Exhibit
10.326


 


	
  CONFIDENTIAL

  	
   

  	
  REDACTED
  VERSION

  



 


[***] CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


 


WNV Association Agreement


 


This WNV Association
Agreement (this “WNV Association Agreement”) is made effective as of July 1,
2003, between America’s Blood Centers (“ABC”), a charitable and non-profit
corporation, having its principal office at 725 15th Street, N.W.
Suite 700, Washington, D.C. 20005, and Chiron Corporation, a Delaware
corporation (“Chiron”) having its offices at 4560 Horton Street, Emeryville,
California 94608-2916.


 


Background


 


A.            WHEREAS, ABC is an association of
non-profit community-based
centers (each such blood center, a “Member”);


 


B             WHEREAS,
Members currently screen for themselves and for other blood banks in the United
States, human blood samples for viruses such as Human Immunodeficiency Virus
type-1 (“HIV-1”)
and Hepatitis C Virus (“HCV”) by performing screening using
amplified nucleic acid screening;


 


C.            WHEREAS, Chiron and ABC are parties to that certain
Association Agreement Regarding Sale and Servicing of Blood Screening Products
effective as of May 1, 2002 (the “2002
Association Agreement”), pursuant to which Chiron sells to
Participating Members, and Participating Members purchase from Chiron, certain
assays and blood screening instruments to conduct nucleic acid amplification
screening to detect the presence of certain viruses in blood, including HIV-1
and HCV;


 


D.            WHEREAS,
Chiron, together with its collaboration partner, Gen-Probe, Incorporated
(“Gen-Probe”)  is developing a WNV Assay which can be used
to conduct amplified nucleic acid tests to detect the West Nile Virus (“WNV”) in pooled and single donor blood
products (the “WNV Assay”);


 


E.             WHEREAS,
Further development and testing of the WNV Assay is necessary before
Chiron and Gen-Probe may seek to obtain FDA approval for the commercial
distribution and use of such WNV Assay;


 


F.             WHEREAS, The costs and efforts required for
such further development and testing far exceed those that Chiron and Gen-Probe
will undertake without assistance and collaboration from other entities, and
the absence or delay of such assistance and collaboration of those entities
would significantly delay the further development and testing, and, thus, the
availability to Members of the WNV Assay;


 


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G.            WHEREAS, The
rapid development and availability of the WNV Assay for the testing of blood
donations is of critical importance to ensure the safety of blood products and
to the protection of the public health;


 


H.            WHEREAS,
ABC wishes to enable its Members to collaborate with and support Chiron
and Gen-Probe in the further development and testing of the WNV Assay necessary
for obtaining FDA approval or licensing for commercial distribution of the WNV
Assay, subject to the terms and conditions stated below:


 


NOW, THEREFORE, in consideration of the foregoing premises and
of the mutual covenants of the parties hereinafter contained, the parties
hereto hereby agree as follows:


 


ARTICLE 1 – DEFINITIONS


 


Capitalized terms not defined herein shall have the
meanings set forth in Schedule A hereto.


 


ARTICLE 2 – PROVISION OF WNV ASSAYS


 


Chiron agrees to supply Participating Members with WNV
Assays in accordance with the terms and conditions set forth in Schedule B
hereto.


 


ARTICLE 3 – BLOOD SCREENING SYSTEMS; SOFTWARE &
DOCUMENTATION


 


3.1           Blood Screening Systems.


 


(a)           General.  Participating Members shall
use the WNV Assay only on the Blood Screening Systems.  Chiron bears no responsibility with respect
to any use of the WNV Assays on instrument systems other than the Blood
Screening Systems.


 


(b)           Additional Components. 
Participating Members may elect to acquire additional equipment
components to supplement the Blood Screening Systems acquired and maintained
pursuant to the 2002 Agreement and applicable 2002 Member Supplement.  Chiron shall coordinate the installation of
such additional components with Participating Members to minimize the impact on
Participating Members’ existing screening activity.


 


3.2           Software and Documentation.  
Chiron agrees to provide to Participating Members, at [***],
the Software and Documentation to run the WNV Assays on the Blood Screening
Systems as contemplated by this Agreement, in accordance with the terms and
conditions set forth in Schedule C hereto.


 


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ARTICLE 4 – SERVICES


 


Installation, training,
telephone support, and other servicing of any of the Products
(collectively, “Services”), shall be provided to each Participating Member by
Chiron in accordance with the terms and conditions set forth in Schedule D
hereto.


 


ARTICLE 5 – COMPENSATION,
PAYMENTS


 


5.1           Support.  Each Participating Member agrees to assist
with the costs related to the development and supply of the WNV Assay and other
costs incurred by Chiron and Gen-Probe under this Agreement by paying to Chiron
the amounts set forth in Schedule E hereto.


 


5.2           Payments. All
payments shall be made on a monthly basis by each Participating Member as set
forth in Schedule E.  All
payments due to Chiron hereunder shall be paid in full by each Participating
Member in U.S. Dollars  within thirty (30) days of the applicable
due date. In the event of late payment, interest shall be charged at the rate
of [***]
from the date such payment was due until the date of actual payment, such
interest to accrue daily and both before and after judgment.


 


5.3           Books & Records;
Audit.  Each Participating Member
shall keep reasonably detailed and accurate records and books of account,
including without limitation retaining all Data on donations tested, to enable
a determination of the amounts payable to Chiron hereunder.  Upon thirty (30) days written notice by
Chiron, not more frequently than once per calendar year, Chiron, at its cost
(except as otherwise provided below in this Section 5.3) may have the records
and books of account of a Participating Member examined during reasonable business
hours by an independent certified public accountant selected by Chiron for the
purpose of verifying the amounts due hereunder.  A copy of any final written report provided by the independent
accountant to Chiron shall be given concurrently to the Participating
Member.  Such examination shall not be
permitted unless [***] to which the books and records pertain. Where such
examination results in a finding that a Participating Member underpaid Chiron [***],
the Participating Member shall reimburse Chiron for its reasonable costs and
expenses in conducting such examination. 
The Participating Member and Chiron shall promptly rectify any
overpayments or underpayments by repaying such amounts together with interest
thereon at the rate set forth in Section 5.2 of this WNV Association
Agreement.  The parties shall endeavor
to resolve any dispute between a Participating Member and Chiron as to amounts
owing hereunder arising out of an audit pursuant to this Section 5.3 pursuant
to Article 11 of this WNV Association Agreement.


 


5.4           Taxes. Each
Participating Member is a non-profit, charitable corporation, exempt from the
payment of sales and use taxes and shall have no tax 


 


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liability on Products
unless specifically legislated by a particular state.  Chiron is responsible for requesting and obtaining all tax
exemption numbers as required. 
Notwithstanding the above, if any federal, state, provincial, county or
municipal sales or use tax, excise or similar charge, or other tax assessment
(other than that assessed against income), is assessed or charged on the
procurement of the WNV Assays from Chiron pursuant to this Agreement, it shall
be paid by the applicable Participating Member.


 


ARTICLE 6 – CERTAIN AGREEMENTS


 


6.1           WNV Assay IND.  Chiron will collaborate with Gen-Probe on
the preparation and submission by Gen-Probe of an Investigational New Drug
Application, including clinical protocols (“IND”), to the FDA to permit the
Participating Members to conduct
nucleic acid amplification screening to detect the presence of the West Nile
Virus using the Products. 
Gen-Probe will submit such IND application to the FDA not later than May
23, 2003.


 


6.2           Use of WNV Assays Per IND. 
Participating Members shall not use the Products in a manner not
specifically described in the IND protocol at any time.


 


6.3           Facilities.  Each Participating Member
agrees to grant Chiron reasonable access during normal business hours to
inspect the facilities used for the conduct of nucleic acid amplification testing of blood donation samples.  Participating Members shall perform such
testing in accordance with all applicable laws and regulations and the
instructions received from Chiron.


 


6.4           Regulatory
Compliance.


 


(a)           The Participating
Members shall be solely responsible for compliance with all reporting and other
regulatory requirements imposed on them. 
Upon reasonable request of Chiron or any Participating Member, any
Participating Member or Chiron shall provide to the requesting party copies of regulatory
reports relating to the use of the WNV Assays or the Blood Screening Systems.


 


(b)           Chiron and Gen-Probe
shall be responsible for compliance with all reporting and other regulatory
requirements imposed on them.


 


(c)           Any party hereunder
agrees to make available to the requesting party (with authority to provide to
its Affiliates or any governmental regulatory agency) such records as may be
reasonably required for the requesting party to satisfy its regulatory
requirements.


 


(d)           Each party agrees to
provide access to their facilities and documents pertaining to this Agreement
without any prior or written 


 


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notice to the FDA should
it require access in accordance with any FDA policy, communication, or
regulation.


 


6.5           Data.  Each Participating Member
shall provide to Chiron data generated in connection with the use of the WNV
Assays or Blood Screening Systems as required for proper submission of the IND
and otherwise as is sufficient to monitor the performance of the Products for
quality assurance and to perform their respective regulatory obligations in the
Territory (collectively the “Data”). 
The Data shall be deemed confidential information of the providing Participating
Members, and shall be subject to Section 6.6, except that the limitations of
Section 6.6 shall not apply to the uses of Data specifically authorized under
Section 6.5(b) of this WNV Association Agreement.


 


(a)           Chiron and to its
Affiliates shall have the right to use the Data in connection with other
regulatory applications, submissions and notifications, in any country, with
respect to WNV Assays, Blood Screening Systems or related products.  ABC and the Participating Members agree to
cooperate in providing to Chiron such information as either may reasonably
believe appropriate or necessary and in applying for any such government
approvals. At ABC’s or any Participating Member’s request, Chiron agrees to
seek from such governmental regulatory agencies confidential treatment of the Data,
to the extent such confidential treatment is available.


 


(b)           All parties acknowledge
the other parties’ interest in publishing, in oral or written form, certain
information related to Participating Members’ use of the Products to obtain
recognition within the scientific community, to advance the state of scientific
knowledge and for marketing purposes. 
All parties also recognize the other parties interest in preserving the
confidentiality of certain information. 
Therefore, none of Chiron, ABC nor any Member will publish any
information relating to use of the Products, including Data Participating
Members generate under IND or during clinical trials, without the express
written consent of the other parties, which consent shall not be unreasonably
withheld.  A party wishing to publish shall provide a copy of the draft publication
and provide the other parties not less than thirty (30) days to review and
comment prior to publication.  Any such
publication shall appropriately acknowledge the contributions of the other
parties.  At the request of any party,
the parties shall reasonably consider joint publications.


 


(c)           The parties acknowledge
and agree that nothing in this Agreement or otherwise will require ABC or any
Participating Member to disclose to Chiron patient-specific, or donor or
recipient identifying information (including information that could identify a
group of 


 


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donors or recipients),
unless and to the extent that such information is required by any applicable
law, regulation or court order.  In such
event, (i) Chiron must provide notice to ABC and the applicable Participating
Member in writing immediately on becoming aware of such a requirement so that ABC
and the applicable Participating Member have an opportunity to seek a
protective order or other remedy; and (ii) ABC and the applicable Participating
Members shall provide the required identifying information to the extent it has
such information, subject to the terms of such protective order or other
remedy.


 


6.6           Confidentiality.  During the term of this Agreement and [***],
absent the consent of the other party, (i) ABC and the Participating Members
agree to keep in confidence and not to disclose to any Third Party other than
their Affiliates, agents or contractors who need to know in connection with ABC
and Participating Members activities under this Agreement, or use for any
purpose, except pursuant to, and in order to carry out, the terms and
objectives of this Agreement, any Confidential Information of Chiron, including
Confidential Information of Gen-Probe which is disclosed to ABC or
Participating Members by or through Chiron; and (ii) Chiron agrees to keep in
confidence and not to disclose to any Third Party other than Gen-Probe and their
respective Affiliates, agents or contractors who need to know in connection
with Chiron activities under this Agreement, or use for any purpose, except
pursuant to, and in order to carry out, the terms and objectives of this
Agreement, any Confidential Information of ABC and Participating Members.   Disclosures of Confidential Information to
Third Parties authorized hereunder shall be permitted only if the Third Party
is bound by confidentiality obligations not less restrictive than those set
forth herein.  Subject to this
Section 6.6 and except as required by a court order issued by a court
having appropriate jurisdiction, ABC and all Members agree not to disclose to
any Third Party any financial terms of this Agreement, or any terms of this
Agreement relating to the WNV Assays provided hereunder, without the prior
written consent of Chiron.  Chiron
agrees to not disclose to any Third Party any financial terms of this
Agreement, or any terms of this Agreement relating to the WNV Assays.  Notwithstanding the above, Chiron
acknowledges that any disclosure by a Participating Member in violation of this
Section 6.6 shall not be deemed a breach of this Agreement by ABC.


 


6.7           Intellectual
Property; Inventions. The provision by Chiron to the Participating Members
of the WNV Assays and Blood Screening Systems hereunder includes the implied
license or sublicense under Chiron and Gen-Probe intellectual property to use
the Products in the Territory as provided herein.  Except for such implied license, and except as specifically set
forth herein, nothing in this Agreement conveys to any party any rights or
licenses under any intellectual property of any other party.  The parties do not anticipate that use of
the Blood Screening Systems and WNV Assays as provided herein will result in
new inventions 


 


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by Participating
Members.   However, in the event that
any such new invention is made solely by a Participating Member or persons
obligated to assign inventions to a Participating Member, arising from the use
of the Products, the Participating Member will own such invention.  If such invention is an improvement to the
WNV Assay or the related Software, the Participating Member will provide
written notice to Chiron of such invention, and the parties will commence
exclusive negotiations, [***], for Chiron to obtain a worldwide
license to such invention on commercially reasonable terms.  If the parties fail to reach agreement on
licensing terms, the Participating Member will be free to license the invention
to any Third Party.  If an invention is
made jointly by a Participating Member or persons obligated to assign
inventions to it, and Chiron or persons obligated to assign inventions to it,
such invention will be owned jointly by the parties.  All inventions made solely by Chiron or persons obligated to
assign inventions to it will be owned by Chiron.


 


6.8           Association Fee.  Chiron agrees to pay ABC for
management and service duties performed during the term of this WNV Association
Agreement in [***]. 
This amount shall be paid by Chiron to ABC quarterly within sixty (60)
days of the close of each quarter.


 


ARTICLE 7
– REPRESENTATIONS & WARRANTIES; WARRANTY DISCLAIMER; INDEMNIFICATION;
LIMITATION OF LIABILITY; INSURANCE


 


7.1           Chiron Representations
& Warranties. Chiron hereby represents and warrants that: (a) it is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it was organized; (b) this Agreement, when executed and
delivered by it, will be the legal, valid and binding obligation of Chiron,
enforceable against Chiron in accordance with its terms; (c) the execution,
delivery and performance of this Agreement by Chiron do not and will not (i)
conflict with, or constitute a breach or default under, its charter documents
or any material agreement, contract, commitment, or instrument to which Chiron
is a party or (ii) require the consent, approval or authorization of, or
notice, declaration, filing or registration with, any Third Party or any
governmental or regulatory authority; (d) Chiron has not previously granted and
will not grant any rights to any Third Party which are, nor contract with any
Third Party in any manner which is, inconsistent with the rights granted
herein.


 


7.2           ABC Representations
& Warranties. ABC hereby represents and warrants that: (a) it is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it was organized; (b) this Agreement, when executed and
delivered by it, will be the legal, valid and binding obligation of ABC,
enforceable against ABC in accordance with its terms; (c) the execution,
delivery and performance of this Agreement by ABC do not and will not (i)
conflict with, or constitute a breach or default under, its charter documents
or any material agreement, contract, commitment, or instrument to which ABC is
a party or (ii) require the consent, approval or 


 


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authorization of, or
notice, declaration, filing or registration with, any Third Party or any
governmental or regulatory authority; (d) ABC has not previously granted and
will not grant any rights to any Third Party which are, nor contract with any
Third Party in any manner which is, inconsistent with the rights granted
herein.


 


7.3           Participating Member
Representations & Warranties. 
Each Participating Member, by executing a WNV Member Supplement,
represents and warrants that:  (a) it is
duly organized, validly existing and in good standing under the laws of the jurisdiction
in which it was organized; (b) the WNV Member Supplement, when executed and
delivered by it, will be the legal, valid and binding obligation of it,
enforceable in accordance with its terms; (c) all Products shall be used in
accordance with the applicable manuals and instructions provided by Chiron and
with all applicable laws and regulations; (d) it has all authority and permits
required under applicable law and regulation to operate as a blood center and
use the Products; (e) it is not, and it will not use in providing Chiron with
any manner of service or work relating to this Agreement, a debarred person or
entity under the Generic Drug Enforcement Act, or otherwise prohibited from
providing such services or work, nor shall it use any investigator who has been
disqualified by the FDA.


 


7.4           Disclaimer of
Warranty.  Chiron is not the manufacturer of the WNV Assays provided to
Participating Members under this Agreement. 
Further, the WNV Assays are not licensed by the FDA or any other
regulatory body for use in the screening and release of blood, plasma or other
blood components and are development stage products, provided pursuant to an
IND submitted to the FDA.  EXCEPT
AS SET FORTH IN SECTION 7.1 OF THIS WNV ASSOCIATION AGREEMENT OR EXPRESSLY
PROVIDED IN SCHEDULES B, C, AND D HEREOF, CHIRON MAKES NO WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING WITHOUT LIMITATION ANY
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.


 


7.5           Participating Member
Responsibility for Certain Damages. 
In no event shall Chiron (or any Affiliate thereof) be responsible for
any Damages suffered by ABC or a Participating Member arising out of a
Participating Member’s own negligence or willful acts or failure to act in
connection with the storage, handling, or use of the Products after transfer to
the Participating Member of risk of loss or damage thereto.


 


7.6           Indemnity by Chiron.  Chiron hereby indemnifies ABC and each
Participating Member, their respective officers, directors, agents, and
employees (the “ABC Indemnitees”) and agrees to hold them harmless from and
against all Third Party Damages arising out of bodily injury claims of Third
Parties, when such Third Party Damages arise from the negligence or willful
misconduct of Chiron, its officers, directors, agents, 


 


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employees or affiliates
in the performance of Chiron’s obligations under this Agreement, except to the
extent arising from negligence or willful misconduct of any of the ABC
Indemnitees.


 


7.7           Indemnity by ABC.  ABC hereby indemnifies Chiron and its
respective officers, directors, agents and employees (the “Chiron Indemnitees”)
and agrees to hold them harmless from and against all Third Party Damages
arising out of bodily injury claims of Third Parties, when such Third Party
Damages arise from the negligence or willful misconduct of ABC, its officers,
directors, agents or employees in the performance of its obligations under this
Agreement, except to the extent arising from negligence or willful misconduct
of any of the Chiron Indemnitees.


 


7.8           Indemnity by
Participating Members.  Each
Participating Member, by executing a WNV Member Supplement, agrees to indemnify
Chiron and its respective officers, directors, agents and employees (the
“Chiron Indemnitees”) and agrees to hold them harmless from and against all
Third Party Damages arising out of bodily injury claims of Third Parties, when
such Third Party Damages arise from the negligence or willful misconduct of the
Participating Member, its officers, directors, agents or employees in the
performance of its obligations under this Agreement, except to the extent
arising from negligence or willful misconduct of any of the Chiron Indemnitees.


 


7.9           IP Infringement
Indemnity.  Chiron shall defend, at
its expense, any legal action brought against ABC or a Participating Member by
a Third Party to the extent that it is based on any claim that the use by a
Participating Member of any Products supplied by Chiron pursuant to this Agreement
constitute an infringement of any patent or intellectual property rights
claimed by such Third Party in the Territory. 
Chiron will pay all Damages finally awarded against ABC or a
Participating Member in such action that are attributable to such claim.  Notwithstanding the foregoing, Chiron shall
have no liability hereunder to the extent that the infringement (or allegation
of infringement) arises from or is attributable to (i) the use of the Products
in combination with other products or materials not supplied by Chiron
hereunder; (ii) part (or all) of the Products being used for a purpose other
than that indicated by this Agreement; or (iii) use of the Products other than
in accordance with the documentation provided by Chiron.  Chiron’s obligation to indemnify shall be
subject to ABC or a Participating Member promptly notifying Chiron in writing
of such claim and providing reasonable cooperation to Chiron in the defense of
such claim or proceeding.


 


7.10         Indemnification
Procedures.  Any party claiming
indemnification under Section 7.6, 7.7 or 7.8 of this WNV Association Agreement
(the “Indemnitee”) shall notify the party from which indemnification is claimed
(the “Indemnifying Party”) in writing promptly upon becoming aware of any claim
to which such indemnification may apply. 
Failure to provide such notice shall constitute a waiver of the
Indemnifying Party’s indemnity 


 


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obligations hereunder if,
and only to the extent that, the Indemnifying Party is materially damaged
thereby.  The Indemnifying Party shall
have the right to assume and control the defense of the claim at its own
expense.  If the right to assume and have
sole control of the defense is exercised, the Indemnitee shall have the right
to participate in, but not to control, such defense at its own expense.  If the Indemnifying Party does not assume
the defense of the claim, the Indemnitee may defend the claim at the
Indemnifying Party’s expense.  The
Indemnitee will not settle or compromise the claim without the prior written
consent of the Indemnifying Party, and the Indemnifying Party will not settle
or compromise the claim in any manner which would have an adverse effect on the
Indemnitee without the consent of Indemnitee, which consent, in each case, will
not be unreasonably withheld.  The
Indemnitee shall reasonably cooperate with the Indemnifying Party and will make
available to the Indemnifying Party all pertinent information under the control
of the Indemnitee.


 


7.11         Exclusion of Consequential
Damages.  Excepting any obligation
to indemnify against Third Party Damages as provided in this Agreement, no
party to this Agreement shall be liable to any other party to this Agreement
with respect to the subject matter of this Agreement under breach of contract,
negligence, strict liability or any other cause of action for any Consequential
Damages.  Notwithstanding any provision herein to the contrary, in no event shall
Chiron nor any Affiliate thereof be liable to ABC or any Participating Member
with respect to the subject matter of this Agreement under breach of contract,
negligence, strict liability or any other cause of action in an aggregate that
exceeds [***], except to the
extent of liability to Third Parties for bodily injury as to which the Parties
are obligated to indemnify each other under Sections 7.6, 7.7 and 7.8.


 


7.12         Insurance.  Chiron and the Participating Members agree
to insure their potential liabilities resulting from this Agreement as follows:


 


(a)           Participating Members
shall obtain and maintain, at their sole cost, a policy or policies of
insurance with the coverages set forth in the applicable WNV Member Supplement.


 


(b)           Chiron shall obtain and
maintain at its sole cost, a policy or policies of insurance with the following
coverages, which shall be in full force and effect for the term of this
Agreement and thereafter through two years following the termination of the
Agreement: a) a Commercial General Liability policy including Products and
Completed Operations Liability in an amount of not less than [***]
combined single limit for each occurrence; and b) Workers’ Compensation
coverage with statutory limits for each jurisdiction where the work required of
such party under this Agreement is performed and c) an employers’ liability
policy with at least the following limits, [***] per accident, [***] per disease (policy
limit), and [***] disease (each employee).


 


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(c)           Each party shall
provide the other with certificates of insurance evidencing the coverage
required herein upon execution of this Agreement, and renewal certificates on
request from the other party.  Each
party must notify the other within a reasonable time if there is a material
change to any of the insurance policies referred to in this Section 7.12.  Such certificates shall provide for thirty
(30) days prior written notice to the certificate holder in the event of
non-renewal of the policies, cancellation or material change in the coverage
provided.


 


ARTICLE 8 - TERM AND TERMINATION


 


8.1           Term.  This WNV Association Agreement shall enter
into force as of the Effective Date and shall continue to [***].  Each WNV Member Supplement will become
effective and terminate on its own terms; provided, however, that all WNV
Member Supplements shall terminate immediately upon the termination or
expiration of this WNV Association Agreement. 
Any termination of a WNV Member Supplement shall have no impact on the
continuing effectiveness of any other WNV Member Supplement or this WNV
Association Agreement.


 


8.2           Termination.  This
WNV Association Agreement may be terminated by written notice to the other
party at any time during  the term of this WNV Association Agreement, which
termination shall be effective, except as set forth specifically below, when
such termination notice is received in accordance with Section 12.6 of this WNV
Association Agreement, as follows:


 


(a)           by either ABC or Chiron
if the other party fails to observe, perform or otherwise breaches any of its
material covenants, agreements or obligations under this WNV Association
Agreement, provided such failure continues for a period of thirty (30) days
after receipt by the other party of an initial written notice thereof
specifying such failure; or


 


(b)           by
either ABC or Chiron if the other party files a petition in bankruptcy, becomes
bankrupt or insolvent or subject to the reorganization of its business for the
benefit of creditors under any law or regulation relating to bankruptcy, or a
receiver is appointed for all or substantially all of its property or assets,
or upon the making by such other party of a composition with its creditors, or
upon the taking by such other party of any act for the winding up of its
business, or upon any governmental authority exercising any power or authority
resulting in the expropriation or confiscation of all or substantially all of
its business and assets; or


 


(c)           by ABC
if the FDA rescinds in full its recommendation for the screening of human
blood, covered and voluntary source plasma, 


 


11

















 


platelets
or other blood products intended for transfusion or other administration to
humans for the presence of the West Nile Virus; or


 


(d)           by
Chiron ninety (90) days after the FDA approval of the use of the WNV Assay for
the screening of human blood, recovered and voluntary source plasma, platelets
or other blood products intended for transfusion or other administration to
humans; or


 


(e)           by mutual agreement of
the parties at any time without penalty.


 


8.3.          Validation.  Chiron agrees to utilize commercially
reasonable efforts so that the WNV Assay will be validated at Participating
Member sites by July 1, 2003.  At any
time after September 1, 2003, a Participating Member may terminate its Member Supplement
with Chiron (without any liability under Schedule E, paragraph 2) if the WNV
Assay has not been validated at the Participating Member site by that
time.  If standards for validation are
provided by Chiron prior to the Effective Date of this Agreement, whether
validation has occurred will be determined by those standards.


 


8.4.          Performance Objectives. 
Chiron hereby acknowledges that the accuracy and operational efficiency
of blood screening tests is of critical importance to the ABC and its Members.  Accordingly, Chiron and ABC have agreed to
establish the certain performance objectives for the WNV Assay set forth on Schedule
F hereto (the “Performance Objectives”). 
Chiron and ABC acknowledge the Performance Objectives set forth on Schedule
F represent Chiron’s expectations regarding the WNV Assay based on results
obtained through the use of the WNV Assay during its development, including
limited testing in the field. 
Accordingly, Chiron does not represent or warrant that the WNV Assay
will be capable of achieving the Performance Objectives consistently, or at
all.  Notwithstanding the foregoing,
Chiron, together with Participating Members, will monitor the actual
performance of the WNV Assay as against the Performance Objectives during the [***]
(each period, a “Performance Measurement Period”).  [***] the WNV Assay to achieve such Performance
Objectives.  [***].


 


8.5           New Technology. 
Chiron hereby acknowledges that the rapid development and availability
of blood screening tests is of critical importance and that nothing in this
Agreement will restrict the right of Members to evaluate new developing
technologies provided by Third Parties, or to perform, in Member’s discretion,
any confirmatory and supplementary screening with such new technologies.  Either party may notify the other party of
its knowledge of the availability of new technology capable of screening
donated blood for one or more of the viruses then currently screened by the WNV
Assay (a “New
Technology Notice”). The parties hereby agree that if [***].


 


12

















 


[***].


 


ARTICLE 9 – CONSEQUENCES OF THE
TERMINATION OF THE AGREEMENT


 


9.1           Payment Obligations
Unaffected.  The termination of this
WNV Association Agreement for any reason whatsoever shall not affect any
party’s obligations to pay any amount actually invoiced and due to Chiron prior
to such termination.  In the event that
termination occurs at a time prior to a Participating Member having made full
payment that is due and owing for any Products, the parties agree that Chiron
shall have all applicable ownership rights to such Products until such payment
has been made in full to Chiron.


 


9.2           Reimbursement upon Termination.  If
this Agreement is terminated other than by mutual agreement of the Parties or
for cause by ABC pursuant to Section 8.2(a), then each Participating Member shall be obligated to reimburse Chiron for
certain un-recovered costs and expenses related to the development of the
Products in an amount to be calculated in accordance with Schedule_E,
paragraph 2; provided, however, [***].


 


9.3           Survival
of Certain Provisions.  In addition, notwithstanding anything herein
to the contrary, the following provisions of this WNV Association Agreement
shall survive termination of this WNV Association Agreement: Sections 6.5, 6.6
and 7.4 through 7.12, and Articles 9, 10, 11 and 12.


 


9.4           Return of
Confidential Information.  Upon
termination of this Agreement for any reason whatsoever, unless required to
retain such information for regulatory purposes, the parties shall immediately
return to the other all confidential information in documentary, electronic or
printed form and any copies or extracts thereof and shall thereafter cease to
use such information but without prejudice to the then surviving
confidentiality obligations provided for in Section 6.5 of this WNV Association
Agreement.


 


9.5           No
Other Payment. No indemnity or
compensation in any form  whatsoever shall be paid by either party
to the other in connection with a termination in accordance with the terms
hereof (subject to any liability that may exist in respect of any material
breach prior to such termination).


 


ARTICLE 10 – APPLICABLE LAW


 


This
Agreement shall be governed by and construed in accordance with the laws of the
State of California, without giving effect to any conflict of law rules and
regulations.


 


13

















 


ARTICLE 11— DISPUTES


 


11.1         To the extent that there
are disputes with respect to performance under this Agreement, such disputes
(other than non-payment) are not cause for Chiron to stop performance under
this Agreement, but will be resolved in due course to the extent possible in
accordance with this Article.


 


11.2         The parties to this
Agreement will attempt to resolve any problem or dispute arising out of, or
related to, this Agreement through good faith consultation in the ordinary
course of business.  In the event that
any problem or dispute is not so resolved, either party may upon written notice
to the other request that the matter be referred to senior management officers
within each respective organization with express authority to resolve the
problem or issue and who are not immediately responsible for the matters
contemplated by this Agreement.  Such
senior management officers will meet or confer at least once in good faith to
negotiate a resolution.


 


11.3         If the senior management
officers are unable to resolve the problem or dispute within thirty (30) days,
either party may pursue the matter as set forth in Sections 11.4 through 11.6
below.  No party may institute a court
proceeding until the procedure has been completed unless, and to the extent
that, doing so is necessary to avoid irreparable harm.


 


11.4         If any problem or dispute
arising out of or related to this Agreement is not resolved by the parties in
the manner set forth in Sections 11.2 and 11.3 above, at the request of either
party, the matter will be submitted to mediation, or to such other form of
dispute resolution as the parties may then agree to.  A neutral person acceptable to both parties will conduct the
mediation, and unless other procedures are agreed to, it will be conducted in
accordance with the Center for Public Resources Model Procedure for Mediation
of Business Disputes.


 


11.5         Any controversy, claim or
dispute arising out of or relating to this Agreement, or the breach thereof,
which is not resolved through the procedures described in Sections 11.2 through
11.4 above shall be resolved by binding arbitration.  If arbitration is necessary pursuant to this paragraph, the
parties shall agree upon a single arbitrator. 
If the parties are unable to agree on an arbitrator, then they will
obtain nominations of three (3) potential arbitrators who are retired federal or
state judges and each party will have the right to strike one candidate’s name
from the list.


 


11.6         The prevailing party
shall be entitled to recover all costs and expenses, including reasonable
attorney’s fees, incurred because of any legal action arising in relation to
this Agreement.


 


14

















 


ARTICLE 12 – MISCELLANEOUS


 


12.1         Force Majeure.  Each party shall be excused from any delay
in performance or from failure to perform in accordance with the terms of this
Agreement, to the extent that such delay or failure to perform results from a
Force Majeure Event. The provisions of this paragraph shall apply only if such
party shall have used its reasonable efforts to avoid such Force Majeure
Event.  Such party shall give notice to
the other promptly in writing upon learning of the Force Majeure Event.  The affected party’s time for performance
shall be extended for the period of the delay or inability to perform due to
such Force Majeure Event and notwithstanding any provision herein to the
contrary, the affected party shall not be liable for any Damages arising out of
such Force Majeure Event.


 


12.2         Exclusion of
Convention of Vienna for the International Sale of Goods.  The parties hereby expressly exclude the
application to this Agreement of the terms of the Convention of Vienna for the
International Sale of Goods.


 


12.3         Equal Employment
Opportunity.  None of the parties
will discriminate, in terms and conditions of employment, against employees or
applicants because of age, race, color, religion, sex, national origin,
qualified disability or any other basis protected by applicable state or local
law.  The parties agree to abide by all
federal, state and local employment and labor law notice posting requirements.


 


12.4         Assignment.  This Agreement shall not be directly or
indirectly assigned or otherwise transferred by ABC or, as to a WNV Member
Supplement, by any Participating Member, nor, except as expressly provided
hereunder, may any right or obligations of ABC or any Participating Member
hereunder be assigned or transferred (whether voluntarily, by operation of law
or otherwise) without the consent of Chiron. Chiron may assign and transfer to
an Affiliate (provided Chiron remains a guarantor of such Affiliate’s
obligations hereunder), or to a Third Party possessing sufficient
capitalization to satisfy its obligations under the Agreement that is acquiring
all or substantially all of the business of Chiron, the rights and obligations
of Chiron hereunder without further action by ABC or any Participating Member.
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.


 


12.5         Subcontracting.  Chiron’s obligations under this Agreement
may not be subcontracted without the prior written consent of the effected
Participating Members.  Any attempt to
subcontract without such consent will be null and void and of no effect.  Chiron must require that all subcontractors
approved by the affected Participating Members be bound by the terms of this
Agreement and to assume toward Chiron all obligations and responsibilities
which Chiron assumes toward the affected Participating Members.  Chiron must make available to each approved 


 


15

















 


subcontractor, prior to
the execution of any subcontract agreement, a copy of this Agreement to which
the subcontractor will be bound.  For
purposes of any subcontracts entered into pursuant to this Section 12.5, the
term “Chiron” as used in this Agreement, will include any and all
subcontractors.


 


12.6         Notices.  Any Notice or request required or permitted
to be given in connection with this Agreement shall be deemed to have been
sufficiently given if sent by pre-paid registered or certified mail, by courier
or by facsimile at the address set forth below or to such other address as may
have been notified in writing.


 


If to
Chiron:           Chiron
Corporation

Attention:  President, Blood Testing

4560 Horton Street

Emeryville, CA 94608

Telephone:  [***]

Fax:  [***]

cc:           General
Counsel


 


If to
ABC:              America’s
Blood Centers

Attention:  Jim MacPherson, Chief
Executive Officer

725 15th Street, N.W., Suite 700

Washington, DC 20005

Telephone:  [***]

Fax:  [***]


 


A notice, consent,
approval or other communication takes effect from the time it is received
unless a later time is specified in it, and receipt shall be deemed to occur as
follows:


 


(a)           if it is sent by mail,
seven (7) calendar days after posting;


 


(b)           if it is sent by
courier, on the date and at the time shown on the courier’s standard written
confirmation of receipt;


 


(c)           if it is sent by
facsimile, on the date and at the time shown on a successful transmission
report by the machine from which the facsimile was sent.


 


12.7         Entire
Agreement. This Agreement
constitutes the entire agreement between the parties in respect of the subject
matter hereof.  This Agreement cancels
and supersedes any and all pre-existing agreements, either oral or in writing
between the parties.  There are not and
shall not be any oral statements, representations, warranties, undertakings or
agreements between the parties other than as provided by this Agreement and any
mutually accepted written amendments hereto. 
For the avoidance of doubt nothing in this Agreement amends, modifies,
cancels 


 


16

















 


or
supercedes the 2002 Association Agreement or any 2002 Member Supplement.


 


12.8         No
Waiver.  The failure on the part of either party
hereto to exercise or enforce any right conferred upon it by this Agreement
shall not be a waiver of any such right nor shall any single or partial
exercise of any right or power hereunder or further exercise thereof operate so
as to bar the later exercise or enforcement thereof.


 


12.9         Nature
of Relationship.  Nothing herein contained shall be deemed to
be or construed as constituting either party the agent or partner of the other
party.  The relationship between Chiron
and each Participating Member shall be that of an independent contractor.  No party shall have the right, title or
authority to enter into any contract, agreement or commitment on behalf of the
other or to bind the other party in any manner whatsoever.  In no event shall ABC have any
responsibility for the financial obligations of any Participating Member, nor
shall any Participating Member have any responsibility for the financial
obligations of any other Participating Member.


 


12.10       Conflict
Between Terms and Conditions.  In the event of any conflict between the
terms and conditions of this WNV Association Agreement and any terms and
conditions that may be set forth in a WNV Member Supplement or on any invoice
or purchase order or other similar document relating to the Products, the terms
and conditions of this WNV Association Agreement govern.  For the avoidance of doubt no term or
condition contained in the 2002 Association Agreement or any 2002 Member
Supplement amends, modifies, cancels or supercedes the terms and conditions of
this Agreement with regard to the Products.


 


12.11       Compliance with
Applicable Law.  In performing this
Agreement, the parties shall comply with all applicable laws.  Nothing in this Agreement shall be construed
so as to require the violation of law, and wherever there is any conflict
between any provision of this Agreement and any rule of mandatory law, the
latter shall prevail, but in such event, the affected provision of this
Agreement shall be ineffective only to the extent necessary to comply with the
applicable law, and the parties hereto undertake to replace the invalid and/or
unenforceable provision by a valid and/or enforceable provision, the nature and
scope of which will come as close as possible to the contractual provision to
be replaced.


 


12.12       Counterparts.  This WNV Association Agreement and any WNV
Member Supplement may be executed in two or more counterparts, each of which
shall be deemed to be an original and each of which shall constitute one and
the same Agreement.


 


12.13       Severability.  In the event that any provision of this
Agreement is found to be invalid or  in
conflict with any applicable law or regulation, the affected provision of this
Agreement shall be limited or eliminated only to the extent 


 


17

















 


necessary to comply with
such law or regulation, and the remainder of this Agreement shall remain in
full force and effect, provided that the remainder of this Agreement is
consistent with the economic intentions of the parties as evidenced by this
Agreement as a whole.


 


12.14       Publicity.  Neither Party shall permit or generate any publicity,
advertising or promotion concerning this Agreement without the prior written
consent of the other Party.  Each Party
recognizes that the name, logo and marks of the other Party represent valuable
assets of that Party and that substantial recognition and goodwill are
associated with such assets.  Each Party
hereby agrees that neither it nor any of its Affiliates shall use the other
Party’s name, logo or marks without the prior written authorization from such
other Party.  Notwithstanding any other provisions
of this paragraph, it is agreed that the parties may, without prior approval of
any other party, make factual, non-promotional statements (a) that WNV testing
will be and/or is being performed by Participating Members, (b) as to the
source of the WNV Assays, and (c) as to costs of WNV testing that will have to
be passed along, so long as the specific financial terms of this Agreement are
not discussed.


 


Each
of the Parties acknowledges that a violation of this Section 12.14 would cause
irreparable harm to the other Party for which no adequate remedy at law exists
and each Party therefore agrees that, in addition to any other remedies
available, and notwithstanding any other provision of this Agreement, the
aggrieved Party shall be entitled to injunctive relief to enforce the terms of
this Section 12.14.  To the extent
allowed by law, the prevailing Party shall be entitled to recover all costs and
expenses, including reasonable attorneys’ fees, incurred because of any legal
action arising in relation to this Section 12.14.


 


12.15       Disclosure of Agreements and Terms.  Subject to mutual agreement as
to form and substance, each of the Parties may issue a press release disclosing
the existence of this Agreement.  Each
Party may disclose any of the terms of this Agreement to any Affiliate;
provided that the recipient of such disclosure is obligated to confidentiality
terms no less restrictive than those contained in Section 6.7.  Each Party may disclose any information
contained in or regarding this Agreement to the extent required in its
respective reasonable judgment by applicable law, regulation or order of any
court or governmental agency.  Further,
each Party may determine in its respective discretion to file this Agreement
under the Securities and Exchange Act of 1934, even if that filing may result
in this Agreement becoming available to the public generally.  The filing Party shall seek confidential
treatment for at least the essential financial terms hereof in connection with
any such filing, subject to applicable law and regulation, and shall notify the
other Party in advance of any such filing and consider such suggestions as the
other Party may make as to the terms herein as to which the filing party should
seek confidential treatment.


 


18

















 


12.16       [***].


 


[Signature Page Immediately Follows]


 


19

















 


IN
WITNESS WHEREOF, the parties hereto, through their authorized representatives,
have set their hands as of the date first above  written, whereby they
evidence their intent to be legally bound.


 


 


	
  CHIRON CORPORATION

  	
  AMERICA’S BLOOD CENTERS

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jack Goldstein

  	
   

  	
  By:

  	
  /s/ Jim MacPherson

  	
   

  
	
  Name:  Jack Goldstein

  	
  Name:  Jim MacPherson

  
	
  Title:  President, CBT

  	
  Title:  CEO

  
						



 


20

















 


SCHEDULE A


 


Definitions


 


Capitalized terms used
and not otherwise defined in this Agreement shall have the following meanings:


 


1.1           “2002 Association Agreement”
shall mean that certain Association Agreement Regarding the Sale and Servicing
of Blood Screening Products effective as of May 1, 2002, pursuant to which
Chiron sells to Participating Members, and Participating Members purchase from
Chiron, certain assays and blood screening instruments to conduct nucleic acid
amplification screening to detect the presence of certain viruses in blood,
including HIV-1 and HCV.


 


1.2           “2002 Member Supplement” shall
mean the agreement executed by and among Chiron and a Member and incorporating
by reference the terms and conditions of the 2002 Association Agreement.


 


1.3           “Affiliate” shall mean (i)
any corporation or business entity of which securities or other ownership
interests representing fifty percent (50%) or more of the equity or fifty
percent (50 %) or more of the ordinary voting power or fifty percent (50%) or
more of the general partnership interests are, at the time such determination
is being made, owned, Controlled (as hereinafter defined) or held, directly or
indirectly, by such corporation or business entity, or (ii) any other
corporation or business entity which, at the time such determination is being
made, is Controlling, Controlled by or under common Control with, such
corporation or business entity.  For
purposes of this definition, “Control”, whether used as a noun or verb, refers
to the possession, direct or indirect, of the power to direct, or cause the
direction of, the management or policies of any corporation or business entity,
whether through the ownership of voting securities, by contract or otherwise.


 


1.4           “Agreement” shall mean
collectively this WNV Association Agreement, including the Schedules hereto,
and all WNV Member Supplements, including the Exhibits thereto.


 


1.5           “Blood Screening Field” shall
mean the nucleic acid probe-based screening of (i) human blood, covered and
voluntary source plasma, platelets or other blood products intended for
transfusion or  other administration to
humans, including autologous donors, and (ii) recovered and voluntary source
plasma for further manufacture, but specifically excluding paid source plasma
intended for further manufacture.


 


1.6           “Blood Screening Systems”
shall mean the instrument(s) and related Software for DNA/RNA amplified assay
processing acquired and maintained
pursuant to the 2002 Agreement and the applicable 2002 


 


21

















 


Member
Supplement, together with such additional equipment components acquired by a
Participating Member from Chiron in accordance with Section 3.1(b) of this WNV
Association Agreement.


 


1.7           “Confidential Information”
means any and all technical, business and other information and materials
disclosed by or on behalf of such party to the other party pursuant to this
Agreement or during discussions leading to this Agreement, except to the extent
that the receiving party can provide evidence that such information:


 


(a)           is known
to the receiving party prior to its disclosure by the disclosing party; or


 


(b)           is
obtained by the receiving party from a source other than the disclosing party
which source (i) did not require the receiving party to hold such information
in confidence; or (ii) did not limit or restrict the receiving party’s use
thereof, or


 


(c)           has
become public knowledge otherwise than through the fault of the receiving
party; or


 


(d)           has been
developed by the receiving party independently of the information received from
the disclosing party as shown by the receiving party’s written records; or


 


(e)           is
required to be disclosed by the receiving party by law or for the purpose of
complying with governmental regulations and/or the obligations of the receiving
party to a licensing or regulatory authority in connection with this Agreement.


 


1.8           “Consequential Damages” means consequential damages as defined by
California law, including loss of profit or loss of business opportunity, and
all Third Party Damages.


 


1.9           “Damages” means Direct Damages and Third Party Damages,
collectively.


 


1.10         “Direct Damages” means costs or expenses incurred by a party that
are not Consequential Damages, including without limitation, the incremental
additional costs of substitute products and costs or expenses of product
recall.


 


1.11         “Documentation” shall mean text material
that describes the design, functions, operation, or use of the Software and
that is delivered by Chiron to Participating Members.  Documentation for the Software shall be the same that is provided
to licensees of such Software generally.


 


1.12         “Effective Date” means the date set forth on the first page of
this Agreement.


 


22

















 


1.13         “Enhancement” means an alteration or
addition to a Product [***], for
which a separate fee will be imposed.


 


1.14         “FDA” shall mean the
United States Food and Drug Administration, or the successor thereto.


 


1.15         “Force Majeure Event” shall mean a cause beyond the reasonable
control of a party, including without limitation, fires, floods, epidemics,
quarantine restrictions, strikes, war, earthquake, acts of God, labor
difficulties, riot, failure of public utilities, freight embargoes, unusually
severe weather conditions, delays in delivery of goods or services by suppliers
or subcontractors to such party, loss of goods in transit, and governmental or
court action.


 


1.16         “Gen-Probe” shall mean
Gen-Probe Incorporated, a Delaware corporation.


 


1.17         “HCV” means the Hepatitis C
virus.


 


1.18         “HIV-1” means Human
Immunodeficiency virus type 1.


 


1.19         “Member” shall have the
meaning set forth in the Recitals.


 


1.20         “Package Insert” shall mean
the draft package insert to be submitted to the FDA for approval for the
applicable WNV Assay, attached to this WNV Association Agreement as Attachment
B-1 as the same may be amended from time to time.


 


1.21         “Participating Member” shall
mean a Member electing to utilize the WNV Assays that memorializes its election
by execution of a WNV Member Supplement.


 


1.22         “Person” shall mean an
individual, corporation, partnership, limited liability company, trust,
business trust, association, joint stock company, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.


 


1.23         “Pooled Testing” means the
conduct of testing on pools of samples from blood donations as follows.  For the purposes of this Agreement, Pooled
Testing consists of:


 


(a)           [***];


 


(b)           [***]


 


(c)           [***]


 


1.24         “Primary Operators” means the
employees of Participating Members trained by Chiron at Chiron’s facility.


 


23

















 


1.25         “Products” shall mean WNV
Assays and Software.


 


1.26         “Reagent Utilization Factor”
means, with respect to a specified time period, the quantity of WNV Assay tests
consumed by an applicable Participating Member during such period divided by
the number of Reportable Results obtained by such Participating Member
during such period.


 


1.27         “Reportable Result” means a
result obtained through the use of a WNV Assay in Pooled Testing or Single Unit
Testing from which it is determined to release for use or hold and not use (a)
a blood donation intended for transfusion or for further processing for other
administration to humans or (b) a product derived from such donation.


 


1.28         “Single Unit Testing” means
testing of blood donations consisting of (i) testing a sample from each
individual blood donation using a WNV Assay, and (ii) follow up repeat or
confirmatory testing of positive results for HIV-1 or HCV.


 


1.29         “Software” means the
following software programs:


 


Procleix® WNV Assay
Software, Version 2.0.1.0

Procleix® WNV System Software, Version 5.0.1.0


 


1.30         “Territory” means the United States of
America, including Puerto Rico, Guam and all other protectorates.


 


1.31         “Testing Centers” mean the locations
identified on Exhibit 2 to the 2002 Member Supplements.


 


1.32         “Testing Month” means a calendar
month during which a Participating Member makes use of the Products to generate
Reportable Results for [***] of
the blood donations screened by such Participating Member during such [***] for HCV and HIV-1 under the 2002
Agreement


 


1.33         “Third Party” shall mean any Person other
than ABC, its Members, Gen-Probe, Chiron and their respective Affiliates.


 


1.34         “Third Party Damages” means any liability arising out of a Third Party’s
claim (whether arising out of fault, strict liability or otherwise) in the form
of an obligation, loss, fine, judgment for damages, arbitration award,
settlement amount, penalty or claim, and all reasonable costs and expenses
related thereto (including reasonable costs of investigation, fees and expenses
payable to outside counsel, independent accountants and similar professional
advisors or consultants, but not including any corporate allocation for use, of
similar in-house services or facilities).


 


1.35         “West Nile Virus” is a mosquito-borne flavivirus, classified
as a member of the Japanese encephalitis virus complex (which includes St.
Louis 


 


24

















 


Encephalitis,
Kunjin, Japanese encephalitis and Murray Hill encephalitis viruses, among
others).  The virus primarily infects
birds, but has been found in several other animal species, including horses,
dogs, alligators and humans.  Humans are
a ‘dead-end’ host for the virus, hence the majority of infected humans (~80 %)
are asymptomatic.  Another ~20% of
infected individuals develop a mild fibrile disease, sometimes accompanied by
rash.  A final ~1% of all humans
infections result in severe and fatal encephalitis.  The virus has been shown to be transmissible by blood transfusion
or by transplant with infected organs.


 


1.36         “WNV Assays” shall mean the
nucleic acid probe assays under development by Chiron and Gen-Probe that are
provided to Participating Members hereunder, as more specifically described in
the Package Insert.


 


1.37         “WNV Member Supplement” shall
mean the agreement executed after the Effective Date of this WNV Association
Agreement by and among Chiron and a Member and incorporating by reference the
terms and conditions of this WNV Association Agreement.


 


25

















 


SCHEDULE B


 


TERMS AND
CONDITIONS FOR PROVISION OF WNV ASSAY


 


1.             Supply, Handling and Storage Obligation. 
During the Term of this Agreement Chiron agrees to supply to
Participating Members the WNV Assays to permit each Participating Member to
conduct screening of blood donations in the Territory.  Participating Members agree to store and
handle all WNV Assays in accordance with the applicable Package Insert.  Any WNV Assays lost or damaged due to
failure to comply with such storage and handling instructions will be replaced
at the Participating Members’ expense.


 


2.             Packing and
Delivery of WNV Assays.  All WNV
Assays will be suitably packed and transported to ensure safe transport to the
Participating Members in accordance with the manufacturer’s instructions and
delivered Carriage and Insurance Paid to the Participating Member’s designated
Testing Centers, and each delivery will be accompanied by a packing slip
indicating the quantity delivered.  WNV
Assays will be delivered during normal business hours and accompanied by
storage instructions and arrive at the temperatures specified by the
manufacturer and set out in the Package Insert.  The WNV Assays will be delivered in kit form, with appropriate
distribution between screening tests, discriminatory tests and related
calibrators.


 


3.             Shipping.
Except as set forth below, all shipping and handling charges for the regular
monthly shipments of WNV Assays will be borne entirely by Chiron on shipments
to the Testing Centers.  All shipping
and handling charges for shipping requests other than to a Testing Center, and
all incremental shipping and handling charges for Modified Orders and Changed
Orders, will be borne by the requesting Participating Member.


 


4.             Forecasts and
Orders.


 


4.1           Each Participating
Member will provide Chiron with a written twelve month forecast of its
requirements of WNV Assays (each a “Product Requirements Forecast”) on an
annual basis, including requested delivery dates, which forecast shall
constitute such Participating Member’s standing firm purchase order for each
month contained therein.  Not less than
ninety (90) days prior to each anniversary of the effective date of the
applicable WNV Member Supplement, each Participating Member will provide such a
Product Requirements Forecast.  Participating
Members shall deliver any modifications to the standing firm purchase order for
WNV Assays for delivery during the next following month on or prior to the
first day of the immediately preceding calendar month (for example, a
Participating Member will provide requested modifications to the February
standing firm purchase order—for deliveries to be made during the month of
February—prior to January 1).  All
purchase order modification requests 


 


26

















 


must be received at least
30 days prior to a requested delivery date. 
Except as otherwise agreed, Chiron agrees to accept modifications to
standing firm purchase orders which do not differ by more than [***]
from the quantities forecast for delivery in the applicable month in the
current Product Requirements Forecast. 
Participating Members may further adjust their Product Requirements
Forecast from time to time with the consent of Chiron, such consent to not be
unreasonably withheld.


 


4.2           If the variance between
the modification requested and the current Product Requirements Forecast
exceeds the [***] referenced in Section 4.1 of this Schedule B,
Chiron will notify the requesting Participating Member within five (5) business
days after receipt of the modification request as to whether it accepts such
modification request.  If a modification
request is accepted, Chiron agrees to deliver such amounts of WNV Assays on the
delivery date(s) stated.  If a
modification request is not accepted, the parties will use all reasonable
endeavors to agree on further modifications to the order and/or delivery date
(a “Modified Order”), subject to Chiron’s manufacturer’s accommodating Chiron’s
requests for changes in forecasted amounts.


 


5.             Changes to Orders.  If a Participating Member requests any
modifications to quantities of WNV Assays ordered or the delivery schedule or
locations reflected in such order within 30 days of a delivery date (a “Changed
Order”), Chiron will use reasonable commercial efforts to comply with such
request.


 


6.             IQA Procedures.  Prior to the initial delivery of WNV Assays,
Chiron, ABC and the Participating Members shall mutually agree upon procedures
for quality assurance testing of WNV Assays received by Participating Members
(“IQA Procedures”).  Chiron agrees to
replace WNV Assays which fail to conform to the specifications as set forth in
the Package Insert.  The IQA Procedures
shall include procedures for notice to Chiron and for implementing the return
of WNV Assays for replacement.  If
testing by Chiron or its supplier confirms the non-conformity of the WNV
Assays, Chiron will bear the shipping costs associated with replacement.  If Chiron’s testing provides reasonably
acceptable evidence to the applicable Participating Member that the WNV Assays
do conform to the specifications in question, the shipping costs will be borne
by the applicable Participating Member.


 


7.             Nature of Testing. 
Each Participating Member will determine, in its sole discretion,
whether to use the WNV Assays supplied by Chiron hereunder  to conduct Pooled Testing or Single Donor
Testing.  If a Participating Member
desires to change its testing from Pooled Testing to Single Unit Testing or any
other pool size, the Participating Member and Chiron shall enter into an
addendum to the applicable WNV Member Supplement reflecting any additional
instrumentation or any other amendments that may be applicable by reason of
such change.


 


27

















 


SCHEDULE C


 


TERMS AND
CONDITIONS FOR USE OF SOFTWARE 


 


Chiron will provide the
Software and Documentation to Participating Members on the following terms and
conditions:


 


1              Title.


 


(a)           Chiron or the
applicable licensor shall own and retain title to the Software, including all
intellectual property rights embodied therein. 
Any copy which a Participating Member makes of the Software, in whole or
in part, is and shall remain the property of Chiron or the applicable licensor.


 


(b)           If ownership of the
Software or any work product does not result as provided in this Agreement or
by operation of law, then the parties each assign and shall cause their
respective employees, agents, and contractors to assign, without further
consideration, the ownership thereof, including all associated intellectual
property rights, as necessary to give effect to the ownership terms specified
in this Agreement.  Each party agrees to
perform, at the reasonable request of the other party, such further acts as may
be necessary or desirable to transfer ownership of, and to perfect and defend,
the Software or work product in order to give effect to such ownership terms.


 


2              Grant of Rights
and Restrictions on Use


 


(a)           Grant of Rights.  Chiron hereby grants, and each Participating
Member hereby accepts, subject to the terms and conditions of this Agreement
including this Schedule C, a nonexclusive, nontransferable and
nonassignable (except as permitted under Section 12.4 [Assignment] of this WNV
Association Agreement) object code license to use the Software at the Testing
Centers solely for Participating Member’s own use in connection with the
operation of the WNV Assays on the Blood Screening Systems during the term of
the applicable WNV Member Supplement, and to copy the Software solely for the
purposes expressly authorized under this Section 2 of this Schedule C.  In addition, Chiron hereby grants to each
Participating Member the right to use the Documentation in connection with its
use of the Software hereunder. 
Documentation may not be copied. 
Additional copies may be obtained from Chiron at Chiron’s charges then
in effect.  No right to use, copy,
display, or print the Software or Documentation, in whole or 


 


28

















 


in part, is granted,
except as expressly provided in this Agreement.


 


(b)           Restrictions on Use.  The grant of rights stated in Section 2(a)
of this Schedule C is subject to the terms and conditions of this
Agreement as well as the following restrictions:


 


(i)            Use of the Software
may be subsequently transferred to other Testing Centers maintained by a
Participating Member, provided (A) the total number of Testing Centers at which
the Software is used by such Participating Member does not exceed the number of
Testing Centers specified in the applicable WNV Member Supplement and (B) such
Participating Member provides Chiron with written notice thirty (30) days
before such transfer.


 


(ii)           In the event that
disaster or other circumstances prevent Participating Member from using the
Software at the Testing Centers identified in the applicable WNV Member
Supplement, the effected Participating Member shall have the right to use the
Software at a disaster recovery facility without prior notice to Chiron, but
shall promptly notify Chiron as soon as circumstances permit.


 


(iii)          Participating Members
shall not use (or cause to be used) the Software for rental, in the operation
of a service bureau, or for any similar purpose; nor shall Participating
Members allow access to the Software through terminals located outside
Participating Member’s business premises by persons who are not Participating
Member’s employees or authorized agents, contractors or representatives.


 


(iv)          Participating Members
shall not distribute the Software, in whole or in any part, to any Third Party
or parties, nor permit its sublicensing, leasing, or other transfer, except as
permitted under Section 12.4 [Assignment] of this WNV Association Agreement.


 


(v)           Participating Members
shall not, either directly, or through a Third Party, reverse engineer,
disassemble or decompile the Software, or make any attempt in any fashion
except as specifically provided in this Agreement to obtain the source code to
any Software.


 


29

















 


(vi)          Any use of the Software
not in accordance with this Agreement, or any modification or alteration of the
Software not expressly authorized in writing by Chiron, shall void all
representations and warranties with regard to the Software and shall be deemed
a breach of this Agreement.


 


(vii)         Upon expiration or termination
of a WNV Member Supplement, the applicable Participating Member shall (A) cease
all use of the Software and the Documentation; (B) return to Chiron the
Software and the Documentation and any copies thereof (unless required to
retain such material for regulatory purposes); and (C) erase from memory all
copies of the Software (unless required to retain such material for regulatory
purposes).  The applicable Participating
Member shall certify in writing to Chiron that it has not retained the Software
and Documentation or any copies thereof (unless required to retain such
material for regulatory purposes).


 


3              Warranties;
Limitation of Liability.


 


(a)           Anti-Virus.  Chiron warrants that to the best of its
knowledge after employing reasonable technical means to detect computer
viruses, the Software at the time of delivery will not contain any virus or
computer software code, routines or devices (other than as set forth in the
Documentation) designed to disable, damage, impair, or erase the Software or
other software or data.  For failure to
comply with this warranty, Chiron shall, at Chiron’s expense, immediately
replace all copies of the affected Software in the possession of a
Participating Member.


 


(c)           Right to License.  Chiron warrants that it has, and on the
effective date of each WNV Member Supplement of the Software will have, full
rights and authority to license the Software to Participating Members and
otherwise as needed for it to perform its obligations hereunder, or has the
authority to do so without infringing the rights of any Third Party.


 


(d)           Limitation of
Liability. Chiron disclaims all other warranties and further limits its
liability in accordance with Sections 7.4 and 7.11 of this WNV Association
Agreement.


 


30

















 


SCHEDULE D 


 


SERVICES


 


1.             Maintenance &
Troubleshooting.


 


1.1           The Participating
Member shall store, handle and utilize the Products in accordance with the
Package Insert and Documentation, which may be amended from time to time.


 


1.2           In the event that any
Testing Center resolves a problem with a Product, such problem shall be logged
in writing, including a description of the problem and the steps taken by the
Participating Member to resolve it.  The
Participating Member shall maintain a log for the Products and make available
all such logs to Chiron’s respective
employees, contractors, subcontractors, or agents whose responsibilities are to
provide Services to Participating Members (“Chiron
Technical  Support”) upon
request.


 


1.3           If a Testing Center is
unable to resolve a problem, the Testing Center shall refer the problem to
Chiron Technical Support for resolution in accordance with Section 2 of this Schedule
D.


 


1.4           Except for routine
maintenance and troubleshooting activities of Primary Operators as provided in
this Schedule D, or otherwise with the prior permission of Chiron,
during the term of this Agreement only Chiron or Chiron’s agents shall install,
service, alter or replace the Products.


 


2.             Technical
Support and Service.


 


2.1           Installation.
Chiron support personnel will provide installation and set up of all Software
on the Blood Screening Systems, including verification of the operation of the
Software in conjunction with the Blood Screening Systems.  At such time as Chiron determines that such
setup and installation has been completed, the Participating Member shall
acknowledge the completion of such setup and installation and its acceptance of
the Software in writing.


 


2.2           Project Management.  Chiron will provide reasonable project management
support to assist the Participating Member project manager in coordinating the
activities of Chiron and the Participating Member in connection with testing
blood using the Products.


 


2.3           Data &
Materials.  The Participating Member
shall make available to Chiron on a timely basis all data, information and
other materials which are reasonably necessary for Chiron to perform the
Services.  


 


31

















 


Such data shall be
treated as confidential Data in accordance with Section 6.5 of this WNV
Association Agreement.  Chiron shall
have no liability for any failure to perform, or for the late performance, of
any Services to the extent such Services require data, information or materials
possessed, prepared or generated by the Participating Member, if the
Participating Member fails to provide the same in accordance with Chiron
reasonable requests.


 


2.4           Support and Service.


 


(a)           Chiron Technical
Support is available 24 hours a day, 7 days a week including weekends and
holidays via telephone.  The
Participating Member will refer problems to Chiron Technical Support through a
central toll-free telephone number ([***]). 
A service representative will be available at this number to receive
problem referrals and provide troubleshooting assistance, from 7:30 a.m. to 5
p.m. PST, Monday through Friday, holidays excepted (“Normal Support
Hours”).  Messages left outside Normal
Support Hours (including weekends and holidays) will automatically page the
on-call Technical Support personnel. 
Required message information left outside Normal Support Hours should
include a contact name, phone number and brief description of the problem.  Telephone support will be initiated within
the Priority/Response timeframes set forth below.  If a problem cannot be resolved through telephone support within
a reasonable amount of time, taking into account its Priority status, the
problem will be escalated to Chiron’s Product Support Center, for analysis by
Blood Screening System specialists and if necessary, OEM support
personnel.  If a problem cannot be
resolved following such escalation, Chiron Technical Support will be dispatched
to the Testing Center to provide service in accordance with the Priority/Response
Time Schedule set forth below.


 


	
  Priority

  	
   

  	
  Response*

  
	
  Priority
  1:  Products not operating and alternate
  or back-up equipment not available; tests cannot be performed

  	
   

  	
  •      Immediate
  telephone support

  •      Support
  Technician on site ASAP but no later than next morning

  •      Resolution
  within 24 hours (may be temporary workaround)

  
	
   

  	
   

  	
   

  
	
  Priority
  2:  Products operational but testing
  process (processing time) is affected

  	
   

  	
  •      Telephone
  support within 2 hours

  •      Support
  Technician on site within 24 hours

  •      Resolution
  within 48 hours

  
	
   

  	
   

  	
   

  
	
  Priority
  3   Products are operational; no impact
  on testing process

  	
   

  	
  •      Telephone
  support next business day

  •      Work
  commenced within 24 hours

  •      Resolution
  within 1 week

  



 


32

















 












*      All timeframes are
approximate; actual response times may vary due to flight availability,
weather-related delays, nature of the problem, etc.


 


(b)           Chiron will maintain
full records of all problem referrals and subsequent actions pursuant to FDA
regulation.


 


3.             Warranty;
Limitation of Liability.


 


3.1           Chiron warrants that
the Services provided by Chiron, its agents, employees or contractors pursuant
to this Agreement will be rendered in a competent workmanlike manner and in
accordance with industry standards.


 


3.2           The Services shall
cover wear and tear and defects in design, material or workmanship of the
Products, and shall include version updates to all Software for which Chiron
has the right to license or sublicense, but shall exclude (i) replacement of
operating supplies, necessaries, consumables or expendable parts; (ii) repairs
required due to improper storage, accident, neglect, misuse, electrical stress,
air conditioning, humidity control, transportation, and Force Majeure Events,
use of non-approved accessories, consumables or supplies, or causes other than intended
normal use; (iii) service for Products that have been tampered with,
disassembled, altered, changed or modified, maintained by anyone other than
Primary Operators, or repaired (or attempts have been so made) by anyone other
than Chiron-authorized personnel; and (v) service for any other equipment not
manufactured or supplied by Chiron.


 


3.3           Chiron disclaims all
other warranties and further limits its liability in accordance with Sections
7.4 and 7.11 of this WNV Association Agreement, respectively.


 


3.4           If any applicable law
implies a condition or warranty which cannot be excluded or modified in this
Agreement (a “Requirement”), then such Requirement is deemed to be included in
this Agreement.


 


33

















 


SCHEDULE E


 


COMPENSATION


 


1.             Each Participating Member agrees to pay to
Chiron the agreed compensation in monthly increments, such increments to be
equal to the number of Reportable Results achieved by the Participating Member
each month, multiplied by the applicable Per Reportable Result amount from the
chart set forth below:


 


	
  POOLED TESTING

  	
   

  	
  SINGLE
  DONOR TESTING

  
	
  Per Reportable Result

  
	
  [***]

  	
   

  	
  [***]

  



 


On
or prior to the 5th business day of each month during the Term, each
Participating Member shall provide Chiron with a report showing the Reportable
Results and Reagent Utilization Factor for the prior month.  On or prior to the 15th calendar
day of each month, Chiron shall prepare and deliver an invoice to each
Participating Member based on such report. 
If a Participating Member’s report is not timely received by Chiron,
Chiron will prepare an invoice that reflects the then current standing order
for the applicable month multiplied by the applicable Per Reportable Result
amount.  The Parties shall “true-up” payments
made to the actual Reportable Results achieved on a quarterly basis, rectifying
any under- or over-payment on the next subsequent invoice, without application
of interest.  Each Participating Member
shall make payment on invoices in accordance with Section 5.2 of the Agreement.


 


2.             Termination Reimbursement. 
The Termination Reimbursement shall be calculated as follows:


 


	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


34

















 


3.             Reagent
Utilization Factor.


 


3.1           Chiron and each
Participating Member agree to monitor the Reagent Utilization Factor at each
Testing Center during the term of this Agreement.  If the Reagent Utilization Factor for any Testing Center set
forth on the report provided by a Participating Member pursuant to Section 1 of
this Schedule E exceeds that Participating Member’s target Reagent
Utilization Factor, set forth in the applicable WNV Member Supplement (the
“Target RUF”), [***], Chiron and each Participating Member shall use their
best endeavors to identify and correct the cause of the excess.


 


3.2           The Reagent Utilization
Factor shall be calculated for each Participating Member promptly following
each successive 52 week period commencing on the Effective Date of the
applicable WNV Member Supplement (each, an “Annual RUF Measuring Period”).  If the Reagent Utilization Factor for a
Participating Member for any Annual RUF Measuring Period exceeds the applicable
Target RUF, Chiron shall invoice the Participating Member on the next subsequent
monthly invoice, and the Participating Member agrees to pay, the additional fee
set forth in their WNV Member Supplement.


 


4.             Additional
Supplies.  The following additional
supplies are available from Chiron at the prices set forth below.  Chiron reserves the right to increase or
decrease these prices at any time, without notice to each Participating Member:


 


	
  External Run Controls
  by Acrometrix [***]

  	
   

  	
  [***]

  
	
  Ten-Tube Units (TTUs) [***]

  	
   

  	
  [***]

  
	
  Ten-Tube Cassettes
  (TTCs) [***]

  	
   

  	
  [***]

  



 


35

















 


SCHEDULE F


 


PERFORMANCE OBJECTIVES


 


	
  Performance Objectives

  	
   

  	
  Target

  
	
  [***]

  	
   

  	
  Assay shall detect the target virus in [***].

  
	
  [***]

  	
   

  	
  Assay will be used to detect WNV in [***]. 
  

  
	
  [***]

  	
   

  	
  At [***].

  
	
  [***]

  	
   

  	
  [***];and as defined in the Specimen
  Collection, Storage and Handling section of the Procleixâ WNV Assay package insert.

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
   

  	
  [***]

  	
  [***]

  
	
   

  	
   

  	
   

  	
  [***]

  	
  [***]

  
	
   

  	
   

  	
   

  	
  [***]

  	
  [***]

  
	
  [***]

  	
   

  	
   

  	
  [***]

  	
  [***]

  
	
   

  	
   

  	
   

  	
  [***]

  	
  [***]

  
	
   

  	
   

  	
   

  	
  [***]

  	
  [***]

  



 


36

















 


[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.


 


WNV MEMBER SUPPLEMENT


 


This WNV Member Supplement (this “WNV Member
Supplement”), dated as of July 1, 2003 (the “Effective Date”), is by and
between Chiron Corporation, a Delaware corporation (“Chiron”), and
                       ,
a
                       
(“WNV MEMBER”).


 


RECITALS


 


A.                                   Chiron
and America’s Blood Centers, an association of non-profit community-based blood
centers (“ABC”), have entered into that certain WNV Association Agreement dated
as of July 1, 2003 (the “WNV Association Agreement”);


 


B.                                     Pursuant
to and in accordance with the terms of the WNV Association Agreement, Chiron has
agreed to provide to ABC Members WNV Assays, for use to conduct nucleic acid
amplification tests to detect the presence of certain viruses in blood donation
samples;


 


C.                                     WNV
MEMBER, an ABC Member, wishes to acquire WNV Assays to conduct nucleic acid amplification
tests to detect the presence of certain viruses in blood donation samples, in
accordance with the terms of the WNV Association Agreement, subject to the
following additional terms and conditions.


 


AGREEMENT


 


NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:


 


1.                                       Definitions.  All capitalized terms used but not otherwise
defined in this Member Supplement shall have the meanings set forth in the WNV
Association Agreement.


 


2.                                       WNV
Association Agreement.  The terms
and conditions of the WNV Association Agreement, attached as Exhibit 1
to this WNV Member Supplement, are adopted by the parties hereto and
incorporated by reference.  For the
purpose of the WNV Association Agreement and this WNV Member Supplement, WNV
MEMBER shall be deemed to be a Participating Member.  In the event of any conflict between the terms and conditions of
this WNV Member Supplement and the terms and conditions of the WNV Association
Agreement, the terms and conditions of the WNV Association Agreement govern.


 


1

















 


3.                                       WNV
Assays.  In accordance with Schedule
B of the WNV Association Agreement, Chiron shall supply WNV MEMBER with its
requirements of WNV Assays to permit WNV MEMBER to conduct Pooled Testing or
Single Unit Testing of blood donations in the Territory.  WNV MEMBER’s initial Product Requirement
Forecast is attached as Exhibit 2 to this WNV Member Supplement.


 


4.                                       Compensation.  WNV MEMBER agrees to compensate Chiron,
calculated and paid in accordance with Schedule E of the WNV Association
Agreement.


 


5.                                       Reporting
Obligation; Nature of Testing.  WNV
MEMBER will determine, in its sole discretion, whether to use the WNV Assays
supplied by Chiron hereunder to conduct Pooled Testing, Single Donor Testing or
a blend thereof.  WNV MEMBER shall
report all Reportable Results, in accordance with Section 1 of Schedule E
of the WNV Association Agreement, indicating the portion of such Reportable
Results obtained through Pooled Testing and the portion obtained through Single
Donor Testing.  If WNV MEMBER desires to
change its blend of testing between Pooled Testing and Single Unit Testing or
to modify the pool size, WNV MEMBER and Chiron shall enter into an addendum to
the applicable WNV Member Supplement reflecting any additional instrumentation
or any other amendments that may be applicable by reason of such change,
including without limitation, appropriate adjustment to the Reagent Utilization
Factor.


 


6.                                       Reagent
Utilization Factor.  In accordance
with Schedule E to the WNV Association Agreement, for each [***] increment by which the actual Reagent
Utilization Factor during each Annual RUF Measuring Period exceeds WNV MEMBER’s
Target RUF of [***], WNV MEMBER agrees to pay an
additional amount [***].


 


7.                                       Training.  Chiron agrees to provide the
following training program for WNV MEMBER personnel.


 


7.1                                           On-Site
WNV Assay Training.  Chiron shall
provide, at Chiron’s sole expense, one day, on-site WNV Assay training to
     existing Primary Operators from WNV MEMBER.  Training will include WNV Assay training on
the Blood Screening System.  Upon successful
completion of training, individuals will be certified to perform the WNV Assay.


 


7.2                                           New
Primary Operator Training. Primary Operator training of up to
     WNV MEMBER personnel will be performed by Chiron
support personnel.  Training will
include WNV Assay training on the Blood Screening System and Pooled Training,
if applicable.  Training will include
theory, practical training and operation/maintenance on all required equipment.  Each new Primary Operator will be required
to pass proficiency certification prior to reporting results.


 


2

















 


8.             Insurance.


 


8.1                                           WNV
MEMBER shall obtain and maintain at its sole cost, a policy or policies of
insurance with the following coverages, which shall be in full force and effect
for the term of this Agreement and thereafter through two years following the
termination of the Agreement: a) a Commercial General Liability policy  including Products and Completed Operations
Liability in an amount of not less than [***] combined
single limit for each occurrence; b) Workers’ Compensation coverage with
statutory limits for each jurisdiction where the work required of such party
under this Agreement is performed and an employers’ liability policy with at
least the following limits, [***] per
accident, [***] per disease (policy limit), and [***] disease (each employee); and c) Professional
Liability (Errors & Omissions) Insurance in an amount not less than [***] each claim specifically insuring claims
arising from obligations of WNV MEMBER.


 


8.2                                           WNV
MEMBER shall provide Chiron with certificates of insurance evidencing the
coverage required herein upon execution of this Agreement, and renewal
certificates on request from Chiron. 
WNV MEMBER must notify Chiron within a reasonable time if there is a
material change to any of the insurance policies referred to in this
Section.  Such certificates shall
provide for thirty (30) days prior written notice to the certificate holder in
the event of non-renewal of the policies, cancellation or material change in
the coverage provided.


 


9.                                       Term and Termination. 
This WNV Member Supplement shall become effective on the Effective Date
of this WNV Member Supplement, and shall terminate on the earlier to occur of
(i) the last calendar day within the [***] Testing Month, or (ii) the
termination or expiration of the WNV Association Agreement.  This WNV
Member Supplement may be terminated by written notice to the other party at any
time during  the
term, which termination shall be effective when such termination notice is
received in accordance with Section 11 of this WNV Member Supplement, as
follows:


 


(a)                                  by Chiron if WNV MEMBER fails to observe,
perform or otherwise breaches any of its material covenants, agreements
or obligations under this WNV Member Supplement, provided such failure
continues for a period of thirty (30) days after receipt by WNV MEMBER of an
initial written notice thereof specifying such failure; or


 


(b)                                 by either WNV MEMBER or Chiron if the other party
files a petition in bankruptcy, becomes bankrupt or insolvent or subject to the
reorganization of its business for the benefit of creditors under any law or
regulation relating to bankruptcy, or a receiver is appointed for all or
substantially all of its property or assets, or upon the making by such other
party of a composition with its creditors, or upon the taking by such other
party of any act for the winding up of its business, or upon any 


 


3

















 


governmental authority
exercising any power or authority resulting in the expropriation or
confiscation of all or substantially all of its business and assets; or


 


(c)                                  by WNV MEMBER if the FDA rescinds in full its
recommendation for the screening of human blood, covered and voluntary source
plasma, platelets or other blood products intended for transfusion or other
administration to humans for the presence of the West Nile Virus; or


 


(d)                                 by Chiron ninety (90) days after the FDA approval
of the use of the WNV Assay for the screening of human blood, covered and
voluntary source plasma, platelets or other blood products intended for
transfusion or other administration to humans; or


 


(e)                                  by WNV MEMBER pursuant to, and in accordance
with, Section 8.4 of the WNV Association Agreement; or


 


(f)                                    by WNV MEMBER pursuant to and in accordance with,
Section 8.5 of the WNV Association Agreement; or


 


(g)                                 by
mutual agreement of the parties at any time without penalty.


 


10.           Reimbursement upon Termination.  If
this WNV Member Supplement is terminated [***], other than in accordance with
Section 9(e) or (g) above, then WNV MEMBER shall be obligated to reimburse
Chiron for certain un-recovered costs and expenses related to the development
of the Products in an amount to be calculated in accordance with Section 2 of Schedule E,
of the WNV Association Agreement; provided, however, [***].


 


11.                                 Notices.  Notices, requests, waivers and other
communications made pursuant to this WNV Member Supplement or the WNV
Association Agreement shall be made in accordance with Section 12.6 of the WNV
Association Agreement and, if to WNV MEMBER, shall be addressed to WNV MEMBER
as set forth below:


 


                If to WNV MEMBER:                             WNV
MEMBER


                                                                                                                                                                Attention:
                  ,
                      


                                                                                                                                                                                                                            


                                                                                                                                                                                                ,
            
            


                                                                                                                                                                Telephone:
(      )
                  


 


12.                                 Survivability.  Sections 2, 8 and 10 of this WNV Member
Supplement shall survive any expiration or termination of this WNV Member Supplement.


 


 


[SIGNATURE PAGE FOLLOWS]


 


4

















 


IN WITNESS WHEREOF, the parties hereto, acting through
their duly authorized officers, have executed this Agreement as of the date
first set forth above.


 


	
   

  	
  CHIRON
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jack Goldstein

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WNV
  MEMBER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  



 


5

















 


EXHIBITS


 


1              WNV Association
Agreement


 


2.             Products
Requirements Forecast


 


6

















 


EXHIBIT 2

PRODUCT REQUIREMENTS FORECAST


 


7