EXHIBIT 10.10


 










[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 


LICENSE AGREEMENT


 


This LICENSE AGREEMENT executed this 7 day
of November, 2002 is made by and between BioMedicines Inc., a Delaware
corporation with principal offices located at 2000 Powell Street, Suite 1640,
Emeryville, California 94608 (“BioMedicines”) and Chiron Corporation, a
Delaware corporation with principal offices located at 4560 Horton Street,
Emeryville, California 94608 (“Chiron”).


 


WITNESSETH:


 


WHEREAS, Chiron has the right to grant
licenses under certain patent rights in technology relating to recombinant
human omega interferon (“Omega Interferon” or “rhIFN-?”);


 


WHEREAS, Chiron has agreed to grant to
BioMedicines an exclusive license under such patents on the terms and
conditions set forth herein; and


 


WHEREAS, simultaneously with the execution
of this Agreement, BioMedicines is issuing to Chiron a warrant for shares of
BioMedicines preferred shares (as defined hereinbelow).


 


NOW THEREFORE, in consideration of the
foregoing and the covenants and promises contained in this Agreement and the
Warrant, the parties agree as follows:


 


ARTICLE
1.


 


DEFINITIONS


 


1.01        “Affiliate” shall mean a
corporation or other business entity controlled by, controlling, or under
common control with a Party.  For this
purpose, control shall mean the direct or indirect ownership of at least fifty
percent (50%) of the voting stock or at least fifty percent (50%) interest in
the income of such corporation or other business.


 


1.02        “Agreement” shall mean this
Agreement.


 


1.03        “Chiron Patent Rights”
shall mean collectively Chiron’s right, title and interest in the following
intellectual property rights: (a) the patents listed in Exhibit A and (b) any
and all extensions or restorations by existing or future extension or
restoration mechanisms, including without limitation, supplementary protection
certificates or the equivalent thereof, substitutions, confirmations,
reregistrations, reexaminations, revalidations, reissues, renewals, extensions
or additions to any such foregoing patents.


 


1





















 


1.04        “Confidential Information”
shall mean (a) any information of either Party, which, if written, is marked
confidential by the disclosing Party or, if oral, is reduced to writing, marked
confidential by the disclosing Party, and provided to the non-disclosing Party
within thirty (30) days of the oral disclosure, (b) all information relating to
the prosecution, maintenance or defense of the Chiron Patent Rights and (c) Net
Sales.


 


1.05        “Default” shall mean, with
respect to either Party, such Party shall have failed to perform any material
obligation set forth herein; provided however, that such Party shall have not
brought, or not commenced substantial remedial action to bring, the facts
underlying such representation or warranty into conformance with such
representation or warranty or shall not have performed, or commenced
substantial remedial action to perform, such material obligation, within sixty
(60) days after receipt of written notice from the other Party specifying in
detail the material obligation which has not been performed and requesting that
the failure to perform be remedied within sixty (60) days.


 


1.06        “Effective Date” shall mean
the date upon which the Warrant is issued by BioMedicines to Chiron pursuant to
Section 5.01 hereof.


 


1.07        “First Commercial Sale”
shall mean the initial transfer of a Licensed Product to a Third Party in
exchange for cash or some equivalent to which value can be assigned for
purposes of determining Net Sales.


 


1.08        “Field” shall mean the
treatment, diagnosis or prevention of disease in humans and animals.


 


1.09        “Force Majeure” shall mean
any occurrence beyond the reasonable control of a Party that prevents or
substantially interferes with the performance by the Party of any of its
obligations hereunder, if such occurs by reason of any act of God, flood, fire,
explosion, breakdown of plant, earthquake, strike, lockout, labor dispute,
casualty or accident, or war, revolution, civil commotion, acts of public
enemies, blockage or embargo, or any injunction, law, order, proclamation,
regulation, ordinance, demand or requirement of any government or of any
subdivision, authority or representative or any such government, inability to
procure or use materials, labor, equipment, transportation, or energy
sufficient to meet manufacturing needs without the necessity of allocation, or
any other cause whatsoever, whether similar or dissimilar to those above
enumerated, beyond the reasonable control of such Party, if and only if the
Party affected shall have used reasonable efforts to avoid such occurrence and
to remedy it promptly if it shall have occurred and shall have notified the
other Party in writing of the reasons for the delay or default.


 


1.10        “GAAP” shall mean United
States generally accepted accounting principles consistently applied.


 


1.11        “Licensed Products” shall
mean any and all rhIFN-? healthcare products, the manufacture, use, sale or
offer to sell of which would, but for the licenses granted in this Agreement,
infringe one or more of the Valid Claims of the Chiron Patent Rights.


 


1.12        “Net Sales” shall mean all
revenues recognized in accordance with GAAP from the sale of Licensed Products
by BioMedicines, its Affiliates or sublicensees to Third Parties, less returns


 










[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 


2





















 


and allowances (actually
paid and allowed, including, but not limited to, prompt payment and volume
discounts, charge backs from wholesalers and other allowances granted to
customers, whether in cash or trade), freight, packing, insurance, rebates
actually paid and allowed, and sales and other taxes based on sales prices when
included in gross sales, but not including taxes when assessed on income
derived from such sales.


 


1.13        “Party” shall mean
BioMedicines or Chiron, as the case may be, and “Parties”
shall mean BioMedicines and Chiron collectively.


 


1.14        “Person” shall mean an
individual, a partnership, a joint venture, a corporation, a trust, an estate,
an unincorporated organization, or any other entity, or a government or any
department or agency thereof.


 


1.15        “Territory” shall mean the
United States of America.


 


1.16        “Third Party” shall mean
any Person other than Chiron and BioMedicines.


 


1.17        “Valid Claim” shall mean a
claim of an issued and unexpired patent included within the Chiron Patent
Rights which has not been held permanently revoked, unenforceable or invalid by
a decision of a court or other governmental agency of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal, and which has
not been disclaimed, denied or admitted to be invalid or unenforceable through
reissue or disclaimer or otherwise.


 


1.18        “Warrant” shall have the
meaning set forth in Section 5.01 hereof.


 


ARTICLE
2.


 


LICENSE
GRANT


 


2.01        License Grant to BioMedicines.


 


(a)           Grant
to BioMedicines.  On the terms and
conditions set forth herein, Chiron hereby grants to BioMedicines and its
Affiliates an exclusive license, with the right to grant sublicenses solely
pursuant to Section 2.01(b), under the Chiron Patent Rights to make, have made,
use, have used, sell, have sold and offer for sale Licensed Products in the
Field anywhere in the Territory.


 


(b)           Sublicenses.  BioMedicines shall not have the right to
grant sublicenses under this Agreement without the prior written consent of
Chiron, such consent not to be unreasonably withheld; provided however, that
Chiron’s consent to any sublicense hereunder is subject to the following:


 


(i)            BioMedicines
agrees that it shall require that its sublicensees be bound and be fully
responsible for complying with all obligations hereunder;


 


(ii)           BioMedicines
agrees not receive from its sublicensees anything of value in lieu of cash
consideration without the express prior written consent of Chiron.


 










[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 


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Furthermore, BioMedicines agrees to provide to Chiron
a fully executed copy of any sublicense agreement within [*]
days of execution.


 


Any and all payments BioMedicines receives as
consideration for a sublicense granted by BioMedicines pursuant to this Section
2.01(b) shall be treated as Net Sales under this Agreement.


 


(c)           No
Other Licenses.  Other than to Chiron
Patent Rights, this Agreement confers no license or rights by implication,
estoppel or otherwise to BioMedicines under any patent applications or patents
of Chiron regardless of whether such patents are dominant or subordinate to
Chiron Patent Rights.


 


2.02        Chiron Reserved Rights. 
During the term of this Agreement, Chiron shall have an unrestricted
right to use the Chiron Patent Rights for any research or commercial purpose
other than the development and commercialization of Licensed Products.


 


ARTICLE
3.


 


REPRESENTATIONS,
WARRANTIES AND COVENANTS;

LIMITATION OF LIABILITY


 


3.01        Representations and Warranties of
BioMedicines.


 


(a)           Corporate
Power.  BioMedicines is duly
organized and validly existing under the laws of the State of Delaware and has
full corporate power and authority to enter into this Agreement and to carry
out the provisions hereof.


 


(b)           Due
Authorization.  BioMedicines is duly
authorized to execute and deliver this Agreement and to perform its obligations
hereunder.  The Person executing this
Agreement on BioMedicines’ behalf has been duly authorized to do so by all
requisite corporate action.


 


(c)           Binding
Agreement.  This Agreement is a legal
and valid obligation binding upon BioMedicines, and enforceable in accordance
with its terms.  The execution, delivery
and performance of this Agreement by BioMedicines does not conflict with any
material agreement, instrument or understanding, oral or written, to which it
is a party or by which it may be bound, nor violate any material law or
regulation of any court, governmental body or administrative or other agency
having jurisdiction over it.


 


3.02        Representations and Warranties of Chiron.


 


(a)           Corporate
Power.  Chiron is duly organized and
validly existing under the laws of the State of Delaware and has full corporate
power and authority to enter into this Agreement and carry out the provisions
hereof.


 


(b)           Due
Authorization.  Chiron is duly
authorized to execute and deliver this Agreement and to perform its obligations
hereunder.  The Person executing this
Agreement on Chiron’s behalf has been duly authorized to do so by all requisite
corporate action.


 










[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 


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(c)           Binding
Agreement.  This Agreement is a legal
and valid obligation binding upon Chiron, and enforceable in accordance with
its terms.  The execution, delivery and
performance of this Agreement by Chiron does not conflict with any material
agreement, instrument or understanding, oral or written, to which it is a party
or by which it may be bound, nor violate any material law or regulation of any
court, governmental body or administrative or other agency having jurisdiction
over it.


 


(d)           No
Other Warranties.  Chiron offers as
warranties the statements set forth herein. 
Chiron makes no other warranties. 
Chiron does not warrant the validity or enforceability of the Chiron
Patent Rights and makes no representations whatsoever with regard to the scope
of the Chiron Patent Rights, or that the Chiron Patent Rights may be exploited
without infringing other patents or other intellectual property rights of Third
Parties.  CHIRON MAKES NO WARRANTIES,
EXPRESSED OR IMPLIED, OF THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR INFRINGEMENT OF ANY SUBJECT MATTER DEFINED BY THE CLAIMS OF THE
CHIRON PATENT RIGHTS. Chiron does not represent that it will commence legal
actions of any kind against third parties for infringement of any of the Chiron
Patent Rights.


 


3.03        Limitation of Liability. 
IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR INDIRECT DAMAGES ARISING IN ANY WAY OUT OF THIS AGREEMENT,
HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY. THIS LIMITATION WILL APPLY EVEN
IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE AND
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED WARRANTY
PROVIDED HEREIN.


 


ARTICLE
4.


 


DEVELOPMENT
AND COMMERCIALIZATION


 


4.01        Diligence.  BioMedicines, in its
sole discretion, shall have the right to make all decisions relating to the
development and commercialization of Licensed Products including, but not
limited to, all decisions relating to the research, pre-clinical, and clinical
development of Licensed Products, and the promotion, advertising, marketing and
pricing of Licensed Products. 
BioMedicines shall use its commercially reasonable efforts to actively
develop and market at least one Licensed Product in the Territory as
expeditiously as possible.


 


4.02        Diligence Reports. 
BioMedicines shall deliver to Chiron, on [*]
until the [*], a reasonably detailed report of
BioMedicines development activities for the prior [*]
period.


 


ARTICLE
5.


 


CONSIDERATION


 


5.01        Warrant.  In consideration for
the grant of the rights and licenses set forth in Section 2.01, in addition to
the other payments set forth in this Article 5, BioMedicines shall issue to


 










[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 


5





















 


Chiron within thirty (30)
days of the Effective Date of this Agreement, a warrant for 150,000 shares of
BioMedicines Common Stock in the form of Exhibit B hereto (the “Warrant”).


 


5.02        Royalties.


 


(a)           In
consideration for the grant of the rights and licenses set forth in Section
2.01, in addition to the other payments set forth in this Article 5,
BioMedicines shall pay to Chiron in immediately available funds a royalty of [*] on aggregate Net Sales.


 


(b)           Royalties
under this Section 5.03 shall be payable on a Licensed Product-by-Licensed
Product basis, and shall be imposed only once with respect to any sale of the
same unit of Licensed Product by BioMedicines or its sublicensees, and no
multiple royalties shall be payable by BioMedicines because any Licensed
Product is covered by more than one of the Chiron Patent Rights or one or more
claims of the Chiron Patent Rights.


 


(c)           BioMedicines’
obligation to pay royalties to Chiron shall expire upon the expiration of the
last to expire of the Chiron Patent Rights.


 


5.03        Payment of Royalties; Reports.


 


(a)           First
Commercial Sale.  BioMedicines shall
report to Chiron the date of First Commercial Sale of a Licensed Product within
thirty (30) days of such occurrence.


 


(b)           Royalty
Statements.  BioMedicines shall
deliver to Chiron, within sixty (60) days after the end of each calendar
quarter, a statement setting forth the Net Sales of Licensed Products during
such calendar quarter (including the country of manufacture and an itemized
calculation of the amount of Net Sales in the United States, its territories
and possessions) and the royalties due hereunder.  Each such statement shall be accompanied by a
remittance of the royalties in United States Dollars due for such calendar
quarter.  Net Sales and royalties
computations contained in any such statement shall be certified by BioMedicines
as accurate to the best of its ability consistent with BioMedicines’ standard
practices in performing such computations.


 


(c)           Manner
of Payment.  All payments hereunder
shall be in United States dollars in immediately available funds and shall be
made by wire transfer to such bank account as may be designated in writing from
time to time by Chiron.


 


(d)           Currency.  If Net Sales are in a currency other than
United States Dollars, the Net Sales, for the purpose of calculating payments
hereunder shall be determined in the applicable foreign currency and then
converted into United States Dollars at the end of each calendar quarter using
an exchange rate equal to the simple average of the daily “U.S. Dollar Noon
Buying Rates,” on each business day of the applicable calendar quarter, as
published at 12:00pm daily New York time by the Federal Reserve Bank of New
York (available on Bloomberg L.P. and Reuters). 
Any loss of exchange, value, taxes or other expenses incurred in the
transfer or conversion to U.S. dollars shall be paid entirely by BioMedicines
for the currency conversion of Net Sales.


 










[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 


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(e)           Taxes.  All taxes levied on account of royalties
payable to BioMedicines hereunder shall be paid by BioMedicines.  In the event laws or regulations require
withholding of taxes from any payment of royalties, the taxes will be deducted
by BioMedicines from the royalty payment and will be paid by BioMedicines to
the proper taxing authority. 
BioMedicines will furnish Chiron with the original copies of all
official receipts for such taxes.  In the
event of any such withholding, the Parties agree to confer regarding other
measures to minimize such withholding.


 


(f)            Overdue
Payments.  Any overdue payments under
this Agreement, including without limitation, royalty payments made hereunder
after the date such payment is due, shall bear interest at the lesser of [*] above the [*] as
published in the Wall Street Journal as of the date such payment was due, or
(b) the maximum rate permitted by applicable law (the “Interest Rate”).  The Interest Rate shall be calculated based
on a 360-day year from the date payment was due until received by Chiron.


 


ARTICLE
6.


 


RECORDS;
AUDIT


 


6.01        Record Retention. 
BioMedicines shall keep complete and accurate records in sufficient
detail to permit Chiron to confirm the accuracy of reported royalties
hereunder, including without limitation, general accounting ledgers,
invoice/sale registers, original invoices and shipping documents, tax returns,
inventory and manufacturing records, sublicense and distributor agreements and
price lists, product catalogs and other marketing materials.  Such records shall be retained by
BioMedicines for at least the longer of one (1) year after completion of the
audit thereof (if an audit has been requested) or three (3) years following the
calendar year in which any such payments were made hereunder.


 


6.02        Royalty Audit. 
Once per [*] period and once within [*] after termination of this Agreement, BioMedicines agrees
to make its records for payment of royalties due available for examination by
Chiron during normal business hours. 
Chiron shall have the option to engage, at its own expense, an
independent certified public accountant reasonably acceptable to BioMedicines
to examine, in confidence, BioMedicines’ records as may be necessary to
determine the correctness of any payment of royalties hereunder made by
BioMedicines.  The report of such
accountant shall be limited to a certificate verifying any report made or
payment submitted by BioMedicines during such period but may include, in the
event the accountant shall be unable to verify the correctness of any such
payment, information relating to why such payment is unverifiable.  All information contained in any such
certificate shall be deemed to be the Confidential Information of BioMedicines
hereunder.  If any audit performed under
this Section 6.02 shall indicate that any payment due hereunder was underpaid,
BioMedicines shall promptly pay the amount of any underpayment.  If any audit performed under this Section
6.02 shall indicate that any payment hereunder was in error to Chiron’s
detriment by more than [*] for any [*] period, BioMedicines shall pay the cost of the audit.


 










[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 


7





















 


ARTICLE
7.


 


PATENTS


 


7.01        Patent Prosecution and Maintenance.


 


During
the term of this Agreement, Chiron, using its sole business judgment, and at
its expense, shall have the right to maintain and prosecute the Chiron Patent
Rights.  If Chiron elects to not
prosecute, maintain, or defend any patent within Chiron Patent Rights, Chiron
shall timely notify BioMedicines of such decision, and BioMedicines may, at
BioMedicines’ sole expense (including attorney’s fees) elect to prosecute,
maintain, and/or defend such patent upon providing written notice of such
election to Chiron.


 


7.02        Enforcement
of Chiron Patent Rights.


 


(a)           Notification
of Infringement.  If either Party
learns of an infringement by a Third Party of the Chiron Patent Rights, such
Party shall promptly notify the other Party and shall provide such other Party
with available evidence of such infringement.


 


(b)           Enforcement
by Chiron.  Chiron shall have the
first right to elect to enforce the Chiron Patent Rights against Third
Parties.  In the event Chiron shall so
elect, Chiron shall determine the strategy and BioMedicines shall reasonably
assist and, at Chiron’s request, cooperate with Chiron in any such
enforcement.  Chiron shall bear all
associated costs and expenses (including attorneys’ fees).  In the event damages or recoveries directly
related to Omega Interferon or the Licensed Products are awarded in such
action, such amounts shall first be applied to reimburse Chiron and
BioMedicines for any out of pocket costs and expenses (including attorney’s
fees) incurred in connection with such action, and the remainder shall be
shared [*] by the Parties.


 


(c)           Enforcement
by BioMedicines.  If within [*] days after written request by BioMedicines, Chiron
elects not to enforce the Chiron Patent Rights against any Third Party
infringing in the Field, BioMedicines shall have the right, but not the
obligation, to enforce the Chiron Patent Rights against such Third Party.  BioMedicines shall consult with Chiron and
keep Chiron regularly advised of BioMedicines’ strategies, plans, progress and
results of any such enforcement action. 
BioMedicines shall bear all associated costs and expenses (including
attorneys’ fees).  In the event damages
or recoveries shall be awarded in such action, such amounts shall be applied
first to reimburse BioMedicines and Chiron for any out of pocket costs incurred
in connection with such action. 
Remaining amounts will be retained by BioMedicines and treated as Net
Sales in the year in which such amounts are received by BioMedicines for
purposes of determination of royalties payable by BioMedicines to Chiron.


 


7.03        Third
Party Claims.  Each Party shall
promptly notify the other upon becoming aware of any Third Party claim or
action against BioMedicines for infringement of Third Party patent rights
through the use of the Chiron Patent Rights in the making, using, selling or
importing of Licensed Products.  Chiron
shall have the right to defend the Chiron Patent Rights against Third Party
claims that the Chiron Patent Rights are invalid or unenforceable and shall
bear all associated costs and expenses (including attorneys’ fees) and pay all
damages and settlement amounts.  Chiron
shall consult with BioMedicines and keep BioMedicines regularly advised of
Chiron’s strategies, plans, progress and results of any such defense.  In the event that Chiron shall decide not to
defend Chiron Patent Rights, it shall notify BioMedicines of such intention
without delay and in sufficient time to enable BioMedicines to defend the
Chiron Patent Rights


 










[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 


8










 










 


ARTICLE 8.


 


CONFIDENTIALITY


 


8.01        Confidentiality.  For the term of this Agreement and any
extensions and for a period of [*] years
thereafter, each Party agrees to keep confidential and not publish or otherwise
disclose or use for any purpose other than as provided for in this Agreement,
any Confidential Information disclosed to it by the other Party, except that
each Party shall not be prevented from disclosing information:


 


(a)           which
it can demonstrate by written records was previously known to it;


 


(b)           which
is, or becomes in the future, public knowledge through no fault or omission
attributable to the receiving Party;


 


(c)           which
is lawfully obtained without restriction by the receiving party from sources
independent of the disclosing Party without breach of a confidentiality
obligation; or


 


(d)           which
was independently discovered or developed by the disclosing Party without
access to or the use of the other Party’s Confidential Information, as can be
documented by written records created at the time of such independent discovery
or development.


 


8.02        This
Agreement.  The Parties agree
that the material terms of the Agreement and the Warrant shall be considered
Confidential Information of both Parties. 
Notwithstanding the foregoing, (i) the Parties shall be permitted to
disclose in filings with the Securities Exchange Commission (“SEC”) those terms
of this Agreement an the Warrant required to be disclosed under law or
regulation; provided that the Parties shall consult with one another concerning
which terms of this Agreement and the Warrant shall be requested to be redacted
in any SEC filings, and provided however, that in the event of a filing each
party shall seek confidential treatment in its SEC filings for the financial
terms of this Agreement and the Warrant, (ii) each Party shall have the right
to disclose in confidence the terms of the Agreement to parties retained by
such Party to perform legal, accounting or similar services and who have a need
to know such terms in order to provide such services and (iii) at the request
of either Party, the Parties shall mutually agree on a press release to be
issued upon execution of this Agreement or reasonably soon thereafter.


 


8.03        Authorized
Disclosure.


 


(a)           Each
Party may disclose Confidential Information belonging to the other Party to the
extent such disclosure is reasonably necessary in the following:


 


(i)            enforcing
and or defending rights or obligations under this Agreement;  and


 


(ii)           complying
with any court order;


 


provided however that the Party required to or
intending to disclose the other Party’s Confidential Information under this
Section 8.03 shall have first given prompt notice to the other


 










[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 


9





















 


Party to enable it to seek any available exemptions
from or limitations on such disclosure, and shall reasonably cooperate in such
efforts by the other Party.


 


(b)           Notwithstanding
the foregoing, in the event a Party is required to make a disclosure of the
other Party’s Confidential Information pursuant to this Section 8.03, it will
give reasonable advance notice to the other Party of such disclosure and use
reasonable commercial efforts to secure confidential treatment of such
information.  In any event, the Parties
agree to take all reasonable action to avoid disclosure of Confidential
Information hereunder.


 


ARTICLE 9.


 


INDEMNIFICATION


 


9.01        Indemnification
by BioMedicines.


 


(a)           BioMedicines
shall indemnify, defend and hold harmless Chiron, its officers, directors,
employees, stockholders, agents and representatives (collectively, “Chiron
Indemnitees”) from any and all losses, demands, damages, liabilities, costs and
expenses, including reasonable attorneys’ fees (collectively, “Losses”),
arising out of or relating to the research, development, marketing, design,
manufacture, distribution, use and/or sale of Licensed Products by, on behalf
of, or under authority of, BioMedicines or its sublicensees.  Notwithstanding the foregoing, no Chiron
Indemnitee shall be entitled to indemnification under this Section 9.01 against
any Losses arising out of such Chiron Indemnitee’s negligence or willful
misconduct.


 


(b)           Each
Chiron Indemnitee shall notify BioMedicines in writing promptly upon becoming
aware of any pending or threatened claim, suit, proceeding or other action (“Claim”)
to which such indemnification may apply. 
Failure to provide such notice shall constitute a waiver of BioMedicines’
indemnity obligations hereunder if and to the extent that BioMedicines is
materially damaged thereby.  BioMedicines
shall have the right to assume and control the defense of the Claim at its own
expense.  If the right to assume and
control the defense is exercised, the Chiron Indemnitee shall have the right to
participate in, but not control, such defense at its own expense, and
BioMedicines’ indemnity obligations shall be deemed not to include attorneys’
fees and litigation expenses incurred by the Chiron Indemnitee after the
assumption of the defense by BioMedicines. 
If BioMedicines does not assume the defense of the Claim, the Chiron
Indemnitee may defend the Claim, at BioMedicines’ expense; provided that the
Chiron Indemnitee shall not settle or compromise the Claim without the consent
of BioMedicines, which consent shall not be unreasonably withheld.  The Chiron Indemnitee shall cooperate with BioMedicines
and will make available to BioMedicines all pertinent information under the
Chiron Indemnitee’s control.


 


9.02        Indemnification
by Chiron.


 


(a)           Chiron
shall indemnify, defend and hold harmless BioMedicines, its officers,
directors, employees, stockholders, agents and representatives (collectively, “BioMedicines
Indemnitees”) from any and all losses, demands, damages, liabilities, costs and
expenses, including reasonable attorneys’ fees (collectively, “Losses”),
arising out of or relating to the


 










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warranties and
representations made by Chiron in the Agreement.  Notwithstanding the foregoing, no
BioMedicines Indemnitee shall be entitled to indemnification under this Section
9.02 against any Losses arising out of such BioMedicines Indemnitee’s
negligence or willful misconduct.


 


(b)           Each
BioMedicines Indemnitee shall notify Chiron in writing promptly upon becoming
aware of any pending or threatened claim, suit, proceeding or other action (“Claim”)
to which such indemnification may apply. 
Failure to provide such notice shall constitute a waiver of Chiron’s
indemnity obligations hereunder if and to the extent that BioMedicines is
materially damaged thereby.  Chiron shall
have the right to assume and control the defense of the Claim at its own
expense.  If the right to assume and
control the defense is exercised, the BioMedicines Indemnitee shall have the
right to participate in, but not control, such defense at its own expense, and Chiron’s
indemnity obligations shall be deemed not to include attorneys’ fees and
litigation expenses incurred by the BioMedicines Indemnitee after the
assumption of the defense by Chiron.  If
Chiron does not assume the defense of the Claim, the BioMedicines Indemnitee
may defend the Claim, at Chiron’s expense; provided that the BioMedicines
Indemnitee shall not settle or compromise the Claim without the consent of
Chiron, which consent shall not be unreasonably withheld.  The BioMedicines Indemnitee shall cooperate
with Chiron and will make available to Chiron all pertinent information under
the BioMedicines Indemnitee’s control.


 


9.03        Damage.  Notwithstanding anything to the contrary in
this Agreement, in no event shall either Party be responsible for any
incidental or consequential damages, including without limitation lost profits
or opportunities, and/or damages in connection with Default and/or termination
of this Agreement, incurred by the other Party or any indemnitee hereunder.


 


9.04        Insurance.  Each party shall
maintain, through self-insurance or commercially-placed insurance, adequate
coverage for the indemnification obligations set forth herein, consistent with
pharmaceutical industry practices.


 


ARTICLE
10.


 


TERMINATION


 


10.01      Term.  This Agreement shall
commence on the Effective Date and automatically terminate upon the expiration
of the last to expire of Chiron Patent Rights in the Territory.


 


10.02      Termination by BioMedicines.  BioMedicines
may terminate, in whole or in part, any of the licenses granted by Chiron to
BioMedicines under Chiron Patent Rights with ninety (90) days’ prior written
notice to Chiron.  All licenses so
terminated shall revert back to Chiron.


 


10.03      Termination for Discontinuation of
Development.  In the event that BioMedicines and its
sublicensees have discontinued all development and commercialization activities
relating to Licensed Products, this Agreement shall terminate and all licenses
under the Chiron Patent Rights granted to BioMedicines and its sublicensees
hereunder shall revert to Chiron thirty (30) days thereafter.


 










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10.04      Termination for Default. 
In the event of a Default by BioMedicines in its capacity as a licensee
under this Agreement, Chiron may terminate the licenses under the Chiron Patent
Rights granted to BioMedicines and its sublicensees hereunder by written notice
to BioMedicines, and upon BioMedicines’ receipt of such notice, all licenses
under the Chiron Patent Rights granted to BioMedicines and its sublicensees
hereunder shall revert to Chiron.


 


10.05      Insolvency
or Bankruptcy.


 


(a)           Rights
in Bankruptcy.  All rights and
licenses granted under or pursuant to this Agreement by the Parties are, and
shall otherwise be deemed to be, for purposes of Section 365(n) of the United
States Bankruptcy Code, licenses of rights to “intellectual property” as
defined under Section 101 of the United States Bankruptcy Code.  The Parties agree that each Party, in its
capacity as a licensee of such rights under this Agreement, shall retain all
licenses granted to it hereunder and may fully exercise all of its rights and
elections under the United States Bankruptcy Code, subject to payment to the
other Party of any royalties or other payments due pursuant to Article 5.  The Parties further agree that, in the event
of commencement of a bankruptcy proceeding by or against either Party under the
United States Bankruptcy Code, the Party hereto which is not a party to such
proceeding shall be entitled to a complete duplicate of (or complete access to,
as appropriate) any such intellectual property, and all embodiments of such
intellectual property, and same, if not already in its possession, shall be
promptly delivered to it (i) upon any such commencement of a bankruptcy
proceeding upon its written request therefore, unless the Party subject to such
proceeding elects to continue to perform all of its obligations under this
Agreement, or (ii) if not delivered under (i) above, upon the rejection of this
Agreement by or on behalf of the Party subject to such proceeding upon written
request therefore by any non-subject Party.


 


10.06      Surviving
Obligations.  The provisions of
Articles 1, 3, 6, 8, 9, 11 and Sections 5.04 (c) and (g) and Section 10.7 shall
survive any termination or expiration of this Agreement.  Termination, relinquishment or expiration of
this Agreement for any reason shall be without prejudice to any rights which
shall have accrued to the benefit of either Party prior to such termination,
relinquishment or expiration.


 


10.07      Effects of Termination. 
Upon termination of this Agreement in its entirety or otherwise with
respect to rights in any Licensed Product in accordance with Section 10.02,
BioMedicines and its sublicensees shall thereupon have the right to sell that
amount of any such Licensed Product that BioMedicines and its sublicensees then
have on hand, provided however, that with respect to any such Licensed
Product for which any payment is due under Article 5 hereof, BioMedicines shall
make such payment to Chiron as required therein.


 


ARTICLE 11.


 


MISCELLANEOUS PROVISIONS


 


11.01      Assignment.  Neither this Agreement nor any interest
hereunder shall be assignable by either Party without the prior written consent
of the other Party; provided that either Party may assign this Agreement and
all of its rights and obligations hereunder, without such consent, to an entity
which acquires all or substantially all of the research program or product
rights to which


 










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this Agreement pertains,
whether by merger, consolidation, reorganization, acquisition, sale, license or
otherwise.  This Agreement shall be
binding upon the successors and permitted assigns of the Parties, and the name
of a Party appearing herein shall be deemed to include the names of such Party’s
successors and permitted assigns to the extent necessary to carry out the
intent of this Agreement.  Any assignment
not in accordance with this Section 11.01 shall be void.


 


11.02      Further Actions. 
Each Party agrees to execute, acknowledge and deliver such further
instruments, and to do all such other acts, as may be necessary or appropriate
in order to carry out the purposes and intent of this Agreement.


 


11.03      Force Majeure. 
Neither Party shall be liable to the other for loss or damages, nor
shall have any right to terminate this Agreement for any default or delay
attributable to any Force Majeure, if the Party affected shall give prompt
notice of any such cause to the other Party.  The Party giving such notice shall thereupon
be excused from such of its obligations hereunder as it is thereby disabled
from performing for so long as it is so disabled, provided however, that such
affected Party commences and continues to take reasonable and diligent actions
to cure such cause.


 


11.04      Notices.  All notices and other communications required
by this Agreement shall be in writing and shall be deemed given if delivered
personally or by facsimile transmission (receipt verified), mailed by
registered or certified mail (return receipt requested), postage prepaid, or
sent by express courier service, to the parties at the following addresses (or
at such other address for a Party as shall be specified by like notice,
provided however, that notices of a change of address shall be effective only
upon receipt thereof):


 


If to BioMedicines, addressed to:


 


BioMedicines Inc.


2000 Powell Street, Suite 1640


Emeryville, California 94608


Attention: Mark Moran, M.D.


Facsimile: (510) 652-2623


 


If to Chiron addressed to:


 


Chiron Corporation


4560 Horton Street


Emeryville, California 94608


Attention: Chief Executive Officer


Facsimile: (510) 655-9910


 


With a copy to: General Counsel


Facsimile: (510) 654-5360


 


11.05      Amendment.  No amendment, modification or supplement of
any provision of this Agreement shall be valid or effective unless made in
writing and signed by a duly authorized officer of each Party.


 










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11.06      Waiver.  No provision of the
Agreement shall be waived by any act, omission or knowledge of any Party or its
agents or employees, except by an instrument in writing expressly waiving such
provision and signed by a duly authorized officer of the waiving Party.


 


11.07      Counterparts. 
This Agreement may be executed in any number of counterparts, each of
which need not contain the signature of more than one Party, but all such
counterparts taken together shall constitute one and the same agreement.


 


11.08      Descriptive Headings. 
The descriptive headings of this Agreement are for convenience only, and
shall be of no force or effect in construing or interpreting any of the
provisions of this Agreement.


 


11.09      Governing
Law.  This Agreement shall be
governed by and interpreted in accordance with the substantive laws of the
State of California, without reference to the conflicts of law principles
thereof, and the Parties hereby submit to the exclusive jurisdiction of the
California courts, both state and federal.


 


11.10      Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement. 
Invalidity, non-enforceability or expiration of any or all of the Chiron
Patent Rights shall not affect BioMedicines’ license rights in and to the
remaining Chiron Patent Rights.


 


11.11      Entire
Agreement of the Parties.  This
Agreement (including all Exhibits attached hereto, which are incorporated herein
by reference) constitutes and contains the complete, final and exclusive
understanding and agreement of the Parties and cancels and supersedes any and
all prior negotiations, correspondence, representations, promises,
understandings and agreements, whether oral or written, between the Parties
respecting the subject matter thereof.


 


11.12      Dispute Resolution. 
The Parties agree that in the event of a dispute between them arising
from, concerning or in any way relating to this Agreement, the Parties shall
undertake good faith efforts to resolve any such dispute in good faith.  In the event the Parties shall be unable to
resolve any such dispute, the matter shall be first referred to the general
counsel for each Party for further review and resolution and, if necessary,
then to the chief executive officer of each Party.  If after such efforts the Parties are unable
to resolve such dispute, a Party may seek any remedy available under applicable
law.


 


11.13      Independent Contractors. 
The relationship between Chiron and BioMedicines created by this
Agreement is one of independent contractors, and neither Party shall have the
power or authority to bind or obligate the other except as expressly set forth
in this Agreement.


 


11.14      Use of Name.  No right, express or implied,
is granted to either Party by this Agreement to use in any manner any trademark
or trade name of the other Party, including the names “BioMedicines” and “Chiron”,
without the prior written consent of the owning Party.


 










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11.15      Further Actions. 
Each Party agrees to execute, acknowledge and deliver such further
instruments, and to do all such other acts, as may be necessary or appropriate
in order to carry out the purposes and intent of this Agreement.


 










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IN
WITNESS WHEREOF, the Parties hereto have executed this
Agreement in duplicate by their respective duly authorized officers.


 


	
  BIOMEDICINES INC.

  
	
   

  	
   

  
	
   

  	
  /s/ S. M. Moran

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Mark Moran, M.D.

  
	
   

  	
   

  
	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  CHIRON CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Craig A. Wheeler

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Craig A. Wheeler

  
	
   

  	
   

  
	
  Title:

  	
  Vice President

  and President, Chiron BioPharmaceuticals

  



 










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EXHIBIT A


 


Chiron Patent Rights


 


[*]


 










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THIS WARRANT AND THE UNDERLYING
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”).  THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.


 


BIOMEDICINES, INC.


 


WARRANT TO PURCHASE COMMON STOCK


 


[*]


 


THIS CERTIFIES THAT,
for value received, CHIRON
CORPORATION, a Delaware corporation, (the “Holder” or “Purchaser”),
is entitled to subscribe for and purchase at the Exercise Price (defined below)
from BIOMEDICINES, INC., a Delaware corporation, with
its principal office at 2000 Powell Street, Suite 1640, Emeryville, California
94608 (the “Company”) up to one hundred fifty thousand
(150,000) shares of Common Stock of the Company (other “Common
Stock”), as provided herein.


[ * ]


“Exercise Price” shall mean $6.00 per share, subject
to adjustment pursuant to Section 5.1 below.


[ * ]










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INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.