EXHIBIT 10.8
COLLABORATION AND LICENSE AGREEMENT
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This Collaboration and License Agreement, dated as of May 30, 1997
(the "AGREEMENT"), is entered into by and between Chiron Corporation, a Delaware
corporation ("CHIRON"), and Hyseq, Inc., a Nevada corporation ("HYSEQ").
A. Hyseq possesses certain patent rights and associated know-how
related to methods of sequencing DNA by hybridization and other gene discovery
technologies.
B. Chiron and Hyseq mutually desire to enter into a collaboration
(the "COLLABORATION") in which Hyseq will apply its sequencing and other gene
discovery technologies to biological materials provided by Chiron.
C. Chiron will use the results of the Collaboration in the
development and commercialization of diagnostic, therapeutic and vaccine
products directed towards certain human health care indications.
D. Simultaneously with the execution of this Agreement, Chiron and
Hyseq are entering into a stock purchase agreement (the "STOCK PURCHASE
AGREEMENT"), pursuant to which Chiron has agreed to purchase certain equity
securities of Hyseq on the terms and subject to the conditions set forth
therein.
NOW, THEREFORE, in consideration of the mutual agreements provided in
this Agreement and the Stock Purchase Agreement, Hyseq and Chiron agree as
follows:
ARTICLE
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DEFINITIONS
The following capitalized terms used herein shall have the respective
meanings set forth below.
1.1 "ADR REQUEST" shall have the meaning set forth in Section 10.3.
1.2 "AFFILIATE" means a person or entity that directly or indirectly
controls, is controlled by or is under common control with, a party to this
Agreement. "Control" (and, with correlative meanings, the terms "controlled by"
and "under common control with") means beneficial ownership of fifty percent
(50%) or more of the outstanding shares or securities or the ability otherwise
to elect a majority of the board of directors or other managing authority.
Notwithstanding the foregoing, the Affiliates of Chiron expressly exclude
Novartis AG ("Novartis"), a Swiss corporation, or any wholly owned subsidiary of
Novartis, unless and until such time as Novartis and Chiron may mutually agree
upon the terms and conditions upon which Novartis may be deemed an Affiliate of
Chiron for the purposes of this Agreement.
* CERTAIN INFORMATION IN THIS AGREEMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
1.3 "ALLOWABLE COSTS" means the fully burdened, fairly allocated internal
costs of a party, on a consolidated basis, including reasonable and customary
allocations of indirect and overhead expense and charges in the nature of
depreciation and amortization of capitalized cost, and out-of-pocket expenses,
to the extent incurred in performing the applicable tasks under this Agreement,
in each case determined in accordance with generally accepted accounting
principles, consistently applied. "Allowable Costs" shall specifically exclude
Excluded Costs.
1.4 "APPLICABLE LAW" means, with respect to a party, any domestic or
foreign, federal, state or local statute, law, ordinance, rule, administrative
interpretation, regulation, order, writ, injunction, directive, judgment, decree
or other requirement of any Governmental Authority applicable to such party or
its properties, business or assets.
1.5 "BANKRUPTCY EVENT" means, with respect to either party, such party
makes an assignment for the benefit of its creditors, files a voluntary petition
under federal or state bankruptcy or insolvency laws, a receiver or custodian is
appointed for such person's business, proceedings are instituted against such
person under federal or state bankruptcy or insolvency laws that have not been
stayed within thirty (30) days, all or substantially all of such person's
business or assets become subject to attachment, garnishment or other process,
or a court or other governmental authority of competent jurisdiction determines
that such person is insolvent.
1.6 "CHIRON DISCOVERIES" means, collectively, all Novel Chiron Results,
all Collaboration Inventions and all Chiron Independent IP.
1.7 "CHIRON INDEPENDENT IP" means any Patent Rights or other intellectual
property that (a) is based on, or is otherwise developed through use of, any
Collaboration Invention and/or any Chiron Results, (b) arises pursuant to the
efforts of Chiron (or by any third parties who convey such rights to Chiron)
outside of the Collaboration, and (c) is not a Collaboration Sequence Patent
Right.
1.8 "CHIRON MATERIALS" means all Libraries and other materials provided by
Chiron to Hyseq pursuant to this Agreement, together with (i) any part, progeny,
mutant or hybrid thereof, (ii) any nucleic acid or other genetic material
therefrom, including any genes, gene sequences and gene sequence information,
(iii) any copy, complement or transcription or expression product thereof, (iv)
any biological or other materials identified in, or derived from, any of the
foregoing, including small molecule targets, antisense and ribozymes, and (v)
any related biological material and associated know-how and data that Chiron
provides to Hyseq.
1.9 "CHIRON PATENT RIGHTS" means all Patent Rights now or hereafter (a)
owned by Chiron, (b) controlled by Chiron or (c) licensed in by Chiron with the
right to sublicense. Chiron Patent Rights shall include, without limitation,
all Downstream Patent Rights.
1.10 "CHIRON RESULTS" means any DNA sequence or other information
generated pursuant to the Collaboration, including without limitation all
Signature Analysis Reports, all
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Sequence Reports, all unpublished patent applications arising therefrom, and all
information included within any of the foregoing.
1.11 "CLAIMS" shall have the meaning set forth in Section 8.1.
1.12 "COLLABORATION INVENTION" means any Invention that is made pursuant
to the efforts of Chiron and/or Hyseq, or any third parties obligated to assign
such Invention to Chiron and/or Hyseq, pursuant to the Collaboration.
"Collaboration Inventions" shall not include any Chiron Independent IP or any
Hyseq Independent IP.
1.13 "COLLABORATION SEQUENCE INVENTIONS" means all Inventions in partial
nucleic acid sequences and encoded polypeptides and/or full length coding
nucleic acid sequences and encoded polypeptides that are (a) made pursuant to
the Collaboration, or (b) based on, or were otherwise made through the use of, a
Collaboration Invention (whether pursuant to, or outside of, the Collaboration).
1.14 "COLLABORATION SEQUENCE PATENT RIGHTS" means all Patent Rights
arising from Collaboration Sequence Inventions. "Collaboration Sequence Patent
Rights" excludes, without limitation, any Downstream Patent Rights.
1.15 "COLLABORATION TERM" has the meaning set forth in Section 9.1.
1.16 "CONFIDENTIAL INFORMATION" has the meaning set forth in Section 7.1.
1.17 "CPR" has the meaning set forth in Section 10.4.
1.18 "DOWNSTREAM PATENT RIGHTS" means all Patent Rights included within
the Chiron Independent IP arising from Inventions further downstream of Hyseq
Sequence Inventions and/or Collaboration Sequence Inventions, including without
limitation Inventions in methods of making or using, modifications and/or
function of any nucleic acid and/or polypeptide product thereof.
1.19 "EXCLUDED COSTS" means (a) allocations of previously expensed
research and development costs and (b) any and all costs and expenses incurred
in defending, settling or otherwise discharging any liability to a third party
(including employees) based upon acts or omissions that are tortious, in breach
of contract, in violation of applicable law or in violation of obligations under
this Agreement.
1.20 "EXCLUSIVE FIELD" means * .
1.21 "FDA" means the United States Food and Drug Administration.
1.22 "FIRST COMMERCIAL SALE" means, with respect to any particular
Licensed Product, the first arms-length sale in any jurisdiction to one or more
Third Parties of such Licensed
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* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Product following receipt of approval from the applicable regulatory agency in
such jurisdiction to market such Licensed Product.
1.23 "GAAP" means U.S. generally accepted accounting principles,
consistently applied.
1.24 "GOVERNMENTAL AUTHORITY" means any foreign, domestic, federal,
territorial, state or local governmental authority, court, government or self-
regulatory organization, commission, tribunal, organization or any regulatory,
administrative or other agency, or any political or other subdivision,
department, instrumentality or branch of any of the foregoing.
1.25 "HYSEQ DISCOVERIES" means, collectively, all novel Hyseq Results and
all Hyseq Independent IP.
1.26 "HYSEQ INDEPENDENT IP" means any Patent Rights or other intellectual
property that (a) is based on, or is otherwise developed through use of, any
novel Hyseq Results, and/or (b) arises pursuant to the use of Hyseq Research
Technology and/or Hyseq Sequence Patent Rights by or on behalf of Hyseq and/or
any Subsequent Hyseq Partner outside of the Collaboration.
1.27 "HYSEQ PATENT RIGHTS" means all Patent Rights now or hereafter (a)
owned by Hyseq, (b) controlled by Hyseq or (c) licensed in by Hyseq with the
right to sublicense. Hyseq Patent Rights shall include, without limitation, all
Hyseq Sequence Patent Rights and all Collaboration Sequence Patent Rights.
1.28 "HYSEQ PROPRIETARY DATABASE" means Hyseq's proprietary HyGenomics
Database, as presently constituted and including any additional data
subsequently added thereto.
1.29 "HYSEQ RESEARCH TECHNOLOGY" means all Hyseq Patent Rights, together
with any know-how (whether or not patentable) related thereto, to the extent
relevant to the performance by Hyseq of the Research. "Hyseq Research
Technology" shall exclude the Hyseq Sequence Patent Rights.
1.30 "HYSEQ RESTRICTED PRODUCTS" means products based on, incorporating or
otherwise made through the use of any Hyseq Discovery and/or the subject matter
of any Hyseq Sequence Patent Rights.
1.31 "HYSEQ RESULTS" means any DNA sequence or other information generated
through the use of Hyseq Research Technology and/or Hyseq Sequence Patent Rights
by or on behalf of Hyseq and/or any Subsequent Hyseq Partner outside of the
Collaboration.
1.32 "HYSEQ SEQUENCE INVENTIONS" means all Inventions in partial nucleic
acid sequences and encoded polypeptides and/or full length coding nucleic acid
sequences and encoded polypeptides that are based on, or otherwise made through
the use of, information contained in the Hyseq Proprietary Database now or at
any time during the Collaboration Term.
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1.33 "HYSEQ SEQUENCE PATENT RIGHTS" means all Patent Rights arising from
Hyseq Sequence Inventions.
1.34 "IND" means an investigational new drug application filed with the
FDA under the regulations set forth in 21 CFR Part 312 or any successor
regulations.
1.35 "INVENTIONS" has the meaning set forth in Section 6.1(a).
1.36 "LICENSED PRODUCTS" means diagnostic, therapeutic and prophylactic
products (including without limitation recombinant proteins, antibodies,
antisense, ribozymes, small molecules and polynucleotides for gene therapy
applications) arising from Chiron Discoveries and/or the subject matter of the
Hyseq Sequence Patent Rights and/or the Collaboration Sequence Patent Rights.
1.37 "NET SALES" shall mean the amount invoiced for Sales of a Licensed
Product hereunder, less the following deductions:
(a) Discounts, returns, allowances (including reasonable bad debt
allowances), and wholesaler chargebacks allowed and taken, but in any case
only in amounts consistent with reasonable and customary pharmaceutical
industry standards;
(b) Import, export, excise, sales or use taxes, value added taxes, and
other taxes, tariffs or duties;
(c) Freight, handling, transportation and insurance prepaid or
allowed; and
(d) Amounts allowed or credited or retroactive price reductions or
rebates (including Medicaid rebates).
Any refund of any of the foregoing amounts (including any reversal of bad
debt allowances, whether arising from amounts received in settlement of bad
debts or otherwise) previously deducted from Net Sales shall be
appropriately credited upon receipt thereof.
Chiron may, at its option, allocate the above deductions from Sales of
Licensed Products based upon accruals estimated reasonably and consistent
with Chiron's standard business practices. If Chiron elects to utilize such
accruals, actual deductions will be calculated and, if applicable, a "true-
up" made, on an annual basis.
If a Sale of a Licensed Product is to an Affiliate of the seller (or to
Novartis, where Chiron is the seller) and such Affiliate (or, where
applicable, Novartis) is the end user of such Product, then the "amount
invoiced" with respect to such Sale shall, for purposes of calculating "Net
Sales," be the greater of (a) the actual amount invoiced, and (b) the
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amount which the invoiced amount would have been had such Sale of the
Licensed Product been to a person at arm's length with the seller.
If a Licensed Product is sold in combination with another product or
products, Net Sales under such circumstances shall be calculated by
multiplying Net Sales of the combination by the fraction A/(A+B), in which
A is the invoice price of the Licensed Product when sold separately, and B
is the total invoice price of any other product or products in combination
when sold separately.
1.38 "NOVEL CHIRON RESULTS" means all Chiron Results that were not
previously known to Chiron or the public prior to Chiron's receipt thereof
pursuant to the Collaboration.
1.39 "PATENT PROSECUTION COSTS" means Allowable Costs arising out of
obtaining and maintaining patent coverage on the applicable Inventions,
including but not limited to U.S. and foreign patent preparation, prosecution,
issuance, maintenance, opposition, interference and litigation costs, but shall
exclude costs and expenses incurred in enforcing any Patent Rights against
alleged infringement by third parties.
1.40 "PATENT RIGHTS" shall mean all inventors' certificates, patent
applications and provisional applications throughout the world, including any
renewal, division, continuation or continuation-in-part of any of such
certificates and applications, and any and all patents issuing thereon, and any
and all reissues, extensions, substitutions, confirmations, registrations,
revalidations, revisions, foreign counterparts and additions of or to any of
said patents.
1.41 "SALE" means the sale or other disposition, whether by Chiron or any
of its licensees, of a Licensed Product to a party that is not an Affiliate of
the seller, or to any party that is both an Affiliate of the seller and the end
user of the Licensed Product sold.
1.42 "STOCK PURCHASE AGREEMENT" has the meaning set forth in Recital D
above.
1.43 "SUBSEQUENT COLLABORATION AGREEMENT" means a bona fide collaboration
agreement (i.e., one containing provisions comparable to the provisions of this
Agreement, but not a naked license) entered into by Hyseq and a Subsequent Hyseq
Partner after the date hereof for the purpose of DNA sequencing and gene
discovery.
1.44 "SUBSEQUENT HYSEQ PARTNER" has the meaning set forth in Section 2.9.
1.45 "THIRD PARTY" means any person or entity other than Chiron, Hyseq or
any of their respective Affiliates.
ARTICLE
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COLLABORATION
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2.1 GENE ANALYSIS. During the Collaboration Term, Hyseq will provide gene
analysis ("Gene Analysis") as requested by Chiron on the terms set forth in this
Section 2.1.
(a) SELECTION AND PROVISION OF LIBRARIES. Chiron will have the right
to provide cDNA libraries of its choosing to Hyseq (each a "LIBRARY," and
collectively the "LIBRARIES"). Each Library will comply with the Hyseq
specifications set forth on Exhibit A hereto (the "SPECIFICATIONS"), or as
otherwise mutually agreed.
(b) PRELIMINARY TESTING. Promptly following receipt of each Library,
Hyseq will perform preliminary testing on * clones within the Library to
determine whether the Library complies with the Specifications. In the
event that such testing determines that any Library does not conform with
the Specifications, Hyseq will notify Chiron in writing of such fact as
promptly as possible (a "NONCOMPLIANCE NOTICE"). Any Noncompliance Notice
shall state the particular respects in which the Library does not comply
with the Specifications. If the noncompliance can be corrected by changing
Library conditions, Hyseq will do so as promptly as possible. Whether or
not the Library complies, Hyseq will provide Chiron with the full results
of the preliminary testing (other than Signatures) within thirty (30) days
after receipt of the Library.
(c) SIGNATURE ANALYSIS OF LIBRARIES. * .
(d) SEQUENCING BY HYSEQ.* .
(e) TIMEFRAMES. Hyseq's obligations to perform Gene Analysis in
compliance with the timeframes set forth in Sections 2.1(b), (c) and (d)
above are subject to the following limitations:
(i) The timeframes will apply to Libraries provided to Hyseq on
or after June 15, 1997. For any Library provided prior to that date,
each applicable timeframe will be extended by one day for each day
prior to June 15, 1997 that such Library is provided to Hyseq.
(ii) The timeframes will apply only if the total number of
sequencing reactions requested by Chiron does not exceed (A) * through
August 31, 1997, and (B) * thereafter. Such number of reactions may
be allocated, in any proportions determined by Chiron, between
Research under Section 2.1(c) and Research under Section 2.1(d). In
the event that any such limitation is exceeded, Hyseq shall use
reasonable commercial efforts to complete the excess sequencing as
promptly as is practicable.
(f) SEQUENCING BY CHIRON. In the event that Hyseq is unable to perform
the sequencing of the selected clones from any Library within the
timeframes specified in Section 2.1(d) above, Chiron may, at its option,
perform the sequencing itself and at its own expense. In that event,
Chiron will be entitled to offset against its minimum funding commitment
under Section 2.8 an amount equal to *. The exercise by Chiron of this
option shall be without prejudice to any other remedies available to
Chiron under this Agreement and under Applicable Law.
(g) CAPACITY. During the Collaboration Term, Hyseq will guarantee
Chiron sufficient capacity to perform Gene Analysis on * . Hyseq will use
commercially
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* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
reasonable efforts to make available any additional capacity that may be
requested by Chiron.
(h) LIMITATION ON NUMBER OF LIBRARIES. Unless otherwise agreed by
Hyseq, Chiron may not * .
(i) RETURN OF BIOLOGICAL MATERIALS, ETC. Following the completion of
Gene Analysis on any Library, Hyseq will, within two (2) weeks after a
request from Chiron, return to Chiron all of the Chiron Materials and
derivatives therefrom, including copies of all gel files from ABI
sequencing runs, all picked clones, the Libraries, glycerol freezes from
bacterial cultures and spotted filters used in performing the Research.
Hyseq will be allowed to retain a copy of the picked clones for
verification purposes. If Chiron does not request the return of such
materials, Hyseq will store them and maintain them as Chiron Results
pursuant to Section 2.9 for a period of at least two (2) years after
expiration of the Collaboration Term.
(j) ELECTRONIC REPORTS. The Electronic Signature Analysis Reports and
Electronic Sequence Reports delivered by Hyseq to Chiron shall contain EST
sequences, and shall enable Chiron to correlate * .
2.2 OTHER RESEARCH. If requested by Chiron, Hyseq will provide for Chiron
during the Collaboration Term research work offered by Hyseq from time to time
in the ordinary course of its business other than the Gene Analysis (the "OTHER
RESEARCH" and, collectively with the Gene Analysis, the "RESEARCH"). The Other
Research may include, without limitation, further analysis of Chiron Results.
2.3 TIME IS OF THE ESSENCE. Hyseq acknowledges that the commercial
benefits to Chiron of entering into this Agreement and participating in the
Collaboration depend in substantial part on the ability of Hyseq to perform the
Research within the applicable timeframes identified in this Agreement and that,
accordingly, time is of the essence in the performance of the Research.
2.4 RESEARCH COMMITTEE.
(a) JURISDICTION AND COMPOSITION. All decisions regarding the scope
and content of the Research to be performed by Hyseq pursuant to the
Collaboration shall be conclusively made, subject to the terms of this
Agreement, by a committee (the "RESEARCH COMMITTEE") composed of three (3)
representatives of Chiron and two (2) representatives of Hyseq. One of the
Chiron representatives shall serve as chair of the Research Committee.
Each party shall select its representatives to the Research Committee, and
shall notify the other party in writing of such selections and any
subsequent changes thereto.
(b) ACTIONS. Each representative of Chiron and Hyseq shall have one
vote on the Research Committee. Any approval, determination, decision or
other action by the
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* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Research Committee shall require the affirmative vote of three (3)
representatives. Representatives of the Research Committee may at any time
vote by proxy.
(c) MEETINGS. The Research Committee shall meet at least once per
calendar quarter, such meetings to alternate between Chiron's offices in
Emeryville, California and Hyseq's offices in Sunnyvale, California. If
approved by a majority of the representatives of the Research Committee,
meetings may be held telephonically.
(d) EXPENSES. Chiron and Hyseq each shall bear all travel, lodging,
meals and other costs and expenses associated with the participation of
their representatives on the Research Committee.
2.5 CHIRON MATERIALS.
(a) OWNERSHIP. Chiron shall solely own all right, title and interest
to and in all Chiron Materials.
(b) USE. Hyseq may use the Chiron Materials only for purposes of
performing the Research, and may not take, send or otherwise provide or
make available any Chiron Materials to any third party without the prior
written approval of Chiron, except to the extent required to enable Hyseq
to satisfy its obligations under Section 6.9.
2.6 HYSEQ PROPRIETARY DATABASE. In performing Research for Chiron
pursuant to this Agreement, Hyseq shall utilize, to the extent relevant, all
information contained in the Hyseq Proprietary Database now or at any time
during the Collaboration Term.
2.7 PERFORMANCE STANDARDS. Hyseq shall perform the Research requested by
Chiron pursuant to this Agreement in a timely and efficient manner, and in
accordance with reasonable and customary commercial and scientific standards.
2.8 RESEARCH FUNDING.
(a) RESEARCH FUNDING. During each year of the Collaboration Term,
Chiron will pay to Hyseq an amount (the "Research Funding") equal to (a)
the Allowable Costs reasonably incurred by Hyseq in performing Research
requested by Chiron pursuant to this Agreement during such year, plus (b) a
margin equal to the Applicable Percentage (as defined below) of such
Allowable Cost. Chiron will pay Hyseq * in Research Funding during the
first year of the Collaboration Term, and * in each of the second and third
years of the Collaboration Term, in each case subject to the performance by
Hyseq of the requisite Research in compliance with the terms of this
Agreement. In the event that, in any given year, Hyseq performs Research
with Chiron that result in Research Funding in excess of the minimum
requirement for that year, the excess (a "CARRYFORWARD AMOUNT") may be
carried forward and applied against the applicable minimums for subsequent
years. In addition, if Chiron elects to extend the Collaboration Term
pursuant to Section 9.1, Chiron shall pay Hyseq a minimum of * in Research
Funding in each year
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* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
of the extension term, which shall be in addition to Research Funding
payable to Hyseq based on the Allowable Costs (plus margin at the
Applicable Percentage) incurred by Hyseq in performing Research during each
such year.
(b) APPLICABLE PERCENTAGE. The "Applicable Percentage" shall be: (i)
for the first year of the Collaboration Term, (A) *, and (B) *; (ii) for
the second and third years of the Collaboration Term, (A) *, and (B) *; and
(iii) if applicable, * for any subsequent years of the Collaboration Term.
2.9 SEGREGATION OF CHIRON RESULTS. It is understood and agreed that Hyseq
contemplates entering into collaborations with other partners outside of the
Exclusive Field ("SUBSEQUENT HYSEQ PARTNERS"), and that such other
collaborations will involve the performance of Gene Analysis and Other Research
for Subsequent Hyseq Partners. It is also understood and agreed that Hyseq
presently owns the Hyseq Proprietary Database and intends to expand that
database, and that Hyseq may in the future engage, whether independently or in
collaboration with third parties, in the research, development and
commercialization of products outside of the Exclusive Field based on
information contained in the Hyseq Proprietary Database. Notwithstanding the
foregoing, Hyseq acknowledges that all Chiron Results are the sole and exclusive
property of Chiron, and Hyseq agrees that it will in no event utilize for
itself, or directly or indirectly make available to any third party, all or any
portion of the Chiron Results, without the express prior written consent of
Chiron. Without limiting the generality of the foregoing, Hyseq will not
perform point mutation analysis, motif searches, further signature analysis or
any other analysis of the Chiron Results, except as requested by Chiron. The
provisions of this Section 2.9 do not apply to any Chiron patent applications
from and after the publication thereof, or to any actions taken by Hyseq to the
extent required to perform its obligations under Section 6.9.
2.10 RECORDS. Hyseq shall maintain records of the Research performed for
Chiron, and the Chiron Results, in sufficient detail and in good scientific
manner appropriate for patent and FDA purposes.
2.11 AVAILABILITY OF EMPLOYEES. Hyseq shall make its employees and
consultants engaged in activities relating to this Agreement available, upon
reasonable notice during normal business hours, to consult with, and provide
customer support to, Chiron on issues related to the Collaboration, but in any
case only to the extent reasonably necessary to enable Chiron to obtain the full
benefit to it of participating in the Collaboration.
2.12 COOPERATION. Each party shall provide any assistance reasonably
requested by the other in connection with the performance of the Research.
2.13 LIAISONS. Throughout the Collaboration Term, Chiron and Hyseq shall
each designate a person to serve as liaison between the parties through whom
communications regarding the Collaboration and the Research to be performed
hereunder shall be coordinated. Such person shall initially be Xx. Xxxxx
Xxxxxxxx for Chiron and Xx. Xxxxxxx Xxxxxxxxxxx for
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* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Hyseq. The parties may change their respective designees from time to time
hereunder by written notice to the other party.
ARTICLE
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LICENSE GRANTS
3.1 LICENSES GRANTED TO CHIRON.
(a) HYSEQ RESEARCH TECHNOLOGY. Hyseq hereby grants to Chiron under
the Hyseq Research Technology an exclusive (as to any and all persons and
entities, including Hyseq, but subject to the reservation of rights under
Section 3.1(c)), worldwide, royalty-bearing license, with the right to
sublicense, to use any and all Chiron Discoveries to develop, make, have
made, use, sell and import Licensed Products directed towards any health
care indication within the Exclusive Field (and, to the limited extent
permitted under Section 4.4(a), outside of the Exclusive Field).
(b) SEQUENCE PATENT RIGHTS. Hyseq hereby grants to Chiron under the
Hyseq Sequence Patent Rights and the Collaboration Sequence Patent Rights
an exclusive (as to any and all persons and entities, including Hyseq, but
subject to the reservation of rights under Section 3.1(c)), worldwide,
royalty-bearing license, with the right to sublicense, to develop, make,
have made, use, sell and import Licensed Products directed towards any
health care indication within the Exclusive Field (and, to the limited
extent permitted under Section 4.4(a), outside of the Exclusive Field).
(c) RESERVATION OF RIGHTS. Hyseq reserves from the licenses granted
under Sections 3.1(a) and 3.1(b) above the right to practice itself (either
alone or in collaboration with third parties), and to enable third parties
to practice, the applicable Hyseq Research Technology, Hyseq Sequence
Patent Rights and/or Collaboration Sequence Patent Rights within the
Exclusive Field, but only to the extent necessary to enable Hyseq or such
third party to commercialize Hyseq Restricted Products within the Exclusive
Field as permitted under Section 4.4(b) below.
(d) SUBLICENSEES. All limitations on the rights of Chiron under this
Agreement shall apply equally to any Chiron sublicensee(s).
3.2 RIGHTS IN BANKRUPTCY. The rights granted to Chiron by Hyseq pursuant
to Section 3.1 constitute "INTELLECTUAL PROPERTY" within the meaning of Sections
101 and 365(n) of the United States Bankruptcy Code.
3.3 INDEPENDENT IP.
(a) CHIRON INDEPENDENT IP. Hyseq acknowledges that (a) Chiron may
develop or acquire Chiron Independent IP, (b) although Chiron has agreed,
pursuant to Section 4.2 and subject to the limited exception in Section
4.4(a), not to commercialize
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any Chiron Independent IP outside of the Exclusive Field, such Chiron
Independent IP may have utility outside of the Exclusive Field, and (c)
Hyseq has no rights through Chiron in any Chiron Independent IP.
(b) HYSEQ INDEPENDENT IP. Chiron acknowledges that (a) Hyseq,
individually or together with Subsequent Hyseq Partners, may develop or
acquire Hyseq Independent IP, (b) such Hyseq Independent IP may have
utility within the Exclusive Field, and (c) except for the Hyseq Sequence
Patent Rights, Hyseq Independent IP is not subject to the licenses granted
in Section 3.1.
3.4 EXPANSION OF EXCLUSIVE FIELD. Chiron shall have the right of first
negotiation to expand the Exclusive Field to include *. Either party shall have
the right to trigger the right of first negotiation by delivery of written
notice to the other party. For a period of ninety (90) days after receipt of
such written notice, the parties shall negotiate exclusively and in good faith
to agree on terms for such expansion of the Exclusive Field. If the parties
have not agreed on terms at the end of such ninety (90) day period, Hyseq shall
submit a final written offer to Chiron. If Chiron does not accept Hyseq's final
offer within five (5) days after receipt thereof, Hyseq may enter an agreement
with a third party regarding * outside of the Exclusive Field; provided,
however, that the terms of that agreement may be no less favorable to Hyseq than
those offered to Chiron in Hyseq's final offer, and provided further, that if
Hyseq has not entered into such an agreement within one hundred eighty (180)
days after submitting its final offer to Chiron, it may not do so without again
complying with this Section 3.4.
ARTICLE
4
EXCLUSIVE COMMERCIALIZATION
4.1 INTENT OF PARTIES. It is the intent of Chiron and Hyseq that, except
in each case as expressly permitted under this Article IV, (a) Chiron and its
licensees shall be entitled to commercialize Licensed Products on an exclusive
basis, but only within the Exclusive Field, and (b) Hyseq shall be entitled to
practice, directly or indirectly, the Collaboration Sequence Patent Rights
outside of the Exclusive Field only in certain limited circumstances specified
in Section 4.3(c). Hyseq acknowledges that the ability to obtain exclusivity
within the Exclusive Field is of critical importance to Chiron, and Chiron
acknowledges that the ability to maintain the option to offer Subsequent Hyseq
Partners exclusivity in fields outside of the Exclusive Field is of critical
importance to Hyseq. Both parties acknowledge that the restrictions contained
in this Article IV are reasonable in light of their respective business
objectives and of the respective benefits to each of them of the transactions
contemplated by this Agreement.
4.2 COVENANT OF CHIRON. In order to give effect to the intent of the
parties specified in Section 4.1, Chiron agrees that it will not commercialize,
directly or indirectly, whether alone or in collaboration with third parties
(including without limitation by licensing any third party to commercialize),
any Licensed Products outside of the Exclusive Field, except (a) to the limited
extent provided in Section 4.4(a) below, (b) for indications where Hyseq has not
previously granted exclusive rights to a Subsequent Hyseq Partner, with the
prior written consent of Hyseq,
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and (c) for indications where Hyseq has previously granted exclusive rights to a
Subsequent Hyseq Partner, with the prior written consent of such Subsequent
Hyseq Partner.
4.3 COVENANTS OF HYSEQ. In order to give effect to the intent of the
parties specified in Section 4.1, Hyseq agrees as follows:
(a) RESTRICTIONS ON CERTAIN GENE ANALYSIS. Hyseq will not directly or
indirectly engage in, whether alone or in collaboration with third parties,
and will not license any third party under any Hyseq Patent Rights to
engage in, Gene Analysis of the type referred to in Section 2.1(c) for
purposes of developing and/or commercializing any diagnostic, therapeutic
or prophylactic products within the Exclusive Field, except (i) to the
limited extent provided in Section 4.4(b) below, or (ii) with the prior
written consent of Chiron.
(b) RESTRICTIONS ON PRACTICE OF COLLABORATION SEQUENCE PATENT RIGHTS.
Hyseq will not practice, directly or indirectly, whether alone or in
collaboration with third parties (including without limitation by licensing
any third party to practice), any of the Collaboration Sequence Patent
Rights outside of the Exclusive Field, except (i) to the limited extent
provided in Section 4.3(c) below, or (ii) with the prior written consent of
Chiron.
(c) LICENSES TO CHIRON; RIGHT OF FIRST NEGOTIATION.
(i) At any time before Hyseq enters a Subsequent Collaboration
Agreement granting a Subsequent Hyseq Partner exclusive rights within
a particular indication, Chiron shall have the option, exercisable by
written notice to Hyseq, to expand the licenses granted in Section 3.1
above to include the practice for the specified indication of any
Collaboration Sequence Patent Rights arising from experiments within
the Exclusive Field. The financial and other terms of such license
shall be * as mutually agreed to by the parties. If Chiron and Hyseq
are unable to agree on the due diligence provisions after having
negotiated in good faith for a period of at least sixty (60) days,
either party shall have the right to submit such disagreement for
binding resolution pursuant to Article X.
(ii) If Chiron subsequently desires to enter into a
collaboration agreement to jointly develop and commercialize products
covered by any license granted pursuant to Section 4.3(c)(i), Chiron
shall so notify Hyseq in writing. Hyseq shall have a period of thirty
(30) days after receipt of such notice to indicate to Chiron in
writing whether Hyseq is interested in participating in such joint
development and collaboration. If Hyseq responds affirmatively, the
parties shall negotiate exclusively and in good faith for a period of
ninety (90) days to agree on terms for such joint development and
commercialization. If the parties have not agreed on terms at the end
of such ninety (90) day period, Chiron shall submit a final written
offer to Hyseq. If Hyseq does not accept Chiron's final offer within
five (5) days after receipt thereof, Chiron may enter an agreement
with a third party; provided, however, that the terms of that
-----------------
agreement may be no less favorable to Chiron than those offered to
Hyseq in Chiron's final offer, and provided further, that if Chiron
----------------
has not entered into such an agreement within one hundred eighty (180)
days after submitting its final offer to Hyseq, it may not do so
without again complying with this Section 4.3(c)(ii).
4.4 IND EXCEPTIONS.
(a) EXCEPTION FOR CHIRON. From and after such time as Chiron
receives approval of an IND to commence a clinical trial of a potential
Licensed Product for an indication within the Exclusive Field, the
restrictions set forth in Section 4.2 above shall no longer apply to such
Licensed Product, *. Any such commercialization pursuant to this Section
4.4(a) shall be subject to the milestone payment and royalty obligations to
Hyseq set forth in Article V. This Section 4.4(a) shall not, expressly or
by implication, grant Chiron any licenses to practice intellectual property
rights of any third party, including without limitation any Subsequent
Hyseq Partner.
(b) EXCEPTION FOR HYSEQ. From and after such time as Hyseq or any
Subsequent Hyseq Partner receives approval of an IND to commence a clinical
trial of a potential Hyseq Restricted Product for an indication outside of
the Exclusive Field, the restrictions set forth in Section 4.3(a) above
shall no longer apply to such Hyseq Restricted Product, *. This Section
4.4(b) shall not, expressly or by implication, grant to Hyseq or any
Subsequent Hyseq Partner any licenses to practice intellectual property
rights of Chiron or of any third party.
4.5 MISCELLANEOUS PROVISIONS.
(a) ENFORCEMENT. It is the understanding of the parties that the
provisions of this Article IV are necessary to protect their respective
rights in connection with the transactions contemplated by this Agreement
and the potential subsequent agreements between Hyseq and Subsequent Hyseq
Partners. It is the intention of Chiron and Hyseq that these covenants be
enforced to the greatest extent (but to no greater extent) in time, area
and degree of participation as is permitted by the law of that jurisdiction
whose law is found to be applicable to any acts in breach of these
covenants.
(b) EQUITABLE RELIEF. Chiron and Hyseq each acknowledge that any
material violation of the provisions of this Article IV may cause
irreparable harm to the other party
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REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
and that damages are not an adequate remedy. Chiron and Hyseq each
therefore agree that the other party shall be entitled to an injunction by
a court of competent jurisdiction, enjoining, prohibiting and restraining
the continuance of any such violation, in addition to any monetary damages
that might occur by reason of the violation of the provisions of this
Article IV. The remedies provided in this Section 4.5(b) are cumulative and
shall not exclude any other remedies to which any party to this Agreement
may be entitled under this Agreement or applicable law, and the exercise of
a remedy shall not be deemed an election excluding any other remedy (any
such claim by any other party to this Agreement being hereby waived).
(c) SEVERABILITY. The covenants and agreements set forth in this
Article IV shall be deemed and shall be construed as separate and
independent covenants and agreements, and, should any part or provision of
such covenants and agreements be held invalid, void or unenforceable by any
court of competent jurisdiction, such invalidity, voidness, or
unenforceability shall in no way render invalid, void or unenforceable any
other part or provision thereof or any separate covenant not declared
invalid, void or unenforceable; and this Article IV shall in that case be
construed as if the void, invalid or unenforceable provisions were omitted.
ARTICLE
5
PAYMENTS, REPORTING, AUDIT RIGHTS
5.1 UP FRONT LICENSE FEE. In consideration of the licenses granted in
Section 3.1 above, Chiron shall pay Hyseq an up front license fee of * upon
execution of this Agreement.
5.2 MILESTONE PAYMENTS. Chiron shall make milestone payments to Hyseq
with respect to each Licensed Product, upon the occurrence of following events
and in the following amounts:
(a) DIAGNOSTIC LICENSED PRODUCTS. The milestone payments for each
diagnostic Licensed Product shall be as follows:
(i) * upon submission of an application to the FDA or equivalent
regulatory agency in any jurisdiction, which application, if approved,
would confer authority to market the applicable diagnostic Licensed
Product in the applicable jurisdiction; and
(ii) * upon the First Commercial Sale of the applicable
diagnostic Licensed Product.
(b) OTHER LICENSED PRODUCTS. The milestone payments for each non-
diagnostic Licensed Product shall be as follows:
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REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
(i) * upon submission of the first IND or equivalent to the FDA
or equivalent regulatory agency in any jurisdiction with respect to
the applicable non-diagnostic Licensed Product;
(ii) * upon submission of the first NDA or equivalent to the FDA
or equivalent regulatory agency in any jurisdiction with respect to
the applicable non-diagnostic Licensed Product; and
(iii) * upon the First Commercial Sale of the applicable non-
diagnostic Licensed Product.
5.3 MILESTONE PAYMENT METHODOLOGY. Each of the foregoing milestone
payments shall be payable separately with respect to each applicable Licensed
Product, but shall be payable only once per applicable Licensed Product. For
purposes of Section 5.2, any products that are based on or incorporate the same
Chiron Discovery, Hyseq Sequence Patent Rights and/or Collaboration Sequence
Patent Rights, as applicable, shall constitute the same Licensed Product (e.g.,
without regard to whether such products target different indications, have
different formulations, are delivered using different delivery technologies,
etc.).
5.4 ROYALTIES.
(a) OBLIGATION TO PAY ROYALTIES. Chiron shall pay Hyseq royalties on
Net Sales of Licensed Products made in any jurisdictions where the
manufacture, use or sale of such Licensed Product is, at the time of Sale,
covered by a valid and enforceable claim of (i) a Chiron Patent Right
directed to (A) a Collaboration Invention or (B) an Invention included
within the Chiron Independent IP, or (ii) a Hyseq Sequence Patent Right
and/or a Collaboration Sequence Patent Right. In addition to the
foregoing, with respect to diagnostic Licensed Products only, the Patent
Rights in a pending patent application shall be deemed to be valid and
enforceable, and royalties shall be payable with respect to diagnostic
Licensed Products covered thereby, for a period beginning on the filing of
any such patent application and ending on the earlier of (x) two (2) years
after such filing and (y) the occurrence of any event that makes it
apparent that claims of the type requiring the payment of royalties under
this Section 5.4(a) will not issue on any such patent applications.
(b) ROYALTY RATES. *.
5.5 *
5.6 REPORTS.
(a) NET SALES REPORTS. Within sixty (60) days after the end of each
fiscal quarter following the First Commercial Sale of any Licensed Product,
Chiron shall provide Hyseq with a written report (a "Sales Report") setting
forth (i) gross Sales of the applicable Licensed Product made during such
quarter, (ii) the deductions taken from
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gross Sales to arrive at Net Sales, and (iii) Net Sales of the applicable
Licensed Product made during such quarter. Each Sales Report shall include
reasonable supporting documentation.
(b) RESEARCH FUNDING REPORTS. Within thirty (30) days after the end
of each month during the Collaboration Term, Hyseq shall provide Chiron
with a written report (an "Research Funding Report") setting forth the
Allowable Costs accrued during such month in connection with the
performance of Research. Each Research Funding Report shall include
reasonable supporting documentation. Hyseq shall use diligent, good faith
efforts to ensure the accuracy of Research Funding Reports; provided,
however, that failure to include any Allowable Cost accrued during a
particular month in the Research Funding Report for such month shall not
prejudice Hyseq's ability to include such Allowable Cost in a subsequent
Research Funding Report given within the same Chiron fiscal year.
5.7 PAYMENT TERMS.
(a) ROYALTY PAYMENTS. Royalties payable under Section 5.4 above shall
be due and payable to Hyseq within sixty (60) days after the end of the
fiscal quarter in which Chiron invoices a customer for the Sale of the
applicable Licensed Product.
(b) RESEARCH FUNDING. Chiron will make Research Funding payments
within thirty (30) days after receipt of each applicable Research Funding
Report.
5.8 ACCOUNTING AND AUDITS.
(a) ROYALTIES. Chiron shall keep and maintain proper and complete
records and books of account documenting gross Sales of Licensed Products,
deductions taken therefrom to arrive at Net Sales of Licensed Products, and
Net Sales of Licensed Products. Chiron shall permit an independent public
accountant designated by Hyseq, except one to which Chiron shall have
reasonable objection, to have access, at Hyseq's own expense (except as to
the fees and expenses of the designated accountants, which shall be borne
as provided below) no more than once in each calendar year during the
License Term and twice during the three (3) calendar years following the
License Term, during regular business hours and upon reasonable notice, to
its records and books for the sole purpose of determining the
appropriateness of any royalty payments made by Chiron to Hyseq hereunder.
If such examination results in a final determination that royalties have
been overstated or understated, the applicable amount shall be refunded or
paid promptly. The fees and expenses of such accountant shall be paid by
Hyseq, unless the audit results in a final determination that royalty
payments have been understated by more than ten percent (10%) for the
period examined, in which case Chiron shall pay the fees and expenses of
such accountant. If Chiron disputes the findings of Hyseq's accountants,
such dispute shall be resolved pursuant to Article X hereof. All Chiron
information obtained by, or provided to, Hyseq and/or its accountants
pursuant to this Section 5.8 shall be subject to the confidentiality
provisions of Article VII hereof.
16
(b) RESEARCH FUNDING. Hyseq shall keep and maintain proper and
complete records and books of account documenting Allowable Costs incurred
in performing Research for Chiron. Hyseq shall permit an independent
public accountant designated by Chiron, except one to which Hyseq shall
have reasonable objection, to have access, at Chiron's own expense (except
as to the fees and expenses of the designated accountants, which shall be
borne as provided below) no more than once in each calendar year during the
Collaboration Term and twice during the three (3) calendar years following
the Collaboration Term, during regular business hours and upon reasonable
notice, to its records and books for the sole purpose of determining the
appropriateness of Allowable Costs charged to Chiron hereunder. If such
examination results in a final determination that Allowable Costs have been
overstated or understated, the applicable amount shall be refunded or paid
promptly. The fees and expenses of such accountant shall be paid by
Chiron, unless the audit results in a final determination that Allowable
Costs have been overstated by more than ten percent (10%) for the period
examined, in which case Hyseq shall pay the fees and expenses of such
accountant. If Hyseq disputes the findings of Chiron's accountants, such
dispute shall be resolved pursuant to Article X hereof. All Hyseq
information obtained by, or provided to, Chiron and/or its accountants
pursuant to this Section 5.8 shall be subject to the confidentiality
provisions of Article VII hereof.
5.9 TAXES. Each party shall pay any and all taxes levied on account of
royalties or other payments it receives under this Agreement. If Applicable
Laws require that taxes be withheld, the paying party shall (a) deduct these
taxes from the remittable amount, (b) pay the taxes to the proper taxing
authority, and (c) send proof of payment to the receiving party within forty-
five (45) days following that payment.
5.10 CURRENCY; CONVERSION. All payments made under this Agreement shall
be in U.S. dollars. With respect to any royalty payment based on Net Sales of
Licensed Products made in a currency other than U.S. dollars, Chiron shall
convert such currency to U.S. dollars in accordance with the foreign currency
conversion procedures, as in effect from time to time, then used by it in the
ordinary course of its business.
5.11 BANK ACCOUNTS. All payments by Chiron to Hyseq hereunder shall be
made by wire transfer to such bank account as may be designated in writing from
time to time by Hyseq.
5.12 MOST FAVORED CUSTOMER. In the event that Hyseq enters into any
Subsequent Collaboration Agreement containing terms that, viewed in the
aggregate, are more favorable to the Subsequent Hyseq Partner than are the terms
of this Agreement to Chiron, the terms of this Agreement shall be revised in an
equitable manner so as to provide Chiron with terms that, viewed in the
aggregate, are as equivalent as is practicable to those contained in the
Subsequent Collaboration Agreement. For purposes of this Section 5.12, in any
comparison of the "terms" of this Agreement with the "terms" of any Subsequent
Collaboration Agreement, any differences in the identity of the exclusive fields
of the respective parties shall be disregarded (but the scope of work to be
performed by Hyseq under such agreements shall not be disregarded). Chiron and
Hyseq shall negotiate such revisions diligently and in good faith. If the
parties are unable to agree after sixty (60) days of negotiations, either party
may submit the matter for dispute resolution under Article X.
ARTICLE
6
INVENTIONS AND PATENT RIGHTS
6.1 DISCLOSURE AND OWNERSHIP OF INVENTIONS.
(a) INVENTION DISCLOSURES. Chiron and Hyseq acknowledge that the
conduct of the Collaboration may result in patentable inventions
("INVENTIONS"). Promptly
17
following any development in the course of the Collaboration that could
reasonably be expected to give rise to an Invention, the party making such
development shall provide the other party with notice and a full written
description of such development (an "INVENTION DISCLOSURE"). The party
providing an Invention Disclosure shall also provide the other party any
additional information reasonably requested by the other party with respect
thereto.
(b) CHIRON INVENTIONS. Chiron shall solely own all right, title and
interest to and in all Inventions arising from the Collaboration that
relate primarily to any Chiron Materials and/or any Chiron Results, but
excluding Hyseq Sequence Inventions and Collaboration Sequence Inventions
("CHIRON INVENTIONS"). Chiron Inventions shall include, without
limitation, any such Inventions further downstream of Hyseq Sequence
Inventions and Collaboration Sequence Inventions, including without
limitation Inventions in methods of making or using, modifications and/or
function of any nucleic acid or polypeptide product thereof. Hyseq shall
have no right, title or interest to or in any Chiron Inventions except (A)
during the Collaboration Term for purposes of carrying out the
Collaboration, and (B) for the right to receive milestone payments and
royalties pursuant to Article V. Hyseq agrees to assign any Patent Rights
in Chiron Inventions, but excluding Patent Rights in Hyseq Sequence
Inventions and Collaboration Sequence Inventions, to Chiron.
(c) HYSEQ INVENTIONS. Hyseq shall solely own all right, title and
interest to and in all Hyseq Sequence Inventions and Collaboration Sequence
Inventions, and in all Inventions that relate primarily to Hyseq Research
Technology (collectively, "HYSEQ INVENTIONS"). Chiron shall have no right,
title or interest to or in any Hyseq Inventions except (A) during the
Collaboration Term for purposes of carrying out the Collaboration, and (B)
for the license rights pursuant to Section 3.1 and any potential future
license rights pursuant to Section 4.3. Chiron agrees to assign any Patent
Rights in Hyseq Inventions to Hyseq, subject to the terms of Section 6.8
below.
(d) ASSIGNMENT OF INVENTIONS. In the event that, despite the
provisions of Sections 6.1(b) and 6.1(c) above, Chiron obtains rights in
any Hyseq Invention or Hyseq obtains any rights in any Chiron Invention
(except for any such rights to which the parties are entitled as specified
in Sections 6.1(b) and 6.1(c)), the party obtaining such rights agrees to
assign all such rights to the other party. Each party will execute any
documents reasonably requested by the other party in order to fully
implement the provisions of this Section 6.1(d).
(e) EMPLOYEE ASSIGNMENTS. Neither Chiron nor Hyseq will permit any
employees or independent contractors to perform work pursuant to the
Collaboration unless such person is contractually obligated to assign his
or her interest in any Inventions to Chiron or Hyseq, as applicable.
6.2 PROSECUTION AND MAINTENANCE OF COLLABORATION SEQUENCE PATENT RIGHTS.
18
(a) CONTROL. Chiron shall control filing, prosecution, maintenance
and defense of all Collaboration Sequence Patent Rights. Chiron shall
provide Hyseq with copies of all patent applications within thirty (30)
days after filing and shall also provide Hyseq copies of all material
documents relating to prosecution of all such patent applications in a
timely manner. Chiron shall notify Hyseq in writing thirty (30) days
before abandoning any Collaboration Sequence Patent Rights or before not
taking a required action such as foreign filing. In such event, Hyseq
shall have the right to assume control of the prosecution, maintenance and
defense of the applicable Collaboration Sequence Patent Rights, at Hyseq's
sole expense, after which time Chiron will have no license or other rights
therein. Chiron shall undertake the above actions in the name of Hyseq.
Hyseq shall execute any and all documents, and take any and all actions,
required to enable Chiron to undertake such actions.
(b) COSTS. Chiron shall bear all Patent Prosecution Costs incurred
pursuant to Section 6.2(a), except that any such costs incurred after any
assumption of prosecution by Hyseq.
6.3 PROSECUTION AND MAINTENANCE OF OTHER HYSEQ PATENT RIGHTS. All
decisions regarding filing, prosecution, maintenance and defense of Hyseq Patent
Rights other than Collaboration Sequence Patent Rights shall be made by Hyseq in
its sole discretion shall be implemented by Hyseq at its sole cost and expense.
Hyseq shall provide Chiron with copies of all patent applications included
within the Hyseq Sequence Patent Rights that are reasonably related to the
Exclusive Field within thirty (30) days after filing and shall also provide
Chiron copies of all material documents relating to prosecution of all such
patent applications in a timely manner. Hyseq shall notify Chiron in writing
thirty (30) days before abandoning any Hyseq Sequence Patent Rights that are
reasonably related to the Exclusive Field, or before not taking a required
action such as foreign filing. In such event, Chiron shall have the right to
assume control of the prosecution, maintenance and defense of the applicable
Hyseq Sequence Patent Rights, at Chiron's sole expense, after which time Hyseq
will assign such Hyseq Sequence Patent Rights to Chiron.
6.4 PROSECUTION AND MAINTENANCE OF CHIRON PATENT RIGHTS. All decisions
regarding filing, prosecution, maintenance and defense of Chiron Patent Rights
shall be made by Chiron in its sole discretion shall be implemented by Chiron at
its sole cost and expense.
6.5 ENFORCEMENT OF SEQUENCE PATENT RIGHTS.
(a) ALLEGED INFRINGEMENT AFFECTING LICENSED PRODUCTS. Chiron shall
have the sole right, at its own expense, to take whatever action it deems
appropriate in its own name or, if required by law, in the name of Hyseq,
to enforce any Hyseq Sequence Patent Rights and Collaboration Sequence
Patent Rights against any alleged infringement that affects Licensed
Products. All monies recovered upon the final judgment or settlement of
any such suit shall be retained by Chiron. Chiron shall keep Hyseq
reasonably apprised of the status of any such enforcement action.
19
(b) ALLEGED INFRINGEMENT NOT AFFECTING LICENSED PRODUCTS. Hyseq shall
have the sole right, at its own expense, to take whatever action it deems
appropriate to enforce any Hyseq Sequence Patent Rights against any alleged
infringement that does not affect Licensed Products. All monies recovered
upon the final judgment or settlement of any such suit shall be retained by
Hyseq. Hyseq shall keep Chiron reasonably apprised of the status of any
such enforcement action.
(c) COOPERATION. Each party shall furnish all cooperation reasonably
requested by the other party in connection with the enforcement of Hyseq
Sequence Patent Rights and Collaboration Sequence Patent Rights.
6.6 ENFORCEMENT OF OTHER HYSEQ PATENT RIGHTS. All decisions regarding
enforcement of Hyseq Patent Rights other than Hyseq Sequence Patent Rights and
Collaboration Sequence Patent Rights shall be made by Hyseq in its sole
discretion shall be implemented by Hyseq at its sole cost and expense.
6.7 ENFORCEMENT OF CHIRON PATENT RIGHTS. All decisions regarding
enforcement of Chiron Patent Rights shall be made by Chiron in its sole
discretion shall be implemented by Chiron at its sole cost and expense.
6.8 OPTION FOR ASSIGNMENT OF CERTAIN SEQUENCE PATENT RIGHTS. From and
after the time that Chiron has filed a patent application arising from
Inventions in methods of making or using, modifications and/or function of any
nucleic acid and/or polypeptide product thereof, Chiron shall have the option,
exercisable by written notice to Hyseq, to require Hyseq to assign to Chiron all
Collaboration Sequence Patent Rights in any full length coding nucleic acid
sequences and encoded polypeptides specifically identified in such patent
application. In such event, Chiron and Hyseq will agree upon and execute a
suitable assignment document that preserves, but does not increase, the
respective rights and obligations of Hyseq, Chiron and any Subsequent Hyseq
Partners in the particular Collaboration Sequence Patent Rights being assigned
(the "ASSIGNED PATENT RIGHTS"). Such assignment document will include, without
limitation, provisions prohibiting Chiron from commercializing the Assigned
Patent Rights outside of the Exclusive Field (except as expressly permitted
under Article IV).
6.9 COOPERATION. Each party shall provide any assistance reasonably
requested by the other to determine priority of Inventions arising from the
Collaboration. In addition, at any time that Chiron files a patent application
included within the Collaboration Sequence Patent Rights, Hyseq will notify
Chiron whether any other patent application owned by Hyseq discloses one or more
sequences disclosed in said Chiron patent application. Hyseq will also notify
Chiron if any subsequent patent application owned by Hyseq discloses one or more
sequences disclosed in said Chiron patent application.
ARTICLE
7
CONFIDENTIALITY
20
7.1 CONFIDENTIAL INFORMATION. Pursuant to the transactions contemplated
by this Agreement, the parties may provide to one another Invention Disclosures,
confidential information, including but not limited to each party's proprietary
materials and/or technologies, economic information, business or research
strategies, trade secrets and material embodiments thereof. As used herein,
"CONFIDENTIAL INFORMATION" of a party means any such confidential information
disclosed by such party to the other party (i) in written form marked
"confidential," (ii) in oral form if summarized in a writing marked
"confidential" delivered to the receiving party within thirty (30) days after
the oral disclosure, or (iii) if further disclosure of such information could
reasonably be expected to result in competitive harm to the providing party.
7.2 CONFIDENTIALITY AND NON-USE. The recipient shall maintain the
providing party's Confidential Information in confidence, except if and to the
extent that such disclosure is required by Applicable Law and provided that the
providing party has received written notice reasonably far in advance of the
proposed disclosure. The recipient shall use the providing party's Confidential
Information solely to exercise its rights and perform its obligations under this
Agreement, unless otherwise mutually agreed in writing. Upon request by the
providing party, the recipient shall return all tangible materials comprising
Confidential Information of the providing party and return or destroy any notes,
copies, summaries or extracts of the providing party's Confidential Information.
7.3 EXCLUSIONS. Confidential Information shall not include information:
(i) is shown by contemporaneous documentation of the recipient to have been in
its possession prior to receipt from the providing party; (ii) is or becomes,
through no fault of the recipient, publicly known; (iii) is furnished to the
recipient by a third party without breach of a duty to the disclosing party; or
(iv) is independently developed by the recipient without use of the providing
party's Confidential Information. The receiving party will have the burden of
proving the availability of any of the above exemptions.
7.4 TERMINATION. All obligations of confidentiality and non-use imposed
under this Article VII shall expire five (5) years following termination of this
Agreement.
ARTICLE
8
INDEMNIFICATION
8.1 INDEMNIFICATION BY HYSEQ. Hyseq shall indemnify and hold Chiron and
its Affiliates, and their respective directors, officers, employees and agents,
harmless against all claims, damages, liabilities, losses, costs and expenses
(collectively, "CLAIMS") if and to the extent arising from (a) the breach by
Hyseq of any of its representations, warranties and covenants hereunder; and (b)
any negligent or willful acts or omissions of Hyseq or its employees or agents
in connection with the performance of any tasks to be performed by Hyseq under
this Agreement, except in each case to the extent any such Claim is subject to
indemnification by Chiron pursuant to Section 8.2 below. Indirect or
consequential losses or damages are expressly excluded.
21
8.2 INDEMNIFICATION BY CHIRON. Chiron shall indemnify and hold Hyseq and
its Affiliates, and their respective directors, officers, employees and agents,
harmless against all Claims if and to the extent arising from (a) the breach by
Chiron of any of its representations, warranties and covenants hereunder; and
(b) any negligent or willful acts or omissions of Chiron or its employees or
agents in connection with the performance of any tasks to be performed by Chiron
under this Agreement, except in each case to the extent any such Claim is
subject to indemnification by Hyseq pursuant to Section 8.1 above. Indirect or
consequential losses or damages are expressly excluded.
8.3 PROCEDURE. The indemnified party shall give prompt written notice to
the indemnifying party of any suits, claims or demands which may give rise to
any loss for which indemnification may be required under this Article VIII;
provided, however, that failure to give such notice shall not impair the
obligation of the indemnifying party to provide indemnification hereunder except
if and to the extent that such failure materially impairs the ability of the
indemnifying party to defend the applicable suit, claim or demand. The
indemnifying party shall be entitled to assume the defense and control of any
suit, claim or demand of any third party at its own cost and expense; provided,
however, that the other party shall have the right to be represented by its own
counsel at its own cost in such matters. In the event that the indemnifying
party shall decline to assume control of any such suit, claim or demand, the
party entitled to indemnification shall be entitled to assume such control,
conduct the defense of, and settle such suit, claim or action, all at the sole
cost and expense of the indemnifying party. The indemnifying party shall not
settle or dispose of any such matter in any manner which would adversely impact
the rights or interests of the indemnified party without the prior written
consent of the indemnified party, which shall not be unreasonably delayed or
withheld.
ARTICLE
9
TERM AND TERMINATION
9.1 COLLABORATION TERM. The term of Collaboration (the "COLLABORATION
TERM") shall begin on the date hereof and terminate three (3) years hereafter,
unless sooner terminated pursuant to Section 9.4 or Section 9.5 below. In
addition, Chiron shall have the option, exercisable by written notice to Hyseq,
to extend the Collaboration Term for up to two (2) additional periods of two (2)
years each.
9.2 LICENSE TERM. The term of the licenses granted in Article III hereof
(the "LICENSE TERM") shall begin on the date hereof and shall expire on the
later of (a) the expiration of the last Patent Right covered by any such
license, or (b) fifteen (15) years after the First Commercial Sale of a Licensed
Product hereunder, unless sooner terminated pursuant to Section 9.4 below.
9.3 EARLY TERMINATION OF AGREEMENT. This Agreement may be terminated as
follows:
22
(a) by mutual written agreement of Chiron and Hyseq, effective as of
the time specified in such written agreement; or
(b) by either party,
(i) in the event of a Bankruptcy Event of the other party,
effective immediately upon the occurrence of such Bankruptcy Event; or
(ii) upon any material breach of this Agreement by the other
party; provided, however, that the party alleging such breach must
first give the other party written notice thereof, which notice must
state that nature of the breach in reasonable detail and that the
party giving such notice views such alleged breach as a basis for
terminating this Agreement under this Section 9.3(b)(ii) and the party
receiving such notice must have failed to cure such alleged breach
within sixty (60) days after receipt of such notice; or
9.4 EARLY TERMINATION OF COLLABORATION.
(a) RIGHT TO TERMINATE. Chiron may terminate the Collaboration if
Hyseq fails to perform sequencing within the timeframe specified in Section
2.1(d) hereof on * consecutive Libraries (a "CONSECUTIVE FAILURE"),
effective thirty (30) days after the date of written notice given to Hyseq
by Chiron but provided that Hyseq has not cured such breach by the end of
such thirty (30) day period. Notwithstanding the foregoing, Hyseq will not
be entitled to any cure period for the * Consecutive Failure that occurs in
any given year. Termination of the Collaboration pursuant to this Section
9.4 shall terminate only the provisions of Article II of this Agreement,
and the remaining provisions of this Agreement shall remain in full force
and effect.
(b) TERMINATION FEE. If Chiron terminates the Collaboration pursuant
to Section 9.4(a), Chiron shall pay Hyseq, within thirty (30) days after
the effective date of such termination (the "Effective Date"), a
termination fee equal to: *.
9.5 SURVIVAL OF OBLIGATIONS. The provisions of Sections 2.5, 2.9, 4.3(b),
5.8, 5.9, 5.10, 5.11, 9.5, 9.6 and 9.7 and Articles VI, VII, VIII, X, XI and XX
shall survive any termination of this Agreement. Chiron's obligations to make
payments under Article V for amounts accrued as of the effective date of
termination and with the statements specified in Section 5.6(a) shall also
survive any such termination. In addition, all provisions of this Agreement,
insofar as they relate to Licensed Products that are being sold commercially
upon termination of this Agreement, shall survive for as long as Licensed
Products continue to be sold commercially in any jurisdiction.
9.6 CONTINUING LIABILITY. Termination of this Agreement for any reason
shall not release any party from any liability, obligation or agreement which
has already accrued nor affect the survival of any provision hereof which is
expressly stated to survive such termination. Termination of this Agreement for
any reason shall not constitute a waiver or release of, or otherwise be deemed
to prejudice or adversely affect, any rights, remedies or claims, whether for
damages or otherwise, which a party may have hereunder or which may arise out of
or in connection with such termination.
9.7 RETURN OF CONFIDENTIAL INFORMATION. Upon termination of this
Agreement, each party shall return to the other all Confidential Information of
such other party that remains in its possession, except that each party shall be
entitled to retain one (1) copy of any such information for archival purposes.
ARTICLE
23
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
10
ALTERNATIVE DISPUTE RESOLUTION ("ADR")
10.1 EXCLUSIVE DISPUTE RESOLUTION MECHANISM. The parties agree the
procedures set forth in this Article X shall be the exclusive mechanism for
resolving any bona fide disputes that arise from time to time pursuant to this
Agreement relating to any party's rights and/or obligations hereunder that
cannot be resolved through good faith negotiation between the parties.
10.2 EXECUTIVE MEDIATION. Any such dispute must first be submitted to the
officers designated below or their successors, for attempted resolution by good
faith negotiations for a period of at least thirty (30) days. Said designated
officers are as follows:
For Hyseq - Chief Executive Officer
For Chiron - President, Chiron Technologies
In the event the designated officers are not able to resolve such dispute within
such thirty (30) day period, any party may invoke the provisions below.
10.3 INITIATION OF ADR. If a party intends to begin an ADR to resolve a
dispute, such party shall provide written notice (the "ADR REQUEST") to counsel
for the other party informing such other party of such intention and the issues
to be resolved. From the date of the ADR Request and until such time as any
matter has been finally settled by ADR, the running of the time periods
contained in this Agreement within which party must cure a breach of this
Agreement shall be suspended as to the subject matter of the dispute.
10.4 SELECTION OF NEUTRAL. Within ten (10) business days after the
receipt of the ADR Request, the other party may, by written notice to the
counsel for the party initiating ADR, add additional issues to be resolved.
Within twenty (20) business days following the receipt of the ADR Request a
neutral shall be selected by the then-President of the Center for Public
Resources ("CPR"), 000 Xxxxx Xxx., Xxx Xxxx, Xxx Xxxx 00000. The neutral shall
be an individual who shall preside in resolution of any disputes between the
parties. The neutral selected shall be a member of the Judicial Panel of the
CPR and shall not be an employee, director or shareholder of any party or of an
Affiliate of either party. Either party shall have ten (10) business days from
the date the neutral is selected to object in good faith to the selection of
that person. If any party makes such an objection, the then-President of the
CPR shall, as soon as possible thereafter, elect another neutral under the same
conditions set forth above. This second selection shall be final.
10.5 HEARING. No later than ninety (90) days after selection, the neutral
shall hold a hearing to resolve each of the issues identified by the parties and
shall render the award as expeditiously thereafter as possible but in no event
more than thirty (30) days after the close of hearings. In making the award the
neutral shall rule on each disputed issue and shall adopt in whole the proposed
ruling of one of the parties on each disputed issue.
24
10.6 PROCEDURES. It is the intention of the parties that discovery,
although permitted as described herein, will be extremely limited except in
exceptional circumstances. The neutral shall permit such limited discovery
necessary for an understanding of any legitimate issue raised in the ADR,
including the production of documents. Each party shall be permitted but not
required to take the deposition of not more than five (5) persons, each such
deposition not to exceed six (6) hours in length. If the neutral believes that
exceptional circumstances exist, and additional discovery is necessary for a
full and fair resolution of the issues, he or she may order such additional
discovery as he or she deems necessary. At the hearing the parties may present
testimony (either by live witness or deposition) and documentary evidence. The
hearing shall be held at a location in San Francisco, California selected by the
neutral. The neutral shall have sole discretion with regard to the
admissibility of any evidence and all other matters relating to the conduct of
the hearing. The neutral shall, in rendering his or her decision, apply the
substantive law of California without giving effect to its principles of
conflicts of law, and without giving effect to any rules or laws relating to
arbitration. The decision of the neutral shall be final and not appealable,
except in cases of fraud or bad faith on the part of the neutral or any party to
the ADR proceeding in connection with the conduct of such proceedings.
10.7 PRESENTATIONS. At least thirty (30) days prior to the date set for
the hearing, each party shall submit to the other party and the neutral a list
of all documents on which such party intends to rely in any oral or written
presentation to the neutral and a list of all witnesses, if any, such party
intends to call at such hearing and a brief summary of each witness's testimony.
At least seven (7) days prior to the hearing, each party must submit to the
neutral and serve on the other party a proposed ruling on each issue to be
resolved and pre-hearing briefs. Such pre-hearing briefs shall not be more than
twenty five (25) pages. Not more than seven (7) days following the close of
hearings, the parties may each submit post hearing briefs to the neutral
addressing the evidence and issues to be resolved. Such post hearing briefs
shall not be more than ten (10) pages.
10.8 COSTS AND FEES. The neutral shall determine the proportion in which
the parties shall pay the costs and fees of the ADR. Each party shall pay its
own costs (including, without limitation, attorneys' fees) and expenses in
connection with such ADR.
10.9 CONFIDENTIALITY. The ADR proceeding shall be confidential and the
neutral shall issue appropriate protective orders to safeguard each party's
Confidential Information. Except as required by law, no party shall make (or
instruct the neutral to make) any public announcement with respect to the
proceedings or decision of the neutral without the prior written consent of the
other party. The existence of any dispute submitted to ADR, and the award of
the neutral, shall be kept in confidence by the parties and the neutral, except
as required in connection with the enforcement of such award or as otherwise
required by Applicable Law.
10.10 AWARD. Any judgment upon the award rendered by the neutral may be
entered in any court having jurisdiction thereof.
ARTICLE
11
25
REPRESENTATIONS AND WARRANTIES
11.1 MUTUAL REPRESENTATIONS. Each party hereby represents and warrants to
the other as follows:
(a) DUE ORGANIZATION. It is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation.
(b) DUE AUTHORITY. It has power and authority to execute and deliver
this Agreement, and to perform its obligations hereunder.
(c) NO CONFLICT. The execution, delivery and performance by it of
this Agreement and its compliance with the terms and provisions hereof does
not and will not conflict with or result in a breach of any of the terms
and provisions of, or constitute a default under or a violation of (i) any
agreement where such conflict, breach or default would impair in any
material respect the ability of such party to perform its obligations
hereunder; (ii) the provisions of its charter document or bylaws; or (iii)
any Applicable Law, but, with respect to this clause (iii), only where such
violation could reasonably be expected to have a material adverse effect on
the ability of such party to perform its obligations hereunder.
(d) BINDING OBLIGATION. This Agreement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation enforceable against it in accordance with its terms subject, as
to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to the
availability of particular remedies under general equitable principles.
(e) COMPLIANCE WITH LAWS. It shall perform all of its obligations
hereunder in compliance with all Applicable Laws the violation of which
could reasonably be expected to have a material adverse effect on such
party's ability to perform its obligations hereunder.
(f) NO ACTIONS. There are no actions, suits or proceedings pending
or, to its knowledge, threatened against it or its Affiliates which affect
its ability to carry out its obligations under this Agreement.
11.2 ADDITIONAL HYSEQ REPRESENTATION. In addition to the foregoing, Hyseq
represents and warrants to Chiron that, to Hyseq's knowledge, the practice of
the Hyseq Research Technology as contemplated by this Agreement will not involve
any infringement or constitute an unauthorized use of any patent, copyright,
trade secret, proprietary information, license or right therein belonging to any
Third Party.
11.3 ADDITIONAL CHIRON REPRESENTATION. In addition to the foregoing,
Chiron represents and warrants to Hyseq that, to Chiron's knowledge, the use by
Hyseq of the Libraries
26
in performing the Research as contemplated by this Agreement will not involve
any infringement or constitute an unauthorized use of any patent, copyright,
trade secret, proprietary information, license or right therein belonging to any
Third Party.
11.4 NO FURTHER REPRESENTATIONS OR WARRANTIES. Except as otherwise
expressly provided in this Article XI, neither party makes any representation or
warranty of any kind to the other party, either express or implied.
ARTICLE
12
MISCELLANEOUS
12.1 COMPLIANCE WITH APPLICABLE LAW. Each party shall exercise its
respective rights and perform its respective obligations hereunder in compliance
with Applicable Law.
12.2 RELATIONSHIP OF THE PARTIES. The parties agree that each is acting
as an independent contractor with respect to the other and nothing contained in
this Agreement is intended, or is to be construed, to constitute Chiron and
Hyseq as partners or joint venturers or Chiron or Hyseq as an agent of the
other. Neither party hereto 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.
12.3 LIMITATION OF LIABILITY. Neither party shall have any liability to
the other party pursuant to this Agreement for any special, indirect or
consequential damages, including but not limited to loss of profits, loss of
business opportunities or loss of business investment.
12.4 NOTICES. Any notice or other communication hereunder shall be in
writing and shall be deemed given when so delivered in person, by overnight
courier (with receipt confirmed) or by facsimile transmission (with receipt
confirmed by telephone or by automatic transmission report) or, if given by
mail, upon receipt, as follows (or to such other persons and/or addresses as may
be specified in writing to the other party hereto):
If to Hyseq, to: Hyseq, Inc.
Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
With a copy to: Xxxxxxxx & Xxxxxx, Ltd.
Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to Chiron, to: Chiron Corporation
00
Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: President, Chiron Technologies
Facsimile: (000) 000-0000
With a copy to: Chiron Corporation
Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
12.5 SUCCESSORS AND ASSIGNS. The terms and provisions of this Agreement
shall inure to the benefit of, and be binding upon, Chiron, Hyseq, and their
respective successors and assigns; provided, however, that neither Chiron nor
Hyseq may transfer or assign any of its rights and obligations hereunder without
the prior written consent of the other, except that either party may transfer or
assign any of its rights and obligations hereunder to an Affiliate or a person
that acquires all or substantially all of the business or assets of such party
to which this Agreement relates or pursuant to a merger or consolidation. Each
party shall notify the other promptly following any such transfer, assignment,
merger or consolidation. Any purported assignment in contravention of this
Section 12.5 shall, at the option of the nonassigning party, be null and void
and of no effect.
12.6 AMENDMENTS AND WAIVERS. No amendment, modification, waiver,
termination or discharge of any provision of this Agreement, nor consent to any
departure by Chiron or Hyseq therefrom, shall in any event be effective unless
the same shall be in writing specifically identifying this Agreement and the
provision intended to be amended, modified, waived, terminated or discharged and
signed by the party against whom enforcement of such amendment is sought, and
each amendment, modification, waiver, termination or discharge shall be
effective only in the specific instance and for the specific purpose for which
given. No provision of this Agreement shall be varied, contradicted or
explained by any oral agreement, course of dealing or performance or any other
matter not set forth in an agreement in writing and signed by the party against
whom enforcement of such variance, contradiction or explanation is sought.
12.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to its
choice of law principles.
12.8 ATTORNEYS' FEES. Each party shall bear its own legal fees incurred
in connection with the transactions contemplated hereby.
12.9 SEVERABILITY. If any provision hereof should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, then, to the
fullest extent permitted by law, all other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
order to carry out the intentions of the parties hereto as nearly as may be
possible; provided, however, that nothing herein shall be construed so as to
defeat the overall intention of the parties.
28
12.10 USE OF NAMES. Neither party shall use the name, trade name or
trademark of the other party in connection with this Agreement without the
express prior written consent of the other party.
12.11 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original, and all of which counterparts,
taken together, shall constitute one and the same instrument.
12.12 ENTIRE AGREEMENT. This Agreement, together with the Stock Purchase
Agreement and all exhibits and schedules attached hereto or thereto, contains
the entire agreement and understanding of the parties hereto, and supersedes any
prior agreements or understandings between the parties with respect to the
subject matter hereof.
12.13 PUBLICITY.
(a) TERMS OF AGREEMENT. Neither party shall disclose this Agreement
or any of the terms thereof to any Third Party, whether in writing or
orally, without the prior written consent of the other party.
Notwithstanding the foregoing, either party may make any such disclosure if
but only to the extent such disclosure is, on advice of counsel, required
by Applicable Law. The disclosing party shall use all commercially
reasonable efforts to preserve the confidentiality of this Agreement and
the terms thereof notwithstanding any such required disclosure, and will
give the other party written notice of such required disclosure, which
notice shall, to the extent reasonably practicable, be given a reasonable
period of time in advance of such required disclosure. In the event either
party is required to file this Agreement with the Securities and Exchange
Commission, such party shall apply for confidential treatment of this
Agreement to the fullest extent permitted by Applicable Law, shall provide
the other party a copy of the confidential treatment request far enough in
advance of its filing to give the other party a meaningful opportunity to
comment thereon, and shall incorporate in such confidential treatment
request any reasonable comments of the other party.
(b) PRESS RELEASES. The parties will issue a joint press release
following the execution of this Agreement, the form and substance of which
shall be approved by both parties. Any subsequent press releases regarding
the transactions contemplated hereby shall be approved in advance by both
parties, such approval not to be unreasonably withheld or delayed.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
CHIRON CORPORATION., a Delaware corporation
29
By: *
-------------------
Name: *
---------------
Title: *
----------------
HYSEQ, INC., a Nevada corporation
By: /s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
---------------
Title: Chief Executive Officer and President
-------------------------------------
30
* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
