Document:

Exhibit
10.1

 

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is effective as of this 14th day of
April 2006 by and between LIPID SCIENCES, INC., a Delaware corporation (the “Company”), and S. LEWIS MEYER, Ph.D., an individual (the “Employee”).

W I T N E S S E T H:

WHEREAS, the Company desires to continue to employ the
Employee in the manner hereinafter specified and to make provision for payment
of reasonable compensation to the Employee for such services, and the Employee
is willing to be employed by the Company to perform the duties incident to such
employment upon the terms and conditions hereinafter set forth; and

WHEREAS, the parties desire to enter into this Agreement as
of the Effective Date (as hereinafter defined), setting forth the terms and
conditions of the employment relationship of the Employee with the Company
during the Term (as hereinafter defined).

NOW, THEREFORE, in consideration of the foregoing premises, the
mutual covenants, terms and conditions set forth herein, and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:

1.             EMPLOYMENT AND DUTIES

(a)           General.  Effective as of the Effective Date, the
Company hereby employs the Employee as Chief Executive Officer and President of
the Company and the Employee agrees upon the terms and conditions herein set
forth to be employed by the Company.  The
Employee shall diligently perform all of the duties normally accorded to such position
and shall report directly to the Board of Directors of the Company (the “Board”).

(b)           Services.  During the Term, the Employee shall well and
faithfully serve the Company, and shall devote substantially all of his
business time and attention to the performance of the duties of such employment
and the advancement of the best interests of the Company and shall not,
directly or indirectly, render services to any other person or organization for
which he receives compensation without the prior written approval of the Board.  No such approval shall be required in
connection with services the Employee performs with respect to other persons
and entities, including, but not limited, to Lexrite Labs and the Ambient
Capital Group, provided that the aggregate amount of time spent on these
services does not exceed a maximum of eight hours per week and that such
services do not contravene the provisions of Section 5 hereof.  The Employee hereby agrees to refrain from
engaging in any activity that does, shall or could reasonably be deemed to
conflict with the best interests of the Company.

(c)           Location of Employment.  The Employee’s place of employment shall be
at the office of the Company located in Pleasanton, California, but the
Employee shall travel to the extent and to the places necessary for the performance
of his duties to the Company.

 

 

2.             TERM OF EMPLOYMENT

The term of the Employee’s employment under this
Agreement shall commence on April 14, 2006 (the “Effective
Date”) and continue until the second anniversary thereof (the “Term”).

3.             COMPENSATION AND OTHER BENEFITS

Subject to the provisions of this Agreement including
without limitation the termination provisions contained in Section 4, the
Company shall pay and provide the following compensation and other benefits to
the Employee during the Term as compensation for all services rendered
hereunder:

(a)           Salary.  The Company shall pay to the Employee a
salary (the “Salary”) at a rate of
$290,000 per annum, payable to the Employee in accordance with the normal
payroll practices of the Company as are in effect from time to time.  The amount of the Salary shall be reviewed
annually by the Compensation Committee of the Board and may be increased on the
basis of the review.

(b)           Annual Performance Bonus.  The Employee shall be eligible to earn an
annual discretionary cash bonus (the “Annual
Bonus”) in an amount and subject to such other terms and conditions,
including performance objectives, as are determined, by the Board.

(c)           Expenses.  The Company shall pay or reimburse the
Employee for all reasonable out-of-pocket expenses incurred by the Employee in
connection with his employment hereunder upon submission of appropriate
documentation or receipts in accordance with the policies and procedures of the
Company as are in effect from time to time. 
No expense payment or reimbursement under this Section 3(d) shall be “grossed
up” or increased to take into account any tax liability incurred by the
Employee as a result of such payment or reimbursement.

(d)           Retirement, Welfare and Fringe
Benefits.  The Employee shall be
eligible to participate in the retirement, medical, disability and life
insurance plans applicable to senior officers of the Company generally in
accordance with the terms of such plans as in effect from time to time.  The foregoing shall not be construed to limit
the ability of the Company or any of its affiliates to amend, modify or
terminate any such benefit plans, policies or programs at any time and from
time to time.

(e)           Vacation.  The Employee shall be entitled to annual
vacation in accordance with the Company’s policies applicable to senior
officers of the Company generally as are in effect from time to time.

4.             TERMINATION OF EMPLOYMENT

Subject to the notice and other provisions of this
Section 4, the Company shall have the right to terminate the Employee’s
employment hereunder, and the Employee shall have the right to resign, at any
time for any reason or for no stated reason.

(a)           Termination for Cause or
Resignation.  (i) If, prior to
the expiration of the Term, the Employee’s employment is terminated by the
Company for “Cause” (as hereinafter 

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defined) or if the Employee
resigns from his employment hereunder, the Employee shall be entitled to
payment of (A) his Salary accrued up to and including the date of termination
or resignation, and (B) any unreimbursed expenses.  Except to the extent required by the terms of
the benefits provided under Section 3(e) or applicable law, the Employee shall
have no right under this Agreement or otherwise to receive any other
compensation or to participate in any other plan, program or arrangement after
such termination or resignation of employment with respect to the year of such
termination or resignation and later years.

(ii)           Termination for “Cause” shall mean a
termination of the Employee’s employment with the Company because of (A) a plea
of guilty or nolo contendere to, or conviction
for, the commission of a felony offense by the Employee; (B) the involvement by
the Employee as a party to any litigation or regulatory proceeding or in any
other circumstance known to the general public that, in the good faith
determination of the Board, is reasonably certain to subject the Employee, the
Company or its affiliates to disrepute, ridicule, contempt or scandal or that
is reasonably certain to reflect unfavorably upon the reputation of the
Employee, the Company or its affiliates or the Company’s products or
technologies; (C) the willful and continued failure to perform in any material
respect the Employee’s duties; (D) an intentional act of fraud, embezzlement,
theft or a material and dishonest act against the Company or its affiliates; or
(E) a material breach by the Employee of the terms and provisions of the
Agreement.

(iii)          Termination of the Employee’s employment
for Cause shall be communicated by delivery to the Employee of a written notice
from the Company stating that the Employee will be terminated for Cause,
specifying the particulars thereof and the effective date of such termination.  In the cases of Sections 4(a)(ii)(B),
4(a)(ii)(C) and 4(a)(ii)(E), the Employee shall have thirty (30) business days
from the date of receipt of such notice to effect a cure of the actions
constituting Cause, or to effect a cure of the adverse effect such actions.  Upon cure or correction thereof by the
Employee to the reasonable satisfaction of the Company, the action shall no
longer constitute Cause for purposes of this Agreement.  The date of a resignation by the Employee
shall be the date specified in a written notice of resignation from the
Employee to the Company.  The Employee
shall provide at least 90 days’ advance written notice of his resignation.

(b)           Termination
without Cause.

(i)            If, prior to the expiration of the
Term, the Company terminates the Employee’s employment for any reason other
than Disability or Cause (such termination or resignation being hereinafter
referred to as a “Termination without Cause”),
the Employee shall be entitled to (A) payment of his Salary accrued up to and
including the date of such Termination without Cause, (B) payment of any
unreimbursed expenses, and (C) severance, subject to the Employee’s execution
and delivery of a release in the form then deemed appropriate by the Company
and in exchange for consulting services of the Employee, consisting of (1)
continuation of his Salary, at the rate in effect on the date of the
Termination without Cause, for the lesser of 12 months commencing on the date
next following the date of the Termination without Cause or the remaining term
of the this Agreement (the “Severance Period”)
and (2) continued participation on the same terms and conditions as are in
effect immediately prior to the Termination without Cause in the Company’s
health and medical plans 

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provided to the Employee
pursuant to Section 3(e) above at the time of such Termination without Cause
through the expiration of the Severance Period, or until the Employee becomes
eligible to participate in a subsequent employer’s benefit plan, whichever
occurs first. Anything herein to the contrary notwithstanding, the Company
shall have no obligation to continue to maintain during the Severance Period
any plan, program or level of benefits solely as a result of the provisions of
this Agreement, but this provision shall apply with respect to any substitute
or replacement plan.

(ii)           The date of termination of employment
without Cause shall be the date specified in a written notice of termination to
the Employee.

(c)           Termination Due to Disability.  In the event of the Employee’s Disability,
the Company shall be entitled to terminate his employment.  In the case that the Company terminates the
Employee’s employment due to Disability, the Employee shall be entitled to his
Salary up to and including the date of termination as well as any unpaid
expense reimbursements.  As used in this
Section 4(c), the term “Disability”
shall mean the Company’s determination that due to physical or mental illness
or incapacity, whether total or partial, the Employee is substantially unable
to perform his duties hereunder for a period of 90 consecutive days or shorter
periods aggregating 90 days during any period of 180 consecutive days.

(d)           Death.  Except as provided in this Section 4(d), no
Salary or benefits shall be payable under this Agreement following the date of
the Employee’s death.  In the event of
the Employee’s death, any Salary earned by the Employee up to the date of
death, as well as any unreimbursed expenses, shall be paid to the Employee’s
estate or Employee’s named beneficiary within a reasonable period following his
death.

5.             PROTECTION OF THE COMPANY’S INTEREST

(a)           Employee Confidential Information
and Invention Agreement.  The
Employee hereby acknowledges that he has previously executed and delivered to
the Company the Company’s Employee Confidential Information and Invention
Agreement (the “Confidentiality Agreement”),
which is attached hereto as Annex A.  The
Employee hereby acknowledges and understands that the provisions of the
Confidentiality Agreement are incorporated into this Agreement.

(b)           Protection of
Trade Secrets; Non-Solicitation.

(i)            The Employee acknowledges that in
the course of his employment with the Company, he has and will in the course of
his continued employment with the Company become familiar with the trade
secrets of the Company and its affiliates and with other Confidential
Information (as defined in the Confidentiality Agreement) concerning the
business of the Company and its affiliates and that his services have been and
will be of special, and unique and extraordinary value to the Company and its
affiliates.  Because of the foregoing and
in further consideration of the compensation and other benefits to be provided
to the Employee hereunder, the Employee hereby agrees that, during the Term,
and at any time thereafter, he shall not, directly or indirectly, use trade
secrets (as such term is defined in Section 3426(1)(d) of the

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Uniform Trade Secrets Act)
of the Company or its affiliates or Confidential Information or otherwise
engage in unfair competition against the Company or any of its affiliates.

(ii)           During the Term, and continuing
through the first anniversary of the termination date of the Employee’s
employment for any reason (the “Restricted
Period”), the Employee shall not directly or indirectly through
another person or entity induce or attempt to induce any customer, supplier,
licensee, licensor, franchisee or other business relation of the Company or any
such affiliate that is within any geographical area in which the Company or its
affiliates engage or plan to engage in such businesses to cease doing business
with the Company or such affiliate or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any such affiliate.

(c)           Extension of Time of Restrictions.  The Restricted Period shall be extended by
the length of any period during which the Employee is in breach of the
restrictions set forth in Section 5(b).

(d)           Non-Disparagement.  The Employee agrees that at any time during
his employment with the Company or at any time thereafter, the Employee shall
not make, or cause or assist any other person to make, any statement or other
communication which impugns or attacks, or is otherwise critical of, the
reputation, business or character of the Company, any subsidiary or any of
their respective officers, directors, employees, products or services.

(e)           Enforcement.  The Employee hereby acknowledges that he has
carefully reviewed the provisions of this Agreement and agrees that the
provisions are fair and equitable, and that they are necessary and reasonable
in order to protect the Company and its affiliates in the conduct of their
business.  However, in light of the
possibility of differing interpretations of law and change in circumstances,
the parties hereto agree that if any one or more of the provisions of this
Section 5 (including any provision contained in the Confidentiality Agreement)
is determined by a court or other tribunal of competent jurisdiction to be
invalid, void or unenforceable under circumstances then existing, the parties
hereto agree that the maximum period, scope or geographical area reasonable or
enforceable under such circumstances shall be substituted for the stated
period, scope or area.

(f)            Remedies.  The Employee acknowledges that the Company
has a compelling business interest in preventing unfair competition stemming
from the intentional or inadvertent use or disclosure of the Company’s
confidential and proprietary information, including trade secrets of the
Company.  The Employee further
acknowledges and agrees that damages for a breach or threatened breach of any
of the covenants set forth in this Section 5 (including any provision contained
in the Confidentiality Agreement) will be difficult to determine and will not
afford a full and adequate remedy, and therefore agrees that the Company, in
addition to seeking actual damages in connection therewith and the termination
of the Company’s obligations in Section 4(b), may seek specific enforcement of
any such covenant in any court of competent jurisdiction, including, without
limitation, by the issuance of a temporary or permanent injunction without the
necessity of showing any actual damages or posting any bond or furnishing any
other security, and that the specific enforcement of the provisions of this
Agreement will not diminish the Employee’s ability to earn a livelihood or create or impose
upon the Employee any undue hardship. The Employee also agrees that any 

5

 

request for such relief by
the Company shall be in addition to, and without prejudice to, any claim for
monetary damages that the Company may elect to assert.

6.             GENERAL PROVISIONS

(a)           No Other Severance Benefits.  Except as specifically set forth in this
Agreement, the Employee covenants and agrees that he shall not be entitled to
any other form of severance benefits from the Company, including, without
limitation, benefits otherwise payable under the Company’s regular severance
policies, if any, in the event his employment hereunder ends for any reason
and, except with respect to obligations of the Company expressly provided for
herein, the Employee unconditionally releases the Company and its subsidiaries
and affiliates, and their respective directors, officers, employees and
stockholders, or any of them, from any and all claims, liabilities or
obligations under any severance arrangements of the Company or any of its subsidiaries
or affiliates.

(b)           Tax Withholding.  All amounts paid to Employee hereunder shall
be subject to all applicable federal, state and local wage withholding.

(c)           Notices.  Any notice hereunder by either party to the
other shall be given in writing by personal delivery, or certified mail, return
receipt requested, or (if to the Company) by facsimile, in any case delivered
to the applicable address set forth below:

	
  (i)

  	
   

  	
  To
  the Company:

  	
   

  	
  Lipid
  Sciences, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  7068
  Koll Center Parkway, Suite 401

  
	
   

  	
   

  	
   

  	
   

  	
  Pleasanton,
  CA 94566-3111

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile
  No.: (925) 249-4000

  
	
   

  	
   

  	
   

  	
   

  	
  Attn:
  Chairman of the Board of Directors

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  	
   

  	
  Shearman &
  Sterling

  
	
   

  	
   

  	
   

  	
   

  	
  1080 Marsh Road

  
	
   

  	
   

  	
   

  	
   

  	
  Menlo Park, CA
  94025

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile No.:
  (650) 838-3699

  
	
   

  	
   

  	
   

  	
   

  	
  Attn: James B.
  Bucher, Esq.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  To
  the Employee:

  	
   

  	
  S.
  Lewis Meyer, Ph.D.

  
	
   

  	
   

  	
   

  	
   

  	
  Last
  known residential address

  
	
   

  	
   

  	
   

  	
   

  	
  and
  fax number on file with the Company

  

 

 

or to such other persons or other addresses as either
party may specify to the other in writing.

6

 

(d)           Representation by the Employee.  The Employee represents and warrants that his
entering into this Agreement does not, and that his performance under this
Agreement and consummation of the transactions contemplated hereby will not,
violate the provisions of any agreement or instrument to which the Employee is
a party or any decree, judgment or order to which the Employee is subject, and
that this Agreement constitutes a valid and binding obligation of the Employee
in accordance with its terms.  Breach of
this representation will render all of the Company’s obligations under this
Agreement void ab initio.

(e)           Assignment; Assumption of
Agreement.  No right, benefit or
interest hereunder shall be subject to assignment, encumbrance, charge, pledge,
hypothecation or setoff by the Employee in respect of any claim, debt,
obligation or similar process.  The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Company to assume expressly and to agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.

(f)            Amendment.  No provision of this Agreement may be
amended, modified, waived or discharged unless such amendment, modification,
waiver or discharge is agreed to in writing and signed by the parties.  No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.

(g)           Severability.  If any term or provision hereof is determined
to be invalid or unenforceable in a final court or arbitration proceeding, (i)
the remaining terms and provisions hereof shall be unimpaired and (ii) the
invalid or unenforceable term or provision shall be deemed replaced by a term
or provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision.

(h)           Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of California (determined without
regard to the choice of law provisions thereof).

(i)            Entire Agreement.  This Agreement and the Confidentiality
Agreement contain the entire agreement of the Employee, the Company and any
predecessors or affiliates thereof with respect to the subject matter hereof
and all prior agreements and negotiations are superceded hereby.

(j)            Counterparts.  This Agreement may be executed by the parties
hereto in counterparts, each of which shall be deemed an original, but both
such counterparts shall together constitute one and the same document.

(k)           Survival.  The provisions of Section 5 (including the
provisions of the Confidentiality Agreement) shall survive the termination of
this Agreement.

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

	
  LIPID SCIENCES,
  INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Sandra
  Gardiner

  	
   

  
	
   

  	
  Name:

  	
  Sandra Gardiner

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
					

 

 

	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ S. Lewis
  Meyer, Ph.D.

  	
   

  
	
   

  	
  S. LEWIS MEYER,
  Ph.D.

  
				

 

 

8EXHIBIT
10.53

 

NOTE:  Portions of
this document marked “***” have been omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment of the omitted and separately filed portions.

 

LICENSE
AGREEMENT

 

THIS LICENSE
AGREEMENT (the “Agreement”) is entered into as of January 26, 2006 (the “Effective
Date”) by and between AVI BioPharma, Inc., an Oregon corporation having its
principal place of business at One SW Columbia, Suite 1105, Portland, Oregon
97258, and Chiron Corporation, a Delaware corporation having its principal
place of business at 4560 Horton Street, Emeryville, California 94608, U.S.A. (“Chiron”).

BACKGROUND

WHEREAS, Chiron has developed certain intellectual property rights with
respect to HCV (as hereinafter defined) which relate to the HCV genome and
encoded proteins;

WHEREAS, Licensee (as hereinafter defined) is engaged in research and development of
antisense compounds for the treatment of HCV infection and desires to
commercialize such compounds, which activities may fall within the scope of the
Chiron Patent Rights (as hereinafter defined) as well as under Licensee’s own
issued and pending patents;

WHEREAS, Licensee wishes to obtain a license under the Chiron
Patent Rights for such purposes;

WHEREAS, Chiron is
willing to grant, and has offered to grant Licensee, a license under the Chiron
Patent Rights for a negotiable fully paid-up, one-time fee; and

WHEREAS, as an alternative to the arrangement whereby Licensee would
secure a license under the Chiron Patent Rights for a fully paid up one time
fee, Licensee wishes to enter into an arrangement pursuant to which Licensee
shall provide consideration for the license under Chiron Patent Rights by
paying to Chiron milestone and royalty payments, which payments represent
Chiron’s interest in the value contributed by the licensure of Chiron Patent
Rights to Licensee’s program(s) for the research, development and
commercialization of Identified Products (as hereinafter defined).

NOW, THEREFORE, in consideration of the above premises and the mutual
covenants contained herein, the parties hereto agree as follows:

1.             DEFINITIONS

 

For the purposes of this Agreement, the following definitions shall
apply, and the terms defined herein in plural shall include the singular and
vice-versa:

1.1.         “Affiliate” means, with respect to a party hereto, any
corporation, partnership, joint venture or other business arrangement which is
controlled by, controlling or under common control with such party, and shall
include any direct or indirect beneficial ownership

 

 

of more than fifty percent (50%) of the voting stock or participating
profit interest of such corporation or other business entity.  Without limiting the generality of the
foregoing, the Affiliates of Chiron expressly exclude Novartis A.G, a Swiss
corporation, and any Affiliate thereof not otherwise an Affiliate of Chiron
(collectively, “Novartis”) unless and until such time as Novartis exercises its
rights to control Chiron in accordance with the terms and conditions of the
November 20, 1994 Governance Agreement between Chiron and Novartis’ predecessor
in interest, Ciba-Geigy Limited.

1.2.           “Chiron Patent Rights” means the
patents or patent applications owned by Chiron listed in Exhibit A attached
hereto, together with all patents issuing thereon, including any divisionals,
continuations, continuations-in-part, reissues, reexaminations and extensions
thereof, and foreign counterparts.  Upon
request of Licensee, in the event that Licensee demonstrates that any patent or
patent application owned by Chiron Corporation as of the Effective Date, but
not listed in Exhibit A, is necessary to conduct activities in the Research and
Development Field with respect to Identified Products, provided that such
patent or patent application is licensable by Chiron to Licensee on the terms
and conditions set forth herein, Exhibit A shall be amended to include such
patent or patent application.  For the
avoidance of doubt, Chiron Patent Rights expressly excludes patents that as of
the Effective Date are owned or controlled by any Third Party or Affiliate to
which Chiron may assign its rights and obligations under this agreement in
accordance with Section 10.4 of this Agreement.

1.3.         “Clinical Trial” means a Phase I Clinical
Trial, a Phase II Clinical Trial, or a Phase III Clinical Trial, as the case
may be.

1.4.         “Confidential
Information” means each party’s confidential and/or proprietary
information, including but not limited to each party’s know-how, invention
disclosures, technology, libraries, targets, compounds, patents, proprietary
materials and/or technologies, economic information, business or research
strategies, trade secrets and material embodiments thereof.  The terms of this Agreement and the Stock
Purchase Agreement shall be considered the confidential information of each
party.

1.5.         “FDA” means the
United States Food and Drug
Administration and any successor drug regulatory entity thereto.

1.6.         “HCV” means the
Hepatitis C virus, including any isolates, strains (natural or engineered) or
mutations thereof.

1.7.         “Identified
Products” means siRNA or
Antisense Compounds, whether developed prior to, on, or after the Effective
Date, that:

1.7.1.      are designed to inhibit HCV
by hybridizing to the HCV genome or its complementary RNA resulting in direct
or indirect inhibition of HCV replication, transcription, translation or
modification of the HCV genome or its complementary RNA, or reducing stability
of HCV nucleic acids or by similar methods of inhibition of host factors involved
in HCV expression or replication, with respect to which Licensed Processes were
employed at any time during the course of the research, development of
commercialization of such compounds; or

 

2

 

1.7.2.      act
on, whether by modulation, stimulation, inhibition, or otherwise:

(a)           the
HCV genome or its complementary RNA with respect to which Licensed
Processes were employed at any time during the course of the research,
development or commercialization of such compounds; or

(b)            
a molecule of which any portion of the
HCV genome or its complementary RNA is a component part, with respect to which
Licensed Processes were employed at any time during the course of the research,
development or commercialization of such compounds; or

1.7.3.       act on,
whether by modulation, stimulation, inhibition, or otherwise, HCV and that
are derived from, synthesized using, based on data from, or reasonably
suggested by compounds described in Section 1.7.1 or 1.7.2 irrespective of whether
Licensed Processes were utilized at any time during the course of the research,
development or commercialization of such compounds.

1.8.         “IND” means (a) an Investigational
New Drug Application (as defined in the U.S. Federal Food, Drug and Cosmetic
Act, as amended, and the regulations promulgated thereunder) that is required
to be filed with the FDA before beginning clinical testing of an Identified
Product in human subjects, or any successor application or procedure or (b) any
counterpart of an Investigational New Drug Application that is required in any
other country or region in the Licensed Territory before beginning clinical
testing of an Identified Product in human subjects in such county or region.

1.9.         “Licensee”
means AVI Biopharma, Inc., an Oregon corporation, and any Affiliates thereof.

1.10.       “Licensee Facility” means and is
limited to the facilities of Licensee and its Affiliates located at the
locations specified in Exhibit B. 
Licensee may add additional locations to this list with prior written
notice to Chiron.

1.11.       “Licensed Composition” means any
composition, the making, using, selling, keeping, offering for sale, importing
or exporting thereof would, but for the license granted herein, infringe any
Valid Claim within Chiron Patent Rights, if practiced in a Reference Country.

1.12.       “Licensed Method” means any
method or process, the practice of which would, but for the license granted
herein, infringe a Valid Claim of the Chiron Patent Rights, (including the
manufacture, use, sale, keeping, offer for sale, importation or exportation of
a product which would infringe any such Valid Claim), if practiced in a
Reference Country.

1.13.        “Licensed Processes” means any
process that involves the use, practice or manufacture of a Licensed Composition
and/or Licensed Method, including:  (a)
the design, synthesis, screening, identification, selection or improvement of
compounds (including mixtures thereof), bioactive “hits” or research leads
during drug discovery research; and (b) the optimization, formulation,
characterization or evaluation of lead compounds or development candidates
during preclinical research or development.

 

 

3

 

1.14.       “Licensed Territory” means (a) for
purposes of use of the Licensed Processes, any country in the world where
Licensee has a Licensee Facility and (b) for purposes of development and
commercialization of Identified Products means worldwide.

1.15.       “NDA” means a New
Drug Application or a Biologics License Application, each as defined in the
U.S. Federal Food, Drug, and Cosmetics Act, as amended, and the regulations
promulgated thereunder, and any corresponding foreign or domestic marketing
authorization application, registration or certification, necessary or
reasonably useful to market a Identified Product in the Licensed Territory, but
not including pricing or reimbursement approvals.

1.16.       “Net Sales” shall be
calculated in accordance with U.S. generally accepted accounting principles
and, for each calendar year during the Term, means the gross amount billed or
invoiced for sales or other dispositions of all Identified Products by Licensee
or a Third Party Beneficiary hereunder (other than sales or other dispositions
to Affiliates unless such Affiliate is the end user) less the following
deductions actually paid or incurred (to the extent they are not already
reflected in the amount invoiced and to the extent they are not otherwise
covered or reimbursed) during such calendar year: (a) discounts, returns,
allowances, and wholesaler chargebacks allowed and taken in amounts customary
in the trade; (b) import, export, excise, sales or use taxes, value added
taxes, and other taxes, tariffs or duties directly imposed and properly
allocable to Identified Product sales, but not taxes assessed on income derived
from Identified Product sales; (c) separately itemized shipping, freight
charges or insurance paid; and (d) amounts allowed or credited for retroactive
price reductions or rebates.  Where
Identified Product is sold in the form of a combination product containing one
or more active ingredients in addition to an Identified Product, Net Sales for
such combination product will be calculated by multiplying actual Net Sales of
such Combination Product by the fraction A/(A+B) where A is the invoice price
of the Identified Product if sold separately, and B is the total invoice price
of any other active component or components, or devices, in the combination, if
sold separately.  If, on a country-by-country
basis, the other active component or components in the combination are not sold
separately in said country, Net Sales for the purpose of determining royalties
of the combination product shall be calculated by multiplying actual Net Sales
of such combination product by the fraction A/C where A is the invoice price of
the Identified Product, if sold separately, and C is the invoice price of the
combination product.  If, on a
country-by-country basis, neither the Identified Product nor the other active
component or components of the combination product is sold separately in said
country, Net Sales for the purposes of determining royalties of the combination
product shall be determined by the parties by mutual agreement.  If Licensee receives any consideration for
the sale or other disposal of any Identified Product or for the use of any
Identified Product other than monetary consideration under bona fide arm’s
length terms, then for the purposes of calculating the royalty payable under
this Agreement, such Identified Products shall be deemed to be sold exclusively
for money at the fair market price generally achieved for such Identified
Products in the country in which such sale or other disposal or use occurred
when such Identified Products are sold alone and not with other products.

1.17.       “Phase I Clinical Trial” shall mean
first human dosing, such as pursuant to a clinical trial, conducted in
accordance with 21 C.F.R. 312.21(a) or other applicable regulatory requirements
outside the United States, designed to establish the safety, and preliminary
evidence of effectiveness, of a pharmaceutical product for human use.

 

4

 

1.18.       “Phase II Clinical Trial” shall mean first human
dosing pursuant to a clinical trial, conducted in accordance with 21 C.F.R.
312.21(b) or other applicable regulatory requirements outside the United States, of appropriate size and
designed to evaluate the effectiveness of a pharmaceutical product in patients
with the disease for its intended use and in the dosage range to be prescribed
by identifying the proportion of patients within the trial who respond to the
pharmaceutical product.

1.19.       “Phase III Clinical Trial” shall mean first human
dosing pursuant to a clinical trial, conducted in accordance with 21 C.F.R.
312.21(c) or other applicable regulatory requirements outside the United
States, that is conducted after preliminary evidence suggesting effectiveness
has been obtained, that is of appropriate size and design to establish that a
pharmaceutical product is safe and effective for its intended use, to
define warnings, precautions and adverse reactions that are associated with the
pharmaceutical product in the dosage range to be prescribed, and to support
regulatory approval of such pharmaceutical product or label expansion of such
pharmaceutical product.

1.20.       “Reference Countries” means the
United States of America for any activities that are conducted in the United
States of America, and the
United Kingdom for any activities that are conducted outside the United States
of America.

1.21.       “Research and Development Field”
means therapeutic applications for HCV infection, and expressly
excludes applications in: (i) small molecules, including small molecular weight
chemical molecules other than oligonucleotide and nucleic acid-based molecules, (ii) diagnostics, including nucleic acid testing and
immunodiagnostics, (iii) vaccines and (iv) peptide and protein based products
(collectively, the “Excluded Applications”).

1.22.       “siRNA or Antisense Compounds” means short,
linear nucleic acid oligomers or polymers, including nucleic acid analogs, and
conjugates of any of the foregoing with agents such as polypeptides that act to
enhance the uptake or therapeutic activity of the nucleic acids or nucleic acid
analogs.

1.23.       “Term” shall have the meaning set
forth in Section 8.1.

1.24.       “Third Party” means a person or entity
other than a party to this Agreement or its respective Affiliates.

1.25.       “Third Party Beneficiary”
means any Third Party receiving from Licensee, directly or indirectly, any
beneficial interest in an Identified Product or information enabling the
development of an Identified Product, and includes any sublicenses or other
rights granted in accordance with Section 2.2.

1.26.       “Valid Claim”
means any claim of an issued (or granted) and unexpired patent that (a) has not
been held unenforceable, unpatentable or invalid by a decision of a court or
governmental agency of competent jurisdiction, which decision is unappealable
or unappealed within the time allowed for an appeal and (b) has not been
admitted by Chiron to be invalid or unenforceable generally through reissue or
disclaimer.

 

5

 

2.             LICENSE

 

2.1.         Research and Development
License Grant; Commercial License. Subject to all of the
terms and conditions in this Agreement, Chiron hereby grants to Licensee, a
non-transferable, non-exclusive license, with the right to sublicense solely as
set forth in Section 2.2, under the Chiron Patent Rights, to use Licensed
Compositions and Licensed Methods in the Research and Development Field at a
designated Licensee Facility in the Licensed Territory during the Term and to
make, have made, use, have used, sell, have sold, import, and export Identified
Products during the Term of this Agreement (the “License”).

2.2.         Sublicenses.  Licensee may grant sublicenses under the
licenses granted in Section 2.1 or other rights to exploit Identified Products
only as set forth below.

2.2.1.      License may grant sublicenses to Third Parties with
which Licensee has a written agreement under which Licensee and such Third
Parties collaborate on research within the Research and Development Field;
provided that, (i) Licensee has provided Chiron with prior written notice
identifying any such Third Party and the scope of the collaboration (which
notice may be provided prior to execution of such agreement, provided that
negotiations of such agreement have commenced, or during the term of such
agreement); (ii) that the proposed scope of the sublicense is limited to the research
in the Research and Development Field, does not grant the right for
commercialization of any Identified Products, and, in any event, does not
exceed the scope or duration of the license granted to Licensee under Section
2.1; (iii) Chiron does not within thirty (30) days after its receipt of such
written notice reasonably object in writing to the grant of such sublicense;
(iv) such Third Party agrees to be bound by all of the applicable terms and
conditions of this Agreement (including Article 5); and (v) such sublicense
shall terminate upon the expiration or termination of its written agreement
with Licensee with respect to such collaboration with Licensee.  For the purposes of Section 2.2.1(iii), it
shall not be unreasonable for Chiron to withhold or delay consent if Chiron
reasonably believes that the proposed Third Party (a) has or is infringing any
Chiron Patent Rights or (b) has or is challenging the validity of any Chiron
Patent Rights.

2.2.2.      Notwithstanding the foregoing, Licensee may sublicense, or otherwise grant or
authorize,  Third Parties to market,
distribute, sell or otherwise commercialize any Identified Product, provided
that (i) Licensee shall remain obligated to make applicable milestone and
royalty payments under Section 3.1 for such Identified Products and (ii) such
Third Parties shall be subject to all obligations of Licensee under this
Agreement (including payment, reporting and indemnity provisions); provided
that neither Licensee nor any such Third Party shall be required to make duplicate
payments for any one Identified Product for which payment has been received by
Chiron.

2.3.         Acquired Compounds. Licensee shall provide Chiron prior
written notice (the “Third Party Notice”) if Licensee seeks to obtain from any
Third Party to which Chiron has not granted a license under Chiron Patent
Rights to practice Licensed Processes in the Research and Development Field (a “Third
Party Licensor”) a license or other right (an “In-License”) to make, have made,
use, have used, sell, have sold, import, or export any compound owned or
controlled by such Third Party Licensor that (i) is a siRNA or Antisense
Compound that has therapeutic applications for HCV infection, (ii) is not
within the Excluded Applications, and

 

6

 

(iii) is reasonably likely to have been identified, discovered or
generated through the practice of Licensed Processes.  The Third Party Notice shall identify (a)
each compound (but not structures) sought from the Third Party Licensor, (b)
the targets of action of such compound to the extent known, (c) the date on
which Licensed Processes are believed to first have been used by such Third
Party Licensor, (d) the stage of development of such compound, (e) the scope
the license to be granted to Licensee (including degree of exclusivity and
territories included), and (f) the identity of such Third Party Licensor.  Chiron may, in its sole discretion, approve
or reject some or all of the In-Licenses set forth in the Third Party Notice,
and shall make such approval or rejection in writing within thirty (30) days of
receipt of the Third Party Notice. Upon Chiron’s written approval of an
In-License, each compound that is the subject of the In-License (an “Acquired
Compounds”) shall become an Identified Product under this Agreement for all
purposes, including the obligations to make milestone and royalty payment.
Within ten (10) days of reaching a binding agreement with the Third Party
Licensor for such In-License (“In-License Date”), Licensee shall pay to Chiron
for such Identified Product any milestone payments in accordance with Section
3.1.1 for milestone events that occurred prior to the In-License Date, and any
royalty payments in accordance with Section 3.1.2 and 3.1.3 for periods prior
to the In-License Date.

2.4.         No Rights by Implication.  Licensee’s rights under the Chiron Patent
rights shall be limited to those rights specified in Sections 2.1 and 2.2, and
Chiron retains all other rights related thereto.

3.             PAYMENTS

 

3.1.         Payments.  In consideration of Chiron’s grant of the
License to Licensee, Licensee shall, in addition to the other Licensee
obligations referenced herein, make to Chiron the payments referenced in this
Section 3.1.

3.1.1.      Milestone Payments.  With respect to each and every Identified
Product developed by Licensee or any Third Party Beneficiary that reaches the
milestone events referenced in this Section 3.1.1, Licensee shall pay to Chiron
the following milestone payments within thirty (30) days following the
occurrence of each such milestone event:

(a)           Upon filing of an IND or commencement
of Phase I Clinical Trials, whichever occurs first:  *** (“First Milestone Payment”); and

(b)           Upon commencement of Phase II
Clinical Trials: ***; and

(c)           Upon commencement of Phase III Clinical
Trials: ***; and

(d)           Upon filing of an NDA: ***; and

(e)           Upon approval of an NDA: ***.

For
the avoidance of doubt, each payment pursuant to clause (a), (b), (c), (d) or
(e) above shall be non-refundable, non-creditable, non-cancelable and payable
once (and only once) with respect to each Identified Product regardless of the
number of countries in which clinical trials are conducted or the number of NDA
registrations filed or

 

7

 

approved with respect to such Identified Product.  If a milestone event occurs and Licensee has
not made any milestone payments due for previous milestone events (regardless
of whether such milestone events have occurred), Licensee shall pay to Chiron
the amounts due for such previous milestone events in conjunction with the
payments for the current milestone events. 
For purposes of this Section 3.1.1, “commencement” of particular
Clinical Trial shall mean the earlier of (i) the date of first such dosing of
Identified Product in humans as part of such Clinical Trial and (ii) the date
upon which Licensee makes a public announcement that such Clinical Trial has
commenced.

3.1.2.      Royalty Payments. 
Licensee shall pay Chiron royalty payments with respect to Net Sales of
Identified Products in accordance with the following royalty payment schedule:

 

	
  For Aggregate Annual Worldwide Net 

  Sales of Identified Products:

  	
  Royalty Rate

  
	
  Above $0 and up to ***
  million

  	
  ***%

  
	
  Above *** million

  	
  ***%

  

 

Following the first commercial sale of an Identified
Product, Licensee will make royalty payments to Chiron on a quarterly
basis.  Payments will be due within
forty-five (45) days of the end of each calendar quarter.

 

	
   

  	
   

  

3.1.3.      No Valid Claim.  If during any time period, an Identified
Product is exploited in a country of the Licensed Territory and is not covered
by a Valid Claim under any Chiron Patent Rights in such country, the Royalty
Rate payable by Licensee during the time period in which there is no such
coverage by a Valid Claim for such Identified Product shall be as follows:

	
  For Aggregate Annual Worldwide
  Net Sales of Identified Products

  	
  Royalty Rate

  
	
  Above $0 and up to *** million

  	
  ***%

  
	
  Above *** million

  	
  ***%

  

 

3.1.4.       Prior Activity.  Any Identified Products that have been
developed prior to the Effective Date by Licensee or its sublicensees shall be
set forth in Exhibit C hereto, and shall include the latest stage of clinical
achievement for such Identified Products. 
On the Effective Date, Licensee shall pay to Chiron any milestone or
royalty payments under Sections 3.1.1, 3.1.2 and 3.1.3 for such Identified
Products related to periods prior to the Effective Date; provided, however,
that in lieu of receiving the First Milestone Payment with respect to that
certain Identified Product described on Exhibit C

 

8

 

as HCV AUG (AVI-4065) and described therein as having commenced a phase
I/II trial, Chiron has agreed to receive from Licensee certain common stock of
Licensee as set forth in that certain Stock Purchase Agreement between the
parties dated of even date herewith.  Any
breach of such agreement by Licensee shall constitute a material breach of this
Agreement.

3.2.         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 from time to time by Chiron.

3.2.1.      Exchange
Rate.  In the
event that Identified Products are sold in currencies other than United States
dollars, Net Sales shall be calculated by Licensee in accordance with generally
accepted accounting principles.  Net Sales in such other currencies shall be
converted into U.S. dollars at the end of each royalty reporting period 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 royalty reporting period,
as published at 12:00pm daily New York time by the Federal Reserve Bank of New
York (available on Bloomberg & Reuters). 
Royalty payments due to Chiron pursuant to Section 3.1.2 and
3.1.3 shall be calculated based on the Net Sales in United States dollars as
calculated above.

3.2.2.      Blocked
Currency.  In the event that
restrictions or prohibitions imposed by a national or international government
authority preclude conversion of a national or international currency into
United States dollars, Licensee and Chiron shall consult to find a prompt and
acceptable solution and, prior to Licensee and Chiron determining such an
acceptable solution, Licensee shall handle all money received by Licensee from
the sale or other distribution of Identified Products as Chiron may lawfully
direct.  The cost and expense incurred as
a consequence of any such handling shall be borne equally by Licensee and
Chiron.  Notwithstanding the foregoing,
if any national or international currency cannot be converted into United
States dollars when payment to Chiron is due and payable under Section 3.1
above, Licensee shall deposit the local currency equivalent of the United States dollar payment amount
due and payable to Chiron in an interest-bearing account in the name of
Chiron.  In the event that conversion
into United States dollars of any payment amount due and payable to Chiron
deposited in an interest-bearing account pursuant to the previous sentence
becomes possible, Licensee shall deliver such payment amount to Chiron
promptly, however, if conversion of any such amount is not possible within
twelve (12) months after the date payment was due and payment to Chiron,
Licensee shall transfer to Chiron the amount deposited in the name of Chiron,
together with all interest accrued on the amount deposited after the date of
deposit.

3.2.3.      Late Payment.  Any
payment, including royalty payments, made by Licensee hereunder after the date such payment is due, shall bear
interest at the lesser of: (a) 300 basis points above the three (3) month
United States Dollar LIBOR as published in the Wall Street Journal on the day
which is two business days prior to the date the payment is due, or (b) the
maximum rate permitted by applicable law (the “Interest Rate”).  The Interest Rate shall be calculated from
the date payment was due until actually received by Chiron (the “Interest
Period”) based on actual number of days

 

9

 

lapsed and a 360-day year.  If
the Interest Period extends beyond three (3) months, at the beginning of each
three (3) month interval, the Interest Rate will be recalculated using the
current three (3) month LIBOR, as described above, until the payment is
received.

3.2.4.      Underpayment.  If an Inspection (as defined in Section 4.3)
reveals an underpayment, then Licensee shall promptly make up such underpayment
with interest at the Interest Rate from the date payment was owed.

3.3.         Withholding Taxes.    If applicable law requires that Licensee withhold
any taxes from the amounts paid to Chiron hereunder, Licensee shall deduct such
taxes from the amounts paid by Licensee hereunder, make timely payment of such
taxes to the proper taxing authority for the account of Chiron and send proof
of such payment to Chiron within thirty (30) days following such payment.    Further,
Licensee shall provide Chiron copies of any tax receipts for any such taxes
paid, together with copies of all pertinent communications from or with
governmental authorities with respect thereto. 
At Chiron’s reasonable request and at Chiron’s reasonable expense,
Licensee shall reasonably assist Chiron in any effort by Chiron in claiming any
exemption from such taxes under any double taxation or similar agreement or
treaty from time to time in force, and in minimizing the amount required to be
so withheld.

3.4.          More Favorable Terms.  Chiron represents that as of the Effective Date it has
not offered to any third party a license to the Chiron Patents and Licensed
Processes in the Research and Development Field to make, have made, use, have
used, sell, have sold, import and export Identified Products on terms that are
substantially more favorable on the whole than the terms of the license to
Licensee hereunder.

 

4.             STATEMENTS, RECORDS AND INSPECTION

 

4.1.         Statements.  All milestone and royalty payments made to
Chiron hereunder shall be accompanied by a written statement setting forth in
reasonable detail the calculation thereof, including, for example, in the case
of royalty payments, the gross amount billed or invoiced by Licensee or an
affiliate or commercial collaborators or any other Third Party for the sale or
distribution for the Identified Product, itemized deductions against such gross
amount, and Net Sales on a country-by country basis.  Such statement shall contain reference to Net
Sales by territory in United States Dollars, as calculated by the method in
Section 3.2.

4.2.         Record Keeping.  Licensee shall keep and maintain, and shall
cause its Affiliates and Third Party Beneficiaries to keep and maintain,
complete and accurate books of account and adequate records of all sales of
Identified Products in sufficient detail to permit Chiron to confirm the
accuracy of reported royalties hereunder, including 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, and shall retain
such books and records for a period of three years from the last day of the
calendar quarter in which such sales were made.

4.3.         Inspection.  Chiron may from time to time and at any
reasonable time, not exceeding once every twelve (12) months, audit (each such
audit, an “Inspection”) the books and records of Licensee, Licensee’s
Affiliates or Third Party Beneficiaries, as the case may be,

 

10

 

and records and books of sublicensees, to the extent necessary in order
to verify the accuracy of any report or payment made under this agreement, or
in the case of Licensee’s failure to make reports or pay royalties, to obtain
information as to the royalty payable for any such period, by Licensee to
Chiron (within the three (3) full-year period immediately preceding such
audit).  Any such audit will be conducted
by a certified public accountant selected by Chiron, unless Licensee reasonably
objects to such certified public accountant (“Auditor”), on reasonable notice
and during normal business hours.  The
Auditor will execute a confidentiality agreement with Licensee in which the
Auditor agrees to only discuss with Chiron information and findings relevant to
royalty calculations and payments pursuant to this Agreement.  Books and records shall include but not be
limited to: (a) accounting general ledgers (electronically if available); (b)
invoice/sales registers; (c) original invoice and shipping documents; (d)
federal and state business tax returns; (e) company financial statements; (f)
sales analysis reports; (g) inventory and or manufacturing records; (h)
sublicense and distributor agreements; and (i) price lists, product catalogs
and other marketing materials.  Licensee
agrees to maintain such books and records for a period of not less than five
(5) years from the date each royalty report is submitted to Chiron.  Such Inspection shall be at Chiron’s expense
unless a royalty payment deficiency is determined and such deficiency is five
percent (5%) or greater, for any royalty reporting period included in the
examination.  In such case Licensee shall
be responsible for reimbursing Chiron for the examination fee and expenses
charged by the Auditor.  Licensee agrees
to pay past due royalties (with interest as per Section 3.2.3) for any royalty
deficiency error as determined by the Auditor, which affects periods prior to
the period under audit.  Chiron and the
Auditor shall maintain in confidence such inspection and its resulting report.  The Auditor may not disclose financial or
proprietary information except as required by this Agreement or if it already
exists in the public domain.

5.             REPRESENTATIONS AND WARRANTIES; DISCLAIMER

 

5.1.         Mutual Warranties.  Each party represents and warrants to the
other party that (a) it has all requisite corporate power and authority to
enter into this Agreement, to grant the licenses granted by it hereunder, and
to perform its other obligations under this Agreement, (b) execution of this
Agreement and the performance by the warranting party of its obligations
hereunder, including the licenses granted by that party hereunder, have been
duly authorized, and (c) this Agreement is fully binding and enforceable in
accordance with its terms subject to the effects of bankruptcy, insolvency or
other laws of general application affecting the enforcement of creditor rights
and judicial principles affecting the availability of specific performance and
general principles of equity, whether enforceability is considered a proceeding
at law or equity.

5.2.         Licensee Warranties and
Covenants. Licensee
warrants, represents and covenants that:

5.2.1.      all of its activities related to its use of the
Chiron Patent Rights pursuant to this Agreement shall comply in all material
respects with all applicable legal and regulatory requirements, including all
applicable regulatory requirements; and

5.2.2.      it shall not engage in any activities that would
infringe the Chiron Patent Rights that are outside the scope of the Research
and Development License

 

11

 

granted hereunder (including the use of the Licensed Processes after
the termination of the Term).

5.3.         DISCLAIMER.  EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, CHIRON MAKES NO REPRESENTATIONS AND
EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ANY
EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE WITH RESPECT TO THE CHIRON PATENT RIGHTS OR ANY LICENSE GRANTED BY
CHIRON HEREUNDER, OR WITH RESPECT TO ANY PRODUCTS OR SERVICES OF LICENSEE.  FURTHERMORE, NOTHING IN THIS AGREEMENT SHALL
BE CONSTRUED AS A WARRANTY THAT ANY PATENT OR OTHER PROPRIETARY RIGHTS INCLUDED
IN THE CHIRON PATENT RIGHTS ARE VALID OR ENFORCEABLE OR THAT LICENSEE’S USE OF
THE CHIRON PATENT RIGHTS CONTEMPLATED HEREUNDER DOES NOT INFRINGE ANY PATENT
RIGHTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY.

5.4.         Patent Matters.  Chiron shall have the exclusive right to take
action against any infringement of any of the Chiron Patent Rights, in its sole
discretion.  Licensee shall cooperate
reasonably in any action Chiron may take against any such infringement, upon
Chiron’s request and at Chiron’s expense.

6.             LIMITATION OF LIABILITY

 

NOTWITHSTANDING
ANYTHING IN THIS AGREEMENT OR OTHERWISE, EXCEPT WITH RESPECT TO A PARTY’S
INDEMNIFICATION OBLIGATIONS UNDER SECTION 7, NEITHER PARTY SHALL BE LIABLE TO
THE OTHER WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY
CONTRACT, NEGLIGENCE, STRICT LIABILITY, OR OTHER LEGAL OR EQUITABLE THEORY FOR
ANY INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES.

7.             INDEMNITY

 

7.1.         Licensee Indemnity. Subject to
Section 7.2, Licensee shall indemnify, defend and hold harmless Chiron and its
Affiliates and the officers, directors, employees, agents and representatives
of Chiron and its Affiliates from and against any and all claims, threatened
claims, damages, losses, suits, proceedings or liabilities of any kind (“Claims”)
arising out of or relating to Licensee’s manufacture, use, sale, offering for
sale, importation or exportation of Identified Products or to its use otherwise
of the Chiron Patent Rights, including Claims based on product liability or
infringement of Third Party patent or intellectual property rights.

7.2.         Indemnification Procedures. Chiron shall
notify Licensee in writing promptly upon becoming aware of any Claim to which
such indemnification may apply.  Licensee
shall be relieved of its obligation of indemnification to the extent, and only
to the extent, Licensee is prejudiced by any failure of Chiron to provide
Licensee with the foregoing notice of any such Claim within a reasonable period
of time.  Licensee 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 by Licensee, Chiron shall have the right to
participate in, but not control, such defense at its own expense and Licensee’s
indemnity obligations shall be deemed not to

 

12

 

include attorneys’ fees and litigation expenses incurred by Chiron
after the assumption of the defense by Licensee.  If Licensee does not assume the defense of
the Claim, Chiron may defend the Claim at Licensee’s expense but shall have no
obligation to do so. Chiron will not settle or compromise the Claim without the
prior written consent of Licensee, and Licensee will not settle or compromise
the Claim in any manner which would have an adverse effect on Chiron without
the consent of Chiron, which consent, in each case, will not be unreasonably
withheld.  Chiron shall reasonably
cooperate with Licensee and will make available to Licensee all pertinent
information under the control of Chiron.

7.3.         Presumptions and Burden of
Proof Regarding Claims of Exempt Product Status.  The parties agree that there shall be a
presumption that siRNA or Antisense Compounds for the treatment of HCV
infection arising prior to the expiration of Chiron Patent Rights in the
relevant Reference Country from Licensee’s program for research, development
and commercialization of HCV genome and
complementary RNA inhibitor products (a “Product in Question”) are
Identified Products, and are subject to the obligations governing Identified
Product provided herein.  In the event
that Licensee contends that a Product In Question is not an Identified Product
(an “Exempt Product”) Licensee shall have the burden of proving such contention
by a preponderance of the evidence, and the provisions of Section 7.4 shall
apply.

7.4.         Exempt Product Notification.  In the event that Licensee or any Licensee
Affiliate files an IND for any Product in Question after
the Effective Date that Licensee contends is an Exempt Product,
Licensee shall provide Chiron written notice providing particular and
sufficient facts which are the basis for such contention (the “Exempt Product
Notification”).  Licensee shall provide
Chiron with the Exempt Product Notification within thirty (30) days following
the IND filing of any such alleged Exempt Product (the “Exempt Product
Notification Period”).  In the event that
Licensee submits to Chiron an Exempt Product Notification, Chiron shall have
the right to have Licensee’s claim that the Product in Question is an Exempt
Product evaluated by an qualified expert in the pharmaceutical industry chosen
by Chiron.  In the event that Chiron
disputes Licensee’s claim that the Product in Question is an Exempt Product
after such evaluation, the dispute shall be governed by the dispute resolution
provisions provided herein, provided that the presumption and burden of proof
provisions referenced in Section 7.3 shall apply to such dispute
resolution.  In the event that Licensee
fails to provide Chiron with an Exempt Product Notification within the Exempt
Product Notification Period, Licensee shall thereafter be estopped from
asserting that the Product in Question is an Exempt Product.

8.             TERM
AND TERMINATION 

 

8.1.         Term.  The term of this Agreement (the “Term”) shall
commence as of the Effective Date and, unless earlier terminated in accordance
with Section 8.2, shall continue until the later to occur of (a) the twentieth
anniversary of the Effective Date and (b) the expiration date of the last to
expire of any issued Chiron Patent that includes at least one Valid Claim covering
such Identified Product in any country in which Identified Product is being
sold.  In acknowledgement of Licensee’s
agreement to enter into a deferred payment arrangement instead of paying a
fully negotiable up-front fee for the license to the Chiron Patent Rights
granted herein, Licensee agrees that Licensee’s obligation to pay milestone
payments pursuant to Section 3.1.1 and royalty payments pursuant to Sections
3.1.2 and 3.1.3

 

13

 

shall be unconditional and irrevocable during
the Term, notwithstanding any earlier expiration or invalidation of any or all
of the Chiron Patent Rights.

8.2.         Termination.

8.2.1.      Chiron shall have the right to terminate this
Agreement, at Chiron’s sole discretion, upon delivery of written notice to
Licensee, upon the occurrence of any of the following:

(a)           In the event of any breach by
Licensee of any terms and conditions of this Agreement, provided that such
breach has not been cured within sixty (60) days after written notice thereof
is given by Chiron to Licensee; or

(b)           In the event that Licensee or any
Third Party Beneficiary challenges or knowingly supports (other than pursuant
to a subpoena or other court order) a challenge to the validity of any of the
Chiron Patent Rights.

8.2.2.      Either party shall have the right to terminate this
Agreement, upon the filing by the other party in any court or agency pursuant
to any statute or regulation of the United States or any state a petition in
bankruptcy or insolvency or for reorganization or similar arrangement or for
the appointment of a receiver or trustee of such party or its assets, upon the
proposal of a written agreement of composition or extension of its debts, or if
such party is served with an involuntary petition against it in any insolvency
proceeding, upon the ninety-first (91st) day after such service if
such involuntary petition has not previously been stayed or dismissed, or upon
the making by such party of an assignment for the benefit of its creditors.

8.3.         Effect of Termination or Expiration.

8.3.1.      In General.  Upon termination of this Agreement for any
reason:

(a)           All rights and licenses granted to
Licensee in Article 2 shall terminate, and Licensee shall cease all use of
Chiron Patent Rights, including any research, development, use, manufacture and
sale of Identified Products;

(b)           Without limitation to Section 8.3.2,
any and all royalty and milestone payment and related obligations of Licensee,
if any, shall survive;

(c)           Chiron shall have the right to retain
all amounts previously paid to Chiron by Licensee; and

(d)           Neither party
shall be relieved of any obligation which accrued prior to the effective date
of such expiration or early termination.

8.3.2.      Survival.  Except as
expressly provided herein, the following provisions shall survive expiration or
termination of this Agreement: Article 3, Section 4.3, Article 5, Article 6,
Article 7, Section 8.3, Article 9, Article 10 and any other provisions which by
their nature are intended to survive termination.

 

14

 

9.             CONFIDENTIAL
INFORMATION

 

9.1.         Confidentiality.  Except to the extent expressly authorized by
this Agreement or otherwise agreed in writing, the parties agree that, for the
term of this Agreement and for ten (10) years thereafter, each party (the “Receiving
Party”) receiving any Confidential Information of the other party (the “Disclosing
Party”) shall keep such Confidential Information confidential and shall not
publish or otherwise disclose or use such Confidential Information for any
purpose other than as provided for by in this Agreement except for Confidential
Information that the Receiving Party can establish:

9.1.1.      was already known to the Receiving Party (other than
under an obligation of  confidentiality),
at the time of disclosure by the Disclosing Party and such Receiving Party has
documentary evidence to that effect;

9.1.2.      was generally available to the public or otherwise
part of the public domain at the time of its disclosure to the Receiving Party;

9.1.3.      became generally available or known, or otherwise
became part of the public domain, after its disclosure to, or, with respect to
know-how, discovery or development by, such Receiving Party through no fault of
the Receiving Party;

9.1.4.      was disclosed to the Receiving Party, other than
under an obligation of confidentiality, by a Third Party who had no obligation
to the Disclosing Party not to disclose such information to others; or

9.1.5.      was independently discovered or developed by or on
behalf of the Receiving Party without the use of the Confidential Information
belonging to the other party and the Receiving Party has documentary evidence
to that effect.

9.2.         Authorized Disclosure and
Use. Notwithstanding Section 9.1, each party may disclose Confidential
Information belonging to the other party to the extent such disclosure is
required to comply with a court order or applicable governmental law or
regulation, including law and regulations of the United States Securities and
Exchange Commission (“SEC”), the National Association of Securities Dealers or
any national stock exchange regulation, and except as expressly provided
herein.  In the event a party is required
by court order to disclose Confidential Information belonging to the other
party, the Disclosing Party shall provide sufficient notice to the other party
and such reasonable cooperation and assistance to enable the other party to
seek a protective order or otherwise prevent or limit disclosure or use of such
Confidential Information.  In the event a
party is required to disclose the terms of this Agreement or the Stock Purchase
Agreement to the SEC, such party shall seek confidential treatment of this
Agreement and the Stock Purchase Agreement to the extent permitted by law and
shall provide to the other party a copy of the proposed redactions to be
provided in connection with the applicable confidential treatment request in
advance of submission to the SEC and shall consider in good faith any
suggestions of the other party with respect to the scope of such
redactions.  In addition, either party
may disclose the terms of this Agreement and the Stock Purchase Agreement to
its accountants or attorneys that are under a duty of confidentiality to such
party.

 

15

 

9.3.         Publicity. Except as set forth in
this Section 9, neither
Licensee nor Chiron shall make any public announcement concerning, or otherwise
disclose, the existence or terms of this Agreement or the Stock Purchase
Agreement without the prior written consent of the other party.  Each party may issue a public announcement
disclosing the execution of this Agreement following such execution; provided
that such announcement shall not disclose the economic structure or terms of this
Agreement; and provided further that the party making such public announcement
shall submit the proposed form of public announcement to the other party at
least (3) three business days in advance of the proposed date of issuance and
shall incorporate the other party’s reasonable comments and suggestions prior
to issuance of such public announcement.

10.          GENERAL

 

10.1.       Notices.  All notices or other communications required
or permitted hereunder shall be in writing and delivered personally or by
facsimile transmission (and promptly confirmed by personal delivery, registered
or certified mail or overnight courier), mailed by registered or certified mail
(return receipt requested), postage prepaid, or sent by nationally-recognized
overnight courier service, addressed as follows

If to Chiron:

 

Chiron Corporation

4560 Horton Street

Emeryville, California
94068-2916

Attention: President, Chiron
BioPharmaceuticals

Fax: (510) 923-3832

Copy to: Office of the
General Counsel

Fax: (510) 654-5360

 

If to Licensee:

 

AVI BioPharma, Inc.

One SW Columbia, Suite 1105

Portland, Oregon 97258

Attention: President

Fax: (503)-227-0751

Copy to: Vice President,
Business Development

Fax: (503)-227-0751

 

 

or to
such other address or facsimile number as the party to whom notice is to be
given may have furnished to the other party in writing in accordance
herewith.  Any such communication shall
be deemed to have been given (a) when delivered, if personally delivered or
sent by facsimile transmission on a business day; (b) on the business day after
dispatch, if sent by nationally-recognized overnight courier; and (c) on the
third (3rd) business day following the date of mailing, if sent by mail.  In addition to any notices required or
permitted hereunder, the parties shall use the contact information below for
purposes of providing payment or accounting information set forth in Article 3
and 4 hereof:

 

16

 

If to Chiron:

 

Chiron Corporation

4560 Horton Street

Emeryville, California
94068-2916

Attention: Manager, R&D
Operations

Tel: (510) 923-8128

Fax: (510) 923-5745

 

If to Licensee:

 

AVI BioPharma, Inc.

4575 SW Research Way, Suite
200

Corvallis, Oregon 97333

Attn: Chief Financial
Officer

Tel: (541)-753-3635

 

10.2.       Force Majeure.  Neither party shall be liable for delay or
failure in the performance of any of its obligations hereunder if such delay or
failure is due to causes beyond its reasonable control, including acts of God,
fires, earthquakes, strikes and labor disputes, acts of war, civil unrest or
intervention of any governmental authority; provided, that the affected party
promptly notifies the other party and further provided that the affected party
shall use its commercially reasonable efforts to avoid or remove such causes of
non-performance and shall continue performance with the utmost dispatch
whenever such causes are removed.  When
such circumstances arise, the parties shall negotiate in good faith any
modifications of the terms of this Agreement that may be necessary or
appropriate in order to arrive at an equitable solution.

10.3.       Use of Names.  Licensee, at its sole cost and expense, shall
be responsible for the selection, registration and maintenance of all
trademarks which it employs in connection with its activities conducted
pursuant to this Agreement, if any, and shall own and control such
trademarks.  Nothing in this Agreement
shall be construed as a grant to Licensee of rights, by license or otherwise,
to the use of any trademarks, service marks, logos or the name of Chiron for
any purpose.  Neither party shall use the
name or marks or logos of the other party for any purpose without the prior
written consent of such other party.

10.4.       Assignment.  Neither
party shall assign its rights or obligations under this Agreement without the
prior written consent of the party, except that (i) Chiron may, without
Licensee’s consent, assign all of its rights and obligations hereunder in
connection with any transfer of all of the Chiron Patent Rights to any
Affiliate of Chiron or another Third Party, (including a successor in interest);
 provided, however, that such Affiliate
or other Third Party agrees to be bound by the terms of this Agreement; and
(ii) Licensee may and shall assign all of its rights and obligation hereunder
to a successor in interest of the entire business to which this Agreement
relates, provided that such successor in interest agrees to be bound by the
terms of this Agreement.  Subject to the
foregoing, this Agreement shall inure to the benefit of and be binding on the
parties’ permitted successors and assigns.

 

17

 

10.5.       Waivers and Modifications.  The failure of any party to insist on the
performance of any obligation hereunder shall not be deemed to be a waiver of
such obligation.  Waiver of any breach of
any provision hereof shall not be deemed to be a waiver of any other breach of
such provision or any other provision. 
No waiver, modification, release or amendment of any obligation under or
provision of this Agreement shall be valid or effective unless in writing and
signed by all parties hereto.

10.6.       Choice of Law and
Jurisdiction.  This
Agreement shall be governed by and shall be construed in accordance with the
laws of the State of California without regard to the conflicts of laws
provisions thereof.

10.7.       Dispute Resolution.  Any dispute arising out of or in connection
with this Agreement shall be resolved by the parties in the following manner:

10.7.1.    Informal Settlement.  Either party may initiate resolution of such
controversy by providing to the other party a brief and concise statement of
the initiating party’s claims, together with relevant facts supporting them,
and referring to this Section 10.7.  For
a period of sixty (60) days from the date of such statement, or such longer
period as the parties may agree in writing, the parties shall make good faith
efforts to settle the dispute.  Such
efforts shall include full presentation of the parties’ respective positions
before their respective designated senior executives.

10.7.2.    Arbitration. Any controversy or claim arising out of or
relating to this Agreement or the validity, inducement, or breach thereof,
shall be settled by binding arbitration before three arbitrators in accordance
with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”)
then pertaining, except where those rules conflict with this provision, in
which case this provision controls.  The
parties hereby consent to the jurisdiction of the federal district court for
the district in which the arbitration is held for the enforcement of this
provision and the entry of judgment on any award rendered hereunder.  Should such court for any reason lack
jurisdiction, any court with jurisdiction shall enforce this clause and enter
judgment on any award.  Each arbitrator
shall be an attorney who has at least fifteen (15) years of experience with a
law firm or corporate law department of over twenty-five (25) lawyers or was a
judge of a court of general jurisdiction. 
The arbitration shall be held in San Francisco, California or such other
place as the parties agree, and in rendering the award the arbitrators must
apply the substantive law of California (except where that law conflicts with
this clause), except that the interpretation and enforcement of this
arbitration provision shall be governed by the Federal Arbitration Act.  The arbitrators shall be neutral,
independent, disinterested, impartial and shall abide by the Code of Ethics for
Arbitrators in Commercial Disputes approved by the AAA.  Within forty-five (45) days of initiation of
arbitration, each party shall select its arbitrator. The third arbitrator shall
be mutually agreed upon by the two arbitrators chosen by the parties.  In the event that the two arbitrators cannot
agree on a third arbitrator within sixty (60) days of their approval then AAA
shall appoint an arbitrator who shall be an attorney who has at least fifteen
(15) years of experience with a law firm or corporate law department of over
twenty-five (25) lawyers or was a judge of a court of general
jurisdiction.  The parties shall reach
agreement upon and thereafter follow procedures assuring that the arbitration
will be concluded and the award rendered within no more than eight months from
selection of

 

18

 

the arbitrators.  Failing such
agreement, the AAA will design and the parties will follow procedures that meet
such a time schedule.  Each party has the
right before or, if the arbitrator cannot hear the matter within a acceptable period,
during the arbitration to seek and obtain from the appropriate court
provisional remedies such as attachment, preliminary injunction, replevin,
etc., to avoid irreparable harm, maintain the status quo or preserve the
subject matter of the arbitration. 
Notwithstanding the foregoing, either party may seek an order from a
court of competent jurisdiction to restrain the other from violating the
nondisclosure provisions of Article 9, the restrictions on use of trademarks in
Section 10.3, or the limitations on the use of the Chiron Patent Rights set
forth in Article 2.

10.8.       Entire Agreement.  This Agreement and the exhibits hereto
constitute the entire agreement between the parties as to the subject matter
hereof, and supersede all prior negotiations, representations, agreements and
understandings regarding the same.

10.9.       Counterparts. This Agreement may be executed in counter­parts
with the same effect as if both parties had signed the same document.  All such counterparts shall be deemed an
original, shall be construed together and shall constitute one and the same
instrument.

10.10.     Relationship of the Parties.  Each party is an independent contractor under
this Agreement.  Nothing contained herein
is intended or is to be construed so as to constitute Chiron and Licensee as
partners, agents or joint venturers. 
Neither party shall have any express or implied right or authority to
assume or create any obligations on behalf of or in the name of the other party
or to bind the other party to any contract, agreement or undertaking with any
Third Party.

10.11.     Severability.  If any
provision hereof should be held invalid, illegal or unenforceable in any
respect, then, to the fullest extent permitted by applicable law, (a) all other
provisions hereof shall remain in full force and effect and shall be liberally
construed in order to carry out the intent of the parties as nearly as may be
possible, and (b) the parties agree to use their best efforts to negotiate a
provision, in replacement of the provision held invalid, illegal or
unenforceable, that is consistent with applicable law and accomplishes, as
nearly as possible, the original intention of the parties with respect
thereto.  To the fullest extent permitted
by applicable law, each party hereby waives any provision of law that would
render any provision hereof prohibited or unenforceable in any respect.

10.12.     Exports.  The rights and obligations of the Parties
under this Agreement shall be subject in all respects to United States laws and
regulations, as shall from time to time govern the license and delivery of
technology and products between the United States and other jurisdictions in
the Research and Development Territory, including the United States Foreign
Assets Control Regulations, Transaction Control Regulations and Expert Control
Regulations, as amended, and any successor legislation issued by the Department
of Commerce, International Trade Administration, Office of Export
Licensing.  Without in any way limiting
the provisions of this Agreement, each party agrees that, unless prior
authorization is obtained from the Office of Export Licensing, it shall not
export, re-export, or transship, directly or indirectly, to any country, any of
the technical data disclosed to it by the other party if such export would
violate the laws of the United States or the regulations of any department or
agency of the United States Government.

 

19

 

10.13.     Construction. 
Headings and captions are for convenience only and are not be used in
the interpretation of this Agreement. Except where the context otherwise
requires, wherever used, the singular shall include the plural, the plural the
singular, the use of any gender shall be applicable to all genders and the word
“or” is used in the inclusive sense.  The
captions of this Agreement are for convenience of reference only and in no way
define, describe, extend or limit the scope or intent of this Agreement or the
intent of any provision contained in this Agreement.  The term “including” as used herein shall
mean including, without limiting the generality of any description preceding
such term.  The language of this
Agreement shall be deemed to be the language mutually chosen by the parties,
and no rule of strict construction shall be applied against either party.

IN
WITNESS WHEREOF,
the parties have duly executed this Agreement as of the date set forth above.

	
  CHIRON CORPORATION

  	
  AVI BIOPHARMA, INC.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:  Craig A. Wheeler

  	
  Name:  Alan P. Timmins

  
	
   

  	
   

  
	
  Title:
   President, Chiron BioPharmaceuticals

  	
  Title:
  President and Chief Operating Officer

  
						

 

20

 

EXHIBIT A

Patents Relating to HCV

 

 

 

	
  Patent/ Application No

  	
   

  	
  Country

  
	
  5,714,596

  	
   

  	
  US

  
	
  6,074,816

  	
   

  	
  US

  
	
  5,712,088

  	
   

  	
  US

  
	
  6,027,729

  	
   

  	
  US

  
	
  5,863,719

  	
   

  	
  US

  
	
  5,371,017

  	
   

  	
  US

  
	
  5,585,258

  	
   

  	
  US

  
	
  5,597,691

  	
   

  	
  US

  
	
  6,194,140

  	
   

  	
  US

  
	
  5,712,145

  	
   

  	
  US

  
	
  5,885,799

  	
   

  	
  US

  
	
  5,989,905

  	
   

  	
  US

  
	
  6,472,180

  	
   

  	
  US

  
	
  09/884455

  	
   

  	
  US

  
	
  09/884456

  	
   

  	
  US

  
	
  10/232643

  	
   

  	
  US

  
	
  6,096,541

  	
   

  	
  US

  
	
  5,679,342

  	
   

  	
  US

  
	
  5,968,775

  	
   

  	
  US

  
	
  2005/0058982A1

  	
   

  	
  US

  
	
  6,297,370

  	
   

  	
  US

  
	
  5,959,092

  	
   

  	
  US

  
	
  5,372,928

  	
   

  	
  US

  
	
  10/626879

  	
   

  	
  US

  
	
  5,922,857

  	
   

  	
  US

  
	
  60/614955

  	
   

  	
  US

  
	
  5,851,759

  	
   

  	
  US

  

 

 

21

 

 

EXHIBIT B

Location(s) of Licensee Facilities

 

AVI BioPharma, Inc.

One SW Columbia, Suite 1105

Portland, OR 97258

 

AVI BioPharma, Inc.

4575 SW Research Way, Suite 200

Corvallis, Oregon, 97333

 

22

 

 

EXHIBIT C

Identified Products Resulting from Prior Activity

 

 

	
  Lot

  	
   

  	
  Seq ID

  	
   

  	
  Name

  	
   

  	
  Sequence

  	
   

  	
  n

  	
   

  	
  5’End

  	
   

  	
  Status

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  04JA12-J(A1)

  	
   

  	
  0-1-4-116

  	
   

  	
  HCV-REP

  	
   

  	
  GCC AGC CCC CTG ATG GGG GC

  	
   

  	
  20

  	
   

  	
  P003-(GMBS)

  	
   

  	
  Research

  
	
  04JA12-J(B1)

  	
   

  	
  0-1-4-117

  	
   

  	
  GBV-bAUG

  	
   

  	
  CAG GCA TGT GCT ACG GTC TAC

  	
   

  	
  21

  	
   

  	
  P003-(GMBS)

  	
   

  	
  Research

  
	
  04JA12-J(C1)

  	
   

  	
  0-1-4-118

  	
   

  	
  GBV-bREP

  	
   

  	
  ACC ACA AAC ACT CCA GTT T

  	
   

  	
  19

  	
   

  	
  P003-(GMBS)

  	
   

  	
  Research

  
	
  04JA12-J(B2)

  	
   

  	
  0-1-4-115

  	
   

  	
  HCV-AUGpse

  	
   

  	
  GTG CTC ATG GTG CAC GGT CTA C

  	
   

  	
  22

  	
   

  	
  P003-(GMBS)

  	
   

  	
  Research

  
	
  04FE02-J(B2)

  	
   

  	
  0-1-4-124

  	
   

  	
  3’ end of (-) strand

  	
   

  	
  GAT TGG GGG CGA CAC TCC ACC

  	
   

  	
  21

  	
   

  	
  P003-(GMBS)

  	
   

  	
  Research

  
	
  04FE09

  	
   

  	
  R&D 0-1-4-119

  	
   

  	
  GBV-bAUG

  	
   

  	
  CAG GCA TGT GCT ACG GTC TAC

  	
   

  	
  21

  	
   

  	
  HO-(CH2CH2O)3-CO

  	
   

  	
  Research

  
	
  04FE10

  	
   

  	
  R&D 0-1-4-121

  	
   

  	
  GBV-bREP

  	
   

  	
  ACC ACA AAC ACT CCA GTT T

  	
   

  	
  19

  	
   

  	
  HO-(CH2CH2O)3-CO

  	
   

  	
  Research

  
	
  04MR31-R(C4)

  	
   

  	
  0-1-0-1004

  	
   

  	
  A13

  	
   

  	
  AAA AAA AAA AAA A

  	
   

  	
  13

  	
   

  	
  P003-(GMBS)

  	
   

  	
  Research

  
	
  04MR31-R(D4)

  	
   

  	
  0-1-0-1005

  	
   

  	
  A17

  	
   

  	
  AAA AAA AAA AAA AAA AA

  	
   

  	
  17

  	
   

  	
  P003-(GMBS)

  	
   

  	
  Research

  
	
  04AP16-J(D1)

  	
   

  	
  0-1-4-123

  	
   

  	
  bases 9550-9570

  	
   

  	
  GGC TCA CGG ACC TTT CAC AGC

  	
   

  	
  21

  	
   

  	
  P003-(GMBS)

  	
   

  	
  Research

  
	
  05MY23-R(A1)

  	
   

  	
  NG-05-0413

  	
   

  	
  HCV SL2

  	
   

  	
  GCT CAC GGC CTT TCA CAG C

  	
   

  	
  19

  	
   

  	
  P007

  	
   

  	
  Research

  
	
  05MY23-R(B1)

  	
   

  	
  NG-05-0414

  	
   

  	
  HCV SL3.2

  	
   

  	
  GGG CAT GAG ACA GGC TGT GAT A

  	
   

  	
  22

  	
   

  	
  P007

  	
   

  	
  Research

  
	
  05MY23-R(C1)

  	
   

  	
  NG-05-0415

  	
   

  	
  HCV SL3.0

  	
   

  	
  CAG TAT CAG CAC TCT CTG CAG

  	
   

  	
  21

  	
   

  	
  P007

  	
   

  	
  Research

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  05MY23-R(C2)

  	
   

  	
  NG-05-0421

  	
   

  	
  HCV AUG (AVI-4065)

  	
   

  	
  GTG CTC ATG GTG CAC GGT C

  	
   

  	
  19

  	
   

  	
  P007

  	
   

  	
  Research

  
	
  05MY23-R(D2)

  	
   

  	
  0-1-4-65

  	
   

  	
  HCV AUG (AVI-4065)

  	
   

  	
  GTG CTC ATG GTG CAC GGT C

  	
   

  	
  19

  	
   

  	
  HO-(CH2CH2O)3-CO

  	
   

  	
  Phase I/II

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  

 

 

23

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