Document:

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.

 

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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.

 

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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

 

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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.

 

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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.

 

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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.

 

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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.

 

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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

 

[ * ] = 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.

 

10

 

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.

 

[ * ] = 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.

 

11

 

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

 

[ * ] = 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.

 

12

 

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.

 

[ * ] = 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.

 

13

 

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.

 

[ * ] = 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.

 

14

 

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.

 

[ * ] = 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.

 

15

 

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

  

 

[ * ] = 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.

 

16

 

EXHIBIT A

 

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.

 

 

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.

[ * ]

[ * ] = 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.Exhibit 10.11

 

[ * ] = 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

 

 

ENDORECHERCHE Inc.

 

BIOMEDICINES, Inc.

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  DEFINITIONS

  	
   

  
	
   

  	
  1.1

  	
  “Accounting”

  	
   

  
	
   

  	
  1.2

  	
  “Affiliate”

  	
   

  
	
   

  	
  1.3

  	
  “Effective Date”

  	
   

  
	
   

  	
  1.4

  	
  “Field”

  	
   

  
	
   

  	
  1.5

  	
  “Licensed Product”

  	
   

  
	
   

  	
  1.6

  	
  “Net Sales”

  	
   

  
	
   

  	
  1.7

  	
  “Party”

  	
   

  
	
   

  	
  1.8

  	
  “Patent Rights”

  	
   

  
	
   

  	
  1.9

  	
  “Person”

  	
   

  
	
   

  	
  1.10

  	
  “Sublicense”

  	
   

  
	
   

  	
  1.11

  	
  “Territory”

  	
   

  
	
   

  	
  1.12

  	
  “Third Party”

  	
   

  
	
   

  	
  1.13

  	
  “Valid Claim”

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  GRANT

  	
   

  
	
   

  	
  2.1

  	
  License

  	
   

  
	
   

  	
  2.2

  	
  Right to Sublicense

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  REPORTS

  	
   

  
	
   

  	
  3.1

  	
  Reports by BMI

  	
   

  
	
   

  	
  3.2

  	
  Reports by ERI

  	
   

  
	
   

  	
  3.3

  	
  Regulatory Authorities

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  PAYMENTS

  	
   

  
	
   

  	
  4.1

  	
  Initial payment

  	
   

  
	
   

  	
  4.2

  	
  One-Time
  Payment on First Approval for Marketing

  	
   

  
	
   

  	
  4.3

  	
  Royalty Payments

  	
   

  
	
   

  	
  4.4

  	
  Generic Competition

  	
   

  
	
   

  	
  4.5

  	
  BMI
  Financial Records and Verification

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  INTELLECTUAL PROPERTY

  	
   

  
	
   

  	
  5.1

  	
  Maintenance

  	
   

  
	
   

  	
  5.2

  	
  Patent Term Extension

  	
   

  
	
   

  	
  5.3

  	
  Notification
  Regarding Infringement

  	
   

  
	
   

  	
  5.4

  	
  Litigation

  	
   

  

 

[ * ] = 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.

 

i

 

	
   

  	
  5.5

  	
  Other Intellectual
  Property

  	
   

  
	
   

  	
  5.6

  	
  Abandonment
  of Patent Rights by ERI and Conversion of License

  	
   

  
	
   

  	
  5.7

  	
  Unblocking License(s)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
  6.1

  	
  Freedom to Execute
  Agreement

  	
   

  
	
   

  	
  6.2

  	
  Patent Rights

  	
   

  
	
   

  	
  6.3

  	
  No Warranty on
  Fitness for Use

  	
   

  
	
   

  	
  6.4

  	
  Third Party License

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  LIABILITY AND
  INDEMNIFICATION

  	
   

  
	
   

  	
  7.1

  	
  by BMI

  	
   

  
	
   

  	
  7.2

  	
  by ERI

  	
   

  
	
   

  	
  7.3

  	
  Unallocated Liability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  ASSIGNMENT OR
  CHANGE IN CONTROL

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  TERM AND TERMINATION

  	
   

  
	
   

  	
  9.1

  	
  Duration of Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  CONFIDENTIALITY

  	
   

  
	
   

  	
  10.1

  	
  Transmittal of
  Information

  	
   

  
	
   

  	
  10.2

  	
  Public Disclosure

  	
   

  
	
   

  	
  10.3

  	
  Acknowledgement
  of Private Disclosure

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  COMMUNICATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  MISCELLANEOUS PROVISIONS

  	
   

  
	
   

  	
  12.1

  	
  Governance of the
  Agreement

  	
   

  
	
   

  	
  12.2

  	
  Entire Agreement

  	
   

  
	
   

  	
  12.3

  	
  Severability

  	
   

  
	
   

  	
  12.4

  	
  Original
  Agreement and Counterparts

  	
   

  
	
   

  	
  12.5

  	
  No Waiver of Rights

  	
   

  
	
   

  	
  12.6

  	
  Section Titles or
  Headings

  	
   

  
	
   

  	
  12.7

  	
  Force Majeure

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  COUNTRY

  	
   

  

 

[ * ] = 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.

 

ii

 

DRAFT LICENSE AGREEMENT

 

This agreement (“Agreement”) is made and entered into
this 4th of November 2002 by and between Endorecherche Inc, a Canadian
corporation (“ERI”), with an address for purposes of the Agreement at 2989, rue
de la Promenade Sainte-Foy G1W 2J5, Québec, Canada, and BioMedicines, Inc., a
Delaware corporation (“BMI”), with an address for purposes of the Agreement at
2000 Powell Street, Ste 1640, Emeryville, CA, USA, 94608.

 

WHEREAS, ERI is the owner of certain Patent Rights (as
hereinafter defined); and

 

WHEREAS, under Patent Rights, ERI has the right to
grant a License to the Licensed Product (each as hereinafter defined); and

 

WHEREAS, BMI desires to establish whether the Licensed
Product is useful in treating patients with cancer in the Territory (as
hereinafter defined); and

 

WHEREAS, BMI desires to obtain a License in respect of
the Licensed Product in the Territory under said Patent Rights, and

 

WHEREAS, ERI wishes to grant such a License to BMI
subject to the terms hereof;

 

NOW, THEREFORE, in consideration of the promises and
mutual covenants contained herein, and other good and valuable consideration,
ERI and BMI agree as follows:

 

1.                                      Definitions

 

1.1                               “Accounting”

 

shall mean, for BMI, Generally Accepted Accounting
Principles (so-called GAAP accounting), also as amended from time to time.

 

1.2                               “Affiliate”

 

shall mean any person, corporation, partnership, firm,
joint venture or other entity which, directly or indirectly, through no intermediary
or through one or more intermediaries controls, is controlled by, or is under
common control with either BMI or ERI, as the case may be.  Control is understood to mean the possession
of the authority, power or right to direct or to cause the direction of the
management and/or policies and actions of the Affiliate.

 

1.3                               “Effective
Date”

 

shall mean the date of execution of the Agreement as
shown above.

 

1.4                               “Field”

 

shall mean the treatment of humans for cancer.

 

1.5                               “Licensed
Product”

 

shall mean any and all BMI 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 (as defined hereinafter) of
the ERI Patent Rights.

 

1.6                               “Net
Sales”

 

shall mean all revenues recognized in accordance with
GAAP from the sale of Licensed Product(s) by BioMedicines, its Affiliates or
Sublicensees to Third Parties (all as further defined herein) less returns and
allowances actually paid and allowed, including, but not limited 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.

 

1

 

a)              reasonable shipping
or freight charges prepaid or allowed and other reasonable charges, such as
insurance, relating thereto;

 

b)             sales or excise taxes
or customs duties paid by BMI;

 

c)              any other non-refundable
governmental charges imposed upon the sale of Licensed Product;

 

d)             distributor’s fees,
rebates, non-cash rebates or allowances actually granted, allowed or incurred,
and not otherwise in violation of local or international laws;

 

e)              quantity discounts,
cash discounts or chargebacks actually granted, allowed or incurred in the
ordinary course of business in connection with the sale of Licensed Product;

 

f)                allowances or
credits to customers, but not in excess of the selling price of Licensed
Product, on account of governmental requirements, rejection of Licensed Product
for good reason, recalls made because of Licensed Product becoming outdated, or
for the value of returned trade goods of Licensed Product; and

 

g)             an allowance for bad
debts not to exceed [*], and
otherwise in accordance with BMI’s Accounting Standards and otherwise
consistently applied within and across all Affiliates or operating business
units or divisions, such allowance or any portion thereof to be refunded in the
next quarter if such bad debts are less than [*].

 

For purposes of calculating Net Sales, ERI and BMI
also recognize that:

 

a)              customers may
include persons or entities in the chain of commerce (such as so-called Health
Maintenance Organizations in the United States, for example) that enter into
contractual and binding agreements with BMI to establish and set a price for
Licensed Product even though

 

1)              title to Licensed
Product does not actually pass directly from selling party to such customers;

 

2)              payment for the
Licensed Product is not made by such customers; and that

 

b)             in such cases,
chargebacks paid by BMI to or through a Third Party such as a wholesale
distributor can then be deducted by BMI from gross revenues in order to
calculate BMI’s Net Sales.

 

1.7                               “Party”

 

shall mean ERI or BMI individually and “Parties” shall
mean ERI and BMI collectively.

 

1.8                               “Patent
Rights”

 

shall mean any and all of the following intellectual
property:

 

a)              the patents and
patent applications listed in Appendix A;

 

b)             the patents issued from
the applications listed in Appendix A and from divisionals and continuations of
these applications;

 

c)              any reissue or
extension of patents in Appendix A;

 

d)             any improvement
patent dominated by the claims of the Patent Rights;

 

e)              any patents,
divisionals, continuations, reissues, extensions or improvement patents
subsequently added to Appendix A as further described herein.

 

[ * ] = 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

 

1.9                               “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.

 

1.10                        “Sublicense”

 

shall mean a license by BMI to a Third Party (as
defined hereinafter) of any rights licensed by ERI to BMI hereunder and “Sublicensee”
shall mean a Third Party recipient of said rights from BMI.

 

1.11                        “Territory”

 

shall mean worldwide.

 

1.12                        “Third
Party”

 

shall mean any Person other than ERI or BMI.

 

1.13                        “Valid
Claim”

 

shall mean a claim of an issued and unexpired patent
included within the ERI 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.

 

2.                                      Grant

 

2.1                               License

 

ERI hereby grants to BMI, and BMI hereby accepts from
ERI, under the Patent Rights, a non-exclusive right and license (the License),
to use, develop, market, and sell Licensed Product in the Territory for one or
more uses within the Field, in accordance with the terms of this
Agreement.  Both ERI and BMI agree that
under this grant, BMI shall receive from ERI rights to practice the invention
of Patent Rights and no other data, scientific information, regulatory
documentation, drug supplies, and the like.

 

2.2                               Right
to Sublicense

 

ERI also hereby grants to BMI and BMI hereby accepts
from ERI the right to sublicense Licensed Product to the extent and in
accordance with the conditions specified in other sections of this
Agreement.  All sublicenses (except to an
Affiliate of BMI) should require ERI’s prior written consent, such consent not
to be unreasonably withheld. 
Sublicensing to other than an Affiliate for the purpose of legalizing an
infringement of the Patent Rights is prohibited.

 

3.                                      Reports

 

3.1                               Reports
by BMI

 

BMI will make periodic reports to ERI, and in any case
at least every [*] months, regarding the development
of any of its products in the Field for which the commercialization of such
products are believed in good faith to be dependent upon Patent Rights.  BMI will be responsible for ensuring that
similar information is made available to ERI in the event that any BMI
Affiliate or Sublicensee is developing products in the Field for which the
commercialization of such products are believed in good faith to be dependent
upon 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.

 

3

 

3.2                               Reports
by ERI

 

ERI shall promptly report to BMI the execution of a
license agreement with, or transfer of intellectual property rights to, a Third
Party involving any of the Patent Rights described herein.

 

3.3                               Regulatory
Authorities

 

ERI acknowledges that approval by or the consent of
regulatory authorities may be necessary prior to the commencement of any
clinical development activities by BMI, Affiliates or Sublicensees.  Both ERI and BMI acknowledge that there is no
guarantee that such approval or consent will be granted.

 

4.                                      Payments

 

4.1                               Initial
payment

 

Within thirty (30) days after the Effective Date, BMI
shall pay to ERI the amount of two hundred fifty thousand dollars (US
$250,000).

 

4.2                               One-Time
Payment on First Approval for Marketing

 

Within thirty (30) days after the first approval of
Licensed Product for a major market (defined for purposes of this Agreement as [*]), BMI shall make a one-time payment to ERI of [*].

 

4.3                               Royalty
Payments

 

Within sixty (60) days after the end of any calendar
quarter, BMI shall pay to ERI the sum of [*] of Net
Sales for any country in the Territory where Patent Rights remain in force and
for a period of [*] thereafter.

 

4.4                               Generic
Competition

 

If a generic version of Licensed Product is approved
for marketing in any country in the Territory, wherein such BMI product was or
could have been commercialized under Patent Rights, then royalty payments in
said country shall be reduced by [*] of Net
Sales.

 

4.5                               BMI
Financial Records and Verification

 

BMI shall keep sufficiently complete and accurate
records to properly reflect all sales and deductions from Net Sales and to
enable the amounts payable hereunder to be determined.

 

Upon the written request of ERI, BMI shall permit an
independent certified public accounting firm to verify the accuracy of reports
and amounts paid to ERI. The accounting firm shall be selected by ERI, shall be
of reputable international standing, and will be otherwise reasonably
acceptable to BMI. The activities of the accounting firm will be paid for
solely by ERI except as provided below.

 

Representatives of the accounting firm will be
permitted to have reasonable access, for reasonable periods of time, to certain
financial records of BMI. Such access will be limited to that reasonably
necessary for the accounting firm to verify the appropriateness of the payments
made previously to ERI.

 

The accounting firm shall disclose in writing all
information gathered to BMI. In the form of a written report, the accounting
firm shall disclose to ERI only whether or not payments made to ERI were
reasonably correct and the specific details concerning any purported
discrepancies.  No other information
shall be shared with ERI.

 

The accounting firm will provide its report
simultaneously to ERI, to BMI, and to the BMI Affiliate or the BMI Sublicensee
as appropriate.

 

[ * ] = 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.

 

4

 

If, and only if, the accounting firm concludes that
additional royalties or other compensation are definitely owed for the audited
period, and the additional amount owed exceeds, in aggregate, [*] of amount actually paid during any one fiscal year, then
BMI shall take additional actions to remedy this underpayment.  BMI will then:

 

a)              pay all reasonable
costs associated with the audit that demonstrated the underpayment (or repay
ERI for said audit costs, as appropriate);

 

b)             pay the underpaid
amount within thirty (30) days of the date the accounting firm delivered the
report to ERI and BMI; and

 

c)              pay interest on the
underpaid amount only (The interest rate will be the average [*] calculated from [*] as
effectively set by the United States Federal Reserve Board.)

 

Should, however, the accounting firm conclude that BMI
has overpaid royalties or other compensation to ERI, then ERI shall credit any
such overpayment to BMI (or otherwise to a Selling Party as appropriate).  This credit will be applied during the next
complete calendar quarter for which payments are due to ERI.

 

5.                                      Intellectual
Property

 

5.1                               Maintenance

 

ERI shall, subject to good business judgment, at its
sole cost and expense maintain the Patent Rights in Appendix A.

 

If ERI shall elect not to maintain Patent Rights in
any country within the Territory, ERI shall inform BMI in writing at least [*] in advance of any action to abandon such maintenance,
and BMI shall have the right to assume, at BMI’s sole cost and expense, the
maintenance of any Patent Rights abandoned by ERI. If BMI does assume such
maintenance following abandonment by ERI in any country, then the royalty or
other payment due, if any, shall be reduced by the cost to BMI of assuming the
maintenance of Patent Rights.  If BMI
elects not to assume such maintenance or if, having assumed such maintenance,
BMI subsequently decides not to continue such maintenance, it must give ERI [*] notice in advance and allow ERI, at ERI’s discretion, to
re-assume such maintenance.

 

Maintenance shall include the continuing effort, on
the basis of good business judgment, to obtain issued patents where patent
applications are pending.

 

ERI shall make information available to BMI on a
regular and timely basis to ensure that patent maintenance is facilitated and
to provide BMI the opportunity to take any desirable or necessary actions in a
timely manner.

 

5.2                               Patent
Term Extension

 

In the event an extension of a patent(s) is available,
the company that is then responsible for maintaining said patent shall have the
right to designate the patent or patents for which such extension will be
applied.

 

If the responsible company (ERI or BMI as the case may
be) shall elect not to extend Patent Rights in any country within the
Territory, then the other company (BMI or ERI, respectively) shall have the
right to extend, at its sole cost and expense, any Patent Rights not otherwise
extended.  If one company does assume
such maintenance following abandonment by the other in any country, royalty or
other payments, if any, shall be reduced by the cost of assuming such
responsibilities.  If one company elects
not to extend such rights or, having elected to extend, decides to abandon such
rights, that company shall provide the other company with at least [*] written notice in advance and allow the other company to
execute such extension.

 

[ * ] = 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

 

5.3                               Notification
Regarding Infringement

 

Each of BMI and ERI shall promptly notify the other
Party in the event that it becomes aware of any:

 

a)              alleged infringement
of the Patent Rights by a Third Party and of any available evidence thereof; or

 

b)             alleged infringement
of patent rights of Third Parties specifically related to the matters described
elsewhere in this Agreement.

 

5.4                               Litigation

 

5.4.1                     Defense of
Patent Rights

 

The company having patent maintenance rights agrees,
subject to good business judgment, to prosecute and/or defend Patent Rights
against challenge or infringement by any Third Party or Parties.  BMI acknowledges that ERI may elect, at its
sole discretion, not to prosecute or defend Patent Rights.

 

In the event that ERI shall elect not to defend Patent
Rights against challenge or infringement, BMI, including its Affiliates or
Sublicensees, may at its sole discretion prosecute and/or defend any
infringement and/or challenge to the Patent Rights.

 

In addition, in the event that ERI has not exercised
or has abandoned its marketing options in any portion of the Territory, then
BMI shall have the first right to prosecute and/or defend Patent Rights in the
name of ERI against challenge or infringement by any Third Party.

 

In any infringement suit that BMI, its Affiliates or
Sublicensees may institute to enforce the Patent Rights, or in any suit brought
by a Third Party in which BMI, its Affiliates or Sublicensees is defending the
Patent Rights, ERI shall cooperate with BMI and, to the extent practicable,
have its employees and, if practicable, former employees, testify when
requested.  ERI will also make available
relevant records, papers, information, samples, specimens and the like.  ERI will obligate its own Affiliates or other
Licensees to cooperate in a similar manner.

 

5.4.2                     Defrayal of
BMI Costs

 

ERI also agrees that any costs, including legal costs,
reasonably incurred by BMI with respect to Patent Rights litigation shall
reduce the total of any payments due from BMI to ERI, provided, however that
such reductions, when applied, shall not exceed [*]
of the amount due to ERI from BMI in any single quarterly payment.  The parties agree that any such reduction in
payment from BMI to ERI shall result in a credit only to BMI and shall not
require any payment from ERI to BMI.

 

5.4.3                     Recovery of
Withheld Amounts

 

If any amounts withheld per Section 5.4.2 are
specifically recovered, however, from an offending Third Party, then these
amounts that were previously withheld by BMI will be remitted to ERI. The
remission shall occur within sixty (60) days of said recovery by BMI. No
interest shall be paid on such amounts.

 

5.5                               Other
Intellectual Property

 

Trademarks, service marks, and tradenames, or any
applications pertaining thereto, as shall be selected, chosen, created or
developed by BMI, its Affiliates or Sublicensees shall be the exclusive
property of BMI, its Affiliates or Sublicensees, as appropriate.  Any new invention within the Field made by
and paid for solely by BMI, a BMI Affiliate or Sublicensee shall be the
property of BMI or said Affiliate or Sublicensee as appropriate.

 

[ * ] = 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.

 

6

 

5.6                               Abandonment
of Patent Rights by ERI and Conversion of License

 

In the event that ERI shall abandon any of Patent
Rights for any country in the Territory and BMI shall assume responsibility for
maintenance or defense of said Patent Rights, then the License from ERI to BMI
shall convert automatically from non-exclusive to exclusive for said country.

 

5.7                               Unblocking
License(s)

 

Should a license from a Third Party (“Unblocking
License”) be required, in the judgment of BMI, to permit, continue or further
commercialization of Licensed Product by BMI, then BMI agrees to attempt to
acquire said Unblocking License on a reasonable-efforts basis subject to
prudent business judgment.  Based upon
the terms of the Unblocking License, payments by BMI to ERI required hereunder
shall then be adjusted [*] between ERI
and BMI. Both ERI and BMI agree that [*] shall be [*] within a [*] following
the effective date of the Unblocking License. 
If no [*], the adjusted payments should
be determined [*], but in no case will the
royalties be reduced by more than [*] for the
country in dispute.

 

6.                                      Representations
and Warranties

 

6.1                               Freedom
to Execute Agreement

 

Each of ERI and BMI represent and warrant to the other
on behalf of its officers, directors, and agents, respectively, that:

 

a)              it is free to enter
into the Agreement and has the full right and authority to do so;

 

b)             it has taken all
corporate action necessary to authorize the execution and delivery of the
Agreement and the performance of its obligations under the Agreement;

 

c)              it is not aware of
any impediment that would inhibit its ability to perform in all material
respects its obligations under the Agreement; and

 

d)             the execution,
delivery and performance of the Agreement will not violate any provision of,
conflict with or result in any breach of any of the terms of, or constitute a
default under either Party’s:

 

1)              respective
certificate of incorporation or by-laws;

 

2)              a material
indenture, lease, any other agreement or material instrument;

 

3)              an applicable
decree, judgment or order; or

 

4)              any applicable law,
statute, rule or regulation.

 

6.2                               Patent
Rights

 

ERI hereby represents and warrants to BMI on behalf of
ERI, its officers, directors, and agents that:

 

a)              it is the legal
owner or assignee of the Patent Rights covered by the Agreement;

 

b)             the patents and
patent applications listed in Appendix A include all of those currently related
in any manner to the Licensed Product or use(s) thereof:

 

c)              it has the full
legal power to convey the rights granted to BMI in the Agreement;

 

d)             it has no knowledge
of any facts which would rebut the presumption of validity accorded any issued
patents within the 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.

 

7

 

e)              it has disclosed to
the United States Patent and Trademark Office, or to other similar offices in
other countries, all information material to patentability, as such is defined
in 37 C.F.R. Section 1.56;

 

f)                it has no
knowledge of any adverse claims to the Patent Rights;

 

g)             all patent
applications included in the Patent Rights are pending and have not been
abandoned and are enforceable as of the Effective Date pursuant to a valid
assignment;

 

h)             to its best knowledge
and belief, as of the Effective Date, there is no asserted or unasserted claim
or demand which may be enforced against any of the Patent Rights;

 

i)                 Appendix A is
accurate and complete with respect to the use, manufacture, sale or distribution
of Licensed Product in the Territory for the Field

 

j)                 to its best
knowledge and belief, on the Effective Date the practice of any processes
and/or products disclosed in the Patent Rights do not infringe upon any Third
Party patents; and, in addition, that

 

k)              ERI has not entered
into, and will not enter into, any agreement with a Third Party which is in
conflict with the rights granted to BMI pursuant to the Agreement.

 

6.3                               No
Warranty on Fitness for Use

 

The Licensed Product is specifically without any
warranty of fitness or merchantability for any particular use.

 

6.4                               Third
Party License

 

In the event that ERI shall license any or all of
Patent Rights to a Third Party, ERI shall inform BMI of said license within
thirty (30) days of the effective date of said license.  In addition, ERI agrees not to license Patent
Rights to a Third Party known or alleged to be infringing Patent Rights and/or
against whom BMI is defending Patent Rights pursuant to Section 5.

 

7.                                      Liability
and Indemnification

 

7.1                               by
BMI

 

BMI shall be liable for and shall indemnify ERI
against all claims arising from the manufacturing, development or
commercialization of Licensed Product by BMI, its Affiliates or
Sublicensees.  The only exceptions shall
be those caused by or attributable to:

 

a)              fraudulent or
deliberately false or misleading information provided by ERI or its Affiliates
to BMI and acted thereon in good faith by BMI;

 

b)             gross negligence by
ERI or its Affiliates or Sublicensees; or

 

c)              any illegal actions
by ERI or its Affiliates or Sublicensees.

 

7.2                               by
ERI

 

Similarly, ERI shall indemnify BMI against all claims
arising from the development or commercialization of Licensed Product by ERI,
its Affiliates.  or other licensees.  The only exceptions shall be those caused by
or attributable to:

 

a)              fraudulent or
deliberately false or misleading information provided by BMI or its Affiliates
to ERI and acted thereon in good faith by ERI;

 

b)             gross negligence by
BMI or its Affiliates or Sublicensees; or

 

[ * ] = 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

 

c)              any illegal actions
by BMI or its Affiliates or Sublicensees.

 

7.3                               Unallocated
Liability

 

Should any liability remain unallocated after
assumption of liability and provision of indemnification as described herein,
such unallocated liability shall be divided between ERI and BMI according to
the fraction of net financial benefits from the commercialization of the
product individually obtained to Affiliates by ERI, BMI or to Affiliates
thereof, if any.

 

8.                                      Assignment
or Change in Control

 

The Agreement may not be assigned by BMI except with
ERI’s prior written consent, such consent not to be unreasonably withheld, and
provided that BMI shall obligate the assignee to comply with the terms of the
Agreement.

 

9.                                      Term
and Termination

 

9.1                               Duration
of Agreement

 

9.1.1                     Duration

 

Except as otherwise specifically provided herein (see
also Section 4.3) or unless sooner terminated pursuant to other provisions
within the Agreement, the Agreement and the licenses and rights granted to BMI
hereunder shall remain in full force and effect in any country in the Territory
for as long as royalties, or other like compensation, is payable to ERI by BMI
for said country.

 

9.1.2                     After
Expiration of Agreement

 

At the end of said term, BMI shall have a fully
paid-up License in the countries of the Territory in which Licensed Product was
commercialized by BMI prior to termination of the Agreement as further
described herein.

 

9.1.3                     Termination
Because of Unremedied Breach.

 

Either ERI or BMI shall have the right to terminate
the Agreement with thirty (30) days’ notice in written form to BMI or ERI,
respectively, in the event that:

 

a)              BMI or ERI,
respectively, fails to remedy any material failure to fulfill its obligations
under the Agreement; or

 

b)             there is a material
breach of the terms or conditions hereof within sixty (60) days after receipt
of notice in written form specifying the circumstances giving rise to failure
or breach.

 

Termination for such causes shall not preclude seeking
redress or injunctive relief.

 

9.1.4                     Termination
Because of Insolvency.

 

ERI may terminate the Agreement with immediate effect
by notice in written form in the event that BMI becomes insolvent, is declared
bankrupt or adopts a plan of liquidation or dissolution.

 

10.                               Confidentiality

 

10.1                        Transmittal
of Information

 

Any information which is transmitted by one Party to
the other Party in connection with the entering into or the performance of the
Agreement, shall be kept confidential by the receiving Party and its Affiliates
and/or Sublicensees prior to the expiration or termination of the Agreement and
for a period of [*] years after its expiration.

 

[ * ] = 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

 

The foregoing obligation shall not apply to:

 

a)              any information
which at the time of disclosure or acquisition is part of the public knowledge
or literature, or thereafter becomes part of the public knowledge or literature
otherwise than by unauthorized disclosure by the recipient;

 

b)             any disclosure of
information to the United States Food and Drug Administration or other similar
governmental authority for the purpose of complying with regulatory
requirements regarding Licensed Product;

 

c)              any information
which at the time of disclosure or acquisition was in the recipient’s rightful
possession as evidenced by its written records;

 

d)             any information which
became rightfully available to the recipient from another source not bound to
secrecy to the disclosing Party with respect to such information;

 

e)              disclosure by the
recipient to a Third Party under provisions of confidentiality similar to those
contained in the Agreement for the purposes of development or marketing of the
Licensed Product or financing thereof; and

 

f)                any disclosure of
information required by law.

 

10.2                        Public
Disclosure

 

At its discretion, BMI may publicly disclose the
existence of the agreement.  BMI may also
disclose the existence and terms of the Agreement to regulatory or legal
authorities or to the public as required by regulation or statute.

 

10.3                        Acknowledgement
of Private Disclosure

 

ERI acknowledges that BMI may disclose to current or
potential private investors in BMI the existence and terms of the
Agreement.  BMI agrees to make reasonable
efforts to preserve the confidentiality of the Agreement during such private
disclosures.

 

11.                               Communications

 

Any payment, notice or other communication pursuant to
the Agreement shall be sufficiently made or given on the date of mailing if
sent to such Party by certified or registered first class mail, postage
prepaid, or by recognized public courier (for example, Federal Express)
addressed to it at the address below or as it shall otherwise subsequently
designate by written notice:

 

	
  In the case of ERI

  	
  In the case of BMI

  
	
   

  	
   

  
	
  Endorecherche Inc.

  2989, rue de la Promenade

  Sainte-Foy G1W 2J5

  Québec Canada

  tel:        418 652 0197

  fax :      418 651 1856

  	
  BioMedicines, Inc.

  2000 Powell Street

  Suite 1640

  Emeryville, CA

  USA 94608

  tel:        510 652 2600

  fax:       510 652 2623

  

 

12.                               Miscellaneous
Provisions

 

12.1                        Governance
of the Agreement

 

The Agreement shall be construed, governed, interpreted
and applied in accordance with the laws of Canada, except that questions
affecting the construction and effect of any patent shall

 

[ * ] = 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.

 

10

 

be determined by the law of the country in which the
patent was granted; and except for questions affecting the construction and
effect of any patent, disputes arising out of the Agreement which cannot be
settled between ERI and BMI will be definitively settled by binding arbitration
under the auspices of the Quebec Commercial National and International
Arbitration Centre to which the parties have adhered.  Place of proceedings shall be Québec, Canada.

 

12.2                        Entire
Agreement

 

Both ERI and BMI acknowledge that the Agreement sets
forth the entire agreement and understanding of both ERI and BMI as to the
subject matter hereof.  No other previous
oral or written communications between ERI and BMI with respect to the License
granted hereunder shall be of any force or effect.  In addition, the Agreement may be modified
only by the execution of a subsequent written amendment approved by both ERI
and BMI.

 

12.3                        Severability

 

The sections of the Agreement are severable.  In the event that any provision in any
section of the Agreement shall be invalid or unenforceable under any
controlling body of the law, the section shall be invalid but the validity or
enforceability of the remaining sections shall remain unaffected.

 

12.4                        Original
Agreement and Counterparts

 

The Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

 

12.5                        No
Waiver of Rights

 

The failure of either ERI or BMI to assert a right
hereunder or to insist upon compliance with any term or condition of the
Agreement shall not constitute a waiver of that right or excuse a subsequent
failure to perform any term or condition by BMI or ERI, respectively.

 

12.6                        Section
Titles or Headings

 

The titles or headings of various numbered or
unnumbered Sections in the Agreement are for reference only and, unless
otherwise indicated herein, do not limit or modify the substance of the
Agreement in any way.

 

12.7                        Force
Majeure

 

Neither Party shall be held liable or responsible to
the other Party nor be deemed to have defaulted under or breached this
agreement for failure or delay in fulfilling or performing any term of this
Agreement, other than an obligation to make a payment, when such failure or
delay is caused by or results from fire, floods, embargoes, government
regulations, prohibitions or interventions, war, acts of war, insurrections,
riots, civil commotions, lockouts, strikes, acts of God or any other cause
beyond the reasonable control of the affected Party.

 

IN WITNESS WHEREOF, ERI and BMI have hereunto duly
executed the Agreement as of the day and year set forth above.

 

	
  For:

  	
  Endorecherche Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/  Fernand
  Labrie

  	
   

  	
   

  
	
   

  	
   

  
	
  Fernand Labrie, M.D., Ph.D.

  	
   

  
	
  President

  	
   

  
				

 

[ * ] = 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.

 

11

 

	
  For:

  	
  BioMedicines, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ S. M. Moran

  	
   

  	
   

  
	
   

  	
   

  
	
  Mark Moran, M.D., M.B.A.

  	
   

  
	
  President

  	
   

  
				

 

[ * ] = 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.

 

12

 

Appendix A

 

[*]

 

[ * ] = 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.

 

1

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