered.

(b) Limitations on Requested Registration. The Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 2.1:

(i) Prior to the earlier of (A) the later to occur of the Entity Conversion and three (3) year anniversary of the date of this Agreement or (B) six (6) months following the Company’s Initial Public Offering;

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(ii) In any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification, or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

(iii) After the Company has initiated two (2) such registrations pursuant to this Section 2.1 (counting for these purposes only (x) registrations which have been declared or ordered effective and pursuant to which securities have been sold, and (y) Withdrawn Registrations);

(iv) During the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of filing of, and ending on a date one hundred eighty (180) days after the effective date of, a Company-initiated registration (or ending on the subsequent date on which all market stand-off agreements applicable to the offering have terminated); provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective;

(v) If the Initiating Holders propose to dispose of Registrable Securities that may be registered on Form S-3 pursuant to a request made under Section 2.3;

(vi) If the Initiating Holders do not request that such offering be firmly underwritten by underwriters selected by the Initiating Holders (subject to the consent of the Company); or

(vii) If the Company and the Initiating Holders are unable to obtain the commitment of the underwriter described in clause (b)(iv) above to firmly underwrite the offer.

(c) Deferral. If (i) in the good faith judgment of the board of directors of the Company, the filing of a registration statement covering the Registrable Securities would be detrimental to the Company and the board of directors of the Company concludes, as a result, that it is in the best interests of the Company to defer the filing of such registration statement at such time, and (ii) the Company shall furnish to such Holders a certificate signed by the President of the Company stating that in the good faith judgment of the board of directors of the Company, it would be detrimental to the Company for such registration statement to be filed in the near future and that it is, therefore, in the best interests of the Company to defer the filing of such registration statement, then (in addition to the limitations set forth in Section 2.1(b)(iv) above) the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders, and, provided further, that the Company shall not defer its obligation in this manner more than twice in any twelve-month period.

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(d) Other Securities. The registration statement filed pursuant to the request of the Initiating Holders may include securities of the Company being sold for the account of the Company.

(e) Underwriting. The right of any Holder to include all or any portion of its Registrable Securities in a registration pursuant to this Section 2.1 shall be conditioned upon such Holder’s participation in an underwriting and the inclusion of such Holder’s Registrable Securities to the extent provided herein. The Company shall (together with all Holders proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by the Company, which underwriters are reasonably acceptable to a majority in interest of the Initiating Holders.

Notwithstanding any other provision of this Section 2.1, if the underwriters advise the Initiating Holders in writing that marketing factors require a limitation on the number of Registrable Securities to be underwritten, the number of Registrable Securities that may be so included shall be allocated among all Holders requesting to include Registrable Securities in such registration statement based on the pro rata percentage of Registrable Securities that each such Holder has requested be included in such registration statement. In no event shall the number of Registrable Securities underwritten in such registration be limited unless and until all Registrable Securities held by persons other than Holders, including the Company, are completely excluded from such offering.

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written notice from the Company, the underwriter or the Initiating Holders. The securities so excluded shall also be withdrawn from registration. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall also be withdrawn from such registration. If Registrable Securities are so withdrawn from the registration and if the number of Registrable Securities to be included in such registration was previously reduced as a result of marketing factors pursuant to this Section 2.1(e), then the Company shall offer to all Holders who have retained rights to include securities in the registration the right to include additional Registrable Securities in the registration in an aggregate amount equal to the number of Registrable Securities so withdrawn, with such Registrable Securities to be allocated among such Holders requesting additional inclusion, as set forth above.

2.2 Company Registration.

(a) Company Registration. If the Company shall determine to register any of its securities either for its own account or the account of a security holder or holders, other than a registration pursuant to Section 2.1 or 2.3, a registration relating solely to employee benefit plans, a registration relating to the offer and sale of debt securities, a registration relating to a corporate reorganization or other Rule 145 transaction, or a registration on any registration form that does not permit secondary sales, the Company will:

(i) promptly give written notice of the proposed registration to all Holders; and

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(ii) use its commercially reasonable efforts to include in such registration (and any related qualification under blue sky laws or other compliance), except as set forth in Section 2.2(b) below, and in any underwriting involved therein, all of such Registrable Securities as are specified in a written request or requests made by any Holder or Holders received by the Company within ten (10) days after such written notice from the Company is mailed or delivered. Such written request may specify all or a part of a Holder’s Registrable Securities.

(b) Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 2.2(a)(i). In such event, the right of any Holder to registration pursuant to this Section 2.2 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and the other holders of securities of the Company with registration rights to participate therein distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Company.

Notwithstanding any other provision of this Section 2.2, if the underwriters advise the Company in writing that marketing factors require a limitation on the number of securities to be underwritten, the underwriters may (subject to the limitations set forth below) limit the number of Registrable Securities to be included in the registration and underwriting. The Company shall so advise all holders of securities requesting registration, and the number of securities that are entitled to be included in the registration and underwriting shall be allocated, as follows: (i) first, to the Company for securities being sold for its own account, and (ii) second, to the Holders requesting to include Registrable Securities in such registration statement based on their pro rata share of Registrable Securities to be included in the registration, assuming conversion. Notwithstanding the foregoing, no such reduction shall reduce the value of the Registrable Securities of the Holders included in such registration below twenty-five percent (25%) of the total value of securities included in such registration, unless such offering is a Qualified Public Offering and such registration does not include securities of any other selling stockholders (excluding Registrable Securities registered for the account of the Company), in which event any or all of the Registrable Securities of the Holders may be excluded.

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall also be excluded therefrom by written notice from the Company or the underwriter. The Registrable Securities or other securities so excluded shall also be withdrawn from such registration. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration. If Registrable Securities are so withdrawn from the registration and if the number of Registrable Securities to be included in such registration was previously reduced as a result of marketing factors

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pursuant to Section 2.2(b), the Company shall then offer to all persons who have retained the right to include securities in the registration the right to include additional securities in the registration in an aggregate amount equal to the number of Registrable Securities so withdrawn, with such Registrable Securities to be allocated among the persons requesting additional inclusion, in the manner set forth above.

(c) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.

2.3 Registration on Form S-3.

(a) Request for Form S-3 Registration. After its initial public offering, the Company shall use its commercially reasonable efforts to qualify for registration on Form S-3 or any comparable or successor form or forms. After the Company has qualified for the use of Form S-3, in addition to the rights contained in the foregoing provisions of this SECTION 2 and subject to the conditions set forth in this Section 2.3, if the Company shall receive from a Holder or Holders of Registrable Securities a written request that the Company effect any registration on Form S-3 or any similar short form registration statement with respect to all or part of such Registrable Securities (such request shall state the number of Registrable Securities to be disposed of and the intended methods of disposition of such Registrable Securities by such Holder or Holders), the Company will take all such action with respect to such Registrable Securities as required by Section 2.1(a)(i) and 2.1(a)(ii).

(b) Limitations on Form S-3 Registration. The Company shall not be obligated to effect, or take any action to effect, any such registration pursuant to this Section 2.3:

(i) In the circumstances described in either Sections 2.1(b)(i), 2.1(b)(ii) or 2.1(b)(iv); or

(ii) After the Company has initiated two (2) such registrations pursuant to this Section 2.3 (counting for these purposes only (x) registrations which have been declared or ordered effective and pursuant to which securities have been sold, and (y) Withdrawn Registrations).

(c) Deferral. The provisions of Section 2.1(c) shall apply to any registration pursuant to this Section 2.3.

(d) Underwriting. If the Holders of Registrable Securities requesting registration under this Section 2.3 intend to distribute the Registrable Securities covered by their request by means of an underwriting, the provisions of Section 2.1(d) shall apply to such registration. Notwithstanding anything contained herein to the contrary, registrations effected pursuant to this Section 2.3 shall not be counted as requests for registration or registrations effected pursuant to Section 2.1.

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2.4 Expenses of Registration. All Registration Expenses incurred in connection with registrations pursuant to Sections 2.1, 2.2 and 2.3 shall be borne by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Sections 2.1 and 2.3 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered or because a sufficient number of Holders shall have withdrawn so that the minimum offering conditions set forth in Sections 2.1 are no longer satisfied (in which case all participating Holders shall bear such expenses pro rata among each other based on the number of Registrable Securities requested to be so registered), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one demand registration pursuant to Section 2.1 in the event that the withdrawn registration was initiated pursuant to Section 2.1 or Section 2.3 in the event that the withdrawn registration was initiated pursuant to Section 2.3; provided, however, in the event that a withdrawal by the Holders is based upon material adverse information relating to the Company that is different from the information known or available (upon request from the Company or otherwise) to the Holders requesting registration at the time of their request for registration under Section 2.1 or Section 2.3, as the case may be, such registration shall not be treated as a counted registration for purposes of Section 2.1 or Section 2.3, as the case may be, even though the Holders do not bear the Registration Expenses for such registration. All Selling Expenses relating to securities registered on behalf of the Holders shall be borne by the holders of securities included in such registration pro rata among each other on the basis of the number of Registrable Securities so registered.

2.5 Registration Procedures. In the case of each registration effected by the Company pursuant to this SECTION 2, the Company will keep each Holder advised in writing as to the initiation of each registration and as to the completion thereof. At its expense, the Company will use its commercially reasonable efforts to:

(a) Keep such registration effective for a period ending on the earlier of the date which is sixty (60) days from the effective date of the registration statement or such time as the Holder or Holders have completed the distribution described in the registration statement relating thereto;

(b) Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in subsection (a) above;

(c) Furnish such number of prospectuses, including any preliminary prospectuses, and other documents incident thereto, including any amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request;

(d) Use its reasonable best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdiction as shall be reasonably requested by the Holders; provided, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

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(e) Notify each seller of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing, and following such notification promptly prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing;

(f) If (i) a registration made pursuant to a registration statement filed under Rule 415 is required to be kept effective in accordance with this Agreement after the third anniversary of the initial effective date of the shelf registration statement and (ii) the registration rights of the applicable Holders have not terminated, file a new registration statement with respect to any unsold Registrable Securities subject to the original request for registration prior to the end of the three (3) year period after the initial effective date of the shelf registration statement, and keep such registration statement effective in accordance with the requirements otherwise applicable under this Agreement;

(g) Use its commercially reasonable efforts to furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and reasonably satisfactory to a majority in interest of the Holders requesting registration of Registrable Securities and (ii) a “comfort” letter dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters;

(h) Provide a transfer agent and registrar for all Registrable Securities registered pursuant to such registration statement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

(i) Otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months, but not more than eighteen (18) months, beginning with the first month after the effective date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act;

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(j) Cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed;

(k) Notify each Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and

(l) In connection with any underwritten offering pursuant to a registration statement filed pursuant to Section 2.1, enter into an underwriting agreement in form reasonably necessary to effect the offer and sale of Registrable Securities, provided such underwriting agreement contains reasonable and customary provisions, and provided further, that each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.

2.6 Indemnification.

(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, each of its officers, directors and partners, legal counsel and accountants and each person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification or compliance has been effected pursuant to this SECTION 2, and each underwriter, if any, and each person who controls within the meaning of Section 15 of the Securities Act any underwriter (each, a “Holder Indemnified Party”), against all expenses, claims, losses, damages and liabilities (or actions, proceedings or settlements in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any registration statement, any prospectus included in the registration statement, any issuer free writing prospectus (as defined in Rule 433 of the Securities Act), any issuer information (as defined in Rule 433 of the Securities Act) filed or required to be filed pursuant to Rule 433(d) under the Securities Act or any other document incident to any such registration, qualification or compliance prepared by or on behalf of the Company or used or referred to by the Company, (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any violation (or alleged violation) by the Company of the Securities Act, any state securities laws or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any offering covered by such registration, qualification or compliance, and the Company will reimburse each such Holder Indemnified Party, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability or action; provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability, or action arises out of or is based on any untrue statement or omission that is based on and conforms with written information furnished to the Company and stated to be specifically for use in any registration statement by such Holder Indemnified Party; and provided, further that, the indemnity agreement contained in this Section 2.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld).

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(b) To the extent permitted by law, each Holder, severally and not jointly, will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification or compliance is being effected, indemnify and hold harmless the Company, each of its directors, officers, partners, legal counsel and accountants and each underwriter, if any, of the Company’s securities covered by such a registration statement, each person who controls such underwriter within the meaning of Section 15 of the Securities Act, each other such Holder, and each of their officers, directors and partners, and each person controlling each other such Holder (each, a “Company Indemnified Party”), against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any prospectus, offering circular or other document (including any related registration statement, notification, or the like) incident to any such registration, qualification or compliance, or (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company Indemnified Party for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) made in such registration statement, prospectus, offering circular or other document is based on and conforms with written information provided by such Holder and stated to be specifically for use therein; provided, however, that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld); and provided that in no event shall any indemnity under this Section 2.6 exceed the net proceeds from the offering received by such Holder, except in the case of fraud or willful misconduct by such Holder.

(c) Any Holder Indemnified Party or Company Indemnified Party entitled to indemnification under this Section 2.6 (each, an “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense; and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.6, to the extent such failure is not materially prejudicial. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

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(d) If the indemnification provided for in this Section 2.6 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. No person or entity will be required under this Section 2.6(d) to contribute any amount in excess of the net proceeds from the offering received by such person or entity, except in the case of fraud or willful misconduct by such person or entity. No person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

2.7 Information by Holder. Each Holder of Registrable Securities shall furnish to the Company such information regarding such Holder and the distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification, or compliance referred to in this SECTION 2.

2.8 Restrictions on Transfer.

(a) The holder of each certificate representing Company Securities by acceptance thereof agrees to comply in all respects with the provisions of this Section 2.8. Each Securityholder agrees not to make any sale, assignment, transfer, pledge or other disposition of all or any portion of such Company Securities, or any beneficial interest therein, unless and until the transferee thereof has agreed in writing for the benefit of the Company to take and hold such Company Securities subject to, and to be bound by, the terms and conditions set forth in this Agreement, including, without limitation, this Section 2.8 and Section 2.10, and:

(i) There is then in effect a registration statement under the Securities Act covering such proposed disposition and the disposition is made in accordance with the registration statement; or

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(ii) The Securityholder shall have given prior written notice to the Company of the Securityholder’s intention to make such disposition and shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition, and, if requested by the Company, the Securityholder shall have furnished the Company with evidence reasonably satisfactory to the Company that such disposition will not require registration of such Company Securities under the Securities Act, including, if requested by the Company, an opinion of counsel reasonably satisfactory to the Company, whereupon the holder of such Company Securities shall be entitled to transfer such Company Securities in accordance with the terms of the notice delivered by the Securityholder to the Company. It is agreed that the Company will not require opinions of counsel for transactions made pursuant to Rule 144 except in unusual circumstances.

(b) Notwithstanding the provisions of Section 2.8(a), no such registration statement or opinion of counsel shall be necessary for (i) a transfer not involving a change in beneficial ownership, (ii) transactions involving the distribution without consideration of Company Securities by any Securityholder to (x) a Related Entity of the Securityholder,or (y) any of the Securityholder’s partners, members or other equity owners, or retired partners, retired members or other equity owners, or to the estate of any of the Securityholder’s partners, members or other equity owners or retired partners, retired members or other equity owners, or (iii) a transfer pursuant to the exercise of the Buy-Out Option; provided, in each case, that the Securityholder shall give written notice to the Company of the Securityholder’s intention to effect such disposition and shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition.

(c) Each certificate representing Company Securities shall (unless otherwise permitted by the provisions of this Agreement) be stamped or otherwise imprinted with a legend substantially similar to the legend set forth in Section 3.8 of the Purchase Agreement. The Securityholders consent to the Company making a notation on its records and giving instructions to any transfer agent of the Company Securities in order to implement the restrictions on transfer established in this Section 2.8.

(d) The first paragraph of the legend referring to federal and state securities laws set forth in Section 3.8 of the Purchase Agreement and the stock transfer instructions and record notations with respect to the Company Securities shall be removed and the Company shall issue a certificate without such paragraph to the Securityholder if (i) those securities are registered under the Securities Act, or (ii) the Holder provides the Company with an opinion of counsel reasonably acceptable to the Company to the effect that a sale or transfer of those securities may be made without registration or qualification.

2.9 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Restricted Securities to the public without registration, the Company agrees to use its commercially reasonable efforts to:

(a) Make and keep adequate current public information with respect to the Company available in accordance with Rule 144 under the Securities Act, at all times from and after ninety (90) days following the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public;

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(b) File with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements; and

(c) So long as a Holder owns any Restricted Securities, furnish to the Holder forthwith upon written request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time from and after ninety (90) days following the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration.

2.10 Market Stand-Off Agreement. No Holder shall sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, of any Registrable Securities (or other securities) of the Company held by such Holder (other than those included in the registration) during the one hundred eighty (180) day period following the effective date of the registration statement for the Company’s Initial Public Offering filed under the Securities Act (or such other period as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto). The obligations described in this Section 2.10 shall not apply to a registration relating solely to employee benefit plans on Form S-l or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions and may stamp each such certificate with the second legend set forth in Section 2.8(c) with respect to the Company Securities (or other securities) subject to the foregoing restriction until the end of such one hundred eighty (180) day (or other) period. Each Holder agrees to execute a market standoff agreement with said underwriters in customary form consistent with the provisions of this Section 2.10.

2.11 Delay of Registration. No Holder shall have any right to take any action to restrain, enjoin, or otherwise delay any registration as the result of any controversy that might arise with respect to the interpretation or implementation of this SECTION 2.

2.12 Transfer or Assignment of Registration Rights. The rights to cause the Company to register securities granted to a Securityholder by the Company under this SECTION 2 may be

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transferred or assigned by a Securityholder only to a transferee or assignee of not less than 5,000,000 Company Securities (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like); provided that (i) such transfer or assignment of Company Securities is effected in accordance with the terms of Section 2.8, the Co-Sale Agreement and applicable securities laws, (ii) the Company is given written notice prior to said transfer or assignment, stating the name and address of the transferee or assignee and identifying the securities with respect to which such registration rights are intended to be transferred or assigned and (iii) the transferee or assignee of such rights assumes in writing the obligations of such Securityholder under this Agreement, including without limitation the obligations set forth in Section 2.10.

2.13 Limitations on Subsequent Registration Rights. The Company shall not, without the prior written consent of each Investor who holds not less than 5,000,000 Company Securities, or in the event that no Investor holds at least 5,000,000 Company Securities, Securityholders holding a majority of the Company Securities, (i) prior to the Option Expiration Date, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which are pari passu with or senior to the registration rights granted to the Securityholders hereunder or (ii) on or after the Option Expiration Date (as defined below), enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which are senior to the registration rights granted to the Securityholders hereunder (however, for the avoidance of doubt, on or following the Option Expiration Date, the Company may give any such holder or prospective holder registration rights which are pari passu with the registration rights granted to the Securityholders hereunder without being required to obtain the prior consent of any Investor pursuant to this Section 2.13, including by making any such holder or prospective holder a party to this Agreement in accordance with Section 6.1).

2.14 Termination of Registration Rights. The right of any Holder to request registration or inclusion in any registration pursuant to Sections 2.1, 2.2 or 2.3 shall terminate on the earlier of (i) such date, on or after the closing of the Company’s first registered public offering of Common Stock, on which all Registrable Securities held or entitled to be held upon conversion by such Holder may immediately be sold under Rule 144 during any ninety (90) day period, and (ii) three (3) years after the closing of the Company’s Initial Public Offering.

SECTION 3 COVENANTS OF THE COMPANY

The Company hereby covenants and agrees, as follows:

3.1 Basic Financial Information and Inspection Rights.

(a) Basic Financial Information. The Company will furnish the following reports to each Securityholder who owns at least 5,000,000 Company Securities (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like); provided, however, that no Securityholder shall by reason of this Section 3.1 have access to any trade secrets or classified information of the Company:

(i) As soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred twenty (120) days after the end of each fiscal year of the Company, an audited consolidated balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and audited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with U.S. generally accepted accounting principles consistently applied, accompanied by an unqualified report of independent certified public accountants regarding such balance sheet and statements selected by the Company, provided, however, that in lieu of the balance sheet and statements of income and cash flows and a report of independent certified public accountants required to be furnished under this Section 3.1(a)(i), the Company may furnish the audited consolidated financial statements and accompanying report of independent certified public accountants of Maxygen, which audited consolidated financial statements and report of independent certified public accountants shall include or cover, as the case may be, the financial results of the Company.

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(ii) As soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within forty-five (45) days after the end of the first, second, and third quarterly accounting periods in each fiscal year of the Company, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal year-end audit adjustments, and certified by the Chief Financial Officer of the Company.

(iii) As soon as practicable after the end of each calendar month, and in any event within thirty (30) days after the end of each calendar month, an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such monthly period, and unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal year-end audit adjustments, and certified by the Chief Financial Officer of the Company.

(iv) At least thirty (30) days prior to the beginning of each fiscal year an annual business plan, including a budget, for such fiscal year.

(b) Inspection Rights. The Company will afford to each Investor and such Investor’s accountants and counsel, reasonable access during normal business hours to all of the Company’s respective properties, books and records to the extent permitted by applicable law. Each Investor shall have such other access to management and information as is necessary for it to comply with applicable laws and regulations and reporting obligations. The Company shall not be required to disclose details of contracts with, work performed for, or trade secrets of specific customers and other business partners where to do so would violate confidentiality obligations to those parties; provided that the Company will use its commercially reasonable efforts to provide exceptions in all confidentiality agreements to permit such disclosure to the Investors subject to the Investors entering

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into such reasonable confidentiality and non-use agreements with respect to such information as the Company or such other parties may request. Such Investors may exercise their rights under this Section 3.1(b) only for purposes reasonably related to their interests under this Agreement and other Transaction Agreements. The rights granted pursuant to this Section 3.1(b) may not be assigned or otherwise conveyed by such Investors or by any subsequent transferee of any such rights without the prior written consent of the Company.

3.2 Confidentiality. Any information disclosed pursuant to this SECTION 3 shall be Confidential Information and subject to the requirements of Section 8.7 of the Joint Venture Agreement. Notwithstanding the foregoing, no Investor shall by reason of any Transaction Agreement (including, without limitation, this Agreement) have access to any trade secrets or classified information of the Company. The Company shall not be required to comply with any information rights contained in any Transaction Agreement (including, without limitation, this Agreement) in respect of any Investor whom the Company reasonably determines to be a competitor or an officer, employee, director or holder of more than a ten percent (10%) ownership interest of a competitor of the Company. The Investors agree that, in the event that any person other than an Investor becomes party to this Agreement, the Investors will take all appropriate actions to require such person to confidentiality requirements substantially consistent with those set forth in this Section 3.2 and Section 8.7 of the Joint Venture Agreement.

3.3 Termination of Covenants. The covenants set forth in this SECTION 3 shall terminate and be of no further force and effect after the closing of the Company’s Initial Public Offering.

SECTION 4 RIGHT OF FIRST REFUSAL

4.1 Right of First Refusal to Investors. The Company hereby grants to each Investor during such time as such Investor owns at least 5,000,000 Company Securities and/or Conversion Units the right of first refusal to purchase its pro rata share of New Securities (as defined in this Section 4.1(a)) which the Company may, from time to time, propose to sell and issue after the date of this Agreement. An Investor’s pro rata share, for purposes of this right of first refusal, is equal to the ratio of (a) the number of Common Units (or, following the Entity Conversion, Conversion Stock) owned by such Investor immediately prior to the issuance of New Securities (assuming full conversion of the Units and full conversion or exercise of all outstanding convertible securities, rights, options and warrants held by said Investor) to (b) the total number of Common Units (or, following the Entity Conversion, Conversion Stock) outstanding immediately prior to the issuance of New Securities (assuming full conversion of the Units and full conversion or exercise of all outstanding convertible securities, rights, options and warrants). For the avoidance of doubt, the right of first refusal provided for in this Section 4.1 shall survive and be unaffected by the occurrence of the Option Expiration Date.

(a) “New Securities” shall mean any security (including Common Units and/or Preferred Units) of the Company whether now authorized or not, and rights, convertible securities, options or warrants to purchase such securities including any capital stock, or Units and securities of

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any type whatsoever that are, or may become, exercisable or convertible into capital stock; provided that the term “New Securities” does not include any security of the Company that is excluded from the definition of “Additional Common Units” in Section 4.03(d)(i) of the LLC Agreement (or, after the Entity Conversion, any Conversion Stock corresponding to the securities excluded from the definition of “Additional Common Units”) as well as any Common Units (including Profits Interest Units, as defined in the LLC Agreement) or Conversion Stock and options, warrants or other rights to purchase Common Units or Conversion Stock issued or issuable to officers, employees, directors, consultants, placement agents or other service providers of the Company (or any subsidiary) pursuant to grants, restricted unit purchase agreements, option plans, purchase plans, agreements or other employee stock incentive programs or similar arrangements approved by the Company’s board of managers to the extent not so excluded by Section 4.03(d)(i) of the LLC Agreement.

(b) In the event the Company proposes to undertake an issuance of New Securities, it shall give each Investor written notice of its intention, describing the type of New Securities, their price and the general terms upon which the Company proposes to issue the same. Each Investor shall have fifteen (15) days after any such notice is mailed or delivered (the “Election Period”) to agree to purchase such Holder’s pro rata share of such New Securities for the price and upon the terms specified in the notice by giving written notice to the Company, in substantially the form attached as Exhibit B, and stating therein the quantity of New Securities to be purchased.

(c) In the event the Investors fail to exercise fully the right of first refusal within the Election Period, the Company shall have ninety (90) days thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered thereby shall be closed, if at all, within ninety (90) days from the date of said agreement) to sell that portion of the New Securities with respect to which the Investors’ right of first refusal option set forth in this Section 4.1 was not exercised, at a price and upon terms no more favorable to the purchasers thereof than specified in the Company’s notice to Investors delivered pursuant to Section 4.1(b). In the event the Company has not sold such New Securities within such ninety (90) day period following the Election Period, or such ninety (90) day period following the date of said agreement, the Company shall not thereafter issue or sell any New Securities, without first again offering such securities to the Investors in the manner provided in this Section 4.1.

(d) The right of first refusal granted under this Agreement shall expire upon, and shall not be applicable to, the Company’s Initial Public Offering.

SECTION 5 COVENANTS OF THE INVESTORS

5.1 Buy-Out Option.

(a) Bio and Maxygen hereby agree and acknowledge that, on the terms and conditions set forth in this Section 5.1, Bio has the right to purchase all, but not part, of the Series A Units and Conversion Units (or, following the Entity Conversion, any Conversion Stock) held by Maxygen at any time prior to the Option Expiration Date (the “Buy-Out Units,” and the right to purchase such Buy-Out Units, the “Buy-Out Option”) and, upon exercise of such Buy-Out Option

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by Bio, Maxygen shall sell to Bio all such Buy-Out Units, notwithstanding any provision of this Agreement or any of the Transaction Agreements to the contrary. Such Buy-Out Option may be exercised by Bio, in its sole and absolute discretion at any time and from time to time, until [                    ], 2012 (the “Option Expiration Date”), by giving written notice to Maxygen, pursuant to the form attached hereto as Exhibit C (the “Option Notice”). The exercise price for the Buy-Out Units (the “Exercise Price”) is set forth on Schedule 5.1 hereof. The Option Notice shall specify the Exercise Price Bio shall pay to Maxygen, with the date that Bio exercises the Buy-Out Option being the relevant date for determining the Exercise Price to be paid in accordance with Schedule 5.1 hereto. Each of Bio and Maxygen covenants that it shall not Transfer any Units or Conversion Units held by Bio or Maxygen, as the case may be, at any time prior to the Option Expiration Date, except as in accordance with this Section 5.1 or in a Permitted Transfer. “Permitted Transfer” means any Transfer (either by operation of law or otherwise) made by either of Bio or Maxygen to (i) an entity that acquires all or substantially all of the business or assets of Bio or Maxygen, as the case may be, whether by merger, reorganization, acquisition, asset sale or otherwise, or (ii) a Related Entity of Bio or Maxygen, as the case may be, in each case subject to the agreement in writing of such transferee to be subject to the terms and conditions of this Agreement (including this Section 5.1).

(b) Upon the delivery of the Option Notice by Bio to Maxygen on or before the Option Expiration Date, the Buy-Out Option shall be deemed exercised and the parties hereto agree to work in good faith and use their reasonable best efforts to consummate the Option Closing as quickly as possible. If the Option Closing does not occur within 90 days of the delivery of the Option Notice by Bio to Maxygen, then the Buy-Out Option shall be forfeited and may not be exercised again; provided that the Buy-Out Option shall not be forfeited pursuant to the foregoing if (i) (A) Maxygen has failed to comply in any material respect with any of its obligations set forth in this paragraph (b) or paragraphs (c) or (d) below or in the agreement with respect to the sale and purchase of such Units referred to in paragraph (d) below respectively and (B) Bio has not failed to comply in any material respect with its obligations set forth in this paragraph (b) or in the agreement with respect to the sale and purchase of such Units referred to in paragraph (d) below or (ii) the Option Closing has not occurred within such period as a result of (A) the failure to obtain any consent, approval or authorization of any Governmental Entity required to consummate the Buy-Out Option or (B) any Governmental Entity having issued an Order or taken any other action enjoining, restraining or otherwise prohibiting the consummation of the Buy-Out Option.

(c) In the event that Bio informs Maxygen or the Company that the exercise of the Buy-Out Option requires the submission of a Hart-Scott-Rodino Act (the “HSR Act”) notification (or an antitrust notification in any other jurisdiction), as promptly as possible after the date of such notice but in any event no later than ten (10) days thereafter, each of Maxygen and Bio shall file with the Federal Trade Commission (the “FTC”) and the Antitrust Division of the United States Department of Justice (the “Antitrust Division”) a pre-merger notification in accordance with the HSR Act with respect to the purchase of all of Maxygen’s equity in the Company by Bio pursuant to the agreement defined in paragraph (d) below and shall submit an antitrust notification in any other jurisdiction as Bio and Maxygen reasonably believe is required with respect to Bio’s exercise of such option. Each of Maxygen and Bio shall furnish promptly to the FTC and the Antitrust Division any additional information requested by either of them pursuant to the HSR Act in connection with such filings. Each of Maxygen and Bio shall pay its own HSR Act filing fees or other filing fees, if any.

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(d) The closing of the purchase of the Buy-Out Units pursuant to Bio’s exercise of the Buy-Out Option shall be effected through a purchase agreement containing terms and conditions which are mutually agreeable to Bio and Maxygen; provided, that notwithstanding the foregoing, (i) such agreement shall contain representations and warranties (which representations and warranties, other than those representations and warranties relating to title and authority, shall not survive closing) and covenants of Maxygen relating to the Buy-Out Units and other matters which are substantially similar to those which it is making in the Asset Contribution Agreement with respect to the Contributed Assets subject to such modifications as may be appropriate to reflect the circumstances at the time and the form and nature of the transaction, and (ii) the Exercise Price shall be that established pursuant to Section 5.1(a). Bio and Maxygen shall negotiate such purchase agreement in good faith. At the closing of the Buy-Out Option (the “Option Closing”), Maxygen shall deliver a certificate or certificates representing all of the Buy-Out Units, duly endorsed in blank, or accompanied by assignments separate from the certificate or certificates representing such Buy-Out Units and made out in blank, with signatures guaranteed, together with evidence reasonably satisfactory to Bio of the payment of all applicable transfer Taxes. Each of Bio and Maxygen covenants that at no time prior to the earlier to occur of the Option Closing or the Buy-Out Expiration Date will any Units or Conversion Units held by Bio or Maxygen, as the case may be, be Transferred (except, with respect to Maxygen, to Bio or its Affiliate pursuant to this Section 5.1, or with respect to Bio or Maxygen in a Permitted Transfer or subjected to any liens, claims or encumbrances (except for those created by the Transaction Agreements or under applicable law)). At the Option Closing, Bio shall pay Maxygen the Exercise Price by wire transfer of same day funds.

(e) The Investors acknowledge and agree that the purchase of Maxygen’s ownership interest in the Company pursuant to the Buy-Out Option shall be treated for federal and applicable state and local income or franchise Tax purposes as a transaction described in Situation 1 of Revenue Ruling 99-6, 1999-1 C.B. 432, pursuant to which: (i) the Company will terminate under Section 708(b)(1)(A) of the Code when Bio purchases Maxygen’s entire interest in the Company and any vested Profits Interest Units, (ii) Maxygen and the holders of vested Profits Interest Units will be treated as selling their entire interest in the Company in accordance with Section 741 of the Code, and (iii) the Company will be deemed to make a liquidating distribution of all of its assets to Bio, Maxygen and the holders of vested Profits Interest Units, following which Bio will be treated as acquiring the assets deemed distributed to Maxygen and the holders of vested Profits Interest Units, so that, pursuant to Section 1012 of the Code, Bio’s tax basis in the Company’s assets attributable to Maxygen’s interest in the Company shall be the purchase price for their interests in the Company as determined pursuant to Section 5.1 hereof.

(f) Concurrently with or immediately after the Option Closing, Bio shall purchase for cash all vested Profits Interest Units held by the Company’s then-current and former Service Providers (as defined in the Equity Plan) and shall make adequate provisions for, and upon the subsequent vesting of, purchase, any unvested Profits Interest Units, in each case pursuant to the Equity Plan.

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(g) The Company and Bio hereby agree and acknowledge that if, at the Option Expiration Date, (i) the Buy-Out Option has not been exercised, (ii) the Company does not have in cash and cash equivalents less debt an amount greater than Twenty Million U.S. Dollars ($20,000,000), (iii) Astellas retains its license rights to products from the 4 Program under the Astellas Agreement (as such terms are defined in Article 1 of the Asset Contribution Agreement), and (iv) Bio has not exercised the Other Products Option (clauses (i) through (iv) collectively referred to as the “Loan Conditions”), the Company shall have the right (the “Loan Option”) to obtain from Astellas US or its assignee revolving loans up to the Maximum Loan Amount, upon the same terms and conditions set forth in the form of loan agreement attached as Exhibit D hereto (the “Loan Agreement”). The Company shall exercise the Loan Option by providing written notice to Astellas US or its assignee, such notice to be delivered no later than the later of (a) thirty (30) days of the Option Expiration Date, or (b) if the Buy-Out Option has been exercised but the Option Closing has not occurred, the 120th day after the delivery of the Option Notice by Bio to Maxygen (the “Loan Exercise Period”), along with a copy of the Loan Agreement executed by the Company. In the event the Loan Option has not been exercised within the Loan Exercise Period, neither Bio, Astellas US nor their respective assignees shall have an obligation to make any loans to the Company pursuant to this subparagraph. Following the valid exercise of the Loan Option, Astellas US shall promptly execute and deliver the Loan Agreement to the Company and its failure to so execute and deliver the Loan Agreement shall not relieve Astellas US of its obligations hereunder.

(h) Bio and Maxygen hereby agree and acknowledge that Bio’s rights under this Section 5.1 may be assigned to an Affiliate of Bio at any time prior to the Option Expiration Date. For the avoidance of doubt, Bio and Astellas shall remain fully and directly responsible for any and all of Bio’s obligations under this Section 5.1 regardless of whether Bio has assigned any or all of its rights to any of its Affiliates.

(i) If the Company effects the Entity Conversion, Bio and Astellas agree to promptly reimburse the Company (or its successor corporation) for costs and expenses (including reasonable attorneys’ fees) incurred by the Company to effect the Entity Conversion.

SECTION 6 MISCELLANEOUS

6.1 Amendment. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument referencing this Agreement and signed by the Company and each Investor; provided, however, that Securityholders purchasing equity securities (including any securities convertible into or exercisable for any equity securities) of the Company on or after the Option Expiration Date may become parties to this Agreement by executing a counterpart of this Agreement without any amendment of this Agreement pursuant to this paragraph or any consent or approval of any other Securityholder. Any such amendment, waiver, discharge or termination effected in accordance with this paragraph shall be binding upon each Securityholder and each future holder of all such securities of Securityholder. Each Securityholder acknowledges that by the operation of this paragraph, the Investors will have the right and power to diminish or eliminate all rights of such Securityholder under this Agreement.

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6.2 Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by electronic mail or otherwise delivered by hand, messenger or courier service addressed:

(a) if to Maxygen, Inc., to the address or electronic mail address of Maxygen, Inc. set forth in Exhibit A, as may be updated in accordance with the provisions hereof, with a copy (which shall not constitute notice) to Wilson Sonsini Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto, California 94304, Attention: David J. Segre and Tony Jeffries;

(b) if to Bio to the address or electronic mail address of Bio set forth in Exhibit A, as may be updated in accordance with the provisions hereof, with a copy (which shall not constitute notice) to Morrison & Foerster LLP, 1290 Avenue of the Americas, New York, New York 10104, Attention: Michael Braun;

(c) if to any Investor or Securityholder not provided for in paragraphs (a) or (b), above, to such address or electronic mail address as shown in the Company’s records, or, until any such Investor or Securityholder so furnishes an address to the Company, then to the address of the last holder of such equity for which the Company has contact information in its records; or

(d) if to the Company, to the attention of the Chief Executive Officer or Chief Financial Officer of the Company at 515 Galveston Drive, Redwood City, CA 94063, as may be updated in accordance with the provisions hereof, with a copy (which shall not constitute notice) to Wilson Sonsini Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto, California 94304, Attention: David J. Segre and Tony Jeffries.

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier service, freight prepaid, specifying next-business-day delivery, two (2) Business Days after deposit with the courier), (ii) if sent via registered or certified mail, at the earlier of its receipt or five (5) days after the same has been deposited in a regularly-maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent via electronic mail, when directed to the relevant electronic mail address, if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the recipient’s next Business Day in either case confirmed in writing.

Each Investor and Securityholder consents to the delivery of any notice to members given by the Company under the Delaware Limited Liability Company Act or the Certificate or the LLC Agreement by (i) electronic mail to the electronic mail address set forth above (or to any other electronic mail address for the Investor or Securityholder in the Company’s records), (ii) posting on an electronic network together with separate notice to the Investor or Securityholder of such specific

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posting or (iii) any other form of electronic transmission (as defined in §18-302 of the Delaware Limited Liability Company Act) directed to the Investor or Securityholder. This consent may be revoked by an Investor or Securityholder by written notice to the Company and may be deemed revoked in the circumstances specified in the LLC Agreement.

6.3 Governing Law. This Agreement shall be governed in all respects by the internal laws of the State of Delaware as applied to agreements entered into among Delaware residents to be performed entirely within Delaware, without regard to principles of conflicts of law that would result in the law of a jurisdiction other than the State of Delaware governing.

6.4 Successors and Assigns. Except as provided in this Section 6.4, this Agreement shall not be assignable or otherwise transferred, in whole or in part, by the Company or any Investor to any Third Party without the written consent of the other parties hereto, provided that this Agreement may without requiring the consent of the other parties be assigned, transferred, delegated or sublicensed in connection with the transfer of Units to (a) an entity that acquires all or substantially all of the business or assets of such party, whether by merger, reorganization, acquisition, asset sale or otherwise, or (b) any Related Entity of such party, in each case subject to the agreement in writing of such transferee to be subject to the terms and conditions of this Agreement and, prior to the Option Expiration Date, the Voting Agreement, the Co-Sale Agreement and the LLC Agreement. The terms and conditions of this Agreement shall be binding on and inure to the benefit of the permitted successors and assigns of the parties. Except as expressly provided in this Section 6.4, any attempted assignment or transfer of this Agreement shall be null and void.

6.5 [Reserved].

6.6 Entire Agreement. This Agreement and the exhibits hereto and the Transaction Agreements constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. No party hereto shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein or therein.

6.7 Delays or Omissions. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative.

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6.8 Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms.

6.9 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. All references in this Agreement to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

6.10 Counterparts. This Agreement may be executed and delivered by PDF signature and in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

6.11 Jurisdiction; Venue. With respect to any disputes arising out of or related to this Agreement, the parties consent to the exclusive jurisdiction of, and venue in, any court in the State of Delaware having subject matter jurisdiction (or in the event of exclusive federal jurisdiction, the courts of the District of Delaware).

6.12 Further Assurances. Each party hereto agrees to execute and deliver, by the proper exercise of its corporate, limited liability company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things as may be necessary to more fully effectuate this Agreement.

6.13 Specific Performance. It is agreed and understood that monetary damages would not adequately compensate an injured party for the breach of this Agreement by any party, that this Agreement shall be specifically enforceable, and that any breach or threatened breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order. Further, each party waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach.

6.14 Termination upon Change of Control. Notwithstanding anything to the contrary herein, this Agreement (excluding any then existing obligations) shall terminate upon (a) the acquisition of the Company by another entity by means of any transaction or series of related transactions to which the Company is party (including, without limitation, any security acquisition, reorganization, merger or consolidation but excluding any bona fide sale of stock for capital raising purposes) other than a transaction or series of transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction continue to retain (either by such voting securities remaining outstanding or by such voting securities being converted into voting securities of the surviving entity), as a result of equity in the Company held by such holders prior to such transaction, at least fifty percent (50%) of the total voting power represented by

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the voting securities of the Corporation or such surviving entity outstanding immediately after such transaction or series of transactions; (b) a sale, lease, exclusive license or other conveyance of all or substantially all of the assets of the Company; or (c) the consummation of the transaction resulting from the exercise of the Buy-Out Option.

6.15 Conflict. In the event of any conflict between the terms of this Agreement and the LLC Agreement, the terms of the LLC Agreement, as the case may be, will control. In the event of any conflict between the Company’s books and records and this Agreement or any notice delivered hereunder, the Company’s books and records will control absent fraud or error.

6.16 Attorneys’ Fees. In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

6.17 Aggregation of Company Securities. All securities held or acquired by affiliated entities or persons shall be aggregated together for purposes of determining the availability of any rights under this Agreement. For the avoidance of doubt, none of the Company, Maxygen or Bio shall be considered to be “affiliated entities” of one another for the purposes of this Agreement.

6.18 Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT. This paragraph shall not restrict a party from exercising remedies under the Uniform Commercial Code or from exercising pre-judgment remedies under applicable law.

(signature page follows)

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The parties are signing this Investors’ Rights Agreement as of the date stated in the introductory clause.

CPC

a Delaware limited liability company

By:

Name:

Title:

[SIGNATURE PAGE TO THE INVESTORS’ RIGHTS AGREEMENT]

The parties are signing this Investors’ Rights Agreement as of the date stated in the introductory clause.

INVESTOR

Astellas Bio Inc.

By:

Name:

Title:

[SIGNATURE PAGE TO THE INVESTORS’ RIGHTS AGREEMENT]

The parties are signing this Investors’ Rights Agreement as of the date stated in the introductory clause.

INVESTOR

Maxygen, Inc.

By:

Name:

Title:

[SIGNATURE PAGE TO THE INVESTORS’ RIGHTS AGREEMENT]

The parties are signing this Investors’ Rights Agreement as of the date stated in the introductory clause.

Astellas Pharma Inc.

(Solely for the purposes of Sections 5.1(h) and 5.1(i))

By:

Name:

Title:

[SIGNATURE PAGE TO THE INVESTORS’ RIGHTS AGREEMENT]

The parties are signing this Investors’ Rights Agreement as of the date stated in the introductory clause.

Astellas US Holding, Inc.

(Solely for the purposes of Section 5.1(g))

By:

Name:

Title:

[SIGNATURE PAGE TO THE INVESTORS’ RIGHTS AGREEMENT]

EXHIBIT A

INVESTORS

Astellas Bio Inc.

Three Parkway

North Deerfield, IL 60015-2458

Email: masaki.doi@jp.astellas.com and kazunori.okimura@jp.astellas.com

Maxygen, Inc.

515 Galveston Drive

Redwood City, CA 94063

Email: corporatesecretary@maxygen.com

EXHIBIT B

NOTICE AND WAIVER/ELECTION OF

RIGHT OF FIRST REFUSAL

I do hereby waive or exercise, as indicated below, my rights of first refusal under the Investors’ Rights Agreement dated as of [            ], 2009 (the “Agreement”):

Waiver of 15 days’ notice period in which to exercise right of first refusal: (please check only one)

(    ) WAIVE in full, on behalf of all Holders, the 15-day notice period provided to exercise my right of first refusal granted under the Agreement.

(    ) DO NOT WAIVE the notice period described above.

Issuance and Sale of New Securities: (please check only one):

(    ) WAIVE in full the right of first refusal granted under the Agreement with respect to the issuance of the New Securities.

(    ) ELECT TO PARTICIPATE in $            (please provide amount) in New Securities proposed to be issued by             , a Delaware corporation, representing LESS than my pro rata portion of the aggregate of $             in New Securities being offered in the financing.

(    ) ELECT TO PARTICIPATE in $             in New Securities proposed to be issued by             , a Delaware corporation, representing my FULL pro rata portion of the aggregate of $            in New Securities being offered in the financing.

(    ) ELECT TO PARTICIPATE in my full pro rata portion of the aggregate of $             in New Securities being made available in the financing AND, to the extent available, the greater of (x) an additional $             (please provide amount) or (y) my pro rata portion of any remaining investment amount available in the event other Investors do not exercise their full rights of first refusal with respect to the $             in New Securities being offered in the financing.

Date:
	(Print investor name)
	(Signature)
	(Print name of signatory, if signing for an entity)
	(Print title of signatory, if signing for an entity)

This is neither a commitment to purchase nor a commitment to issue the New Securities described above. Such issuance can only be made by way of definitive documentation related to such issuance. The company will supply you with such definitive documentation upon request or if you indicate that you would like to exercise your first offer rights in whole or in part.

EXHIBIT C

FORM OF OPTION NOTICE

[Date]

By Overnight Delivery

Maxygen, Inc.

515 Galveston Drive

Redwood City, CA 94063

Attention: Chief Executive Officer

Re: Notice of Exercise of Buy-Out Option

Dear Sir or Madam:

Reference is made to the Investors’ Rights Agreement dated as of [            ], 2009 (the “Investors’ Rights Agreement”) by and among Maxygen, Inc. (“Maxygen”), CPC (the “Company”) and Astellas Bio Inc. (“Bio”). Capitalized terms used herein, unless otherwise defined herein, shall have the respective meanings assigned to them in the Investors’ Rights Agreement.

This letter serves as the written notice of Bio under Section 5.1(a) of the Investors’ Rights Agreement of Bio’s election to purchase the Buy-Out Units at the Exercise Price of $[            ], as determined in accordance with Schedule 5.1 of the Investors’ Rights Agreement. We look forward to working with you to expeditiously close the purchase of the Buy-Out Units in accordance with Section 5.1(b) of the Investors’ Rights Agreement.

Very Truly Yours,

Astellas Bio Inc.

By:

Name:

Title:

EXHIBIT D

LOAN AGREEMENT

[Intentionally omitted]

The registrant agrees to furnish to the Securities and Exchange Commission upon request a copy of any omitted schedule or exhibit.

SCHEDULE 5.1

OPTION EXERCISE PRICE

	Option Notice dated on or before September 30th		Option Notice dated on or before December 31st		Option Notice dated on or before March 31st		Option Notice dated on or before June 30th
Year 1	$	53 million	$	57 million	$	61 million	$	65 million
Year 2	$	70 million	$	76 million	$	81 million	$	88 million
Year 3	$	95 million	$	104 million	$	113 million	$	123 million

EX-10.1

EXHIBIT 10.1

MAXYGEN, INC.

AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT

This CHANGE OF CONTROL AGREEMENT (the “Agreement”), originally made by and between MAXYGEN, INC., a Delaware corporation (the “Company”), and [                                ] (the “Executive”) on [            ], as amended and restated May 7, 2008 and December     , 2008 (the “Prior Agreement”), is hereby amended and restated in its entirety as set forth below.

WHEREAS, the Company is concurrently with the execution of this Agreement entering into a Master Joint Venture Agreement with Haley Pharma Inc. and Comet Private Company (the “Transaction”), the closing of which Transaction (the “Closing”) will constitute a Change in Control for purposes of this Agreement (as amended and restated);

WHEREAS, the Executive’s employment with the Company will terminate following the Executive’s provision of services for a specified period following the Closing;

WHEREAS, over the past several years, the Executive has foregone other employment opportunities and assisted in successfully implementing the Company’s strategic direction, as periodically revised;

WHEREAS, the Board has determined that appropriate steps should be taken to reward the Executive for successfully discharging his duties in assisting with implementing the Company’s strategic direction, as periodically revised, recognizing that implementing other Company strategies would have likely resulted in benefits under this Agreement being triggered, and to reinforce and encourage the continued attention and dedication of the Executive to his assigned duties following the consummation of the Closing.

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

1. Introduction; Purposes and Effectiveness.

(a) The purpose of this Agreement is to provide the Executive with certain benefits due to the termination of his or her employment with the Company in connection with a Change of Control of the Company.

(b) The Company, by means of the Agreement, seeks to (i) retain the services of the Executive, (ii) reward the Executive for the successful discharge of his duties, and (iii) provide incentives for the Executive to exert maximum efforts for the success of the Company during a transition period following the Closing.

(c) This Agreement, which shall be binding immediately upon its execution by the parties, shall go into effect if and only if the Closing occurs on or prior to December 31, 2009. The date of the Closing shall be the “Effective Date” of this Agreement and, upon this Agreement becoming effective at the Closing, the Prior Agreement shall terminate. Prior to the Effective Date of this Agreement, as well as following termination of this Agreement without its having become effective as set forth in this paragraph, the Prior Agreement shall remain in full force and effect.

2. Definitions.

(a) “Agreement” means this Amended and Restated Change of Control Agreement.

(b) “Board” means the Board of Directors of the Company.

(c) “Cause” means the Executive’s: (i) willful and continued failure to substantially perform the Executive’s duties with the Company (other than as a result of physical or mental disability or death) after a written demand for substantial performance is delivered to the Executive by the Company, which demand specifically identifies the manner in which the Company believes that the Executive has not substantially performed the Executive’s duties and that has not been cured within fifteen (15) days following receipt by the Executive of the written demand; (ii) commission of a felony (other than a traffic-related offense) that in the written determination of the Company is likely to cause or has caused material injury to the Company’s business; (iii) dishonesty with respect to a significant matter relating to the Company’s business; or (iv) material breach of any agreement by and between the Executive and the Company, which material breach has not been cured within fifteen (15) days following receipt by the Executive of written notice from the Company identifying such material breach.

(d) “Change of Control” means: (i) a dissolution or liquidation of the Company; (ii) a sale of all or substantially all the assets of the Company; (iii) a merger, recapitalization, reorganization, consolidation or other similar transaction (a “Business

2

Combination”) in which beneficial ownership of securities of the Company representing at least thirty-five percent (35%) of the combined voting power entitled to vote in the election of directors has changed; (iv) a reverse merger in which the Company is the surviving corporation but the shares of the common stock of the Company outstanding immediately before the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, and in which beneficial ownership of securities of the Company representing at least thirty-five percent (35%) of the combined voting power entitled to vote in the election of directors has changed; (v) an acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the Company or subsidiary of the Company or other entity controlled by the Company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the Company representing at least thirty-five percent (35%) of the combined voting power entitled to vote in the election of directors; (vi) in the event that the individuals who are members of the Incumbent Board cease for any reason to constitute at least fifty percent (50%) of the Board; (vii) a sale of substantially all the assets of the Company’s protein pharmaceutical business; (viii) the consummation by the Company of a Business Combination with respect to which all or substantially all of the individuals and entities who were the beneficial owners of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors immediately prior to such Business Combination do not, following consummation of all transactions intended to constitute part of such Business Combination, beneficially own, directly or indirectly, at least sixty-five percent (65%) of the voting securities of the Company (or the corporation, business trust or other entity resulting from or being the surviving entity in such Business Combination); or (ix) the Closing.

(e) “Code” means the Internal Revenue Code of 1986, as amended.

(f) “Company” means Maxygen, Inc., a Delaware corporation.

(g) “Confidential Information, Secrecy and Invention Agreement” has the meaning given thereto in Section 7(b).

(h) “Consulting Agreement” has the meaning given thereto in Section 4.

(i) “Disability” means the Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering Company employees.

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(j) “Effective Date” means the date specified in Section 1(c) above.

(k) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(l) “Executive” means the person identified in the introductory paragraph of this Agreement.

(m) “Good Reason” means: (i) a reduction by the Company in the base salary of the Executive, or of twenty-five percent (25%) or more in the Target Bonus opportunity of such Executive, as in effect immediately before such reduction, except if agreed to in writing by the Executive; (iii) the relocation of the Executive to a facility or a location more than thirty (30) miles from the Executive’s then present business location, except if agreed to in writing by the Executive; (iv) a material breach by the Company of any provision of this Agreement or (v) any failure of the Company to obtain the assumption of this Agreement by any successor or assign of the Company; provided, however, that such events shall not constitute grounds for a Good Reason termination unless the Executive has provided notice to the Company of the existence of the one or more of the above conditions within ninety (90) days of its initial existence and the Company has been provided at least thirty (30) days to remedy the condition.

(n) “Incumbent Board” means the individuals who, as of the Effective Date, are members of the Board. If the election, or nomination for election by the Company’s stockholders, of any new director is approved by a vote of at least fifty percent (50%) of the Incumbent Board, such new director shall be considered as a member of the Incumbent Board

(o) “Non-Competition and Non-Solicitation Agreement” has the meaning given thereto in Section 7(d).

(p) “Target Bonus” means the Executive’s target bonus for the fiscal year ending on or about December 31, 2009, as set by the Board or the appropriate committee thereof.

3. Transition Period. The Executive’s employment with the Company will terminate effective on the date six months following the Closing (the “Six Month Anniversary”), or such shorter period as is designated in writing by the Company’s Board of Directors (the date on which the Executive’s employment actually terminates is

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referred to as the “Termination Date”). The Termination Date shall constitute a “separation from service” with the meaning of Code Section 409A (as defined in Section 12(a)). During the period commencing with the Effective Date of this Agreement and ending on the Termination Date, the Executive will use his best efforts to fulfill his duties and responsibilities as [TITLE], and to assist in the implementation of the Transaction as directed by the Company’s Board of Directors.

4. Consulting Duties. The Executive agrees to enter into a consulting agreement in the form attached as Exhibit A (the “Consulting Agreement”) with the Company, covering the Executive’s performance of services following the Termination Date.

5. Retention Benefits.

(a) If (x) prior to the Six Month Anniversary the Executive’s employment terminates as a result of (A) his death or Disability, (B) the Company’s terminating his employment other than for Cause, or (C) the Executive’s terminating his employment with the Company voluntarily with Good Reason, or (y) the Executive remains employed by the Company through the Six Month Anniversary, then in each case, subject to Sections 7 and 12: (i) the Executive shall be entitled to receive, on the first payroll date that occurs on or after the date that is six (6) months and one (1) day after the Termination Date (or, if sooner, upon the Executive’s death), a lump sum payment equal to $                     [Insert 3x base salary] (ii) each of the Executive’s outstanding stock options, all stock subject to repurchase or forfeiture, including without limitation, restricted stock, restricted stock units and performance shares awards, and any options, stock subject to repurchase or forfeiture, awards or purchases held in the name of an estate planning vehicle for the benefit of the Executive or his or her immediate family, shall have their vesting and exercisability schedule accelerate in full (or, as applicable, the corresponding repurchase or forfeiture right shall lapse in full) as of the Termination Date, provided that the Company shall deliver shares (or other property including cash that is in the interim substituted for or distributed with respect to shares of the Company’s Common Stock, with any such property or cash related to shares underlying vested but as-yet-unsettled restricted stock units held by the Company or an agent authorized by the Company for delivery to the Executive) in satisfaction of the accelerated vesting of restricted stock units on the earlier of (A) the date that is six (6) months and one (1) day after the Termination Date (or, if sooner, upon the Executive’s death), or (B) the originally scheduled vesting date, (iii) if on the Termination Date the Executive is covered by any Company-paid group health, dental or vision plans or programs, then subject to the Executive timely electing continued group health coverage under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay the 100% of the cost, on behalf of Executive, for Executive’s continued group health, dental and vision coverage under COBRA for the Executive and the Executive’s eligible and covered spouse and/or dependents until the earlier of the end of the period to which the Executive, his spouse and/or dependents, as the case may be,

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are entitled to coverage (including as a result of any subsequent qualifying event that occurs and extends coverage for a person covered hereunder following the Termination Date) with respect to the Company’s group health, dental and vision plans under COBRA following the Termination Date, or the date that the Executive and his spouse and/or dependents become covered under another employer’s group health plans or programs that provide the Executive and his or her spouse and/or dependents with comparable benefits and levels of coverage; and (iv) the post-termination exercise period of the Executive’s outstanding stock option and stock appreciation right awards with an exercise price of $20.00 or less shall automatically be extended to the end of their original maximum term; provided, however, that if the Executive becomes entitled to benefits under this Section 5(a), then all of the Executive’s Company stock options with an exercise price exceeding $20.00 per share shall automatically be canceled as of the effective date of the Release referred to in Section 7(c) hereof.

(b) In no event shall the Executive be obligated to seek other employment or take any other action to mitigate the amounts payable or benefits provided to the Executive under this Agreement, nor shall any such payments or benefits be reduced by any earnings or benefits that the Executive may receive from any other source.

(c) If the Executive is eligible for severance benefits pursuant to this Section 5, then the Executive shall be eligible for and considered for a bonus (in an amount, if any, determined in the sole and absolute discretion of the Board) for the 2009 calendar year, at the same time other employees are considered for a bonus for such calendar year even though the Executive will no longer be an employee of the Company at that time; provided, however, that such bonus, if any, shall be pro-rated based on Executive’s service during the year of termination. Any such bonus shall be paid on the date that is six (6) months and one (1) day following the Termination Date, or if later, the date upon which active employees are paid their annual bonus on account of the 2009 calendar year, but in no event later than December 31, 2010.

6. Parachute Payments; Excise Tax.

In the event that the severance, acceleration of stock options and other benefits payable to the Executive as a result of a Change of Control of the Company (i) constitute “parachute payments” within the meaning of Section 280G (as it may be amended or replaced) of the Code and (ii) but for this Section 6, would be subject to the excise tax imposed by Section 4999 (as it may be amended or replaced) of the Code (the “Excise Tax”), then the Executive’s benefits payable in connection therewith shall be either

(a) delivered in full, or

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(b) delivered as to such lesser extent that would result in no portion of such benefits being subject to the Excise Tax,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by the Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under the Excise Tax. Unless the Company and the Executive otherwise agree in writing, any determination required under this Section 6 shall be made in writing in good faith by a “Big Four” national accounting firm selected by the Company or such other person or entity to which the parties mutually agree (the “Accountants”). Any reduction in payments and/or benefits required by this section shall occur in the following order: (1) reduction in vesting acceleration of stock options; (2) reduction in vesting acceleration of restricted stock units and restricted stock; (3) reduction of cash payments; and (4) reduction of other benefits paid or provided to the Executive. In the event that acceleration of vesting of equity awards is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant for the Executive’s equity awards. If two or more equity awards are granted on the same date, each award will be reduced on a pro-rata basis. For purposes of making the calculations required by this Section 6, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code. Any good faith determination of the Accountants made hereunder shall be final, binding and conclusive upon the Company and the Executive.

The Company and the Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 6. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 6.

7. Limitations and Conditions on Benefits. The benefits and payments provided under this Agreement shall be subject to the following terms and limitations:

(a) Withholding Taxes. The Company shall withhold required foreign, federal, state and local income and employment taxes from any payments hereunder.

(b) Confidential Information, Secrecy and Invention Agreement Prior to Receipt of Benefits. The Executive shall have executed and delivered to the Company, a standard form of the Company’s confidential information, secrecy and invention agreement, a copy of the current form of which is attached as Exhibit B (the “Confidential Information, Secrecy and Invention Agreement”), prior to the receipt or provision of any benefits (including the acceleration benefits) under this Agreement. Additionally, the Executive agrees that all documents, records, apparatus, equipment and other physical property that is furnished to or obtained by the Executive in the course of his or her employment with the Company shall be and shall remain the sole property of

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the Company. The Executive agrees not to make or retain copies, reproductions or summaries of any such property, except as otherwise necessary while acting in the normal course of business. In the event of any material breach by the Executive of the Confidential Information, Secrecy and Invention Agreement that is not cured within thirty (30) days of notice of such breach to the Executive, all benefits payable under Section 5 of this Agreement shall immediately terminate and all outstanding stock options shall immediately be canceled.

(c) Employee Agreement and Release Prior to Receipt of Benefits. If the Executive’s employment with the Company terminates under circumstances entitling him to benefits under Section 5(a), then prior to, and as a condition of the receipt of any benefits (including the acceleration benefits) under this Agreement on account of such termination, the Executive (or in the event of Executive’s death or Disability, his estate or personal representative, respectively) shall execute a release of claims in the form attached as Exhibit C (the “Release”) prior to receipt of benefits. The receipt of any severance payments or benefits pursuant to Section 5 will be subject to the Executive signing and not revoking such Release and provided that such agreement is effective within twenty-eight (28) days following the Termination Date. No benefits under Section 5 of this Agreement shall be payable or made available to the Executive on account of a termination until the Release becomes effective. Such Release shall specifically relate to all the Executive’s rights and claims in existence at the time of such execution and shall confirm the Executive’s obligations under the Company’s standard form of Confidential Information, Secrecy and Invention Agreement.

(d) Non-Competition and Non-Solicitation Agreement. If the Executive’s employment with the Company terminates under circumstances entitling him to benefits under Section 5(a), then prior to, and as a condition of the receipt of any benefits (including the acceleration benefits) under this Agreement on account of such termination, the Executive shall, as of the date of such termination, enter into a thirty-six (36) month non-competition and non-solicitation agreement in the form attached as Exhibit D (the “Non-Competition and Non-Solicitation Agreement”). In the event of any breach by the Executive of the Non-Competition and Non-Solicitation Agreement, all benefits payable under Section 5 of this Agreement shall immediately terminate and all outstanding stock options shall immediately be canceled, and that shall be the sole remedy to the Company for such breach.

(e) Consulting Agreement. In the event of any breach by the Executive of the Consulting Agreement, all benefits payable under Section 5 of this Agreement shall immediately terminate and all outstanding stock options shall immediately be canceled.

8. At-Will Employment. The Company and the Executive acknowledge that the Executive’s employment is and shall continue to be at-will, as defined under applicable law. This Agreement shall not be construed as creating an express or implied contract of employment between the Executive and the Company. The Executive shall not have any right to be retained in the employment of the Company.

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9. Notices. Any notice provided under this Agreement shall be in writing and shall be deemed to have been effectively given (i) upon receipt when delivered personally, (ii) one day after sending when sent by express mail service (such as Federal Express), or (iii) five (5) days after sending when sent by regular mail to the following address:

In the case of the Company:

Maxygen, Inc.

515 Galveston Drive

Redwood City, CA 94063

Attn: General Counsel

In the case of the Executive:

The last personal residence

address known by the Company

or to such other address as the Company or the Executive hereafter designates by written notice in accordance with this Section 9.

10. Litigation/Arbitration Expenses. Reasonable litigation and/or arbitration costs and expenses shall be paid by the Company, win or lose, in connection with any dispute between the Company (and its successors) and the Executive concerning this Agreement; provided, however, that if the litigation or arbitration is found to have been commenced in bad faith by the Executive, the Executive shall bear all of his or her own costs and expenses in connection with such litigation or arbitration.

11. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Executive, and the Company, and any surviving entity resulting from a Change of Control and upon any other person who is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company, and their respective successors, assigns, heirs, executors and administrators, without regard to whether or not such person actively assumes any rights or duties hereunder; provided, however, that the Executive may not assign any duties hereunder without the prior written consent of the Company.

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12. Section 409A.

(a) Notwithstanding any provision to the contrary herein, no severance payable to the Executive, if any, under this Agreement, when considered together with any other severance payments or separation benefits that are considered deferred compensation under Section 409A (together the “Deferred Compensation Separation Payments”) that becomes payable under this Agreement by reason of the Executive’s termination of employment with the Company (or any successor entity thereto) will be made unless such termination of employment constitutes a “separation from service” within the meaning of Section 409A of the Internal Revenue Code (the “Code”), and any final regulations and Internal Revenue Service guidance promulgated thereunder (“Section 409A”). Each payment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. Any taxable reimbursements and/or taxable in-kind benefits provided in this Agreement shall be made or provided in accordance with the requirements of Section 409A, including: (i) the amount of any such expense reimbursement or in-kind benefit provided during a taxable year of the Executive shall not affect any expenses eligible for reimbursement in any other taxable year; (ii) the reimbursement of an eligible expense shall be made no later than the last day of the employee’s taxable year that immediately follows the taxable year in which the expense was incurred; and (iii) the right to any such reimbursement shall not be subject to liquidation or exchange for another benefit or payment. The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided in this Agreement will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and the Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

13. Miscellaneous.

(a) No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing by each of the parties.

(b) No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party that are not expressly set forth in this Agreement. This Agreement replaces and supersedes in its entirety the Prior Agreement.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

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14. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California, regardless of the law that might be applied under applicable principles of conflicts of law.

15. Entire Agreement. Upon its Effective Date, this Agreement, together with the Employee Agreement and Release; the Confidential Information, Secrecy and Invention Agreement; the Non-Competition and Non-Solicitation Agreement; the Consulting Agreement; and the agreements relating to the Executive’s equity compensation (as modified hereby) represent the entire agreement and understanding between the Company and the Executive concerning the Executive’s transition, termination and consulting arrangement with the Company. As of its Effective Date, this Agreement supersedes the Prior Agreement in its entirety.

MAXYGEN, INC.
By:
	Louis Lange
	Chairman, Compensation Committee
Date:		, 2009
THE EXECUTIVE
[Name], [Title]
Date:		, 200

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Exhibit A

to Change of Control Agreement

MAXYGEN, INC.

CONSULTING AGREEMENT

This Consulting Agreement (“Agreement”), effective as of [            ] (the “Effective Date”), is made by and between Maxygen, Inc., a corporation formed under the laws of the State of Delaware, with offices at 515 Galveston Drive, Redwood City, CA 94063 (the “Company”) and [                    ], an individual (the “Consultant”).

BACKGROUND

The Consultant is party to an Amended and Restated Change in Control Agreement (the “Change in Control Agreement”) with the Company dated [            ]. Pursuant to the terms of the Change in Control Agreement, the Consultant agrees to enter into this Agreement following Consultant’s termination as an executive of the Company and to continue to abide by this Agreement as a condition of receiving certain benefits and payments under the Change in Control Agreement. The Company desires to have the Consultant provide consulting services to the Company, and the Consultant is willing to provide such consulting services and assistance, on the terms and conditions set forth below. Accordingly, the parties hereto hereby agree as follows:

1. Consulting Services.

1.1 The Consultant shall advise the Company and its Affiliates and their respective management, employees and agents regarding the business of the Company. The Consultant shall at all times retain the right to control the manner and means of performance hereunder; provided, however, that the Consultant shall at all times provide the services and otherwise perform his obligations hereunder in a professional manner, with reasonable skill and care and in accordance with the terms and conditions of this Agreement.

1.2 From time to time during the term of this Agreement (including any extension or renewal term thereof) upon request by the Company, the Consultant shall provide consulting and advisory services to the Company and its Affiliates and their respective management, employees and agents at reasonable times agreed upon by the Consultant and the Company at the Company’s offices, or such other locations as may be agreed upon by the Consultant and the Company. Such consultation may be provided by telephone, by electronic mail, by audioconference, by videoconference and/or through written correspondence.

2. Consideration; Payment.

2.1 In consideration for consulting services provided by the Consultant to the Company hereunder, the Company shall pay to the Consultant a consulting fee of [$                 per hour] [TBD by dividing base salary by 2000] for each hour devoted to consulting for the Company as provided hereunder (“Consulting Hour”). Unless otherwise agreed to in writing by the parties, the Consultant’s consulting time shall not include travel time.

2.2 In addition to any consulting fees due to the Consultant pursuant to Section 2.1 above, the Company will reimburse reasonable out-of-pocket expenses (including reasonable travel expenses) actually incurred by the Consultant in the course of performing the consulting services hereunder, in compliance with the Company’s travel policies for its officers and subject to customary written verification of such expenses in a form reasonably satisfactory to the Company, within thirty (30) business days after the Company’s receipt from the Consultant of a proper written invoice therefore.

2.3 The Consultant shall provide to the Company a written invoice of any services provided by Consultant and the date and time spent on such consulting services.

2.4 The Consultant and Company agree that the time spent on services Consultant is expected to perform under this Agreement will not exceed 20% of the average level of time spent on services Consultant performed for the Company over the immediately preceding three-year period.

2.5 The Consultant will not be eligible for, nor will participate in, any health, pension, or other employee benefit plan sponsored or established by the Company for the benefit of its employees.

3. Term and Termination.

3.1 The term of this Agreement will begin on the Termination Date (as defined in the Change in Control Agreement) and the Agreement will continue in full force and effect until the third anniversary of the Termination Date, unless earlier terminated as provided in Sections 3.2 and 3.3 below or extended or renewed pursuant to Section 3.4 below (the “Term”).

3.2 The Company may terminate this Agreement for any reason or no reason with at least ninety (90) days written notice of termination to the Consultant.

3.3 This Agreement will terminate automatically upon the Consultant’s death, or in the event the Consultant becomes disabled and such disability substantially impairs the Consultant’s ability to carry out his or her obligations hereunder. In such case, the Company’s obligation to pay ceases after the date of termination, except for those services actually performed on or prior to the date of such termination.

3.4 This Agreement may be extended or renewed for additional agreed upon periods upon the written agreement of the parties.

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3.5 In the event, following the first anniversary of the Termination Date, Executive’s obligations under this Agreement render Executive unable to secure employment with a new employer, then the parties (including any party who succeeds to the Company’s interests as a result of a Change of Control), shall negotiate in good faith a modification or earlier termination of this Agreement.

4. Certain Other Contracts.

The Consultant shall not disclose to the Company, or bring onto the Company’s premises, or induce the Company to use, any information that the Consultant is obligated to keep confidential pursuant to an existing agreement with any third party, and nothing in this Agreement will be construed to impose any obligation on the Consultant to the contrary.

The Consultant shall not perform consulting work hereunder on time that the Consultant is required to devote to any third party. The Consultant shall not use the funding, resources and facilities of any third party to perform consulting work hereunder and shall not perform the consulting work hereunder in any manner that would give any third party rights to the product of such work.

The Consultant has disclosed and, during the term of this Agreement (including any extension or renewal term thereof), shall continue to disclose to the Chief Executive Officer of the Company, or his designee, any conflicts between this Agreement and any other agreements or obligations binding the Consultant.

The Consultant acknowledges that, except as set forth in the Change in Control Agreement, the Company has not made any agreement or commitment, or offered to the Consultant any such agreement or commitment, (i) to have the Consultant perform any additional services, (ii) to make any other payments to the Consultant, or (iii) to enter into any other agreement with or commitment to the Consultant.

5. Inventions and Documents; Assignment.

The Consultant shall promptly and fully disclose to the Chief Executive Officer of the Company (or his designee) any and all work product and intellectual property, including without limitation any invention, improvement, algorithm, code, discovery, process, know-how, design right, copyright, mask work, formula, technique, method, and/or trade secret, whether or not patentable, whether or not copyrightable, made, discovered, conceived, developed, generated, contributed to, or first reduced to practice by the Consultant, either alone or jointly with others, while performing or arising from the services provided hereunder (collectively, “Inventions”). The Consultant understands and agrees that all Inventions are and shall remain the exclusive property of the Company and shall be treated as Confidential Information (as defined in Section 6 below). The Consultant agrees to assign and hereby assigns to the Company (or its designee) all right, title and interest in and to any such Inventions. The Consultant shall execute all instruments necessary to perfect the assignment of such Inventions to the Company (or its designee) and to enable the Company or its designee to apply for, obtain, and enforce

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patents, copyrights and other intellectual property rights in any and all countries on such Inventions. The Consultant hereby irrevocably designates the Secretary of the Company as the Consultant’s agent and attorney-in-fact to execute and file any such document and to do all lawful acts necessary to apply for and obtain such patents, copyrights and other intellectual property rights, and to enforce the Company’s rights (or the rights of its designee) under this paragraph.

The parties acknowledge that all original works of authorship, including but not limited to computer software, which are made by the Consultant within the scope of the consulting services provided to the Company hereunder and which are protectable by copyright shall be “works made for hire” within the meaning of the Copyright Law of the United States of America and its related laws contained in Title 17 of the United States Code and are hereby assigned to Company (or its designee) pursuant to such laws; provided, however, that in no event shall anything in this Agreement be construed to render the Consultant an employee of the Company under any state or local labor or employment laws.

All documents, data and/or other records provided by or obtained from the Company or created as a result of the consulting services provided hereunder, including any summary, abstract or excerpt thereof, (the “Documents”) are, will be and shall remain the Company’s sole property and must be promptly returned to the Company when this Agreement expires or terminates, as the case may be. Any copyright in such Documents and any other documents of any other work prepared for the Company by the Consultant shall be solely owned by the Company.

No royalty or other payment will be due to the Consultant in respect of any Inventions or the assignment thereof to the Company.

This Section 5 will survive the expiration or termination of this Agreement.

6. Confidentiality.

The Consultant acknowledges that, during the course of performing the consulting services hereunder, confidential and proprietary information (i) owned by the Company and/or its Affiliates (e.g., technical information, business plans, identification or characterization of biological or other materials, results and/or design of experiments and/or preclinical or clinical testing, financial analysis or marketing plans), and/or (ii) received by the Company and/or its Affiliates in confidence from one or more third parties, may, in each case, be disclosed to the Consultant by or on behalf of the Company, and that in connection with the consulting activities conducted by Consultant under this Agreement the Consultant will be developing information and creating work product related to the Field (e.g. inventions, projects, products, potential customers, personnel, business plans, finances and/or other commercially valuable information). All such information described in the previous sentence, whatever its form or medium (whether in written, oral, electronic, or graphic format), shall be referred to as “Confidential Information.” The Consultant acknowledges and agrees that the Company’s business area is extremely competitive, that the success of the Company’s business is dependent in part upon the maintenance of secrecy of Confidential Information, and that any disclosure of the Confidential Information would result in serious harm to the Company.

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The Consultant agrees that the Confidential Information of the Company will be used by the Consultant only in connection with the consulting services hereunder, and will not be used in any way that is detrimental to the Company.

The Consultant agrees to hold in strict confidence and not to disclose, directly or indirectly, the Confidential Information of the Company to any third person or entity, other than representatives or agents of the Company.

The term “Confidential Information” does not include information to the extent that it (i) is or becomes generally available to the public other than through breach of this Agreement or other wrongful act by the Consultant, (ii) was already lawfully within the Consultant’s possession prior to being furnished to the Consultant by or on behalf of the Company hereunder, or (iii) becomes available to the Consultant on a nonconfidential basis from a third party who has no obligation of confidentiality to the Company or any of its Affiliates. Specific Confidential Information shall not be deemed to be within any of the foregoing exclusions merely because it is within the scope of more general information within one or more of the exclusions. Further, any combination of Confidential Information (whether or not combined with non-confidential information) shall not be deemed to be within the above exceptions merely because one or more individual items of Confidential Information are within the above exceptions.

The Consultant may disclose any Confidential Information that is required to be disclosed by applicable law, government regulation or court order; provided that if any such disclosure is required, the Consultant shall give the Company reasonable advance notice of any such contemplated disclosure so that the Company may seek a protective order or take other action reasonable in light of the circumstances to prevent and/or limit the scope of any such disclosure.

Upon expiration or termination of this Agreement, the Consultant will promptly return to the Company or, at the Company’s request, destroy (and provide to the Company written confirmation of such destruction) all materials containing Confidential Information as well as data, records, reports and other property, furnished by the Company to the Consultant or produced by the Consultant in connection with services rendered hereunder, together with all copies, excerpts, summaries and abstracts of any of the foregoing. Notwithstanding such return or destruction, as the case may be, the Consultant shall continue to be bound by the terms and conditions of this Section 6 for a period of five (5) years after the termination or expiration of this Agreement. This Section 6 shall survive the termination or expiration of this Agreement (including any extension or renewal term thereof).

7. Use of Equipment and Facilities. If, at any time, the Consultant is required to work at any of the Company’s premises or use any of its equipment, the Consultant will comply with all relevant health, safety and security regulations and related instructions issued by the Company.

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8. Use of Name. It is understood by the Consultant that the name of the Consultant may appear in disclosure documents required by securities laws, and in other regulatory and administrative filings in the ordinary course of the Company’s business.

9. No Conflict; Valid and Binding. The Consultant warrants and represents that (i) neither the execution of this Agreement nor the performance of the Consultant’s obligations under this Agreement will result in a violation or breach of any other agreement by which the Consultant is bound, (ii) the Consultant has the legal power and authority and right to enter into and perform under this Agreement without violating the rights or obtaining the consent of any third party, and (iii) the Consultant is entering this Agreement as principal and not as agent for any other party. The Company represents that this Agreement has been duly authorized and executed and is a valid and legally binding obligation of the Company.

10. Notices. Any notice provided under this Agreement shall be in writing and shall be deemed to have been effectively given (i) upon receipt when delivered personally, (ii) one day after sending when sent by private courier service (such as Federal Express), or (iii) five (5) days after sending when sent by first-class mail (postage prepaid), in each case to the applicable address noted herein above or to other such address as may have been last designated by the Company or the Consultant by written notice to the other party as provided herein.

11. Independent Contractor; Withholding.

The parties agree that the Consultant will at all times be an independent contractor, and not an agent or an employee, in the performance of the consulting services hereunder, and nothing in this Agreement shall be construed or have effect as constituting any relationship of employer and employee or of partnership between the Company and the Consultant. The Consultant does not have the power or authority to bind the Company or to assume or create any obligation or responsibility, express or implied, on the Company’s behalf or in the Company’s name, and the Consultant shall not represent to any person or entity that the Consultant has such power or authority. Consultant shall not act as an agent nor be deemed to be an employee of the Company for the purposes of any employee benefit program, unemployment benefits, or otherwise.

The Consultant shall provide the Company with his United States Tax Identification Number (TIN) upon execution of this Agreement. The Company shall provide the Consultant with an Internal Revenue Service (IRS) Form 1099 in connection with the performance of the services hereunder. The Consultant recognizes that no amount will be withheld by the Company from the Consultant’s compensation for payment of any federal, state, or local taxes or related payroll deductions of any country, and that the Consultant has sole responsibility to pay all such taxes, if any, and file all such returns as may be required by applicable laws and regulations with respect to the Consultant’s performance of the consulting services hereunder and receipt of fees under this Agreement, and the Consultant shall indemnify and hold harmless the Company from the Consultant’s failure to do so.

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12. Assignment; Successors and Assigns. Due to the personal nature of the services to be rendered by the Consultant hereunder, the Consultant may not assign this Agreement nor subcontract any of the consulting services to be performed under this Agreement. The Company may assign all its rights and liabilities under this Agreement to any of its Affiliates or to a successor to all or a substantial part of its business or assets without the consent of the Consultant. Subject to the foregoing, this Agreement will inure to the benefit of and be binding upon each of the assigns and successors of the respective parties.

13. Advice of Counsel. Each party represents that it has voluntarily executed this Agreement having read and fully understood it, and after having the opportunity to freely consult with counsel or other advisor(s) of each party’s choice, and each acknowledges and agrees that this Agreement shall not be deemed to have been drafted by one party or the other and will be construed accordingly.

14. Severability. If any provision of this Agreement shall be declared invalid, illegal or unenforceable, such provision shall be severed and the remaining provisions shall continue in full force and effect.

15. Remedies. The Consultant acknowledges that the Company would have no adequate remedy at law to enforce Sections 5 and/or 6 hereof. In the event of a violation by the Consultant of such Sections notwithstanding, the Company shall have the right to obtain from a court of competent jurisdiction injunctive relief and/or other similar equitable remedies for any such violation, without the requirement of posting bond or other similar measures.

16. Indemnity. The Company shall indemnify, defend and hold harmless the Consultant, from and against all expenses and liabilities arising from any claim or proceeding brought by any third party, including any shareholder of the Company, based on or relating to any services performed by Consultant for the Company pursuant to this Agreement, except to the extent that such expense or liability is due to the negligence or willful misconduct of Consultant. In the event that Consultant becomes aware of any claim or proceeding he believes is subject to this Section 16 he shall promptly notify the Company and cooperate fully with the Company and its counsel in the defense and/or settlement of any such claim or proceeding. This Section 16 shall survive the termination or expiration of this Agreement (including any extension or renewal term thereof).

17. Arbitration. The parties hereby agree that any dispute arising under this Agreement, or in connection with any breach thereof, shall be finally resolved through binding arbitration conducted in San Francisco, California, in accordance with the Commercial Arbitration Rules of the American Arbitration Association by one (1) arbitrator appointed in accordance with such Rules. The arbitrator shall determine what discovery will be permitted, and shall not order or require discovery against either party of a type or scope that is not permitted against the other party because of differences in applicable law. The costs of the arbitration shall be shared equally by the parties, and each party shall bear its own costs and attorneys’ and witness’ fees. No punitive damages may be granted by the arbitrator. The parties agree that the arbitrator’s decision shall be the sole, exclusive and binding remedy between them regarding any and all disputes, controversies, claims and counterclaims presented to the arbitrator.

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18. Governing Law; Entire Agreement; Amendment. This Agreement shall be governed by the laws of the State of California without reference to the conflicts of laws principles, represents the entire understanding of the parties with respect to the subject matter hereof, supersedes and cancels all prior agreements, understandings, arrangements or representations between the parties with respect to the consulting services to be provided hereunder, and may only be amended by written agreement of the parties. Notwithstanding the above, the parties agree that the Change in Control Agreement and that certain Confidential Information, Secrecy and Invention Agreement; Employee Agreement and Release; and Non-Competition and Non-Solicitation Agreement which were entered into in connection with the Change in Control Agreement, as well as certain equity award agreements between Consultant and the Company referenced in the Change in Control Agreement, shall remain in full force and effect.

19. Headings. The underlined headings contained in this Agreement are for convenience of reference only, shall not be deemed to be part of this Agreement, and shall not be referred to in connection with the construction or interpretation of this Agreement.

20. Definition of Affiliates. In this Agreement, “Affiliates” means any and all corporations or other business entities which (directly or indirectly) control, are controlled by, or are under common control with the Company.

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

UNDERSTOOD AND AGREED:
MAXYGEN, INC.	CONSULTANT:
By:	Signature:
Name:	Name:	[                                                                                      ]
Title:

8

Exhibit B

to Change of Control Agreement

MAXYGEN, INC.

CONFIDENTIAL INFORMATION, SECRECY AND

INVENTION AGREEMENT

THIS AGREEMENT (the “Agreement”), made effective as of this      day of             , 2009 (the “Effective Date”), by and between Maxygen, Inc., with principal place of business at 515 Galveston Drive, Redwood City, California 94063 (“MAXYGEN”), and [                                    ], (the “Receiving Party”), is entered into in connection with the following facts and circumstances:

WHEREAS, MAXYGEN and the Receiving Party have entered into that certain Amended and Restated Change in Control Agreement (“Change in Control Agreement”) pursuant to which the Receiving Party agrees to provide certain consulting services to MAXYGEN pursuant to a consulting agreement (the “Services”);

WHEREAS, pursuant to the Change in Control Agreement and in connection with the Services, the Receiving Party further agrees to enter into this the Agreement and continue to abide by its terms as a condition of receiving certain benefits and payments under the Change in Control Agreement; and

WHEREAS, both MAXYGEN and the Receiving Party desire to assure the protection and preservation of the confidential and proprietary nature of information to be disclosed or made available by MAXYGEN to the Receiving Party.

NOW THEREFORE, in consideration of the following undertakings, the parties hereby agree as follows:

1. Subject to the other terms of this Agreement, all information disclosed by MAXYGEN or any subsidiary of MAXYGEN to the Receiving Party hereunder shall be deemed to be “Confidential Information” of MAXYGEN. Confidential Information may be disclosed to or developed, learned or acquired by the Receiving Party in the course of providing Services to MAXYGEN, whether or not related to the Receiving Party’s duties. Confidential Information is broadly defined, and includes (i) all information that has or could have commercial value or other utility in the businesses in which MAXYGEN or a subsidiary is engaged or in which it contemplates engaging, and (ii) all information that, if disclosed without authorization, could be detrimental to the interests of MAXYGEN or the entities with which it has business relationships, whether or not this information is identified as Confidential Information. Subject to the other terms of this Agreement, such Confidential Information shall include any and all information which relates to, refers to or consists of any of MAXYGEN’s or any subsidiary’s trade secrets, inventions, ideas, compounds, samples, biologic materials, procedures, processes, formulations, formulae, techniques, data, results, research projects, development projects, pre-clinical studies, clinical studies, testing, engineering, manufacturing, quality assurance/control,

suppliers, regulators, clients, customers, collaborators, contractors, marketing, promotions, sales, pricing, employees, personnel, finances, investors, strategies, facilities, business and/or operations, whether conducted by MAXYGEN on its own or with one or more third parties, and whether disclosed by MAXYGEN hereunder in written, graphic or electronic form or orally.

2. “Confidential Information” shall not be deemed to include information which the Receiving Party can demonstrate by competent written evidence: (a) was in the public domain when disclosed by MAXYGEN or subsequently becomes public through no act or failure to act on the part of the Receiving Party; (b) was already known by the Receiving Party when disclosed by MAXYGEN; or (c) was or is furnished to the Receiving Party by a third party not bound by any confidentiality obligation or other restriction on disclosure with respect to such information.

3. The Receiving Party shall maintain in trust and confidence, and shall not disclose to any third party except with MAXYGEN’s express prior written consent, any and all Confidential Information, and shall use any and all Confidential Information only for purposes of performing the Services. The Receiving Party’s obligations of confidentiality and non-use under this Agreement shall remain in effect for ten (10) years from the Effective Date. No rights or licenses to Confidential Information or to any trademark, invention, copyright, patent, patent application, intellectual property or other property of MAXYGEN are implied or granted under this Agreement. Nothing herein shall be construed to obligate either party to enter into any further agreements with the other party.

4. As between the parties, all Confidential Information (including all copies thereof) shall remain the property of MAXYGEN. After the Receiving Party’s need for Confidential Information has expired, or promptly upon any request by MAXYGEN, the Receiving Party shall return to MAXYGEN all copies of Confidential Information or shall destroy all copies of Confidential Information, and shall promptly provide a written certification to MAXYGEN of such return or destruction in compliance with this Agreement.

5. Notwithstanding any other provision of this Agreement, disclosure of Confidential Information shall not be precluded if such disclosure is required under applicable law, regulation or valid order of a court or other governmental body to which the Receiving Party is subject, provided that the Receiving Party shall have first have given written notice to MAXYGEN of the need for such disclosure reasonably in advance so that MAXYGEN may (if it elects) seek a protective order or other confidential treatment of the Confidential Information. Any disclosure of Confidential Information as permitted under this Section 5, (i) shall be limited to only that Confidential Information which is necessary to comply with such law, regulation or order of a court or government body, and (ii) shall in no way alter the confidential nature of such Confidential Information for all other purposes.

6. The Receiving Party acknowledges and agrees that it is aware of the restrictions imposed by the United States federal securities laws and other applicable foreign and domestic laws on a person possessing material non-public information about a public company and that the Receiving Party will comply with such laws.

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7. The Receiving Party will promptly disclose to MAXYGEN any and all formulas, processes, techniques, data, copyrightable material, improvements and inventions, whether or not patentable or copyrightable, which the Receiving Party makes, conceives, learns or reduces to practice, either alone or jointly with others, which are related to or useful in MAXYGEN’s business, and which result from the Receiving Party’s performance of the Services or from the Receiving Party’s use of MAXYGEN’s Confidential Information or facilities (collectively, “Inventions”).

8. Any and all materials, data, work product, results, reports and any other information received, generated, derived or provided to MAXYGEN by the Receiving Party as part of or in connection with the performance of the Services hereunder shall be and remain the sole property of MAXYGEN. In addition, all Confidential Information, all Inventions and all patent, copyright and other rights related thereto shall be and remain the sole property of MAXYGEN. The Receiving Party hereby assigns to MAXYGEN any rights he or she may have or acquire in any of the foregoing (including all such Confidential Information, Inventions and all patent, copyright and other rights related thereto), and the Receiving Party shall not have any rights to disclose or otherwise use any MAXYGEN property hereunder except in his or her performance of Services hereunder, or otherwise only with MAXYGEN’s prior written consent. The Receiving Party shall assist MAXYGEN (at the latter’s expense) in every proper way (including execution of patent applications and other documents) to obtain and enforce patents on any Inventions and to evidence MAXYGEN’s ownership of its property hereunder. The Receiving Party’s obligation to assist MAXYGEN in obtaining and enforcing patents will continue beyond the time that the Receiving Party provides Services to MAXYGEN. MAXYGEN will compensate the Receiving Party at reasonable rates for the assistance the Receiving Party provides at MAXYGEN’s request after the Receiving Party has ceased providing Services to MAXYGEN. The Receiving Party hereby irrevocably appoints MAXYGEN and its duly authorized officers and agents as the Receiving Party’s agents and attorneys-in-fact to execute and file all documents and perform all other lawful acts related to the foregoing.

9. It is acknowledged that the Receiving Party may possess certain inventions, processes, know-how, trade secrets, computer technical expertise and software and other intellectual property, all of which has been independently developed without the benefit of any Confidential Information or any other property of MAXYGEN under this Agreement and which is owned or controlled by the Receiving Party (collectively, “Receiving Party Property”). The Receiving Party and MAXYGEN agree that any Receiving Party Property or any improvements thereto which are used, improved, modified or further developed solely by the Receiving Party during the Receiving Party’s performance of the Services, which are the product of the Receiving Party’s technical expertise, which are related to the Receiving Party’s line of business or the way he or she performs his or her services, and which do not use or include any Confidential Information or any other property of MAXYGEN, shall be and remain the property of the Receiving Party.

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10. The parties agree that money damages would not be a sufficient remedy for any breach of this Agreement by the Receiving Party and that, in the event of such a breach, MAXYGEN may be entitled to equitable relief including injunctive relief and specific performance. Such remedies shall be in addition to any other remedies at law or in equity available to MAXYGEN.

11. The Receiving Party acknowledges that MAXYGEN is subject to extensive federal and state laws and regulations, including but not limited to laws and regulations of the United States Food and Drug Administration (“FDA”), the International Committee on Harmonization (“ICH”) and other health authorities. These laws and regulations provide, inter alia, that (a) vendors that provide MAXYGEN with products, supplies, equipment or services that may be used in the production or testing of medicines or pharmaceuticals or may affect, process, interpret or otherwise affect medical or pharmaceutical data, directly or indirectly, must meet certain regulatory minimum validation requirements and (b) that MAXYGEN must perform quality assurance audits on any vendors that may provide such supplies, equipment or services. The Receiving Party agrees to cooperate with MAXYGEN in satisfying these requirements, as applicable, including allowing MAXYGEN, the FDA, the ICH and other health authorities to perform any necessary audits of the Receiving Party’s records and/or facilities and providing MAXYGEN, the FDA, the ICH and other health authorities with any necessary information and materials.

12. The Receiving Party acknowledges and agrees that the Receiving Party is not an employee of MAXYGEN and that this Agreement is not an employment contract of any type.

13. This Agreement shall be governed by the laws of the State of California, without regard to its conflicts of laws principles. This Agreement contains the final, complete and exclusive agreement of the parties relative to the subject matter hereof, and supersedes any and all prior agreements or understandings (oral or written) between the parties with respect to the subject matter hereof. This Agreement may not be changed, modified, amended or supplemented except by mutual written agreement of both parties. If any of the provisions of this Agreement are held invalid or unenforceable, unless such invalidity or unenforceability substantially frustrates the underlying intent and sense of the remainder of this Agreement, such invalidity or unenforceability shall not affect the remainder of this Agreement. This Agreement may be signed in one (1) or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.

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AGREED TO:	AGREED TO:
MAXYGEN, INC.	RECEIVING PARTY
By:	Signature:
Name:	Name:
Title:
Date:	Date:

5

Exhibit C

to Change of Control Agreement

MAXYGEN, INC.

AGREEMENT AND RELEASE

I hereby confirm my obligations under the Confidential Information, Secrecy and Invention Agreement that I have previously entered into with the Company.

I acknowledge that I have read and understand Section 1542 of the California Civil Code that reads as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to my release of any claims I may have against the Company.

Except as otherwise set forth in this Agreement and Release (the “Release”) and except for obligations of the Company set forth in the Change of Control Agreement entered into between the Company and me, I hereby release, acquit and forever discharge the Company, its parents and subsidiaries, and their officers, directors, agents, servants, employees, shareholders, successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed (other than any claim for indemnification I may have as a result of any third party action against me based on my employment with the Company), arising out of or in any way related to agreements, events, acts or conduct at any time prior to and including the Effective Date of this Release (as defined below), including but not limited to: all such claims and demands directly or indirectly arising out of or in any way connected with my employment with the Company or the termination of that employment, including but not limited to, claims of intentional and negligent infliction of emotional distress, any and all tort claims for personal injury, claims or demands related to salary, bonuses, commissions, stock, stock options, or any other ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements, severance pay, or any other form of compensation; claims pursuant to any federal, state or local law or cause of action including, but not limited to, the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”); the federal Americans with Disabilities Act of 1990; the California Fair Employment and Housing Act, as amended; tort law; contract law; wrongful discharge; discrimination;

fraud; defamation; emotional distress; and breach of the implied covenant of good faith and fair dealing; provided, however, that nothing in this paragraph shall be construed in any way to release the Company from its obligation to (i) indemnify me pursuant to any applicable statute, provision in the Company’s certificate of incorporation or bylaws, or indemnification agreement, and to provide me with continued coverage under the Company’s directors and officers liability insurance policy to the same extent that it has provided such coverage to previously departed officers and directors of the Company or (ii) provide the benefits to me set forth in the Change of Control Agreement entered into between the Company and me; and provided further that this paragraph shall not be effective as a release to claims which cannot be waived under applicable law.

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under ADEA. I also acknowledge that the consideration given for the waiver and release in the preceding paragraph hereof is in addition to anything of value to which I was already entitled. If and only if I am covered by ADEA, I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (A) my waiver and release do not apply to any rights or claims that may arise after the Effective Date of this Release; (B) I have the right to consult with an attorney prior to executing this Release; (c) I have twenty-one (21) days to consider this Release (although I may choose to voluntarily execute this Release earlier); (D) I have seven (7) days following the execution of this Release to revoke the Release; and (E) this Release shall not be effective until the date upon which the revocation period has expired, which shall be the eighth day after this Release is executed by me (the “Effective Date”). If I am not covered by ADEA, I acknowledge that this Agreement shall be effective as of the date upon which this Release has been executed by me (the “Effective Date”).

By:
	THE EXECUTIVE
Date:

2

Exhibit D

to Change of Control Agreement

MAXYGEN, INC.

NON-COMPETITION AND NON-SOLICITATION AGREEMENT

This Non-Competition and Non-Solicitation Agreement (this “Agreement”) is being executed and delivered as of             , 2009 by [EXECUTIVE] (“Executive”) in favor and for the benefit of Maxygen, Inc. (“Company”).

WHEREAS, the Company is entering into a Master Joint Venture Agreement with Haley Pharma Inc. and Comet Private Company (the “Transaction”);

WHEREAS, Executive has entered into that certain Amended and Restated Change in Control Agreement (“Change in Control Agreement”) with the Company, pursuant to which Executive may receive substantial benefits in connection with the Transaction payable following Executive’s termination of employment from the Company, subject to certain conditions including Executive’s entering into and not breaching this Agreement.

WHEREAS, in consideration of the benefits payable under the Change in Control Agreement, Executive agrees to enter into this Agreement effective as of the date of the date of Executive’s termination of employment with the Company (the “Effective Time”).

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

1. Effective Date. This Agreement shall be effective as of the Effective Time.

2. Noncompetition. During the period commencing on the Effective Time and ending on the 36-month anniversary of the Closing (the “Non-Competition Period”), Executive shall not (other than in connection with any services to Company or Comet Private Company, or their respective affiliates, successors or assigns), without the prior written consent of Company, directly or indirectly:

(a) engage, anywhere in the Restricted Territory (as defined below), in any business (including research and development), operations, activities and/or services that are reasonably related to the products and services of the Company or of Comet Private Company, in either case as such exist immediately prior to the Effective Time, including, without limitation, the use of DNA shuffling recombination technology or involving the discovery or development of protein pharmaceuticals targeting the following: G-CSF, CTLA-4, BAFF, April, OX40, or ICOS (“Competing Business Purpose”);

(b) be or become an officer, director, stockholder, owner, affiliate, salesperson, co-owner, partner, trustee, promoter, technician, engineer, analyst, employee, agent, representative, supplier, contractor, consultant, advisor or manager of or to, or otherwise acquire or hold any interest in, or participate in or facilitate the financing, operation, management or control of, any firm, partnership, corporation, person, entity or business that engages or participates in a Competing Business Purpose in the Restricted Territory; or

(c) contact, solicit or communicate with Company’s customers in connection with a Competing Business Purpose;

provided, however, that nothing in this Agreement shall prevent or restrict Executive from any of the following: (i) owning as a passive investment less than 1% of the outstanding shares of the capital stock of a corporation (whether public or private) that is engaged in a Competing Business Purpose and Executive is not otherwise associated with such corporation; (ii) performing speaking engagements and receiving honoraria in connection with such engagements; (iii) being employed by any government agency, college, university or other non-profit research organization; (iv) owning a passive equity interest in a private debt or equity investment fund in which the Executive does not have the ability to control or exercise any managerial influence over such fund; (v) becoming an employee, director, agent, representative, supplier, contractor, consultant, advisor or manager of or to an Entity that engages or participates in a Competing Business Purpose in the Restricted Territory, if such Entity has more than one distinct business units and Executive is not employed in or providing services to a business unit of such Entity that engages or participates in a Competing Business Purpose or, if Executive serves on the Board of Directors of such Entity, he recuses himself from all discussion and decision-making with respect to the unit engaging in the Competing Business Purpose; or (vi) any activity consented to in writing by the Company.

“Restricted Territory” means each and every country, province, state, city, or other political subdivision of the world in which Company, Comet Private Company or any of their subsidiaries or affiliates is currently engaged, or currently plans to engage in a Competing Business Purpose.

3. Nonsolicitation. Executive further agrees that Executive shall not during the Non-Competition Period, directly or indirectly, without the prior written consent of Company:

(a) personally or through others, solicit or attempt to solicit (on Executive’s own behalf or on behalf of any other person) any employee of Company or Comet Private Company, or any subsidiary thereof or their respective successors or assigns, to leave his or her employment with Company or Comet Private Company or any of their subsidiaries or their respective successors or assigns;

(b) personally or through others, induce, attempt to induce, solicit or attempt to solicit (on Executive’s own behalf or on behalf of any other person), any

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Executive of Company or Comet Private Company, or any subsidiary thereof, to engage in any activity in which Executive would, under the provisions of Section 2 hereof, be prohibited from engaging.

Notwithstanding the foregoing, for purposes of this Agreement, the placement of general advertisements that may be targeted to a particular geographic or technical area but that are not specifically targeted toward employees of Company, Comet Private Company or of their subsidiaries or their respective successors or assigns, shall not be deemed to be a breach of this Section 3.

4. Severability of Covenants. The covenants contained in Section 2 hereof shall be construed as a series of separate covenants, one for each country, province, state, city or other political subdivision of the Restricted Territory. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in Section 2 hereof. If, in any judicial proceeding, a court refuses to enforce any of such separate covenants (or any part thereof), then Company and Executive agree that such unenforceable covenant (or such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event that the provisions of Section 2 or Section 3 are deemed to exceed the time, geographic or scope limitations permitted by applicable law, then Company and Executive agree that such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable law.

5. Executive Acknowledgement. Executive acknowledges that (i) Executive has received adequate consideration for this Agreement and that the limitations of time, geography and scope of activity agreed to in this Agreement are reasonable and necessary because, among other things: (A) the Company is engaged in a highly competitive industry, (B) Executive has had unique access to the trade secrets, confidential and proprietary information, and know-how of the Company, including, without limitation, the plans and strategy (and, in particular, the competitive strategy) of the Company, and (C) Executive believes that this Agreement provides no more protection than is reasonably necessary to protect Company’s and Comet Private Company’s trade secrets and confidential and proprietary information.

6. Remedy. The non-competition and non-solicitation covenants in this Agreement are essential to the Company’s willingness to provide benefits and payments under the Change in Control Agreement. In the event Executive breaches any provision of Section 2 or 3 of this Agreement, the sole remedy to the Company for such breach shall be that (i) any benefits and payments not yet provided or paid shall be cancelled immediately, and (ii) any of Executive’s options to purchase common stock of the Company shall be cancelled immediately.

7. Non-Exclusivity. The rights and remedies of Company hereunder, and the obligations and liabilities of Executive hereunder, are in addition to their respective rights, remedies, obligations and liabilities under the law of unfair competition, misappropriation of trade secrets and the like. This Agreement does not limit Executive’s obligations or the rights of Company (or any affiliate of Company) under the terms of any other agreement between Executive and Company or any affiliate of Company.

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8. Notices. All notices and other communications pursuant to this Agreement shall be in writing and deemed to be sufficient if contained in a written instrument and shall be deemed given if delivered personally, telecopied, sent by nationally-recognized overnight courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to the respective parties at the following address:

(a) if to Company, to:

Maxygen, Inc.

515 Galveston Drive

Redwood City, CA 94063

Attn: General Counsel

(b) if to Executive, to the address for notice set forth on Executive’s signature page hereto.

or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall only be effective upon receipt.

9. Severability. If any provision of this Agreement or any part of any such provision is held under any circumstances to be invalid or unenforceable in any jurisdiction, then: (a) except as otherwise set forth herein, such provision or part thereof shall, with respect to such circumstances and in such jurisdiction, be deemed amended to conform to applicable laws so as to be valid and enforceable to the fullest possible extent, (b) the invalidity or unenforceability of such provision or part thereof under such circumstances and in such jurisdiction shall not affect the validity or enforceability of such provision or part thereof under any other circumstances or in any other jurisdiction, and (c) such invalidity of enforceability of such provision or part thereof shall not affect the validity or enforceability of the remainder of such provision or the validity or enforceability of any other provision of this Agreement.

10. Governing Law. This Agreement shall be construed in accordance with, and governed in all respects by, the laws of the State of California, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

11. Attorneys’ Fees. Should any litigation, arbitration or other proceeding be commenced between the parties concerning this Agreement (including, without limitation, the enforcement hereof and the rights and duties of the parties hereunder), the party prevailing shall be entitled, in addition to such other relief as may be granted, such party’s attorneys’ fees and expenses in connection with such litigation, arbitration or other proceeding.

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12. Waiver. No failure on the part of any party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. No party shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of the waiving party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.

13. Captions. The captions contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

14. Entire Agreement. This Agreement and the Amended and Restated Change in Control Agreement (including the agreements referenced therein) set forth the entire understanding of Executive and Company relating to the subject matter hereof and supersede all prior agreements and understandings between any of such parties relating to the subject matter hereof. Executive understands and agrees that he has had an opportunity to seek his own counsel in his review of this Agreement.

15. Amendments. This Agreement may not be amended, modified, altered, or supplemented other than by means of a written instrument duly executed and delivered on behalf of Company and Executive.

16. Assignment. This Agreement and all obligations hereunder are personal to Executive and may not be transferred or assigned by Executive at any time. Company may assign its rights under this Agreement to any entity in connection with any merger or sale or transfer of all or substantially all of Company’s assets.

17. Binding Nature. This Agreement will be binding upon Executive and Executive’s representatives, executors, administrators, estate, heirs, successors and assigns, and will inure to the benefit of Company and its respective successors and assigns.

18. Counterpart Execution. This Agreement may be executed by facsimile and in counterparts, each of which shall be deemed an original and all of which when taken together shall constitute but one and the same instrument.

[Remainder of Page Intentionally Left Blank]

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In witness whereof, the undersigned have executed this Agreement as of the date first above written.

“EXECUTIVE”

By:

Print Name:

Address:

Telephone:

Fax:

“COMPANY”

[                                                 ]

a Delaware corporation

[name

EX-10.2

EXHIBIT 10.2

MAXYGEN, INC.

RETENTION AGREEMENT

This RETENTION AGREEMENT (the “Agreement”), is made by and between MAXYGEN, INC., a Delaware corporation (the “Company”), and Grant Yonehiro (the “Executive”) on the terms set forth below.

WHEREAS, concurrently with the execution of this Agreement, the Executive is entering into an Amended and Restated Change in Control Agreement with the Company (the “Change in Control Agreement”).

WHEREAS, concurrently with the execution of this Agreement, the Company is entering into a Master Joint Venture Agreement with Astellas Pharma Inc. and Astellas Bio Inc., pursuant to which the parties will create a new jointly owned limited liability company (“Newco”). The closing of the foregoing transaction is referred to herein as the “Transaction” and closing of the Transaction is referred to herein as the “Closing Date.”

WHEREAS, concurrently with the execution of this Agreement, the Executive is entering into an employment offer letter (the “Offer Letter”) with the Company, on behalf of Newco, a majority owned subsidiary of the Company, pursuant to which the Executive will become the Chief Executive Officer and President of Newco.

WHEREAS, the Company desires to reward Executive for successfully implementing the Transaction, to provide incentives for the Executive to assure that the Company will have the continued dedication and objectivity of the Executive, notwithstanding the occurrence of the Transaction, and, notwithstanding the Executive’s responsibilities to Newco under the terms of the Offer Letter, create incentives for the Executive to continue providing services to the Company following the Transaction.

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

1. Effective Date. This Agreement, which shall be binding immediately upon its execution by the parties, shall go into effect if and only if the Closing occurs on or prior to December 31, 2009. The Closing Date shall be the “Effective Date” of this Agreement.

2. Definitions.

(a) “Cause” means the Executive’s: (i) willful and continued failure to substantially perform the Executive’s duties with the Company (other than as a result of physical or mental disability or death) after a written demand for substantial performance is delivered to the Executive by the Company, which demand specifically identifies the manner in which the Company believes that the Executive has not substantially performed the Executive’s duties and that has not been cured within fifteen (15) days following receipt by the Executive of the written demand; (ii) commission of a felony

(other than a traffic-related offense) that in the written determination of the Company is likely to cause or has caused material injury to the Company’s business; (iii) dishonesty with respect to a significant matter relating to the Company’s business; or (iv) material breach of any agreement by and between the Executive and the Company, which material breach has not been cured within fifteen (15) days following receipt by the Executive of written notice from the Company identifying such material breach.

(b) “Disability” means Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering Company employees.

(c) “Effective Date” means the date specified in Section 1 above.

(d) “Good Reason” means: (i) the relocation of the Executive to a facility or a location more than thirty (30) miles from the Executive’s then present business location, except if agreed to in writing by the Executive; (ii) a material breach by the Company of any provision of this Agreement; or (iii) any failure of the Company to obtain the assumption of this Agreement by any successor or assign of the Company; provided, however, that such events shall not constitute grounds for a Good Reason termination unless the Executive has provided notice to the Company of the existence of the one or more of the above conditions within ninety (90) days of its initial existence, the Company has been provided at least thirty (30) days to remedy the condition and the effective date of the Executive’s resignation is within six months of the initial occurrence or circumstance giving rise to Good Reason.

3. Retention Payments. Subject to acceleration as provided below, Executive shall be entitled to receive a lump sum cash retention bonus of $200,000, less applicable withholding, on each of the first three anniversaries of the Closing Date (so that the aggregate amount contemplated shall be $600,000), provided Executive remains employed by the Company or Newco through each such date.

4. Severance Benefits.

(a) Severance Payment. If, prior to the third anniversary of the Closing Date, (i) the Executive’s employment terminates as a result of (A) his death or Disability, (B) the Company’s terminating his employment other than for Cause, or (C) the Executive’s terminating his employment with the Company for Good Reason, or (ii) the Company’s dissolution or liquidation, then subject to the Executive (or in the event of the Executive’s death or Disability, his estate or personal representative, respectively) entering into and not revoking an Agreement and Release (“Release”) in the form attached as Exhibit C hereto and such Release becoming effective within thirty (30) days thereafter, Executive shall be entitled to receive a lump-sum severance payment (less

applicable withholding taxes) equal to the greater of (1) any remaining unpaid retention payments under Section 3, or (2) six (6) months of the Executive’s then applicable base salary from Newco. Subject to Section 14 hereof, such payment shall be made on the first payroll date following the Executive’s termination or, if made as a result of the Company’s dissolution or liquidation, on the effective date of such event.

(b) Medical Benefit Continuation. Upon any termination of employment with the Company for any or no reason, then subject to Executive entering into and not revoking a Release and such Release becoming effective within thirty (30) days thereafter, the Executive shall be entitled to receive continued medical benefits as provided in Section 6(e).

5. Voluntary Resignation not for Good Reason; Termination for Cause. In the event the Executive’s employment with the Company terminates due to the Executive’s voluntary termination without Good Reason or by the Company for Cause, then Executive shall not be entitled to the Severance Payment set forth in Section 4(a) of this Agreement.

6. Transaction Benefits. Effective as of and contingent upon the closing of the Transaction (the “Closing”), and subject to Executive remaining employed through the Closing and entering into and not revoking the Release within thirty (30) days thereafter (such Release to be in addition to any Release required under Section 4 above), the Executive shall be entitled to receive the following payments and benefits:

(a) Transaction Bonus. A lump sum cash payment of Six Hundred Thousand Dollars ($600,000), less applicable withholding, payable on the first payroll date following the effective date of the Release;

(b) 2009 Performance Bonus. The Executive shall be eligible for and considered for a bonus (in an amount, if any, determined at the discretion of the Board) for the 2009 calendar year, which shall be paid at the same time other employees are considered for a bonus for such calendar year.

(c) Equity Acceleration. Each of the Executive’s outstanding stock options, all stock subject to repurchase or forfeiture, including without limitation, restricted stock, restricted stock units and performance shares awards, and any options, stock subject to repurchase or forfeiture, awards or purchases held in the name of an estate planning vehicle for the benefit of the Executive or his or her immediate family, shall have their vesting and exercisability schedule accelerate in full (or, as applicable, the corresponding repurchase or forfeiture right shall lapse in full) as of the Closing, provided that the Company shall deliver shares (or other property including cash that is in the interim substituted for or distributed with respect to shares of the Company’s Common Stock, with any such property or cash related to shares underlying vested but as-yet-unsettled restricted stock units held by the Company or an agent authorized by the Company for delivery to the Executive) in satisfaction of the vesting of restricted stock units on their presently scheduled vesting dates of December 31, 2009 and May 3, 2010 (for the sake of clarification, the restricted stock units shall vest as of the Closing but

distribution of the shares or substituted property subject to restricted stock units will be delayed as set forth above), unless the Executive’s termination of employment occurs within six months prior to such date, in which case the shares will be delivered on the date that is six (6) months and one (1) day after such termination date (or, if sooner, upon the Executive’s death); provided, further, that if the Executive becomes entitled to benefits under this Section 6, then all of the Executive’s Company stock options with an exercise price exceeding $20.00 per share shall automatically be canceled as of the effective date of the Release.

(d) Extended Exercise Period. The post-termination exercise period of the Executive’s outstanding stock option and stock appreciation right awards shall automatically be extended to the end of the original maximum term of such awards.

(e) Medical Benefit Continuation. If at the time of any termination of the Executive’s employment with the Company, the Executive is covered by any Company-paid health plans or programs, then subject to the Executive timely electing continued group health coverage under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay the 100% of the cost, on behalf of Executive, for Executive’s continued group health, dental and vision coverage under COBRA for the Executive and the Executive’s eligible and covered spouse and/or dependents until the earlier of the end of the period to which the Executive, his spouse and/or dependents, as the case may be, are entitled to coverage (including as a result of any subsequent qualifying event that occurs and extends coverage for a person covered hereunder following the termination date) with respect to the Company’s group health, dental and vision plans under COBRA following the Termination Date, or the date that the Executive and his spouse and/or dependents become covered under another employer’s group health plans or programs that provide the Executive and his or her spouse and/or dependents with comparable benefits and levels of coverage.

7. Mitigation. In no event shall the Executive be obligated to seek other employment or take any other action to mitigate the amounts payable or benefits provided to the Executive under this Agreement, nor shall any such payments or benefits be reduced by any earnings or benefits that the Executive may receive from any other source.

8. Consulting Duties. The Executive agrees to enter into a consulting agreement in the form attached as Exhibit A (the “Consulting Agreement”) with the Company, to become effective immediately following Executive’s termination of employment with the Company.

9. Limitations and Conditions on Benefits. The benefits and payments provided under this Agreement shall be subject to the following terms and limitations:

(a) Withholding Taxes. The Company shall withhold required foreign, federal, state and local income and employment taxes from any payments hereunder.

(b) Confidential Information, Secrecy and Invention Agreement Prior to Receipt of Benefits. The Executive shall have executed and delivered to the Company, a standard form of the Company’s confidential information, secrecy and invention agreement, a copy of the current form of which is attached as Exhibit B (the “Confidential Information, Secrecy and Invention Agreement”), prior to the receipt or provision of any benefits (including the acceleration benefits) under this Agreement. Additionally, the Executive agrees that all documents, records, apparatus, equipment and other physical property that is furnished to or obtained by the Executive in the course of his or her employment with the Company shall be and shall remain the sole property of the Company. The Executive agrees not to make or retain copies, reproductions or summaries of any such property, except as otherwise necessary while acting in the normal course of business. In the event of any material breach by the Executive of the Confidential Information, Secrecy and Invention Agreement that is not cured within thirty (30) days of notice of such breach to the Executive, all benefits payable under this Agreement shall immediately terminate and all outstanding stock options shall immediately be canceled.

(c) Non-Competition and Non-Solicitation Agreement. As a condition of the receipt of any benefits under this Agreement on account of the Executive’s termination of employment with the Company, the Executive shall, as of the date of such termination, enter into a non-competition and non-solicitation agreement in the form attached as Exhibit D (the “Non-Competition and Non-Solicitation Agreement”). In the event of any breach by the Executive of the Non-Competition and Non-Solicitation Agreement, all benefits payable under this Agreement shall immediately terminate and all outstanding stock options shall immediately be canceled, and that shall be the sole remedy to the Company for such breach.

(d) Consulting Agreement. In the event of any breach by the Executive of the Consulting Agreement, all benefits payable under this Agreement shall immediately terminate and all outstanding stock options shall immediately be canceled.

10. At-Will Employment. The Company and the Executive acknowledge that the Executive’s employment is and shall continue to be at-will, as defined under applicable law. This Agreement shall not be construed as creating an express or implied contract of employment between the Executive and the Company. The Executive shall not have any right to be retained in the employment of the Company.

11. Notices. Any notice provided under this Agreement shall be in writing and shall be deemed to have been effectively given (i) upon receipt when delivered personally, (ii) one day after sending when sent by express mail service (such as Federal Express), or (iii) five (5) days after sending when sent by regular mail to the following address:

In the case of the Company:

Maxygen, Inc.

515 Galveston Drive

Redwood City, CA 94063

Attn: General Counsel

In the case of the Executive:

The last personal residence

address known by the Company

or to such other address as the Company or the Executive hereafter designates by written notice in accordance with this Section 11.

12. Litigation/Arbitration Expenses. Reasonable litigation and/or arbitration costs and expenses shall be paid by the Company, win or lose, in connection with any dispute between the Company (and its successors) and the Executive concerning this Agreement; provided, however, that if the litigation or arbitration is found to have been commenced in bad faith by the Executive, the Executive shall bear all of his or her own costs and expenses in connection with such litigation or arbitration.

13. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Executive, and the Company, and any surviving entity resulting from a Change of Control and upon any other person who is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company, and their respective successors, assigns, heirs, executors and administrators, without regard to whether or not such person actively assumes any rights or duties hereunder; provided, however, that the Executive may not assign any duties hereunder without the prior written consent of the Company.

14. Section 409A.

(a) Notwithstanding any provision to the contrary herein, no Deferred Compensation Separation Payments (as defined below) that becomes payable under this Agreement by reason of Employee’s termination of employment with the Company (or any successor entity thereto) will be made unless such termination of employment constitutes a “separation from service” within the meaning of Section 409A of the Internal Revenue Code (the “Code”), and any final regulations and Internal Revenue Service guidance promulgated thereunder (“Section 409A”). Further, if Executive is a “specified employee” of the Company (or any successor entity thereto) within the meaning of Section 409A on the date of Employee’s termination (other than a termination due to death), then the severance payable to Employee, if any, under this Agreement, when considered together with any other severance payments or separation benefits that are considered deferred compensation under Section 409A (collectively, but excluding any amounts specified in paragraphs (b) or (c) below, the “Deferred Compensation Separation Payments”) that are payable within the first six (6) months following Employee’s termination of employment, shall be delayed until the first payroll date that occurs on or after the date that is six (6) months and one (1) day after the date of the termination, when they shall be paid in full arrears. All subsequent Deferred Compensation Separation Payments, if any, shall be paid in accordance with the payment

schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following his termination but prior to the six (6) month anniversary of his termination, then any Payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Employee’s death and all other Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

(b) Any amounts paid under this Agreement that satisfy the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Compensation Separation Payments for purposes of clause (a) above.

(c) Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that do not exceed the Section 409A Limit shall not constitute Deferred Compensation Separation Payments for purposes of clause (ii) above. “Section 409A Limit” will mean the lesser of two (2) times: (A) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Company’s taxable year preceding the Company’s taxable year of Executive’s termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (B) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.

(d) Any taxable reimbursements and/or taxable in-kind benefits provided in this Agreement shall be made or provided in accordance with the requirements of Section 409A, including: (i) the amount of any such expense reimbursement or in-kind benefit provided during a taxable year of the Executive shall not affect any expenses eligible for reimbursement in any other taxable year; (ii) the reimbursement of an eligible expense shall be made no later than the last day of the employee’s taxable year that immediately follows the taxable year in which the expense was incurred; and (iii) the right to any such reimbursement shall not be subject to liquidation or exchange for another benefit or payment.

(e) The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided in this Agreement will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

15. Miscellaneous.

(a) No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing by each of the parties.

(b) No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party that are not expressly set forth in this Agreement. This Agreement replaces and supersedes in its entirety the Prior Agreement.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

16. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California, regardless of the law that might be applied under applicable principles of conflicts of law.

17. Entire Agreement. This Agreement, together with the Employee Agreement and Release; the Change of Control Agreement; the Confidential Information, Secrecy and Invention Agreement; the Non-Competition and Non-Solicitation Agreement; the Consulting Agreement; and the agreements relating to the Executive’s equity compensation (as modified hereby) represent the entire agreement and understanding between the Company and the Executive concerning the Executive’s employment, transition, and potential termination and consulting arrangement with the Company.

MAXYGEN, INC.
By:	/s/ Louis Lange
	Louis Lange
	Chairman, Compensation Committee
Date: June 30, 2009
THE EXECUTIVE
/s/ Grant Yonehiro
Grant Yonehiro
Date: June 30, 2009

Exhibit A

to Retention Agreement

MAXYGEN, INC.

CONSULTING AGREEMENT

This Consulting Agreement (“Agreement”), effective as of this         day of             , 20    (the “Effective Date”), is made by and between Maxygen, Inc., a corporation formed under the laws of the State of Delaware, with offices at 515 Galveston Drive, Redwood City, CA 94063 (the “Company”) and Grant Yonehiro, an individual (the “Consultant”).

BACKGROUND

The Consultant is party to Retention Agreement (the “Retention Agreement”) with the Company dated June 30, 2009. Pursuant to the terms of the Retention Agreement, the Consultant agrees to enter into this Agreement following Consultant’s termination as an executive of the Company and to continue to abide by this Agreement as a condition of receiving certain benefits and payments under the Retention Agreement. The Company desires to have the Consultant provide consulting services to the Company, and the Consultant is willing to provide such consulting services and assistance, on the terms and conditions set forth below. Accordingly, the parties hereto hereby agree as follows:

1. Consulting Services.

1.1 The Consultant shall advise the Company and its Affiliates and their respective management, employees and agents regarding the business of the Company. The Consultant shall at all times retain the right to control the manner and means of performance hereunder; provided, however, that the Consultant shall at all times provide the services and otherwise perform his obligations hereunder in a professional manner, with reasonable skill and care and in accordance with the terms and conditions of this Agreement.

1.2 From time to time during the term of this Agreement (including any extension or renewal term thereof) upon request by the Company, the Consultant shall provide consulting and advisory services to the Company and its Affiliates and their respective management, employees and agents at reasonable times agreed upon by the Consultant and the Company at the Company’s offices, or such other locations as may be agreed upon by the Consultant and the Company. Such consultation may be provided by telephone, by electronic mail, by audioconference, by videoconference and/or through written correspondence.

2. Consideration; Payment.

2.1 In consideration for consulting services provided by the Consultant to the Company hereunder, the Company shall pay to the Consultant a consulting fee of $150 per hour for each hour devoted to consulting for the Company as provided hereunder (“Consulting Hour”). Unless otherwise agreed to in writing by the parties, the Consultant’s consulting time shall not include travel time.

2.2 In addition to any consulting fees due to the Consultant pursuant to Section 2.1 above, the Company will reimburse reasonable out-of-pocket expenses (including reasonable travel expenses) actually incurred by the Consultant in the course of performing the consulting services hereunder, in compliance with the Company’s travel policies for its officers and subject to customary written verification of such expenses in a form reasonably satisfactory to the Company, within thirty (30) business days after the Company’s receipt from the Consultant of a proper written invoice therefore.

2.3 The Consultant shall provide to the Company a written invoice of any services provided by Consultant and the date and time spent on such consulting services.

2.4 The Consultant and Company agree that the time spent on services Consultant is expected to perform under this Agreement will not exceed 20% of the average level of time spent on services Consultant performed for the Company over the immediately preceding three-year period.

2.5 The Consultant will not be eligible for, nor will participate in, any health, pension, or other employee benefit plan sponsored or established by the Company for the benefit of its employees.

3. Term and Termination.

The term of this Agreement will begin on the date the Consultant’s employment with the Company terminates and the Agreement will continue in full force and effect until the third anniversary of the Closing Date of the Transaction (as such terms are defined in the Retention Agreement), unless earlier terminated, modified, extended or renewed as otherwise provided in this Section 3 (the “Term”).

The Company may terminate this Agreement for any reason or no reason with at least ninety (90) days written notice of termination to the Consultant.

This Agreement will terminate automatically upon the Consultant’s death, or in the event the Consultant becomes disabled and such disability substantially impairs the Consultant’s ability to carry out his or her obligations hereunder. In such case, the Company’s obligation to pay ceases after the date of termination, except for those services actually performed on or prior to the date of such termination.

This Agreement may be extended or renewed for additional agreed upon periods upon the written agreement of the parties.

In the event, following the date (if any) within the Term on which the Consultant’s employment with Newco (as such term is defined in the Retention Agreement) terminates for any reason, the Consultant’s obligations under this Agreement render the Consultant unable to secure employment with a new employer, then the parties (including any party who succeeds to the Company’s interests as a result of a Change of Control), shall negotiate in good faith a modification or earlier termination of this Agreement.

4. Certain Other Contracts.

Notwithstanding anything to the contrary in this Agreement, nothing within the scope of the Consultant’s employment with Newco shall conflict with this Agreement.

The Consultant shall not disclose to the Company, or bring onto the Company’s premises, or induce the Company to use, any information that the Consultant is obligated to keep confidential pursuant to an existing agreement with any third party, and nothing in this Agreement will be construed to impose any obligation on the Consultant to the contrary.

The Consultant shall not perform consulting work hereunder on time that the Consultant is required to devote to any third party. The Consultant shall not use the funding, resources and facilities of any third party to perform consulting work hereunder and shall not perform the consulting work hereunder in any manner that would give any third party rights to the product of such work.

The Consultant has disclosed and, during the term of this Agreement (including any extension or renewal term thereof), shall continue to disclose to the Chief Executive Officer of the Company, or his designee, any conflicts between this Agreement and any other agreements or obligations binding the Consultant.

The Consultant acknowledges that the Company has not made any agreement or commitment, or offered to the Consultant any such agreement or commitment, (i) to have the Consultant perform any additional services, (ii) except as set forth in the Retention Agreement, to make any other payments to the Consultant, or (iii) to enter into any other agreement with or commitment to the Consultant.

5. Inventions and Documents; Assignment.

The Consultant shall promptly and fully disclose to the Chief Executive Officer of the Company (or his designee) any and all work product and intellectual property, including without limitation any invention, improvement, algorithm, code, discovery, process, know-how, design right, copyright, mask work, formula, technique, method, and/or trade secret, whether or not patentable, whether or not copyrightable, made, discovered, conceived, developed, generated, contributed to, or first reduced to practice by the Consultant, either alone or jointly with others, while performing or arising from the services provided hereunder (collectively, “Inventions”). The Consultant understands and agrees that all Inventions are and shall remain the exclusive property of the Company and shall be treated as Confidential Information (as defined in Section 6 below). The

Consultant agrees to assign and hereby assigns to the Company (or its designee) all right, title and interest in and to any such Inventions. The Consultant shall execute all instruments necessary to perfect the assignment of such Inventions to the Company (or its designee) and to enable the Company or its designee to apply for, obtain, and enforce patents, copyrights and other intellectual property rights in any and all countries on such Inventions. The Consultant hereby irrevocably designates the Secretary of the Company as the Consultant’s agent and attorney-in-fact to execute and file any such document and to do all lawful acts necessary to apply for and obtain such patents, copyrights and other intellectual property rights, and to enforce the Company’s rights (or the rights of its designee) under this paragraph.

The parties acknowledge that all original works of authorship, including but not limited to computer software, which are made by the Consultant within the scope of the consulting services provided to the Company hereunder and which are protectable by copyright shall be “works made for hire” within the meaning of the Copyright Law of the United States of America and its related laws contained in Title 17 of the United States Code and are hereby assigned to Company (or its designee) pursuant to such laws; provided, however, that in no event shall anything in this Agreement be construed to render the Consultant an employee of the Company under any state or local labor or employment laws.

All documents, data and/or other records provided by or obtained from the Company or created as a result of the consulting services provided hereunder, including any summary, abstract or excerpt thereof, (the “Documents”) are, will be and shall remain the Company’s sole property and must be promptly returned to the Company when this Agreement expires or terminates, as the case may be. Any copyright in such Documents and any other documents of any other work prepared for the Company by the Consultant shall be solely owned by the Company.

No royalty or other payment will be due to the Consultant in respect of any Inventions or the assignment thereof to the Company.

This Section 5 will survive the expiration or termination of this Agreement.

6. Confidentiality.

The Consultant acknowledges that, during the course of performing the consulting services hereunder, confidential and proprietary information (i) owned by the Company and/or its Affiliates (e.g., technical information, business plans, identification or characterization of biological or other materials, results and/or design of experiments and/or preclinical or clinical testing, financial analysis or marketing plans), and/or (ii) received by the Company and/or its Affiliates in confidence from one or more third parties, may, in each case, be disclosed to the Consultant by or on behalf of the Company, and that in connection with the consulting activities conducted by Consultant under this Agreement the Consultant will be developing information and creating work product related to the Field (e.g. inventions, projects, products, potential customers, personnel, business plans, finances and/or other commercially valuable information). All such

information described in the previous sentence, whatever its form or medium (whether in written, oral, electronic, or graphic format), shall be referred to as “Confidential Information.” The Consultant acknowledges and agrees that the Company’s business area is extremely competitive, that the success of the Company’s business is dependent in part upon the maintenance of secrecy of Confidential Information, and that any disclosure of the Confidential Information would result in serious harm to the Company.

The Consultant agrees that the Confidential Information of the Company will be used by the Consultant only in connection with the consulting services hereunder, and will not be used in any way that is detrimental to the Company.

The Consultant agrees to hold in strict confidence and not to disclose, directly or indirectly, the Confidential Information of the Company to any third person or entity, other than representatives or agents of the Company.

The term “Confidential Information” does not include information to the extent that it (i) is or becomes generally available to the public other than through breach of this Agreement or other wrongful act by the Consultant, (ii) was already lawfully within the Consultant’s possession prior to being furnished to the Consultant by or on behalf of the Company hereunder, or (iii) becomes available to the Consultant on a nonconfidential basis from a third party who has no obligation of confidentiality to the Company or any of its Affiliates. Specific Confidential Information shall not be deemed to be within any of the foregoing exclusions merely because it is within the scope of more general information within one or more of the exclusions. Further, any combination of Confidential Information (whether or not combined with non-confidential information) shall not be deemed to be within the above exceptions merely because one or more individual items of Confidential Information are within the above exceptions.

The Consultant may disclose any Confidential Information that is required to be disclosed by applicable law, government regulation or court order; provided that if any such disclosure is required, the Consultant shall give the Company reasonable advance notice of any such contemplated disclosure so that the Company may seek a protective order or take other action reasonable in light of the circumstances to prevent and/or limit the scope of any such disclosure.

Upon expiration or termination of this Agreement, the Consultant will promptly return to the Company or, at the Company’s request, destroy (and provide to the Company written confirmation of such destruction) all materials containing Confidential Information as well as data, records, reports and other property, furnished by the Company to the Consultant or produced by the Consultant in connection with services rendered hereunder, together with all copies, excerpts, summaries and abstracts of any of the foregoing. Notwithstanding such return or destruction, as the case may be, the Consultant shall continue to be bound by the terms and conditions of this Section 6 for a period of five (5) years after the termination or expiration of this Agreement. This Section 6 shall survive the termination or expiration of this Agreement (including any extension or renewal term thereof).

7. Use of Equipment and Facilities. If, at any time, the Consultant is required to work at any of the Company’s premises or use any of its equipment, the Consultant will comply with all relevant health, safety and security regulations and related instructions issued by the Company.

8. Use of Name. It is understood by the Consultant that the name of the Consultant may appear in disclosure documents required by securities laws, and in other regulatory and administrative filings in the ordinary course of the Company’s business.

9. No Conflict; Valid and Binding. The Consultant warrants and represents that (i) neither the execution of this Agreement nor the performance of the Consultant’s obligations under this Agreement will result in a violation or breach of any other agreement by which the Consultant is bound, (ii) the Consultant has the legal power and authority and right to enter into and perform under this Agreement without violating the rights or obtaining the consent of any third party, and (iii) the Consultant is entering this Agreement as principal and not as agent for any other party. The Company represents that this Agreement has been duly authorized and executed and is a valid and legally binding obligation of the Company.

10. Notices. Any notice provided under this Agreement shall be in writing and shall be deemed to have been effectively given (i) upon receipt when delivered personally, (ii) one day after sending when sent by private courier service (such as Federal Express), or (iii) five (5) days after sending when sent by first-class mail (postage prepaid), in each case to the applicable address noted herein above or to other such address as may have been last designated by the Company or the Consultant by written notice to the other party as provided herein.

11. Independent Contractor; Withholding.

The parties agree that the Consultant will at all times be an independent contractor, and not an agent or an employee, in the performance of the consulting services hereunder, and nothing in this Agreement shall be construed or have effect as constituting any relationship of employer and employee or of partnership between the Company and the Consultant. The Consultant does not have the power or authority to bind the Company or to assume or create any obligation or responsibility, express or implied, on the Company’s behalf or in the Company’s name, and the Consultant shall not represent to any person or entity that the Consultant has such power or authority. Consultant shall not act as an agent nor be deemed to be an employee of the Company for the purposes of any employee benefit program, unemployment benefits, or otherwise.

The Consultant shall provide the Company with his United States Tax Identification Number (TIN) upon execution of this Agreement. The Company shall provide the Consultant with an Internal Revenue Service (IRS) Form 1099 in connection with the performance of the services hereunder. The Consultant recognizes that no amount will be withheld by the Company from the Consultant’s compensation for payment of any federal, state, or local taxes or related payroll deductions of any country, and that the Consultant has sole responsibility to pay all such taxes, if any, and file all

such returns as may be required by applicable laws and regulations with respect to the Consultant’s performance of the consulting services hereunder and receipt of fees under this Agreement, and the Consultant shall indemnify and hold harmless the Company from the Consultant’s failure to do so.

12. Assignment; Successors and Assigns. Due to the personal nature of the services to be rendered by the Consultant hereunder, the Consultant may not assign this Agreement nor subcontract any of the consulting services to be performed under this Agreement. The Company may assign all its rights and liabilities under this Agreement to any of its Affiliates or to a successor to all or a substantial part of its business or assets without the consent of the Consultant. Subject to the foregoing, this Agreement will inure to the benefit of and be binding upon each of the assigns and successors of the respective parties.

13. Advice of Counsel. Each party represents that it has voluntarily executed this Agreement having read and fully understood it, and after having the opportunity to freely consult with counsel or other advisor(s) of each party’s choice, and each acknowledges and agrees that this Agreement shall not be deemed to have been drafted by one party or the other and will be construed accordingly.

14. Severability. If any provision of this Agreement shall be declared invalid, illegal or unenforceable, such provision shall be severed and the remaining provisions shall continue in full force and effect.

15. Remedies. The Consultant acknowledges that the Company would have no adequate remedy at law to enforce Sections 5 and/or 6 hereof. In the event of a violation by the Consultant of such Sections notwithstanding, the Company shall have the right to obtain from a court of competent jurisdiction injunctive relief and/or other similar equitable remedies for any such violation, without the requirement of posting bond or other similar measures.

16. Indemnity. The Company shall indemnify, defend and hold harmless the Consultant, from and against all expenses and liabilities arising from any claim or proceeding brought by any third party, including any shareholder of the Company, based on or relating to any services performed by Consultant for the Company pursuant to this Agreement, except to the extent that such expense or liability is due to the negligence or willful misconduct of Consultant. In the event that Consultant becomes aware of any claim or proceeding he believes is subject to this Section 16 he shall promptly notify the Company and cooperate fully with the Company and its counsel in the defense and/or settlement of any such claim or proceeding. This Section 16 shall survive the termination or expiration of this Agreement (including any extension or renewal term thereof).

17. Arbitration. The parties hereby agree that any dispute arising under this Agreement, or in connection with any breach thereof, shall be finally resolved through binding arbitration conducted in San Francisco, California, in accordance with the Commercial Arbitration Rules of the American Arbitration Association by one (1) arbitrator appointed in accordance with such Rules. The arbitrator shall determine what

discovery will be permitted, and shall not order or require discovery against either party of a type or scope that is not permitted against the other party because of differences in applicable law. The costs of the arbitration shall be shared equally by the parties, and each party shall bear its own costs and attorneys’ and witness’ fees. No punitive damages may be granted by the arbitrator. The parties agree that the arbitrator’s decision shall be the sole, exclusive and binding remedy between them regarding any and all disputes, controversies, claims and counterclaims presented to the arbitrator.

18. Governing Law; Entire Agreement; Amendment. This Agreement shall be governed by the laws of the State of California without reference to the conflicts of laws principles, represents the entire understanding of the parties with respect to the subject matter hereof, supersedes and cancels all prior agreements, understandings, arrangements or representations between the parties with respect to the consulting services to be provided hereunder, and may only be amended by written agreement of the parties. Notwithstanding the above, the parties agree that the Retention Agreement and that certain Confidential Information, Secrecy and Invention Agreement; Employee Agreement and Release; and Non-Competition and Non-Solicitation Agreement which were entered into in connection with the Retention Agreement shall remain in full force and effect.

19. Headings. The underlined headings contained in this Agreement are for convenience of reference only, shall not be deemed to be part of this Agreement, and shall not be referred to in connection with the construction or interpretation of this Agreement.

20. Definition of Affiliates. In this Agreement, “Affiliates” means any and all corporations or other business entities which (directly or indirectly) control, are controlled by, or are under common control with the Company.

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

UNDERSTOOD AND AGREED:
MAXYGEN, INC.	CONSULTANT:
By:	Signature:
Name:
Title:

Exhibit B

to Retention Agreement

MAXYGEN, INC.

CONFIDENTIAL INFORMATION, SECRECY AND

INVENTION AGREEMENT

THIS AGREEMENT (the “Agreement”), made effective as of this         day of             , 20    (the “Effective Date”), by and between Maxygen, Inc., with principal place of business at 515 Galveston Drive, Redwood City, California 94063 (“MAXYGEN”), and Grant Yonehiro, (the “Receiving Party”), is entered into in connection with the following facts and circumstances:

WHEREAS, MAXYGEN and the Receiving Party have entered into that certain Retention Agreement (the “Retention Agreement”) pursuant to which the Receiving Party agrees to provide certain consulting services to MAXYGEN pursuant to a consulting agreement (the “Services”);

WHEREAS, pursuant to the Retention Agreement and in connection with the Services, the Receiving Party further agrees to enter into this Agreement and continue to abide by its terms as a condition of receiving certain benefits and payments under the Retention Agreement; and

WHEREAS, both MAXYGEN and the Receiving Party desire to assure the protection and preservation of the confidential and proprietary nature of information to be disclosed or made available by MAXYGEN to the Receiving Party.

NOW THEREFORE, in consideration of the following undertakings, the parties hereby agree as follows:

1. Subject to the other terms of this Agreement, all information disclosed by MAXYGEN or any subsidiary of MAXYGEN to the Receiving Party hereunder shall be deemed to be “Confidential Information” of MAXYGEN. Confidential Information may be disclosed to or developed, learned or acquired by the Receiving Party in the course of providing Services to MAXYGEN, whether or not related to the Receiving Party’s duties. Confidential Information is broadly defined, and includes (i) all information that has or could have commercial value or other utility in the businesses in which MAXYGEN or a subsidiary is engaged or in which it contemplates engaging, and (ii) all information that, if disclosed without authorization, could be detrimental to the interests of MAXYGEN or the entities with which it has business relationships, whether or not this information is identified as Confidential Information. Subject to the other terms of this Agreement, such Confidential Information shall include any and all information which relates to, refers to or consists of any of MAXYGEN’s or any subsidiary’s trade secrets, inventions, ideas, compounds, samples, biologic materials, procedures, processes, formulations, formulae, techniques, data, results, research projects, development projects, pre-clinical studies, clinical studies, testing, engineering, manufacturing, quality assurance/control,

suppliers, regulators, clients, customers, collaborators, contractors, marketing, promotions, sales, pricing, employees, personnel, finances, investors, strategies, facilities, business and/or operations, whether conducted by MAXYGEN on its own or with one or more third parties, and whether disclosed by MAXYGEN hereunder in written, graphic or electronic form or orally.

2. “Confidential Information” shall not be deemed to include information which the Receiving Party can demonstrate by competent written evidence: (a) was in the public domain when disclosed by MAXYGEN or subsequently becomes public through no act or failure to act on the part of the Receiving Party; (b) was already known by the Receiving Party when disclosed by MAXYGEN; or (c) was or is furnished to the Receiving Party by a third party not bound by any confidentiality obligation or other restriction on disclosure with respect to such information.

3. The Receiving Party shall maintain in trust and confidence, and shall not disclose to any third party except with MAXYGEN’s express prior written consent, any and all Confidential Information, and shall use any and all Confidential Information only for purposes of performing the Services. The Receiving Party’s obligations of confidentiality and non-use under this Agreement shall remain in effect for ten (10) years from the Effective Date. No rights or licenses to Confidential Information or to any trademark, invention, copyright, patent, patent application, intellectual property or other property of MAXYGEN are implied or granted under this Agreement. Nothing herein shall be construed to obligate either party to enter into any further agreements with the other party.

4. As between the parties, all Confidential Information (including all copies thereof) shall remain the property of MAXYGEN. After the Receiving Party’s need for Confidential Information has expired, or promptly upon any request by MAXYGEN, the Receiving Party shall return to MAXYGEN all copies of Confidential Information or shall destroy all copies of Confidential Information, and shall promptly provide a written certification to MAXYGEN of such return or destruction in compliance with this Agreement.

5. Notwithstanding any other provision of this Agreement, disclosure of Confidential Information shall not be precluded if such disclosure is required under applicable law, regulation or valid order of a court or other governmental body to which the Receiving Party is subject, provided that the Receiving Party shall have first have given written notice to MAXYGEN of the need for such disclosure reasonably in advance so that MAXYGEN may (if it elects) seek a protective order or other confidential treatment of the Confidential Information. Any disclosure of Confidential Information as permitted under this Section 5, (i) shall be limited to only that Confidential Information which is necessary to comply with such law, regulation or order of a court or government body, and (ii) shall in no way alter the confidential nature of such Confidential Information for all other purposes.

6. The Receiving Party acknowledges and agrees that it is aware of the restrictions imposed by the United States federal securities laws and other applicable foreign and domestic laws on a person possessing material non-public information about a public company and that the Receiving Party will comply with such laws.

7. The Receiving Party will promptly disclose to MAXYGEN any and all formulas, processes, techniques, data, copyrightable material, improvements and inventions, whether or not patentable or copyrightable, which the Receiving Party makes, conceives, learns or reduces to practice, either alone or jointly with others, which are related to or useful in MAXYGEN’s business, and which result from the Receiving Party’s performance of the Services or from the Receiving Party’s use of MAXYGEN’s Confidential Information or facilities (collectively, “Inventions”).

8. Any and all materials, data, work product, results, reports and any other information received, generated, derived or provided to MAXYGEN by the Receiving Party as part of or in connection with the performance of the Services hereunder shall be and remain the sole property of MAXYGEN. In addition, all Confidential Information, all Inventions and all patent, copyright and other rights related thereto shall be and remain the sole property of MAXYGEN. The Receiving Party hereby assigns to MAXYGEN any rights he or she may have or acquire in any of the foregoing (including all such Confidential Information, Inventions and all patent, copyright and other rights related thereto), and the Receiving Party shall not have any rights to disclose or otherwise use any MAXYGEN property hereunder except in his or her performance of Services hereunder, or otherwise only with MAXYGEN’s prior written consent. The Receiving Party shall assist MAXYGEN (at the latter’s expense) in every proper way (including execution of patent applications and other documents) to obtain and enforce patents on any Inventions and to evidence MAXYGEN’s ownership of its property hereunder. The Receiving Party’s obligation to assist MAXYGEN in obtaining and enforcing patents will continue beyond the time that the Receiving Party provides Services to MAXYGEN. MAXYGEN will compensate the Receiving Party at reasonable rates for the assistance the Receiving Party provides at MAXYGEN’s request after the Receiving Party has ceased providing Services to MAXYGEN. The Receiving Party hereby irrevocably appoints MAXYGEN and its duly authorized officers and agents as the Receiving Party’s agents and attorneys-in-fact to execute and file all documents and perform all other lawful acts related to the foregoing.

9. It is acknowledged that the Receiving Party may possess certain inventions, processes, know-how, trade secrets, computer technical expertise and software and other intellectual property, all of which has been independently developed without the benefit of any Confidential Information or any other property of MAXYGEN under this Agreement and which is owned or controlled by the Receiving Party (collectively, “Receiving Party Property”). The Receiving Party and MAXYGEN agree that any Receiving Party Property or any improvements thereto which are used, improved, modified or further developed solely by the Receiving Party during the Receiving Party’s performance of the Services, which are the product of the Receiving Party’s technical expertise, which are related to the Receiving Party’s line of business or the way he or she performs his or her services, and which do not use or include any Confidential Information or any other property of MAXYGEN, shall be and remain the property of the Receiving Party.

10. The parties agree that money damages would not be a sufficient remedy for any breach of this Agreement by the Receiving Party and that, in the event of such a breach, MAXYGEN may be entitled to equitable relief including injunctive relief and specific performance. Such remedies shall be in addition to any other remedies at law or in equity available to MAXYGEN.

11. The Receiving Party acknowledges that MAXYGEN is subject to extensive federal and state laws and regulations, including but not limited to laws and regulations of the United States Food and Drug Administration (“FDA”), the International Committee on Harmonization (“ICH”) and other health authorities. These laws and regulations provide, inter alia, that (a) vendors that provide MAXYGEN with products, supplies, equipment or services that may be used in the production or testing of medicines or pharmaceuticals or may affect, process, interpret or otherwise affect medical or pharmaceutical data, directly or indirectly, must meet certain regulatory minimum validation requirements and (b) that MAXYGEN must perform quality assurance audits on any vendors that may provide such supplies, equipment or services. The Receiving Party agrees to cooperate with MAXYGEN in satisfying these requirements, as applicable, including allowing MAXYGEN, the FDA, the ICH and other health authorities to perform any necessary audits of the Receiving Party’s records and/or facilities and providing MAXYGEN, the FDA, the ICH and other health authorities with any necessary information and materials.

12. The Receiving Party acknowledges and agrees that the Receiving Party is not an employee of MAXYGEN and that this Agreement is not an employment contract of any type.

13. This Agreement shall be governed by the laws of the State of California, without regard to its conflicts of laws principles. This Agreement contains the final, complete and exclusive agreement of the parties relative to the subject matter hereof, and supersedes any and all prior agreements or understandings (oral or written) between the parties with respect to the subject matter hereof. This Agreement may not be changed, modified, amended or supplemented except by mutual written agreement of both parties. If any of the provisions of this Agreement are held invalid or unenforceable, unless such invalidity or unenforceability substantially frustrates the underlying intent and sense of the remainder of this Agreement, such invalidity or unenforceability shall not affect the remainder of this Agreement. This Agreement may be signed in one (1) or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.

AGREED TO:	AGREED TO:
MAXYGEN, INC.	RECEIVING PARTY
By:	Signature:
Name:	Name:
Title:
Date:

Exhibit C

to Retention Agreement

MAXYGEN, INC.

AGREEMENT AND RELEASE

I hereby confirm my obligations under the Confidential Information, Secrecy and Invention Agreement that I have previously entered into with the Company.

I acknowledge that I have read and understand Section 1542 of the California Civil Code that reads as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to my release of any claims I may have against the Company.

Except as otherwise set forth in this Agreement and Release (the “Release”) and except for obligations of the Company set forth in the Retention Agreement entered into between the Company and me, I hereby release, acquit and forever discharge the Company, its parents and subsidiaries, and their officers, directors, agents, servants, employees, shareholders, successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed (other than any claim for indemnification I may have as a result of any third party action against me based on my employment with the Company), arising out of or in any way related to agreements, events, acts or conduct at any time prior to and including the Effective Date of this Release (as defined below), including but not limited to: all such claims and demands directly or indirectly arising out of or in any way connected with my employment with the Company or the termination of that employment, including but not limited to, claims of intentional and negligent infliction of emotional distress, any and all tort claims for personal injury, claims or demands related to salary, bonuses, commissions, stock, stock options, or any other ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements, severance pay, or any other form of compensation; claims pursuant to any federal, state or local law or cause of action including, but not limited to, the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”); the federal Americans with Disabilities Act of 1990; the California Fair Employment and Housing Act, as amended; tort law; contract law; wrongful discharge; discrimination; fraud; defamation; emotional distress; and breach of the implied covenant of good faith

and fair dealing; provided, however, that nothing in this paragraph shall be construed in any way to release the Company from its obligation to (i) indemnify me pursuant to any applicable statute, provision in the Company’s certificate of incorporation or bylaws, or indemnification agreement and to provide me with continued coverage under the Company’s directors and officers liability insurance policy to the same extent that it has provided such coverage to previously departed officers and directors of the Company or (ii) provide the benefits to me set forth in the Retention Agreement entered into between the Company and me; and provided further that this paragraph shall not be effective as a release to claims which cannot be waived under applicable law.

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under ADEA. I also acknowledge that the consideration given for the waiver and release in the preceding paragraph hereof is in addition to anything of value to which I was already entitled. If and only if I am covered by ADEA, I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (A) my waiver and release do not apply to any rights or claims that may arise after the Effective Date of this Release; (B) I have the right to consult with an attorney prior to executing this Release; (c) I have twenty-one (21) days to consider this Release (although I may choose to voluntarily execute this Release earlier); (D) I have seven (7) days following the execution of this Release to revoke the Release; and (E) this Release shall not be effective until the date upon which the revocation period has expired, which shall be the eighth day after this Release is executed by me (the “Effective Date”). If I am not covered by ADEA, I acknowledge that this Agreement shall be effective as of the date upon which this Release has been executed by me (the “Effective Date”).

By:
	THE EXECUTIVE
Date:

Exhibit D

to Retention Agreement

MAXYGEN, INC.

NON-COMPETITION AND NON-SOLICITATION AGREEMENT

This Non-Competition and Non-Solicitation Agreement (this “Agreement”) is being executed and delivered as of             , 20     by Grant Yonehiro (“Executive”) in favor and for the benefit of Maxygen, Inc. (“Company”).

WHEREAS, the Company is entering into a Master Joint Venture Agreement with Astellas Pharma Inc. and Astellas Bio Inc., pursuant to which the parties will create a new jointly owned limited liability company, CPC, LLC (“Newco” and the transaction between the Company, Astellas Pharma Inc and Astellas Bio Inc. the “Transaction”);

WHEREAS, Executive has entered into that certain Retention Agreement (“Retention Agreement”) with the Company, pursuant to which Executive may receive substantial benefits in connection with the Transaction, subject to certain conditions including Executive’s entering into and not breaching this Agreement.

WHEREAS, in consideration of the benefits payable under the Retention Agreement, Executive agrees to enter into this Agreement effective as of the date of the date of Executive’s termination of employment with the Company (the “Effective Time”).

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

1. Effective Date; General. This Agreement shall be effective as of the Effective Time. The parties acknowledge that the Executive is party to an employment offer letter dated June 26, 2009 with the Company, acting on behalf of Newco, pursuant to which the Executive will become Chief Executive Officer and President of Newco (the “Offer Letter”), and acknowledge and agree that nothing in connection with the Executive’s performance of services to Newco whether under the Offer Letter or otherwise shall be deemed to be a breach of this Agreement or otherwise conflict with his obligations hereunder.

2. Noncompetition. During the period commencing on the Effective Time and ending on the 36-month anniversary of the Closing Date (as defined in the Retention Agreement and such period, the “Non-Competition Period”), the Executive shall not (other than in connection with any services to Company or Newco, or their respective successors, affiliates or assigns), without the prior written consent of Company, directly or indirectly:

(a) engage, anywhere in the Restricted Territory (as defined below), in any business (including research and development), operations, activities and/or services that are related to the products and services of the Company as such exist immediately prior to the Closing that include the use of DNA shuffling recombination technology or the business (including research and development), operations, activities and/or services that are related to the products and services of the Newco as such exist immediately prior to the Effective Time (“Competing Business Purpose”);

(b) be or become an officer, director, stockholder, owner, affiliate, salesperson, co-owner, partner, trustee, promoter, technician, engineer, analyst, employee, agent, representative, supplier, contractor, consultant, advisor or manager of or to, or otherwise acquire or hold any interest in, or participate in or facilitate the financing, operation, management or control of, any firm, partnership, corporation, person, entity or business that engages or participates in a Competing Business Purpose in the Restricted Territory; or

(c) contact, solicit or communicate with Company’s customers in connection with a Competing Business Purpose;

provided, however, that nothing in this Agreement shall prevent or restrict Executive from any of the following: (i) owning as a passive investment less than 1% of the outstanding shares of the capital stock of a corporation (whether public or private) that is engaged in a Competing Business Purpose and Executive is not otherwise associated with such corporation; (ii) performing speaking engagements and receiving honoraria in connection with such engagements; (iii) being employed by any government agency, college, university or other non-profit research organization; (iv) owning a passive equity interest in a private debt or equity investment fund in which the Executive does not have the ability to control or exercise any managerial influence over such fund; (v) becoming an employee, director, agent, representative, supplier, contractor, consultant, advisor or manager of or to an Entity that engages or participates in a Competing Business Purpose in the Restricted Territory, if such Entity has more than one distinct business units and Executive is not employed in or providing services to a business unit of such Entity that engages or participates in a Competing Business Purpose or, if Executive serves on the Board of Directors of such Entity, he recuses himself from all discussion and decision-making with respect to the unit engaging in the Competing Business Purpose; or (vi) any activity consented to in writing by the Company.

“Restricted Territory” means each and every country, province, state, city, or other political subdivision of the world in which Company, Newco or any of their subsidiaries or affiliates is currently engaged, or currently plans to engage in a Competing Business Purpose.

3. Nonsolicitation. Executive further agrees that Executive shall not during the Non-Competition Period, directly or indirectly, without the prior written consent of Company:

(a) personally or through others, solicit or attempt to solicit (on Executive’s own behalf or on behalf of any other person) any employee of Company or Newco, or any subsidiary thereof or their respective successors or assigns, to leave his or her employment with Company or Newco or any of their subsidiaries or their respective successors or assigns;

(b) personally or through others, induce, attempt to induce, solicit or attempt to solicit (on Executive’s own behalf or on behalf of any other person), any Executive of Company or Newco, or any subsidiary thereof, to engage in any activity in which Executive would, under the provisions of Section 2 hereof, be prohibited from engaging.

Notwithstanding the foregoing, for purposes of this Agreement, the placement of general advertisements that may be targeted to a particular geographic or technical area but that are not specifically targeted toward employees of Company, Newco or of their subsidiaries or their respective successors or assigns, shall not be deemed to be a breach of this Section 3.

4. Severability of Covenants. The covenants contained in Section 2 hereof shall be construed as a series of separate covenants, one for each country, province, state, city or other political subdivision of the Restricted Territory. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in Section 2 hereof. If, in any judicial proceeding, a court refuses to enforce any of such separate covenants (or any part thereof), then Company and Executive agree that such unenforceable covenant (or such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced. In the event that the provisions of Section 2 or Section 3 are deemed to exceed the time, geographic or scope limitations permitted by applicable law, then Company and Executive agree that such provisions shall be reformed to the maximum time, geographic or scope limitations, as the case may be, permitted by applicable law.

5. Executive Acknowledgement. Executive acknowledges that (i) Executive has received adequate consideration for this Agreement and that the limitations of time, geography and scope of activity agreed to in this Agreement are reasonable and necessary because, among other things: (A) the Company is engaged in a highly competitive industry, (B) Executive has had unique access to the trade secrets, confidential and proprietary information, and know-how of the Company, including, without limitation, the plans and strategy (and, in particular, the competitive strategy) of the Company, and (C) Executive believes that this Agreement provides no more protection than is reasonably necessary to protect Company’s and Newco’s trade secrets and confidential and proprietary information.

6. Remedy. The non-competition and non-solicitation covenants in this Agreement are essential to the Company’s willingness to provide benefits and payments under the Change in Control Agreement. In the event Executive breaches any provision of Section 2 or 3 of this Agreement, the sole remedy to the Company for such breach

shall be that (i) any benefits and payments not yet provided or paid shall be cancelled immediately, and (ii) any of Executive’s options to purchase common stock of the Company shall be cancelled immediately.

7. Non-Exclusivity. The rights and remedies of Company hereunder, and the obligations and liabilities of Executive hereunder, are in addition to their respective rights, remedies, obligations and liabilities under the law of unfair competition, misappropriation of trade secrets and the like. This Agreement does not limit Executive’s obligations or the rights of Company (or any affiliate of Company) under the terms of any other agreement between Executive and Company or any affiliate of Company.

8. Notices. All notices and other communications pursuant to this Agreement shall be in writing and deemed to be sufficient if contained in a written instrument and shall be deemed given if delivered personally, telecopied, sent by nationally-recognized overnight courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to the respective parties at the following address:

(a) if to Company, to:

Maxygen, Inc.

515 Galveston Drive

Redwood City, CA 94063

Attn: General Counsel

(b) if to Executive, to the address for notice set forth on Executive’s signature page hereto.

or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall only be effective upon receipt.

9. Severability. If any provision of this Agreement or any part of any such provision is held under any circumstances to be invalid or unenforceable in any jurisdiction, then: (a) except as otherwise set forth herein, such provision or part thereof shall, with respect to such circumstances and in such jurisdiction, be deemed amended to conform to applicable laws so as to be valid and enforceable to the fullest possible extent, (b) the invalidity or unenforceability of such provision or part thereof under such circumstances and in such jurisdiction shall not affect the validity or enforceability of such provision or part thereof under any other circumstances or in any other jurisdiction, and (c) such invalidity of enforceability of such provision or part thereof shall not affect the validity or enforceability of the remainder of such provision or the validity or enforceability of any other provision of this Agreement.

10. Governing Law. This Agreement shall be construed in accordance with, and governed in all respects by, the laws of the State of California, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

11. Attorneys’ Fees. Should any litigation, arbitration or other proceeding be commenced between the parties concerning this Agreement (including, without limitation, the enforcement hereof and the rights and duties of the parties hereunder), the party prevailing shall be entitled, in addition to such other relief as may be granted, such party’s attorneys’ fees and expenses in connection with such litigation, arbitration or other proceeding.

12. Waiver. No failure on the part of any party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. No party shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of the waiving party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.

13. Captions. The captions contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

14. Entire Agreement. This Agreement, the Retention Agreement, the Offer Letter and the Amended and Restated Change in Control Agreement (including the agreements referenced in any such other agreements) set forth the entire understanding of Executive and Company relating to the subject matter hereof and supersede all prior agreements and understandings between any of such parties relating to the subject matter hereof. Executive understands and agrees that he has had an opportunity to seek his own counsel in his review of this Agreement.

15. Amendments. This Agreement may not be amended, modified, altered, or supplemented other than by means of a written instrument duly executed and delivered on behalf of Company and Executive.

16. Assignment. This Agreement and all obligations hereunder are personal to Executive and may not be transferred or assigned by Executive at any time. Company may assign its rights under this Agreement to any entity in connection with any merger or sale or transfer of all or substantially all of Company’s assets.

17. Binding Nature. This Agreement will be binding upon Executive and Executive’s representatives, executors, administrators, estate, heirs, successors and assigns, and will inure to the benefit of Company and its respective successors and assigns.

18. Counterpart Execution. This Agreement may be executed by facsimile and in counterparts, each of which shall be deemed an original and all of which when taken together shall constitute but one and the same instrument.

[Remainder of Page Intentionally Left Blank]

In witness whereof, the undersigned have executed this Agreement as of the date first above written.

“EXECUTIVE”
Print Name:
Address:
Telephone:
Fax:
“COMPANY”
	MAXYGEN, a Delaware corporation
By:
Name:
Title:

EX-10.3

EXHIBIT 10.3

MAXYGEN, INC.

AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT

This CHANGE OF CONTROL AGREEMENT (the “Agreement”), originally made by and between MAXYGEN, INC., a Delaware corporation (the “Company”), and Grant Yonehiro (the “Executive”) on March 3, 2008, as amended and restated May 7, 2008 and December 23, 2008 (the “Prior Agreement”), is hereby amended and restated in its entirety effective as set forth below.

WHEREAS, concurrently with the execution of this Agreement, the Company is entering into a Master Joint Venture Agreement with Astellas Pharma Inc. and Astellas Bio Inc.

WHEREAS, concurrently with the execution of this Agreement, the Executive and the Company are entering into a Retention Agreement, providing certain benefits to the Executive (the “Retention Agreement”).

WHEREAS, the Board has determined that in light of the benefits provided in the Retention Agreement and to reinforce and encourage the continued attention and dedication of the Executive to his assigned duties without distraction, the Prior Agreement should be amended and restated in its entirety by this Agreement to conform its provisions to the safe harbor good reason termination provisions under Section 409A of the Code and to provide for its automatic termination on December 31, 2009 unless a Change of Control (as defined herein) occurs on or prior to such date.

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

1. Introduction; Purposes and Effectiveness.

(a) The purpose of this Agreement is to provide the Executive with protection of certain benefits in case of a termination of his or her employment with the Company in connection with a Change of Control of the Company.

(b) The Company, by means of the Agreement, seeks to (i) secure and/or retain the services of the Executive and (ii) provide incentives for the Executive to exert maximum efforts for the success of the Company even in the face of a potential Change of Control of the Company.

(c) This Agreement, which shall be binding immediately upon its execution by the parties, shall go into effect if and only if the Closing occurs on or prior to December 31, 2009. The date of the Closing shall be the “Effective Date” of this Agreement and, upon this Agreement becoming effective at the Closing, the Prior Agreement shall terminate. Prior to the Effective Date of this Agreement, as well as following termination of this Agreement without its having become effective as set forth in this paragraph, the Prior Agreement shall remain in full force and effect.

2. Definitions.

(a) “Accountants” has the meaning given thereto in Section 4.

(b) “ADEA” has the meaning given thereto in Section 5(c).

(c) “Agreement” means this Amended and Restated Change of Control Agreement.

(d) “Board” means the Board of Directors of the Company.

(e) “Cause” means the Executive’s: (i) willful and continued failure to substantially perform the Executive’s duties with the Company (other than as a result of physical or mental disability) after a written demand for substantial performance is delivered to the Executive by the Company, which demand specifically identifies the manner in which the Company believes that the Executive has not substantially performed the Executive’s duties and that has not been cured within fifteen (15) days following receipt by the Executive of the written demand; (ii) commission of a felony (other than a traffic-related offense) that in the written determination of the Company is likely to cause or has caused material injury to the Company’s business; (iii) dishonesty with respect to a significant matter relating to the Company’s business; or (iv) material breach of any agreement by and between the Executive and the Company, which material breach has not been cured within fifteen (15) days following receipt by the Executive of written notice from the Company identifying such material breach.

(f) “Change of Control” means: (i) a dissolution or liquidation of the Company; (ii) a sale of all or substantially all the assets of the Company; (iii) a merger, recapitalization, reorganization, consolidation or other similar transaction (a “Business Combination”) in which beneficial ownership of securities of the Company representing at least thirty-five percent (35%) of the combined voting power entitled to vote in the election of directors has changed; (iv) a reverse merger in which the Company is the surviving corporation but the shares of the common stock of the Company outstanding immediately before the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, and in which beneficial ownership of securities of the Company representing at least thirty-five percent (35%) of the combined voting power entitled to vote in the election of directors has changed; (v) an acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the Company or subsidiary of the Company or other entity controlled by the Company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the Company representing at least thirty-five percent (35%) of the combined voting power entitled to vote in the election of directors; (vi) in the event that the individuals who are members of the Incumbent Board cease for any reason to constitute at least fifty percent (50%) of the Board; (vii) a sale of substantially all the assets of the Company’s protein pharmaceutical business; or (viii) the consummation by the Company of a Business Combination with respect to which all or

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substantially all of the individuals and entities who were the beneficial owners of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors immediately prior to such Business Combination do not, following consummation of all transactions intended to constitute part of such Business Combination, beneficially own, directly or indirectly, at least sixty-five percent (65%) of the voting securities of the Company (or the corporation, business trust or other entity resulting from or being the surviving entity in such Business Combination).

(g) “Code” means the Internal Revenue Code of 1986, as amended.

(h) “Committee” means the Finance Committee of the Board or such other committee as appointed by the Board to administer this Agreement.

(i) “Company” means Maxygen, Inc., a Delaware corporation.

(j) “Company-Paid Coverage” has the meaning given thereto in Section 3(a).

(k) “Confidential Information, Secrecy and Invention Agreement” has the meaning given thereto in Section 5(b).

(l) “Disability” means Executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering Company employees.

(m) “Effective Date” means the date specified in Section 1(c) above.

(n) “Employee Agreement and Release” has the meaning given thereto in Section 5(c).

(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(p) “Excise Tax” has the meaning given thereto in Section 4.

(q) “Executive” means the person identified in the introductory paragraph of this Agreement.

(r) “Good Reason” means: (i) any material reduction in the Executive’s duties, authority, or responsibilities relative to the Executive’s duties, authority, or responsibilities in effect immediately before such reduction, except if agreed to by the Executive: (ii) a material reduction by the Company in the base compensation of the Executive as in effect immediately before such reduction, except if agreed to in

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writing by the Executive; (iii) a material change in the geographic location at which Executive must perform services, except if agreed to in writing by the Executive; or (iv) a material breach by the Company of any provision of this Agreement; provided, however, that such events shall not constitute grounds for a Good Reason termination unless the Executive has provided notice to the Company of the existence of the one or more of the above conditions within ninety (90) days of its initial existence and the Company has been provided at least thirty (30) days to remedy the condition.

(s) “Incumbent Board” means the individuals who, as of the Effective Date, are members of the Board. If the election, or nomination for election by the Company’s stockholders, of any new director is approved by a vote of at least fifty percent (50%) of the Incumbent Board, such new director shall be considered as a member of the Incumbent Board.

(t) “Section 16 Officer” means an “officer” of the Company, as defined in Rule 16a-1(f) promulgated under the Exchange Act, designated as such by action of the Board.

(u) “Target Bonus” means the Executive’s target bonus for the then current fiscal year, as set by the Board or the appropriate committee thereof.

3. Severance Benefits in the Event of a Change of Control.

(a) If within eighteen (18) months following the date of a Change of Control of the Company either (A) the Company terminates the Executive’s employment other than for Cause, death or Disability, or (B) the Executive terminates his or her employment with the Company voluntarily with Good Reason, then in each case, subject to Section 4 and Section 5: (i) the Executive shall be entitled to receive, on the 61^st day following the employment termination date or such later date as is required under Section 11, a lump sum payment equal to three times the Executive’s yearly base salary in effect on the date of termination (without giving effect to any reduction in base salary subsequent to a Change of Control that constitutes Good Reason), (ii) each of the Executive’s outstanding stock options, all stock subject to repurchase or forfeiture, including without limitation, restricted stock, restricted stock units and performance shares awards, and any options, stock subject to repurchase or forfeiture, awards or purchases held in the name of an estate planning vehicle for the benefit of the Executive or his or her immediate family, shall have their vesting and exercisability schedule accelerate in full (or, as applicable, the corresponding repurchase or forfeiture right shall lapse in full) as of the date of termination; (iii) if on the date of termination the Executive is covered by any Company-paid health, disability, accident and/or life insurance plans or programs, the Company shall provide to the Executive benefits substantially similar to those that the Executive was receiving immediately prior to the date of termination (the “Company-Paid Coverage”), with any premiums related to such coverage paid by the Company no later than thirty (30) days following the premium due date; and (iv) the post-termination exercise period of Executive’s outstanding stock option and stock appreciation right awards shall automatically be extended to the later of (A) the fifteenth day of the third month following the date at which the stock option or stock appreciation

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right would otherwise have expired but for this extension, based on the terms of the stock option or stock appreciation right on its grant date, or (B) December 31 of the calendar year in which the stock option or stock appreciation right would otherwise have expired but for this extension, based on the terms of the stock option or stock appreciation right on its grant date; provided, however, that in the event final Treasury Regulations under Code Section 409A permit a longer extension without resulting in the imposition of an additional tax under Code Section 409A, the stock option or stock appreciation right shall provide for such greater post-termination exercise period; provided, further, that in no event shall the term of the stock option or stock appreciation right be extended longer than its original maximum term. If such coverage included the Executive’s spouse and/or dependents immediately prior to the date of termination, such spouse and/or dependents shall also be covered at Company expense. Company-Paid Coverage shall continue until the earlier of (x) three (3) years from the date of termination, or (y) the date that the Executive and his or her spouse and/or dependents become covered under another employer’s health, disability, accident and/or life insurance plans or programs that provides the Executive and his or her spouse and/or dependents with comparable benefits and levels of coverage; provided, however that such coverage, premium payments, or reimbursements (to the extent Executive pays the premiums in the interim) shall be delayed six months and one day from Employee’s termination date (and then paid in full in arrears) to the extent required to avoid the imposition of additional tax under Code Section 409A.

(b) If within eighteen (18) months following the date of a Change of Control of the Company the Executive’s employment with the Company is terminated as a result of death or Disability, then in each case, subject to Section 4 and Section 5: (i) each of the Executive’s outstanding stock options, all stock subject to repurchase or forfeiture, including without limitation restricted stock, restricted stock units, performance shares awards, and any options, stock subject to repurchase or forfeiture, awards or purchases held in the name of an estate planning vehicle for the benefit of the Executive or his or her immediate family, shall have their vesting and exercisability schedule accelerated such that vesting (or, as applicable, the corresponding repurchase or forfeiture right lapsing) shall occur as if the vesting (or lapsing) had occurred on a monthly basis from the last date of vesting (or lapse) to the date of termination; and (ii) the Company will provide the Executive with health, disability, accident and/or life insurance benefits as described in Section 3(a)(iii).

(c) In no event shall the Executive be obligated to seek other employment or take any other action to mitigate the amounts payable or benefits provided to the Executive under this Agreement, nor shall any such payments or benefits be reduced by any earnings or benefits that the Executive may receive from any other source.

(d) The Executive’s employment shall be deemed to have been terminated following a Change of Control by the Company without Cause or by the Executive with Good Reason if the Executive’s employment is terminated prior to a Change of Control without Cause at the direction of a person who has entered into an agreement with the Company the consummation of which will constitute a Change of

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Control or if the Executive terminates his or her employment with Good Reason prior to a Change of Control if the circumstances or event that constitutes Good Reason occurs at the direction of such person.

(e) If the Change of Control is the result of the circumstances described in subsection (vii) of Section 2(f) then, subject to Section 4 and 5 hereof, the benefits described in Section 3(a) shall be payable to the Executive upon cessation of employment with the Company (for any reason) that occurs after the earlier to occur of (x) twelve (12) months after the Change of Control and (y) disposition of all or substantially all the remaining assets of the Company, or such shorter period as determined in the sole discretion of the Board.

(f) If the Executive is eligible for severance benefits pursuant to this Article 3, then the Executive shall be eligible for and considered for a bonus for the calendar year in which the Executive’s employment terminates at the same time other employees are considered for a bonus for such calendar year even though the Executive will no longer be an employee of the Company at that time; provided, however, any such bonus shall not be pro-rated regardless of the effective date of the Executive’s termination. Any such bonus shall be paid no later than 2 ¹/2 months following the end of the taxable year in which the bonus is earned.

(g) Notwithstanding any contrary provision of the Agreement, if the Company determines, in its good faith judgment, that Section 409A of the Code shall result in the imposition of additional tax on any payment or benefit otherwise due to the Executive under the Agreement during the six (6) month period following the Executive’s termination date, all such payments or benefits shall accrue during the six (6) month period and shall become payable in a lump sum payment on the date six (6) months and one (1) day following the Executive’s termination date. All subsequent payments or benefits, if any, shall be paid as provided in the Agreement.

4. Parachute Payments; Excise Tax.

In the event that the severance, acceleration of stock options and other benefits payable to the Executive as a result of a Change of Control of the Company (i) constitute “parachute payments” within the meaning of Section 280G (as it may be amended or replaced) of the Code and (ii) but for this Section 4, would be subject to the excise tax imposed by Section 4999 (as it may be amended or replaced) of the Code (the “Excise Tax”), then the Executive’s benefits payable in connection therewith shall be either

(a) delivered in full, or

(b) delivered as to such lesser extent that would result in no portion of such benefits being subject to the Excise Tax,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by the Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under the Excise Tax. Unless the Company and the

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Executive otherwise agree in writing, any determination required under this Section 4 shall be made in writing in good faith by a “Big Four” national accounting firm selected by the Company or such other person or entity to which the parties mutually agree (the “Accountants”). Any reduction in payments and/or benefits required by this section shall occur in the following order: (1) reduction in vesting acceleration of stock options; (2) reduction in vesting acceleration of restricted stock units and restricted stock; (3) reduction of cash payments; and (4) reduction of other benefits paid or provided to the Executive. In the event that acceleration of vesting of equity awards is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant for the Executive’s equity awards. If two or more equity awards are granted on the same date, each award will be reduced on a pro-rata basis. For purposes of making the calculations required by this Section 4, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code. Any good faith determination of the Accountants made hereunder shall be final, binding and conclusive upon the Company and the Executive.

The Company and the Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 4. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 4.

5. Limitations and Conditions on Benefits.

The benefits and payments provided under this Agreement shall be subject to the following terms and limitations:

(a) Withholding Taxes. The Company shall withhold required foreign, federal, state and local income and employment taxes from any payments hereunder.

(b) Confidential Information, Secrecy and Invention Agreement Prior to Receipt of Benefits. The Executive shall have executed and delivered to the Company, a standard form of the Company’s confidential information, secrecy and invention agreement, a copy of the current form of which is attached as Exhibit A (the “Confidential Information, Secrecy and Invention Agreement”), prior to the receipt or provision of any benefits (including the acceleration benefits) under this Agreement. Additionally, the Executive agrees that all documents, records, apparatus, equipment and other physical property that is furnished to or obtained by the Executive in the course of his or her employment with the Company shall be and shall remain the sole property of the Company. The Executive agrees not to make or retain copies, reproductions or summaries of any such property, except as otherwise necessary while acting in the normal course of business. In the event of any material breach by the Executive of the Confidential Information, Secrecy and Invention Agreement that is not cured within thirty (30) days of notice of such breach to the Executive, all benefits payable under Section 4 of this Agreement shall immediately terminate.

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(c) Employee Agreement and Release Prior to Receipt of Benefits. If the Executive’s employment with the Company terminates involuntarily other than for Cause, death or Disability, or the Executive terminates his or her employment with the Company voluntarily with Good Reason, then prior to, and as a condition of the receipt of any benefits (including the acceleration benefits) under this Agreement on account of such termination, the Executive shall, as of the date of such termination, execute an employee agreement and release in the form attached as Exhibit B (the “Employee Agreement and Release”) prior to receipt of benefits. The receipt of any severance payments or benefits pursuant to Section 3 will be subject to the Executive signing and not revoking such Employee Agreement and Release and provided that such Employee Agreement and Release is effective within sixty (60) days following the termination of Executive’s employment. No benefits (including the acceleration benefits) under Section 3 of this Agreement shall be payable or made available to the Executive on account of a termination until the Executive Agreement and Release becomes effective. Such Employee Agreement and Release shall specifically relate to all the Executive’s rights and claims in existence at the time of such execution and shall confirm the Executive’s obligations under the Company’s standard form of Confidential Information, Secrecy and Invention Agreement.

6. Termination. Prior to a Change of Control of the Company, this Agreement shall automatically terminate on the date the Executive ceases to be a Section 16 Officer, as evidenced by action of the Board removing the Executive as a Section 16 Officer or otherwise; provided, however, that if the Executive ceases to be a Section 16 Officer prior to a Change of Control at the direction of a person who has entered into an agreement with the Company the consummation of which will constitute a Change of Control, this Agreement shall not terminate due to the change in status of the Executive. If there is no Change of Control of the Company on or prior to December 31, 2009, then this Agreement will terminate on December 31, 2009.

7. At-Will Employment. The Company and the Executive acknowledge that the Executive’s employment is and shall continue to be at-will, as defined under applicable law. This Agreement shall not be construed as creating an express or implied contract of employment between the Executive and the Company. The Executive shall not have any right to be retained in the employment of the Company.

8. Notices. Any notice provided under this Agreement shall be in writing and shall be deemed to have been effectively given (i) upon receipt when delivered personally, (ii) one day after sending when sent by express mail service (such as Federal Express), or (iii) five (5) days after sending when sent by regular mail to the following address:

In the case of the Company:

Maxygen, Inc.

515 Galveston Drive

Redwood City, CA 94063

Attn: General Counsel

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In the case of the Executive:

The last personal residence

address known by the Company

or to such other address as the Company or the Executive hereafter designates by written notice in accordance with this Section 8.

9. Litigation/Arbitration Expenses. Reasonable litigation and/or arbitration costs and expenses shall be paid by the Company, win or lose, in connection with any dispute between the Company (and its successors) and the Executive concerning this Agreement; provided, however, that if the litigation or arbitration is found to have been commenced in bad faith by the Executive, the Executive shall bear all of his or her own costs and expenses in connection with such litigation or arbitration.

10. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Executive, and the Company, and any surviving entity resulting from a Change of Control and upon any other person who is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company, and their respective successors, assigns, heirs, executors and administrators, without regard to whether or not such person actively assumes any rights or duties hereunder; provided, however, that the Executive may not assign any duties hereunder without the prior written consent of the Company.

11. Section 409A.

(a) Notwithstanding any provision to the contrary herein, no Deferred Compensation Separation Payments (as defined below) that become payable under this Agreement by reason of Employee’s termination of employment with the Company (or any successor entity thereto) will be made unless such termination of employment constitutes a “separation from service” within the meaning of Section 409A of the Internal Revenue Code (the “Code”), and any final regulations and Internal Revenue Service guidance promulgated thereunder (“Section 409A”). Further, if Executive is a “specified employee” of the Company (or any successor entity thereto) within the meaning of Section 409A on the date of Employee’s termination (other than a termination due to death), then the severance payable to Employee, if any, under this Agreement, when considered together with any other severance payments or separation benefits that are considered deferred compensation under Section 409A (collectively, but excluding any amounts specified in paragraphs (b) or (c) below, the “Deferred Compensation Separation Payments”) that are payable within the first six (6) months following Employee’s termination of employment, shall be delayed until the first payroll date that occurs on or after the date that is six (6) months and one (1) day after the date of the termination, when they shall be paid in full arrears. All subsequent Deferred Compensation Separation Payments, if any, shall be paid in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following his termination but prior to the six (6) month

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anniversary of his termination, then any Payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Employee’s death and all other Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

(b) Any amounts paid under this Agreement that satisfy the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Compensation Separation Payments for purposes of clause (a) above.

(c) Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that do not exceed the Section 409A Limit shall not constitute Deferred Compensation Separation Payments for purposes of clause (ii) above. “Section 409A Limit” will mean the lesser of two (2) times: (A) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Company’s taxable year preceding the Company’s taxable year of Executive’s termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (B) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.

(d) Any taxable reimbursements and/or taxable in-kind benefits provided in this Agreement shall be made or provided in accordance with the requirements of Section 409A, including: (i) the amount of any such expense reimbursement or in-kind benefit provided during a taxable year of the Executive shall not affect any expenses eligible for reimbursement in any other taxable year; (ii) the reimbursement of an eligible expense shall be made no later than the last day of the employee’s taxable year that immediately follows the taxable year in which the expense was incurred; and (iii) the right to any such reimbursement shall not be subject to liquidation or exchange for another benefit or payment.

(e) The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided in this Agreement will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

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12. Miscellaneous.

(a) No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing by each of the parties.

(b) No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party that are not expressly set forth in this Agreement. This Agreement replaces and supersedes in its entirety the Prior Agreement.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

13. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California, regardless of the law that might be applied under applicable principles of conflicts of law.

MAXYGEN, INC.
By:	/s/ Louis Lange
	Louis Lange
	Chairman, Compensation Committee
Date:	June 30	, 2009
THE EXECUTIVE
/s/ Grant Yonehiro
Grant Yonehiro
Date:	June 30	, 2009

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Exhibit A

to Change of Control Agreement

MAXYGEN, INC.

CONFIDENTIAL INFORMATION, SECRECY AND

INVENTION AGREEMENT

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Exhibit B

to Change of Control Agreement

MAXYGEN, INC.

AGREEMENT AND RELEASE

I hereby confirm my obligations under the Confidential Information, Secrecy and Invention Agreement that I have previously entered into with the Company.

I acknowledge that I have read and understand Section 1542 of the California Civil Code that reads as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to my release of any claims I may have against the Company.

Except as otherwise set forth in this Agreement and Release (the “Release”) and except for obligations of the Company set forth in the Change of Control Agreement entered into between the Company and me, I hereby release, acquit and forever discharge the Company, its parents and subsidiaries, and their officers, directors, agents, servants, employees, shareholders, successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed (other than any claim for indemnification I may have as a result of any third party action against me based on my employment with the Company), arising out of or in any way related to agreements, events, acts or conduct at any time prior to and including the Effective Date of this Release (as defined below), including but not limited to: all such claims and demands directly or indirectly arising out of or in any way connected with my employment with the Company or the termination of that employment, including but not limited to, claims of intentional and negligent infliction of emotional distress, any and all tort claims for personal injury, claims or demands related to salary, bonuses, commissions, stock, stock options, or any other ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements, severance pay, or any other form of compensation; claims pursuant to any federal, state or local law or cause of action including, but not limited to, the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”); the federal Americans with Disabilities Act of 1990; the California Fair Employment and Housing Act, as amended; tort law; contract law; wrongful discharge; discrimination; fraud; defamation; emotional distress; and breach of the implied covenant of good faith

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and fair dealing; provided, however, that nothing in this paragraph shall be construed in any way to release the Company from its obligation to (i) indemnify me pursuant to any applicable statute, provision in the Company’s certificate of incorporation or bylaws, or indemnification agreement and to provide me with continued coverage under the Company’s directors and officers liability insurance policy to the same extent that it has provided such coverage to previously departed officers and directors of the Company or (ii) provide the benefits to me set forth in the Change of Control Agreement entered into between the Company and me; and provided further that this paragraph shall not be effective as a release to claims which cannot be waived under applicable law.

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under ADEA. I also acknowledge that the consideration given for the waiver and release in the preceding paragraph hereof is in addition to anything of value to which I was already entitled. If and only if I am covered by ADEA, I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (A) my waiver and release do not apply to any rights or claims that may arise after the Effective Date of this Release; (B) I have the right to consult with an attorney prior to executing this Release; (c) I have twenty-one (21) days to consider this Release (although I may choose to voluntarily execute this Release earlier); (D) I have seven (7) days following the execution of this Release to revoke the Release; and (E) this Release shall not be effective until the date upon which the revocation period has expired, which shall be the eighth day after this Release is executed by me (the “Effective Date”). If I am not covered by ADEA, I acknowledge that this Agreement shall be effective as of the date upon which this Release has been executed by me (the “Effective Date”).

By:
	THE EXECUTIVE
Date:

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EX-10.4

EXHIBIT 10.4

Date June 26, 2009

Grant Yonehiro

[Address]

Dear Grant:

On behalf of Maxygen, Inc., I am pleased to extend to you this offer of employment with a majority owned subsidiary of Maxygen (the “Maxygen Subsidiary”) that will be formed in connection with a transaction currently being negotiated between Maxygen and Astellas Pharma, Inc. (the “Astellas Transaction”). As you know, this newly formed, majority-owned subsidiary will be focused on protein therapeutics development and discovery in collaboration with Astellas, which will be a minority owner of the Maxygen Subsidiary. As discussed further below, this offer of employment and your acceptance are contingent upon the successful consummation of the Astellas Transaction, which event will be determined at Maxygen’s sole discretion. If you accept this offer of employment with the Maxygen Subsidiary, your hire date (your “Start Date”) will be the date that the Astellas Transaction is successfully consummated. If the Astellas Transaction is not successfully consummated, you will remain an at-will employee of Maxygen in your current position.

Your position with the Maxygen Subsidiary will be Chief Executive Officer and President, reporting to the Board of Managers (or equivalent body, if the entity is not a limited liability company) of the Maxygen Subsidiary (the “Board”). Your position is a full-time, exempt, executive officer position.

Compensation

If you accept this offer and begin your employment with the Maxygen Subsidiary, the Maxygen Subsidiary will pay you a base salary at a rate of $25,000 per month (equivalent to $300,000 per year), which will be paid in accordance with the normal payroll procedures established by the Maxygen Subsidiary. The first and last payment by the Maxygen Subsidiary to you will be adjusted, if necessary, to reflect a commencement or termination date other than the first or last working day of a pay period.

For 2010, you will also be eligible to receive an annual performance-based discretionary cash bonus from the Maxygen Subsidiary. The anticipated range for this bonus award for 2010 will be from 0% to 60% of your annualized base salary, with a target bonus of 45%. However, the decision of whether to award a bonus and the amount of such bonus shall be at the sole discretion of the Maxygen Subsidiary. Bonus payments, if any, will be made on or before February 15, 2011 and will not be deemed earned until paid. You must be employed by the Maxygen Subsidiary on the date that the bonus is to be paid in order to be eligible to receive a bonus. You should note that the Maxygen Subsidiary will have the authority to modify compensation and benefits from time to time as it deems necessary, in its sole discretion.

Equity Incentives

The Maxygen Subsidiary will be a limited liability company (LLC) and, as a result, it will not issue stock options or other stock-related awards. Instead, the Maxygen Subsidiary will grant LLC equity or equity-based incentives. Accordingly, subject to approval by the board of managers of the Maxygen Subsidiary, you will be granted 3,750,000 common units in the Maxygen Subsidiary as profits interest units. It is anticipated that the profits interest award will be made to you within 15 days of your employment Start Date; however, the specific date of your grant is dependent on a variety of factors. Your award will be subject to the terms and conditions of the Maxygen

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Subsidiary equity compensation plan and a form of award agreement between you and the Maxygen Subsidiary, which will include vesting and transfer restrictions. Your award also will be subject to the terms of the limited liability company agreement of the Maxygen Subsidiary.

Employee Benefits

In addition, as a full-time employee of the Maxygen Subsidiary, you will be eligible to participate in the employee benefit plans that are available to the Maxygen Subsidiary, in accordance with the terms and eligibility requirements of those plans. Currently, it is anticipated that you will be eligible to continue your participation in certain employee benefit plans currently maintained by Maxygen, including the insurance plans for medical, dental, vision, long and short-term disability and group life insurance and accidental death and dismemberment insurance (AD&D).

Maxygen and the Maxygen Subsidiary also intend to offer employees of the Maxygen Subsidiary the continued opportunity to participate in the Maxygen 401(k) savings plan. However, please note that the stock match currently offered by Maxygen for contributions to the 401(k) plan is discretionary and Maxygen may reduce or discontinue this benefit at any time.

Your benefits will also include eligibility for flexible time off (“FTO”). While the FTO plan of the Maxygen Subsidiary is anticipated to be substantially similar to the current Maxygen FTO plan, the FTO plan of the Maxygen Subsidiary is currently being established and therefore is subject to modification by the Maxygen Subsidiary in its sole discretion. As discussed in more detail below, your service time with Maxygen will count towards your years of service with the Maxygen Subsidiary in terms of the FTO accrual rate. Your earned, but unused FTO will be transferred with you to the Maxygen Subsidiary.

Other employee benefits currently offered by Maxygen (such as the commuter reimbursement, health club reimbursement, ESPP) are under review and may be significantly modified, or eliminated by the Maxygen Subsidiary. You will be informed of any decisions of the Maxygen Subsidiary regarding such benefits once they are made.

You may receive such other benefits as the Maxygen Subsidiary may offer from time to time, in its sole discretion. In addition, the Maxygen Subsidiary will reserve the right to modify, amend or discontinue any benefit plan at any time, in its sole discretion.

Maxygen, Inc. Compensation and Benefits

FTO

Although your hire date with the Maxygen Subsidiary will be the date of the successful consummation of the Astellas Transaction, you will receive credit for your service time at Maxygen for purposes of calculating your FTO accrual at the Maxygen Subsidiary. Any FTO days that you have earned with Maxygen will be honored by the Maxygen Subsidiary. Your existing FTO balance with Maxygen will be carried over to the Maxygen Subsidiary. In acceptance of this offer of employment, you acknowledge and agree that your current FTO balance be transferred to the Maxygen Subsidiary and that your use of FTO will be subject to the terms and conditions of the vacation policies in place at the Maxygen Subsidiary.

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Maxygen Equity Plan Benefits

For stock options, because the Maxygen Subsidiary will be an “Affiliate” of Maxygen, all outstanding options for Maxygen common stock that were granted to you during your employment with Maxygen will continue to vest and be exercisable in accordance with the terms of the applicable Maxygen equity plan and stock option agreement, as well as the Retention Agreement between you and Maxygen (the “Retention Agreement”). Any Maxygen restricted stock unit awards (RSUs) you hold as of the date of this letter will be treated as set forth in your Retention Agreement.

As an employee of the Maxygen Subsidiary, you will no longer be eligible to participate in the Maxygen Employee Stock Purchase Plan (ESPP). All payroll deductions credited to your ESPP account at the time of your termination from Maxygen will be promptly refunded to you.

Severance

In the event that the Maxygen Subsidiary terminates your employment without Cause, or you resign your position with the Maxygen Subsidiary with Good Reason, in each case as defined below, then subject to the conditions set forth below, you will be entitled to the following benefits:

(a) continuation of your then-current base salary for 6 months following the date of your employment termination (the “Termination Date”), payable on the Maxygen Subsidiary’s normal payroll schedule;

(b) a payment to be made on or prior to the earlier of (i) the 60^th day following your Termination Date, or (ii) 2 ¹/2 months following the end of your tax year in which such amount is earned, equal to the pro-rated amount of your target bonus for the year in which the Termination Date occurs (in an amount, if any, determined at the discretion of the Board);

(c) payment on or prior to the 60^th day following the Termination Date of any earned but as yet unpaid bonus for the year preceding the year in which the Termination Date occurs;

(d) accelerated vesting of any Maxygen Subsidiary or Maxygen equity awards such that you will be vested in the number of shares underlying such awards as you would have been vested in had your employment continued for an additional 6 months beyond your Termination Date (with pro-rated monthly vesting applying in the event any award you hold as of immediately preceding the Termination Date is subject to annual vesting);

(e) an additional 6 months beyond the termination date that would otherwise apply under your options in which to exercise your vested options (including any options that vest pursuant to paragraph (d) above); and

(f) unless you are receiving health, dental and vision benefits paid for by Maxygen either directly or under the terms and conditions of the Retention Agreement (in which case the medical coverage benefits provided in that agreement shall apply and this paragraph (f) shall not apply), and provided you timely elect coverage under COBRA, payment by the Maxygen Subsidiary of 100% of the cost, on your behalf, for your continued group health, dental and vision coverage under COBRA for your and your eligible dependents until the earlier of the end of the 6-month period following the date on which you cease to be covered under either the Maxygen Subsidiary or the Maxygen (as applicable) group health, dental and vision plans or the date on which you and your dependents become covered under another employer’s group health plans and programs that provide your and your dependents with comparable benefits and levels of coverage.

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The benefits described in (a), (b), (d), (e) and (f) above are contingent upon your entering into and not revoking an Agreement and Release (the “Release”) in the form attached hereto as Exhibit A and such Release becoming effective within 30 days following the Termination Date under the circumstances set forth above. The payments described in (a) above, in addition to being subject to any delay in payment set forth below in “Section 409A Matters” will not commence until the Release has become effective with any accumulated amounts that are not paid during the period in which the Release has not yet become effect being accumulated and being paid on the first payroll period next following the Release effective date.

For purposes of this letter agreement, the following definitions apply:

“Cause” for termination of your employment means your (i) willful and continued failure to substantially perform your duties with the Maxygen Subsidiary (other than as a result of physical or mental disability) after a written demand for substantial performance is delivered to you by the Board, which demand specifically identifies the manner in which the Board believes that you have not substantially performed your duties and that has not been cured within fifteen (15) days following your receipt of the written demand; (ii) commission of a felony (other than a traffic-related offense) that in the written determination of the Board is likely to cause or has caused material injury to the Maxygen Subsidiary’s business; (iii) dishonesty with respect to a significant matter relating to the Maxygen Subsidiary’s business; or (iv) material breach of any agreement by and between you and the Maxygen Subsidiary, which material breach has not been cured within fifteen (15) days following your receipt of written notice from the Board identifying such material breach.

“Good Reason” for you to resign your employment shall exist upon (i) any material reduction in your duties, authority, or responsibilities relative to your duties, authority, or responsibilities in effect immediately before such reduction, except if agreed to by you: (ii) a material reduction in your base compensation as in effect immediately before such reduction, except if agreed to in writing by you; (iii) a relocation of the geographic location at which you must perform services more than thirty (30) miles from your then present geographic location, except if agreed to in writing by you; (iv) a material breach by the Maxygen Subsidiary of any provision of this letter agreement; or (v) failure of the Maxygen Subsidiary to obtain the assumption of this letter agreement by any successor or assign of the Maxygen Subsidiary; provided, however, that such events shall not constitute grounds for a Good Reason termination unless (i) you have provided notice to the Maxygen Subsidiary of the existence of the one or more of the above conditions within ninety (90) days of its initial existence, (ii) the Maxygen Subsidiary has been provided at least thirty (30) days to remedy the condition, and the effective date of your resignation is within six months of the initial occurrence or circumstance giving rise to Good Reason.

Section 409A Matters

(a) Notwithstanding any provision to the contrary herein, no Deferred Compensation Separation Payments (as defined below) that becomes payable under this letter agreement by reason of your termination of employment with the Maxygen Subsidiary (or any successor entity thereto) will be made unless such termination of employment constitutes a “separation from service” within the meaning of Section 409A of the Internal Revenue Code (the “Code”), and any final regulations and Internal Revenue Service guidance promulgated thereunder (“Section 409A”). Further, if you are a “specified employee” of the Maxygen Subsidiary (or any affiliate, including Maxygen, or successor entity thereto) within the meaning of Section 409A on the Termination Date (other than a termination due to death), then the severance payable to you, if any, under this letter agreement, when considered together with any other severance payments

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or separation benefits that are considered deferred compensation under Section 409A (together, but excluding any amounts specified in paragraphs (b) or (c) below, the “Deferred Compensation Separation Payments”) that are payable within the first six (6) months following your Termination Date shall be delayed until the first payroll date that occurs on or after the date that is six (6) months and one (1) day after the Termination Date, when they shall be paid in full arrears. All subsequent Deferred Compensation Separation Payments, if any, shall be paid in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if you die following you termination but prior to the six (6) month anniversary of you termination, then any Payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of your death and all other Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

(b) Any amounts paid under this letter agreement that satisfy the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Compensation Separation Payments for purposes of clause (a) above.

(c) Any amount paid under this letter agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that do not exceed the Section 409A Limit shall not constitute Deferred Compensation Separation Payments for purposes of clause (ii) above. “Section 409A Limit” will mean the lesser of two (2) times: (A) your annualized compensation based upon the annual rate of pay paid to you during the Maxygen Subsidiary’s taxable year preceding its taxable year of your Termination Date as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (B) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which your employment is terminated.

(d) Any taxable reimbursements and/or taxable in-kind benefits provided in this letter agreement shall be made or provided in accordance with the requirements of Section 409A, including: (i) the amount of any such expense reimbursement or in-kind benefit provided during a taxable year of you shall not affect any expenses eligible for reimbursement in any other taxable year; (ii) the reimbursement of an eligible expense shall be made no later than the last day of your taxable year that immediately follows the taxable year in which the expense was incurred; and (iii) the right to any such reimbursement shall not be subject to liquidation or exchange for another benefit or payment.

(e) The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided in this letter agreement will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. You and the Maxygen Subsidiary agree to work together in good faith to consider amendments to this letter agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A.

Other Terms and Conditions of Employment with the Maxygen Subsidiary

Any offer of employment by the Maxygen Subsidiary is not to be construed as a contract of employment for any particular period of time. All employment with the Maxygen Subsidiary is “at

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will.” Employment “at will” means that you are free to resign from your employment at any time, for any reason or no reason, with or without cause and with or without notice. Similarly, the Maxygen Subsidiary may terminate your employment at any time for any reason or no reason, with or without cause and with or without notice. By accepting this offer of employment, you are accepting employment by the Maxygen Subsidiary on the terms and conditions above and contingent upon the successful consummation of the Astellas Transaction. You agree that your employment is at will, and acknowledge that no one, other than the Board, has the authority modify the at-will nature of your employment with the Maxygen Subsidiary. Any such modification must be in writing and signed by both you and the Chairperson of the Board to be effective. You should also understand that nothing contained herein shall alter your current at-will employment relationship with Maxygen.

Please note that the Maxygen Subsidiary expects its employees to devote their time and energies to their jobs with the Maxygen Subsidiary (although we acknowledge that you will have continued responsibilities directly with Maxygen). For this reason, employment with any other entity (other than Maxygen or another subsidiary or affiliate thereof), or for yourself in competition with the Maxygen Subsidiary during the term of your the Maxygen Subsidiary employment, will not be permitted. If you want to take any outside work during your employment with the Maxygen Subsidiary (other than as noted above), you are required to disclose the outside opportunity in writing to the Chairperson of the Board in advance so that the Maxygen Subsidiary can determine if any actual or potential conflict of interest exists.

The business of the Maxygen Subsidiary will require all employees to be flexible in their ability to perform multiple tasks, and to accept changes in scheduling and duties to reflect shifting demands. By accepting this offer of employment, you agree that your title and compensation are subject to change, and that your job duties may change from time to time, as required by the business needs of the Maxygen Subsidiary.

During the course of your employment with the Maxygen Subsidiary, you may create, develop or have access to confidential information belonging to the Maxygen Subsidiary, including trade secrets and proprietary information, such as technical and scientific research and/or protocols, customer and supplier information, business plans, marketing plans, unpublished financial information, designs, drawings, innovations, inventions, discoveries, specifications, software, source codes, and personnel information. You agree that as a condition of your employment with the Maxygen Subsidiary, you will sign and comply with the Confidential Information, Secrecy and Invention Agreement of the Maxygen Subsidiary.

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Arbitration of Disputes

As more fully set forth in the Confidential Information, Secrecy and Invention Agreement, in the event of any dispute or claim relating to or arising out of your employment relationship, you and the Maxygen Subsidiary agree to an arbitration in which (i) you are waiving any and all rights to a jury trial but all court remedies will be available in arbitration, (ii) we agree that all disputes between you and the Maxygen Subsidiary shall be fully and finally resolved by binding arbitration, (iii) all disputes shall be resolved by a neutral arbitrator who shall issue a written opinion, (iv) the arbitration shall provide for adequate discovery, and (v) the Maxygen Subsidiary shall pay all the arbitration fees, except an amount equal to the filing fees you would have paid had you filed a complaint in a court of law.

Other Employment-Related Matters

The terms and conditions of this letter supersede any prior or other written or oral communications to you concerning the terms of this contingent employment offer, including (except as set forth in the Amended and Restated Change of Control Agreement with Maxygen, the Retention Agreement and any agreements contemplated in either of those agreements) any commitments or promises that may have been made to you by or on behalf of the Maxygen Subsidiary, Maxygen, Astellas, or agreements between you and the Maxygen Subsidiary, Maxygen or Astellas regarding your employment with the Maxygen Subsidiary.

The Maxygen Subsidiary may seek to collect information from Maxygen regarding your background, qualifications, and performance, and to verify any information you may provide to the Maxygen Subsidiary on those subjects. By signing below, you authorize the Maxygen Subsidiary, its affiliates and any of their authorized employees or agents to contact Maxygen to discuss your background, qualifications and performance with them. You also authorize the Maxygen Subsidiary and its affiliates and any of their authorized employees to review your personnel records and arrange for their transfer to the Maxygen Subsidiary.

You acknowledge and agree that this offer of employment with the Maxygen Subsidiary and your acceptance hereof, is contingent upon the successful consummation of the Astellas Transaction (as determined in the sole discretion of Maxygen) and creates no employment relationship with the Maxygen Subsidiary or any other obligation of the Maxygen Subsidiary or Maxygen regarding the matters set forth herein unless and until such time. Accordingly, this offer of employment will become null and void if the Astellas Transaction is not consummated for whatever reason. You also acknowledge that this letter and any information you have received regarding the Astellas Transaction is considered by Maxygen to be “Confidential Information” under the Confidential Information, Secrecy and Invention Agreement between Maxygen and you and is subject to restrictions on the use and disclosure of such information as set forth in that agreement.

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Grant, we are pleased to extend this offer of employment to you on behalf of the Maxygen Subsidiary, and hope that your association with the Maxygen Subsidiary will be successful and rewarding. Please indicate your acceptance of this contingent offer by signing this letter below and returning the letter to me by Friday, June 26, 2009. A copy of the letter is enclosed for your records.

Sincerely,
Maxygen, Inc.
By:	/s/ Lawrence Briscoe
	Lawrence Briscoe

My signature below acknowledges my understanding that employment with the Maxygen Subsidiary is subject to each of the following: (a) the successful consummation of the Astellas Transaction; and (b) my execution of the Confidential Information, Secrecy and Invention Agreement of the Maxygen Subsidiary before my first day of employment. I understand and agree to the foregoing terms and conditions of employment with the Maxygen Subsidiary.

/s/ Grant Yonehiro

Grant Yonehiro

6/26/09

Date

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Exhibit A

to Offer Letter

MAXYGEN SUBSIDIARY

AGREEMENT AND RELEASE

I hereby confirm my obligations under the Confidential Information, Secrecy and Invention Agreement I have previously entered into with the Maxygen Subsidiary (the “Company”).

I acknowledge that I have read and understand Section 1542 of the California Civil Code that reads as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to my release of any claims I may have against the Company.

Except as otherwise set forth in this Agreement and Release (the “Release”), I hereby release, acquit and forever discharge the Company, its parents and subsidiaries, and their officers, directors, agents, servants, employees, shareholders, successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed (other than any claim for indemnification I may have as a result of any third party action against me based on my employment with the Company), arising out of or in any way related to agreements, events, acts or conduct at any time prior to and including the Effective Date of this Release (as defined below), including but not limited to: all such claims and demands directly or indirectly arising out of or in any way connected with my employment with the Company or the termination of that employment, including but not limited to, claims of intentional and negligent infliction of emotional distress, any and all tort claims for personal injury, claims or demands related to salary, bonuses, commissions, stock, stock options, or any other ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements, severance pay, or any other form of compensation; claims pursuant to any federal, state or local law or cause of action including, but not limited to, the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”); the federal Americans with Disabilities Act of 1990; the California Fair Employment and Housing Act, as amended; tort law; contract law; wrongful discharge; discrimination; fraud; defamation; emotional distress; and breach of the implied covenant of good faith and fair dealing; provided, however, that nothing in this paragraph shall be construed in any way to release the Company from its obligation to (i) indemnify me

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pursuant to any applicable statute, provision in the Company’s certificate of incorporation or bylaws, or indemnification agreement and to provide me with continued coverage under the Company’s directors and officers liability insurance policy to the same extent that it has provided such coverage to previously departed officers and directors of the Company or (ii) provide the benefits to me set forth in the Retention Agreement entered into between the Company and me; and provided further that this paragraph shall not be effective as a release to claims which cannot be waived under applicable law.

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under ADEA. I also acknowledge that the consideration given for the waiver and release in the preceding paragraph hereof is in addition to anything of value to which I was already entitled. If and only if I am covered by ADEA, I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (A) my waiver and release do not apply to any rights or claims that may arise after the Effective Date of this Release; (B) I have the right to consult with an attorney prior to executing this Release; (c) I have twenty-one (21) days to consider this Release (although I may choose to voluntarily execute this Release earlier); (D) I have seven (7) days following the execution of this Release to revoke the Release; and (E) this Release shall not be effective until the date upon which the revocation period has expired, which shall be the eighth day after this Release is executed by me (the “Effective Date”). If I am not covered by ADEA, I acknowledge that this Agreement shall be effective as of the date upon which this Release has been executed by me (the “Effective Date”).

By:
	THE EXECUTIVE
Date:

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EX-99.1

EXHIBIT 99.1

For Immediate Release

Maxygen Announces Joint Venture with Astellas to Develop

Protein Pharmaceuticals

-Maxygen to Contribute R&D Operations and Assets to Newly-Formed Joint Venture-

-Astellas to be Granted 3-Year Option to Acquire Joint Venture-

-Maxygen Plans Strategic Restructuring of Remaining Operations-

-Maxygen to Host Conference Call on July 1, 2009 at 4:30 p.m. ET (1:30 p.m. PT)-

REDWOOD CITY, Calif., June 30, 2009 – Maxygen, Inc. (Nasdaq: MAXY) today announced that Astellas Pharma Inc. and Maxygen have executed an agreement to establish a joint venture focused on the discovery, research and development of multiple protein pharmaceutical programs, including Maxygen’s MAXY-4 program and other early stage programs. As part of the arrangement, Maxygen will provide Astellas with an option to acquire all of Maxygen’s ownership interest in the joint venture within three years after establishment of the joint venture. The joint venture arrangement represents a significant expansion of the existing collaboration agreement between the parties for the development and commercialization of MAXY-4 program candidates for autoimmune diseases and transplant rejection.

The Joint Venture

Pursuant to the joint venture agreement, Maxygen will contribute substantially all of its programs and technology assets in protein pharmaceuticals, including its existing MAXY-4 collaboration agreement with Astellas, together with $10 million in cash, to a newly-formed joint venture in which Maxygen will have an ownership interest of approximately 83%. Astellas also will invest $10 million in the joint venture in exchange for the remaining ownership interest in the joint venture of approximately 17%. Astellas will be granted an option to acquire all of Maxygen’s ownership interest in the joint venture at specified exercise prices that will increase each quarter from $53 million to $123 million over the three-year term of the option. Grant Yonehiro, Maxygen’s Chief Business Officer, is expected to serve as chief executive officer of the joint venture.

As part of the joint venture arrangement, the joint venture and Astellas will also enter into a collaboration agreement under which Astellas will fund substantially all of the costs, estimated at up to $30 million over the three-year option term and subject to certain limitations, related to the discovery, research and development by the joint venture of multiple protein therapeutics (other than MAXY-4). Astellas will be granted an option to obtain a license to one product developed by the joint venture under this collaboration arrangement, subject to certain conditions and exercisable only if Astellas does not exercise its buy-out option during the option term. Development costs for the MAXY-4 program will be shared by Astellas and the joint venture in accordance with the existing terms of the MAXY-4 collaboration agreement.

The transactions will also include a grant by Maxygen to the joint venture of certain licenses to use its MolecularBreeding™ technology platform and ancillary protein expression technologies, subject to certain existing licenses and other limitations.

In the event Astellas does not exercise its buy-out option prior to expiration of the three-year option term, all rights to the protein therapeutics developed through the joint venture (with the exception of any product for which Astellas has exercised its license option) will be retained by the joint venture, and Astellas will be required to provide up to 18 months of transition funding to the joint venture in the form of revolving loans of up to $20 million on pre-agreed terms if the MAXY-4 collaboration agreement between the joint venture and Astellas remains in force.

The boards of directors of Astellas and Maxygen, respectively, have approved the terms of the joint venture arrangement. The consummation of this transaction is subject to customary closing conditions, including approval by Maxygen’s stockholders. The parties expect the transaction to close late in the third quarter or early in the fourth quarter of 2009.

Maxygen Strategic Reorganization

“Today’s announcement largely completes a multi-year strategic process to position Maxygen’s programs and assets in collaborations and other arrangements that are primarily supported by external parties,” said Isaac Stein, the Executive Chairman of the Board of Directors of Maxygen. “Going forward, Maxygen’s focus will be to manage these arrangements to maximize the return to our stockholders over the next few years.”

In addition to its majority ownership of the joint venture, Maxygen will continue to retain a number of significant assets, including:

• approximately $200 million in cash;

• its MAXY-G34 program (including the previously announced licensing arrangement with Cangene Corporation for Acute Radiation Syndrome);

• a 22% ownership interest in Codexis, Inc. and a revenue stream from Maxygen’s biofuels license to Codexis;

• a potential $30 million milestone payment from Bayer HealthCare LLC;

• its MolecularBreeding™ platform and intellectual property portfolio (including certain additional fields of application of the technology platform not yet licensed); and

• a fully funded vaccine discovery program.

As a result of this transaction, substantially all of Maxygen’s research and development operations and personnel will be transferred to the new joint venture. “We intend to restructure and downsize Maxygen’s corporate and administrative staff and expenses to best align the company’s operations with its future business needs,” said Mr. Stein. “As a part of this process and following an appropriate transition period after the closing of the joint venture transaction, we also expect Maxygen’s current senior management team – Russell Howard, Larry Briscoe

and Elliot Goldstein – will be leaving the company. On behalf of the company, I would like to thank each of them for their extraordinary efforts in the development of Maxygen’s programs and to wish them the best of success in their future endeavors.”

Conference Call

We will host a conference call tomorrow, July 1, 2009, at 4:30 p.m. ET (1:30 p.m. PT) to discuss this transaction. Participants in the U.S. can access the call by dialing 800.901.5217 and using the passcode 53785247. International participants can dial 617.786.2964 and use the same passcode. A live webcast of the conference call will be available on the Maxygen web site at www.maxygen.com/webcasts.

Telephone and webcast replays of the conference call will be available until July 30, 2009. To access the telephone replay, dial 888.286.8010 (U.S.) or 617.801.6888 (international) and use the passcode 43903995. To access the webcast archive, go to www.maxygen.com/webcasts.

About Maxygen

Maxygen is a biopharmaceutical company focused on developing improved versions of protein drugs through both internal development and external collaborations and other arrangements. Maxygen uses its proprietary DNA shuffling technology and extensive protein modification expertise to pursue the creation of biosuperior proteins. For more information, please visit our website at www.maxygen.com.

About Astellas

Astellas Pharma Inc., located in Tokyo, Japan, is a pharmaceutical company dedicated to improving the health of people around the world through the provision of innovative and reliable pharmaceutical products. For more information on Astellas Pharma Inc., please visit its website at http://www.astellas.com/en/.

Additional Information and Where You Can Find It

In connection with the transaction discussed herein, Maxygen will file a proxy statement with the SEC. The proxy statement will be furnished to the stockholders of Maxygen. Investors and security holders of Maxygen are urged to read the proxy statement when it becomes available because it will contain important information about Maxygen and the proposed transaction. The proxy statement (when it becomes available), and any other documents filed by Maxygen with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Maxygen by contacting Maxygen at info@maxygen.com or via telephone at (650) 298-5300. Investors and security holders are urged to read the proxy statement and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction.

Maxygen and its respective directors and executive officers may be deemed to be participants in the solicitation of proxies from its stockholders in favor of the proposed transaction. Information about the directors and executive officers of Maxygen and their respective interests in the proposed transaction will be available in the proxy statement.

Cautionary Statement Regarding Maxygen Forward-Looking Statements

This document contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on the current expectations and beliefs of Maxygen’s management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described

in the forward-looking statements. The forward-looking statements contained in this document include statements about the proposed transaction, the timing of the transaction and the potential benefits of the transaction and the strategic restructuring. These statements are not guarantees of future performance, involve certain risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Therefore, actual outcomes and results may differ materially from what is expressed herein. For example, if Maxygen does not receive required stockholder approval or fails to satisfy other conditions to closing, the joint venture will not be formed. Further, there is no assurance that the joint venture will be successful or that Astellas will exercise its buy-out option even if the joint venture is successful. In any forward-looking statement in which Maxygen expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: failure of the Maxygen stockholders to approve the formation of the joint venture and the other transactions, the failure of any other closing condition to be satisfied, unexpected delays in the formation of the joint venture, risks inherent in drug development, such as potential difficulties or delays in the development, testing, regulatory approvals, progression or production of drug compounds, the failure to develop products suitable for commercialization, the delay or suspension of predicted development and commercial timelines for any potential products, the failure to protect intellectual property portfolio and rights; the failure to identify and develop new potential products, and the risk that any compounds developed may have adverse side effects or inadequate therapeutic efficacy, and other economic, business, competitive, and/or regulatory factors affecting Maxygen’s business and the market it serves generally, including those set forth in Maxygen’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, especially in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections, and its Current Reports on Form 8-K and other SEC filings. Maxygen is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.

MolecularBreeding™ and Maxygen are U.S. trademarks used by Maxygen, Inc.

###

Contact Maxygen:

Linda Chrisman

+1-650-298-5351

linda.chrisman@maxygen.com