printer-friendly

Sample Business Contracts

Agreement - Syntro Corp. and Nanogen Inc.

Sponsored Links

                                    AGREEMENT


        THIS AGREEMENT, is entered into as of November 24, 1997 by and between
Syntro Corporation, a Delaware corporation having a place of business at 3535
General Atomics Court, San Diego, California 92121 ("Syntro") and Nanogen, Inc.,
a Delaware corporation having a place of business at 10398 Pacific Center Court,
San Diego, California 92121 ("Nanogen"). Syntro and Nanogen may each be referred
to herein individually as a "Party" and collectively as the "Parties."

        WHEREAS, Syntro has been assigned rights to United States Patent
4,787,963, entitled "Method and Means of Annealing Complementary Nucleic Acid
Molecules at an Accelerated Rate"; and

        WHEREAS, Nanogen desires to obtain an exclusive license to practice such
patent in certain fields and Syntro is willing to grant such a license to
Nanogen;

        NOW THEREFORE, in consideration of the foregoing and the promises and
covenants set forth below, the Parties hereby agree as follows:

                                   ARTICLE I.
                                   DEFINITIONS

        1.1    "Affiliate" shall mean any individual or entity directly or
indirectly controlling, controlled by or under common control with, a Party to
this Agreement. For purposes of this Agreement, the direct or indirect ownership
of fifty percent (50%) or more of the outstanding voting securities of an
entity, or the right to receive fifty percent (50%) or more of the profits or
earnings of an entity shall be deemed to constitute control. Such other
relationship as in fact results in actual control over the management, business
and affairs of an entity shall also be deemed to constitute control.

        1.2    "Calendar Quarter" shall mean the respective periods of three (3)
consecutive calendar months ending on March 31, June 30, September 30 or
December 31, for so long as this Agreement is in effect.

        1.3    "Field" shall mean all uses of Licensed Products.

        1.4    "First Commercial Sale" shall mean, with respect to the Licensed
Product, the first sale for end use of any Licensed Product.

                                       -1-

<PAGE>   2

        1.5    "Licensed Products" shall mean all products, the making, using or
selling of which, would infringe one or more claims included within the Patent
Rights.

        1.6    "Net Sales" shall mean the amounts billed or invoiced to
independent, third-party customers by Nanogen, its Affiliates and sublicensees
for sales of Licensed Products, which are made, sold or used in the Territory,
less deductions for (a) quantity and/or cash discounts and rebates actually
allowed and taken; (b) freight, postage, duties, insurance and taxes directly
related to the sale of Licensed Products; (c) amounts repaid or credited by
reason of rejections or returns of goods or because of retroactive price
reductions. Licensed Products shall be considered sold in accordance with GAAP
and Nanogen's procedures for recording sales for financial reporting purposes.
The value of any Licensed Products used by Nanogen or its Affiliates, calculated
as if sold to a third party under an arms-length transaction, shall be deemed to
be included in Net Sales.

        1.7    "Patent Rights" shall mean United States Patent
4,787,963, entitled "Method and Means of Annealing Complementary
Nucleic Acid Molecules at an Accelerated Rate."

        1.8    "Territory" shall mean the United States of America, its
territories and possessions.

                                   ARTICLE II.
                                 GRANT OF RIGHTS

        2.1    Exclusive License. Syntro hereby grants to Nanogen, and Nanogen
accepts, an exclusive, royalty-bearing license, under the Patent Rights, to
make, have made, use, import, market, offer to sell and sell Licensed Products
solely for use in the Licensed Field in the Territory. Subject to the prior
written approval of Syntro, which approval shall not unreasonably be withheld,
Nanogen shall have the right to sublicense the rights granted hereunder to third
parties, provided, however, that Nanogen shall be responsible for the
performance of each of its sublicensees.

        2.2    Reserved Rights. Syntro hereby retains the right, without right
to sublicense, under the Patent Rights, to make, have made, use, import, market,
offer to sell and sell Licensed Products and practice the Patent Rights for any
and all human therapeutic uses and any and all veterinary uses and Syntro
further retains the right to practice the Patent Rights for research purposes,
including, without limitation, the development of products for human therapeutic
uses and/or any veterinary uses (hereinafter collectively referred to as
"Reserved Uses"). For avoidance of doubt, nothing in this Paragraph 2.2
reservation of rights by Syntro shall preclude or limit Nanogen's right to make,
have made, use, import, market, offer to sell and sell Licensed Products or
practice the Patent Rights for such Reserved Uses pursuant to the exclusive
license granted under Paragraph 2.1 above.

                                       -2-

<PAGE>   3


        2.3    No Implied License. This Agreement confers upon Nanogen no
license or rights by implication, estoppel, or otherwise under any patent,
patent application, know-how or other intellectual property right of Syntro
(collectively, "IP Rights") other than the Patent Rights regardless of whether
such other IP Rights are dominant or subordinate to the Patent Rights.

                                  ARTICLE III.
                             PAYMENTS AND ROYALTIES

        3.1    License Fee. In partial consideration for the rights granted to
Nanogen hereunder, Nanogen shall pay to Syntro a license fee in the amount of
***. Such license fee shall be paid in three (3) installments as follows:

            *** upon Nanogen's signature of this Agreement;

            *** on the *** anniversary of the Effective Date of
                this Agreement; and

            *** on the *** anniversary of the Effective Date of
                this Agreement.

        3.2    Royalties. In further consideration for the rights granted to
Nanogen hereunder, Nanogen shall pay to Syntro a royalty in the amount of ***
of Nanogen's Net Sales of Licensed Products.

        3.3    Term and Scope of Royalty Obligations. Royalties on Net Sales of
each Licensed Product at the rate set forth in Section 3.2 shall continue until
the expiration of the last to expire of the Patent Rights in the Territory. No
royalties shall be due upon the sale or other transfer among Nanogen, its
Affiliates or sublicensees, but in such cases the royalty shall be due and
calculated upon Nanogen's or its Affiliates' or its sublicensees' Net Sales to
the first independent third party.

        3.4    Reports and Payment of Royalty.

               3.4.1     Royalties Paid Quarterly. Within forty-five (45)
        calendar days following the close of each Calendar Quarter, following
        the First Commercial Sale of a Licensed Product, Nanogen shall furnish
        to Syntro a written report for the Calendar Quarter showing the Net
        Sales of Licensed Products sold by Nanogen, its Affiliates and its
        sublicensees in the Territory during such Calendar Quarter and the
        royalties payable under this Agreement for such Calendar Quarter.
        Simultaneously with the submission of the written report, Nanogen shall
        pay to Syntro, for the account of Nanogen or the applicable Affiliate or
        sublicensee, as

***     CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
        COMMISSION

                                       -3-


<PAGE>   4


the case may be, a sum equal to the aggregate royalty due for such Calendar
Quarter calculated in accordance with this Agreement (reconciled for any
previous overpayments, underpayments or credits).

               3.4.2     Method of Payment. Payments to be made by Nanogen to
        Syntro under this Agreement shall be paid by bank wire transfer in
        immediately available funds to such bank account as is designated in
        writing by Syntro from time to time or by check in immediately available
        funds. Royalty payments shall be made in United States dollars.

        3.5    Maintenance of Records; Audits.

               3.5.1     Record Keeping by Syntro. Nanogen and its Affiliates
        shall keep and Nanogen shall require its sublicensees to keep complete
        and accurate records in sufficient detail to enable the royalties
        payable hereunder to be determined. Upon ten (10) days prior written
        notice from Syntro, Nanogen shall permit an independent certified public
        accounting firm of nationally recognized standing selected by Syntro, at
        Syntro's expense, to have access during normal business hours to examine
        pertinent books and records of Nanogen and/or its Affiliates as may be
        reasonably necessary to verify the accuracy of the royalty reports
        hereunder. The examination shall be limited to pertinent books and
        records for any year ending not more than thirty-six (36) months prior
        to the date of such request. An examination under this Section 3.5.1
        shall not occur more than once in any Calendar Year. Nanogen may
        designate competitively sensitive information which such auditor may not
        disclose to Syntro, provided, however, that such designation shall not
        encompass the auditor's conclusions. The accounting firm shall disclose
        to Syntro only whether the royalty reports are correct or incorrect and
        the specific details concerning any discrepancies. No other information
        shall be provided to Syntro. Nanogen may require any such accounting
        firms to sign a confidentiality agreement (in form and substance
        acceptable to Nanogen) as to any of Nanogen's or its Affiliate's
        confidential information which they are provided, or to which they have
        access, while conducting any audit pursuant to this Section 3.5.1.

               3.5.2     Underpayment/Overpayments. If such accounting firm
        correctly concludes that additional royalties were owed during such
        period, Nanogen shall pay the additional royalties within thirty (30)
        days of the date Syntro delivers to Nanogen such accounting firm's
        written report so concluding. If such underpayment exceeds five percent
        (5%) of the royalty correctly due Syntro then the fees charged by such
        accounting firm for the work associated with the underpayment audit
        shall be paid by Nanogen. Any overpayments by Nanogen will be credited
        against future royalty obligations.

                                       -4-

<PAGE>   5




                                   ARTICLE IV.
                    PRODUCT DEVELOPMENT AND COMMERCIALIZATION

        4.1    Development. Nanogen shall, at its own cost and expense,
diligently perform, consistent with sound scientific principles and reasonable
business judgment, those research and development activities necessary or
appropriate to develop, make, use and sell Licensed Products in the Field in the
Territory, complying with any applicable regulatory and other applicable legal
requirements in the Territory.

        4.2    Manufacturing. Nanogen shall, at its own cost and expense, be
solely responsible for manufacturing, either itself or through third parties,
sufficient quantities of the Licensed Products to satisfy its obligations to
provide Licensed Products to its customers.

        4.3    Commercialization. Nanogen shall, at its own cost and expense,
use diligent efforts to market and sell the Licensed Products and to exploit the
Patent Rights in the Field hereunder.

                                   ARTICLE V.
                                     PATENTS

        5.1    Maintenance of Patent Rights. Subject to Sections 5.2 and 5.3
hereof, Syntro will, or will cause its Affiliates to, in its sole discretion,
maintain the Patent Rights, including, without limitation, payment of applicable
maintenance fees in the Territory.

        5.2    Infringement.

               5.2.1     Notice. In the event that Nanogen becomes aware of
        substantial infringement by a third party in a country in the Territory
        (e.g. greater than twenty percent (20%) of Nanogen's or its Affiliates'
        sales of Licensed Products) of any issued patent within the Patent
        Rights, Nanogen shall promptly notify Syntro in writing to that effect,
        including with said written notice evidence to establish a prima facie
        case of infringement by such third party.

               5.2.2     Enforcement of Patent Rights by Syntro.  Upon receipt
        of notice provided by Nanogen pursuant to Section 5.2.1 hereof, Syntro
        shall have the right but not the obligation to enforce the Patent Rights
        against the alleged third party infringer. If Syntro, in its sole
        discretion elects to so enforce the Patent Rights, Syntro shall have six
        (6) months from the date of such notice to obtain a discontinuance of
        such infringement or bring suit against such third party infringer.
        Syntro shall bear all of the expenses of any suit brought by it and
        shall retain all damages or other moneys awarded or received in
        settlement of such suit. At Syntro's request, Nanogen will reasonably


                                       -5-


<PAGE>   6

        cooperate with Syntro in any such suit and shall have the right to
        consult with Syntro and bc represented by its own counsel at its own
        expense.

               5.2.3     Enforcement of Patent Rights by Nanogen.  If Syntro
        either (i) notifies Nanogen that it elects not to enforce the Patent
        Rights against the alleged third party infringer or (ii) elects to
        enforce the Patent Rights against the alleged third party infringer
        pursuant to Section 5.2.2 hereof, but after the expiration of the six
        (6) month period set forth in Section 5.2.2, has not obtained a
        discontinuance of the infringement or brought suit against the third
        party infringer, Nanogen shall have the right, but not the obligation,
        to bring suit against such third party infringer under the Patent Rights
        in its own name and/or that of Syntro, provided that Nanogen shall bear
        all of the expenses of such suit. At Nanogen's request, Syntro will
        reasonably cooperate with Nanogen in any such suit for infringement of a
        Patent Right brought by Nanogen, and shall have the right to consult
        with Nanogen and to participate in and be represented by independent
        counsel in such litigation at its own expense. Nanogen shall impute no
        liability to Syntro as a consequence of such litigation or any
        unfavorable decision resulting therefrom, including any decision holding
        any of the Patent Rights invalid or unenforceable. In the event that
        Nanogen recovers any moneys in such litigation by way of damages or in
        settlement thereof, Nanogen shall have the right to keep such sums to
        offset its costs and expenses, provided, however, that to the extent
        such recovery includes an award based on lost profits, Nanogen shall pay
        to Syntro an amount equal to the royalties that would have been payable
        to Syntro based on Net Sales corresponding to such lost profits. Nanogen
        shall not enter into any settlement agreement which would adversely
        affect the Patent Rights without the prior written consent of Syntro.

        5.3    Defense of Patent Rights.

               5.3.1     Notice. In the event that a declaratory judgment action
        alleging invalidity or non-infringement of any of the Patent Rights
        shall be brought against Syntro or Nanogen or raised by way of
        counterclaim or affirmative defense to a suit brought under Section 5.2,
        the Party that such suit is brought against shall immediately provide
        the other Party with written notice of such suit.

               5.3.2     Defense by Syntro. Syntro shall have the first right,
        but not the obligation, to defend such suit. If Syntro, in its sole
        discretion, elects to defend such suit, Syntro shall do so at its own
        expense.

               5.3.3     Defense by Nanogen.  If Syntro, in its sole discretion,
        elects not to defend such suit pursuant to

      

                                       -6-
<PAGE>   7

        Section 5.3.2 hereof, Nanogen shall have the right, but not the
        obligation to so defend such suit at its sole cost and expense,
        provided, however, that Nanogen shall not enter into any settlement
        agreement which would adversely affect the Patent Rights without the
        prior written consent of Syntro.

                                   ARTICLE VI.
                                 INDEMNIFICATION

        6.1    Indemnification by Nanogen. Nanogen shall indemnify and hold
Syntro, its Affiliates, and each of their respective employees, officers,
directors and agents (each, a "Syntro Indemnified Party") harmless from and
against any and all claims, suits, liability, damages, loss, costs or expenses
(including reasonable attorneys' fees) which the Syntro Indemnified Party may
incur, suffer or be required to pay resulting from or arising in connection with
(i) the breach by Nanogen or its Affiliates of any covenant, representation or
warranty contained in this Agreement, (ii) the testing, research, development,
manufacture, storage, distribution, use, marketing, promotion or sale of
Licensed Products by or on behalf of Nanogen or its Affiliates or any of their
respective customers or clients, (iii) any negligent act or omission or willful
misconduct of Nanogen or its Affiliates in the conduct of any activity by
Nanogen or such Affiliates under this Agreement which is the proximate cause of
injury, death or property damage to a third party, or (iv) the violation, by
Nanogen, its Affiliates or any of its or their respective employees, officers,
directors and agents, of any municipal, state, or federal laws, rules or
regulations applicable to the performance of Nanogen's obligations under this
Agreement, or (v) the successful enforcement by a Syntro Indemnified Party of
any of the foregoing. Upon learning of the filing of any such claim or suit,
Syntro shall immediately notify Nanogen thereof.

        6.2    Indemnification by Syntro. Syntro shall indemnify and hold
Nanogen, its Affiliates, and each of their respective employees, officers,
directors and agents (each, a "Nanogen Indemnified Party") harmless from and
against any and all claims, suits, liability, damages, loss, costs or expenses
(including reasonable attorneys' fees) which the Nanogen Indemnified Party may
incur, suffer or be required to pay resulting from or arising in connection with
(i) the breach by Syntro or its Affiliates of any covenant, representation or
warranty contained in this Agreement, (ii) any negligent act or omission or
willful misconduct of Syntro or its Affiliates in the conduct of any activity by
Syntro or such Affiliates under this Agreement with respect to the Patent
Rights, or (iii) the violation, by Syntro, its Affiliates or any of its or their
respective employees, officers, directors and agents, of any municipal, state,
or federal laws, rules or regulations applicable to the performance of Syntro's
obligations under this Agreement, or (iv) the successful enforcement by a
Nanogen Indemnified Party of any of

                                       -7-

<PAGE>   8


the foregoing.  Upon learning of the filing of any such claim or
suit, Nanogen shall immediately notify Syntro thereof.

        6.3    Insurance. Nanogen shall maintain adequate insurance to cover its
liability exposure and indemnification obligations. Upon request of Syntro,
copies of certificates evidencing such insurance coverage will be made available
to Syntro and Nanogen shall provide thirty (30) days prior written notice to
Syntro in the event of cancellation or any material change in such insurance.

                                  ARTICLE VII.
                              TERM AND TERMINATION

        7.1    Term. Unless sooner canceled or terminated under the provisions
hereof, this Agreement shall continue in effect until the last to expire of the
Patent Rights.

        7.2    Termination by Syntro. If Nanogen brings a declaratory action
against Syntro alleging invalidity or non-infringement of any of the Patent
Rights, Syntro shall have the right to terminate this Agreement at any time
thereafter upon thirty (30) days written notice to Nanogen.

        7.3    Material Breach. Either Party hereto may, at its option, cancel
the licenses herein granted to Nanogen and terminate this Agreement by giving
the other Party prior notice in writing to that effect of not less that sixty
(60) days in the event such other Party shall materially breach this Agreement
and shall fail to cure such breach during the period of said notice; provided,
however, that any such cancellation and termination shall not release such other
Party from any obligations hereunder incurred prior thereto.

        7.4    Insolvency. If Nanogen shall become insolvent or shall make an
assignment for the benefit of its creditors, or proceedings in voluntary or
involuntary bankruptcy shall be instituted on behalf of or against Nanogen, or a
receiver or trustee of Nanogen's property shall be appointed, the licenses
granted herein to Nanogen shall, without other action or notice, immediately
terminate.

        7.5    Effects of Termination.

               7.5.1     Payment Obligations. Upon cancellation or termination
        of this Agreement for any reason, all royalties on Net Sales made on or
        before the effective date of said cancellation or termination shall
        accrue and become due and payable on the thirtieth (30th) day
        thereafter. Additionally, any installments of the license fee required
        under Section 3.1 which have not yet been paid shall accrue and become
        immediately due and payable.


                                       -8-

<PAGE>   9

               7.5.2     Inventory. In the event of the cancellation or
        termination of this Agreement prior to the expiration thereof, other
        than as a result of a substantial safety question having arisen with
        respect to Licensed Product(s) or as a result of a termination pursuant
        to Section 7.2 hereof or because of a material breach of this Agreement
        by Nanogen, Nanogen shall be permitted to sell its then existing
        inventory of Licensed Products for a period of nine (9) months, on
        condition that Nanogen pay to Syntro royalties thereon and comply with
        the other terms of this Agreement. Any inventory not sold during such
        nine (9) month period shall be promptly destroyed by Nanogen.

        7.6    Survival. The obligations of the Parties set forth in
Sections 3.4, 3.5, 5.3.4, 6.1, 6.2, 6.3, 7.3, 7.4, 7.5, 9.1, 9.2, 10.1, 10.5 and
10.6 and the last sentence of Section 8.2 hereof shall survive expiration or any
termination of this Agreement.

                                  ARTICLE VIII.
                         REPRESENTATIONS AND WARRANTIES

        8.1    Representations and Warranties of Each Party. Each of Syntro and
Nanogen hereby represents and warrants to the other that, as of the Effective
Date,:

               (a)  it is a corporation duly organized and validly existing
        under the laws of the state or other jurisdiction of incorporation or
        formation;

               (b)  except for the governmental and regulatory approvals
        required to market Licensed Product(s) in the Territory, the execution,
        delivery and performance of this Agreement by such Party does not
        require the consent, approval or authorization of, or notice,
        declaration, filing or registration with, any governmental or regulatory
        authority and the execution, delivery or performance of this Agreement
        will not violate any law, rule or regulation applicable to such Party;

               (c)  it shall comply with all applicable material laws and
        regulations relating to its activities under this Agreement;

               (d)  the individual executing this Agreement is its duly
        authorized representative with full power and authority to sign, bind
        and otherwise commit such Party to the terms and obligations of this
        Agreement;

               (e)  it has the power and authority to execute and deliver this
        Agreement and to perform its obligations hereunder; and

               (f)  as of the date of this Agreement it is not a party to any
        oral or written contract or understanding with any

                                       -9-

<PAGE>   10



        third party that is inconsistent with this Agreement and/or its
        performance hereunder or that will in any way limit or conflict with
        it's ability to fulfill the terms of this Agreement and that it will not
        enter into any such agreement during the term of this Agreement.

        8.2    Representations and Warranties of Syntro. Syntro hereby
represents and warrants to Nanogen that Syntro owns the Patent Rights and, as of
the Effective Date, the Patent Rights are subsisting and all maintenance fees
that have become due on or before the Effective Date have been paid. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN SECTION 8.1 HEREOF OR IN THIS SECTION 8.2,
SYNTRO MAKES NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS OF ANY KIND AS
TO ANY OF THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION,
ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PATENT RIGHTS LICENSED HEREUNDER OR ANY LICENSED PRODUCTS MADE, USED OR SOLD
HEREUNDER, AND SYNTRO FURTHER DISCLAIMS ANY LIABILITY, TO THE MAXIMUM EXTENT
PERMITTED BY LAW, ARISING OUT OF NANOGEN'S, ITS AFFILIATES' OR ANY OR THEIR
RESPECTIVE CUSTOMERS' USE OF LICENSED PRODUCTS OR THE PATENT RIGHTS.

                                   ARTICLE IX.
                                 CONFIDENTIALITY

        9.1 Confidentiality. Each of Nanogen and Syntro shall use only in
accordance with this Agreement and shall not disclose to any third party any
Proprietary Information received by it from the other Party, without the prior
written consent of the other Party. The foregoing obligations shall survive the
expiration or termination of this Agreement for a period of five (5) years.
These obligations shall not apply to Proprietary Information that:

               (i)  is known by the receiving Party at the time of its receipt,
        and not through a prior disclosure by the disclosing Party, as
        documented by business records;

              (ii)  is at the time of disclosure or thereafter becomes published
        or otherwise part of the public domain without breach of this Agreement
        by the receiving Party;

             (iii)  is subsequently disclosed to the receiving Party by a third
        party who has the right to make such disclosure;

              (iv)  is developed by the receiving Party independently of
        Proprietary Information or other information received from the
        disclosing Party and such independent development can be documented by
        the receiving Party; or

               (v)  is required by law, regulation, rule, act or order of any
        governmental authority or agency to be disclosed by a Party, provided
        that notice is promptly delivered to the other Party in order to provide
        an opportunity to seek a

                                      -10-

<PAGE>   11

        protective order or other similar order with respect to such Proprietary
        Information and thereafter the disclosing Party discloses to the
        requesting entity only the minimum Proprietary Information required to
        be disclosed in order to comply with the request, whether or not a
        protective order or other similar order is obtained by the other Party.

        9.2    Return of Proprietary Information. At any time upon request of
the disclosing Party after termination of this Agreement pursuant to Article VII
hereof, the receiving Party shall return all documents, and copies thereof,
containing the disclosing Party's Proprietary Information. However, the
receiving Party may retain one (1) copy of such documents in a secure location
solely for the purpose of determining its obligations hereunder, to comply with
any applicable regulatory requirements, or to defend against any product
liability claims.

                                   ARTICLE X.
                                  MISCELLANEOUS

        10.1   Governing Law. This Agreement shall be construed and the legal
relations between the Parties hereto determined in accordance with the laws of
the State of New Jersey, without regard for its conflicts of law provisions.

        10.2   Assignment. This Agreement and the licenses granted herein shall
not be assignable by either Party without the prior written consent of the other
Party, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, either Party may assign this Agreement and its
rights and obligations hereunder to any of its Affiliates or in connection with
the acquisition, sale of all or substantially all of its assets without first
obtaining such consent, but shall notify the other Party, in writing, promptly
after such assignment is made. A Party may assign its rights and/or obligations
hereunder to one of its Affiliates only if such Party provides the other Party
with a signed document guaranteeing the performance of such Affiliate. If a
Party assigns its rights and obligations hereunder to a third party, such
assignment will be effective only if the third party agrees, in writing, to
assume all of the obligations under this Agreement of the Party from whom it is
receiving such assignment.

        10.3   Entire Agreement. This Agreement, including any exhibits and
schedules hereto, constitutes the entire understanding of the Parties with
respect to the subject matter hereof. This Agreement supersedes and cancels all
previous agreements among the Parties, written and oral, in respect of the
subject matter hereof. No modification or amendment of this Agreement shall be
valid or binding upon the Parties unless made in writing and duly executed on
behalf or each of the Parties hereto.


                                      -11-
<PAGE>   12



        10.4   Export Control. This Agreement is made subject to any
restrictions concerning the export of products or technical information from the
United States of America which may be imposed upon or related to Nanogen or
Syntro from time to time by the government of the United States of America.
Furthermore, Nanogen agrees that it will not export, directly or indirectly, any
technical information acquired from Syntro under this Agreement or any products
using such technical information to any country for which the United States
government or any agency thereof at the time of export requires an export
license or other governmental approval, without first obtaining the written
consent to do so from the Department of Commerce or other agency of the United
States government when required by an applicable statute or regulation.

        10.5   Notices. Any notice or other communication required or permitted
to be given to the other Party pursuant to this Agreement shall be sufficiently
given if sent to such Party in writing by express delivery service or certified
or registered mail, return receipt postage prepaid, or by facsimile with
confirmation via mail, addressed to:

        To Syntro:         Syntro Corporation
                           3535 General Atomics Court
                           San Diego, California 92121
                           Attention: President
                           Facsimile no.: (908) 629-3103

               with copies to:

                           Schering Corporation
                           2000 Galloping Hill Road
                           Kenilworth, New Jersey 07033
                           Attention: Law Department,
                                         Senior Legal Director - Licensing
                             Facsimile no.:  (908) 298-2739

                                              and

                           Schering Corporation
                           One Giralda Farms
                           Madison, New Jersey
                           Attention:  Staff Vice President - Corporate
                                       Business Development, Strategy
                                       and Internal Consulting
                           Facsimile no.:  (973) 822-7468

        To Nanogen:        Nanogen, Inc.
                           10398 Pacific Center Court
                           San Diego, California 92121
                           Attention: Chief Executive Officer
                           Facsimile no.: (619) 546-7717


                                      -12-

<PAGE>   13



               with copies to:

                          Nanogen, Inc.
                          10398 Pacific Center Court
                          San Diego, California 92121
                          Attention: General Counsel
                          Facsimile no.: (619) 546-7717

or to such other address as it shall designate by written notice given to the
other Party. Any such notice or other communication shall be deemed to be
received on the earlier of the date actually received or the date five (5)
business days after the same was posted or sent. Either Party may change its
address or its facsimile number by giving the other Party written notice,
delivered in accordance with this Section.

        10.6   Publicity. Neither Party shall use the name of the other Party
(or the such other Party's Affiliates) for promotional purposes without the
prior written consent of the Party whose name is proposed to be used. No news
release, publicity or other public announcement, either written or oral,
regarding the terms or existence of this Agreement or performance hereunder,
shall be made by either Party without the prior written agreement of the other
Party.

        10.7   Severability. If any term or condition of this Agreement, the
deletion of which would not adversely affect the receipt of any material benefit
by either Party hereunder, shall be held illegal, invalid or unenforceable, the
remaining terms and conditions of this Agreement shall not be affected thereby
and such terms and conditions shall be valid and enforceable to the fullest
extent permitted by law.

        10.8   No Waiver. Failure on the part of Syntro to exercise or enforce
any right conferred upon it hereunder shall not be deemed to be a waiver of any
such right nor operate to bar the exercise or enforcement thereof at any time or
times thereafter.

        10.9   Force Majeure. Noncompliance by either Party with the obligations
of this Agreement due to force majeure, (laws or regulations of any government,
war, civil commotion, destruction of production facilities and materials, fire,
flood, earthquake or storm, labor disturbances, shortage of materials, failure
of public utilities or common carriers), or any other causes beyond the
reasonable control of the applicable Party, shall not constitute breach of this
Agreement and such Party shall be excused from performance hereunder to the
extent and for the duration of such prevention, provided it first notifies the
other Party in writing of such prevention and that it uses its best efforts to
cause the event of such force majeure to terminate, be cured or otherwise ended.

        10.10  Dispute Resolution.  The Parties recognize that a bona fide
dispute as to certain matters may from time to time

                                      -13-

<PAGE>   14


arise during the term of this Agreement. In the event of the occurrence of such
a dispute either Party may, by written notice to the other Party, have such
dispute referred to their respective officers (designated below) or their
successors for attempted resolution by good faith negotiations within thirty
(30) calendar days after such notice is received. Said designated officers are
as follows:

        For Syntro:          Staff Vice-President,
                             Corporate Business Development, Strategy and
                             Internal Consulting
                             Schering-Plough Corporation

        For Nanogen:         Chief Executive Officer
                             Nanogen Corporation

In the event the designated officers are not able to resolve such dispute
through good faith negotiations within such thirty (30) calendar day period,
either Party may invoke the provisions of Schedule 10.10 at any time within
thirty (30) calendar days following the end of such thirty (30) calendar day
period. Notwithstanding the foregoing, nothing in this Section 10.10 shall
prohibit a Party from seeking temporary or injunctive relief from a court of
competent jurisdiction pending the resolution of a dispute in accordance with
the provisions of this Section l0.l0.

        IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed, by duly authorized representatives, as of the last date written below.

NANOGEN, INC.                                      SYNTRO CORPORATION


By:  /s/ Howard C. Birndorf                        By:  /s/ Carl Battle
   --------------------------------                   -------------------------
        Howard C. Birndorf                                Carl Battle
        Chairman and CEO                                  Vice President


Date:          11-24-97                            Date:    Nov. 24, 1997
      --------------------------------------             ----------------


                                      -14-

<PAGE>   15



                                 SCHEDULE 10.10

                          DISPUTE RESOLUTION PROCEDURES

        Any dispute, controversy or claim arising out of or relating to the
validity, construction, enforceability or performance of this Agreement
including disputes relating to an alleged breach or termination of this
Agreement (but excluding disputes regarding the validity of any Patent Rights,
which disputes may be submitted to the appropriate tribunal) shall be settled by
binding arbitration in the manner set forth below:

               (a)  Scope. Subject to and in accordance with the terms of this
        Agreement and this Schedule 10.10, all differences, disputes, claims or
        controversies arising out of or in any way connected or related to this,
        whether arising before or after the expiration of the term of this
        Agreement, and including, without limitation, its negotiation,
        execution, delivery, enforceability, performance, breach, discharge,
        interpretation and construction, existence, validity and any damages
        resulting therefrom or the rights, privileges, duties and obligations of
        the Parties under or in relation to this Agreement (including any
        dispute as to whether an issue is arbitrable), which are not otherwise
        resolved in accordance with Section 10.10 of this Agreement, shall be
        referred to binding arbitration in accordance with the rules of the
        American Arbitration Association, as in effect at the time of the
        arbitration.

               (b)  Parties to Arbitration. For the purposes of each arbitration
        under this Agreement, Syntro shall constitute one Party to the
        arbitration and Nanogen shall constitute the other Party to the
        arbitration.

               (c)  Notice of Arbitration. A Party requesting arbitration
        hereunder shall give a notice of arbitration to the other Party
        containing a concise description of the matter submitted for
        arbitration, including references to the relevant provisions of the
        Agreement and a proposed solution (a "Notice of Arbitration"). Notice of
        Arbitration shall be delivered to the other Party in accordance with
        Section 10.5 of the Agreement.

               (d)  Response. The non-requesting Party must respond in writing
        within forty-five (45) days of receiving a Notice of Arbitration with an
        explanation, including references to the relevant provisions of the
        Agreement and a response to the proposed solution and suggested time
        frame for action. The nonrequesting Party may add additional issues to
        be resolved.

               (e)  Meeting. Within fifteen (15) days of receipt of the response
        from the non-requesting Party pursuant to Paragraph (d), the Parties
        shall meet and discuss in good

                                       -1-
<PAGE>   16

        faith options for resolving the dispute. The requesting Party must
        initiate the scheduling of this resolution meeting; Each Party shall
        make available appropriate personnel to meet and confer with the other
        Party during such fifteen-(15) day period.

               (f)  Selection of Arbitrator. Any and all disputes that cannot be
        resolved pursuant to Paragraphs (c), (d) and (e) shall be submitted to
        an arbitrator (the "Arbitrator") to be selectee by mutual agreement of
        the Parties. Unless the Parties otherwise agree, the Arbitrator shall be
        a retired judge of a state or federal court, to be chosen from a list of
        such retired judges to be prepared jointly by the Parties, with each
        Party entitled to submit the names of three such retired judges for
        inclusion in the list. No Arbitrator appointed or selected hereunder
        shall be an employee, director or shareholder of, or otherwise have any
        current or previous relationship with, any Party or its respective
        Affiliates. If the Parties fail to agree on the selection of the
        Arbitrator, the Arbitrator shall be designated by a judge of the Federal
        District Court in New Jersey upon application by either Party.

               (g)  Powers of Arbitrator. The Arbitrator may determine all
        questions of law and jurisdiction (including questions as to whether a
        dispute is arbitrable) and all matters of procedure relating to the
        arbitration. The Arbitrator shall have the right to grant legal and
        equitable relief (including injunctive relief) and to award costs
        (including reasonable legal fees and costs of arbitration) and interest.
        The Arbitrator is not empowered to award punitive, exemplary or any
        similar damages.

               (h)  Arbitration Procedure. In the event that Syntro is the Party
        requesting arbitration, the arbitration shall take place in the State of
        California unless otherwise agreed by the Parties, at such place and
        time as the Arbitrator may fix for the purpose of hearing the evidence
        and representations that the Parties may present. In the event that
        Nanogen is the Party requesting arbitration, the arbitration shall take
        place in the State of New Jersey unless otherwise agreed by the Parties
        at such place and time as the Arbitrator may fix for the purpose of
        hearing the evidence and representations that the Parties may present.
        The arbitration proceedings shall be conducted in the English language.
        The law applicable to the arbitration shall be the law of the State of
        New Jersey. No later than twenty (20) business days after hearing the
        representations and evidence of the Parties, the Arbitrator shall make
        its determination in writing and deliver one copy to each of the
        Parties.

               (i)  Discovery and Hearing. During the meeting referred to in
        Paragraph (e) of this Schedule 10.10, the

                                       -2-


<PAGE>   17


        Parties shall negotiate in good faith the scope and schedule of
        discovery, relating to depositions, document production and other
        discovery devices, taking into account the nature of the dispute
        submitted for resolution. If the Parties are unable to reach agreement
        as to the scope and schedule of discovery, the Arbitrator may order such
        discovery as it deems necessary. To the extent practicable taking into
        account the nature of the dispute submitted for resolution, such
        discovery shall be completed within sixty (60) days from the date of the
        selection of the Arbitrator. At the hearing, which shall commence within
        twenty (20) days after completion of discovery unless the Arbitrator
        otherwise orders, the Parties may present testimony (either live witness
        or deposition), subject to cross-examination, and documentary evidence.
        To the extent practicable taking into account the nature of the dispute
        submitted for resolution and the availability of the Arbitrator, the
        hearing shall be conducted over a period not to exceed thirty (30)
        consecutive business days, with each Party entitled to approximately
        half of the allotted time unless otherwise ordered by the Arbitrator.
        The Arbitrator shall have sole discretion with regard to the
        admissibility of any evidence and all other matters relating to the
        conduct of the hearing.

               (j)  Witness Lists. At least twenty (20) business days prior to
        the date set for the hearing, each Party shall submit to each other
        Party and the Arbitrator a list of all documents on which such Party
        intends to rely in any oral or written presentation to the Arbitrator
        and a list of all witnesses, if any, such Party intends to call at such
        hearing and a brief summary of each witness' testimony. At least five
        (5) business days prior to the hearing, each Party must submit to the
        Arbitrator and serve on each other Party a proposed findings of fact and
        conclusions of law on each issue to be resolved. Following the close of
        hearings, the Parties shall each submit such post-hearing briefs to the
        Arbitrator addressing the evidence and issues to be resolved as may be
        required or permitted by the Arbitrator.

               (k)  Confidentiality. The arbitration proceedings shall be
        confidential and, except as required by law, no Party shall make, or
        instruct the Arbitrator to make, any public announcement with respect to
        the proceedings or decision of the Arbitrator without the prior written
        consent of the other Party. The existence of any dispute submitted to
        arbitration and the award of the Arbitrator shall be kept in confidence
        by the Parties and the Arbitrator, except as required in connection with
        the enforcement of such award or as otherwise required by law.

               (l)  Awards and Appeal. Subject to the provisions of this
        Schedule 10.10, the decision of the Arbitrator shall be final and
        binding upon the Parties in respect of all matters

                                       -3-

<PAGE>   18

        relating to the arbitration, the conduct of the Parties during the
        proceedings, and the final determination of the issues in the
        arbitration. There shall be no appeal from the final determination of
        the Arbitrator to any court, except in the case of fraud or bad faith on
        the part of the Arbitrator or any Party to the arbitration proceeding in
        connection with the conduct of such proceedings. Judgment upon any award
        rendered by the Arbitrator may be entered in any court having
        jurisdiction thereof.

               (m)  Costs of Arbitration. The costs of any arbitration hereunder
        shall be borne by the Parties in the manner specified by the Arbitrator
        in its determination.

               (n)  Performance of the Agreement. During the pendency of the
        arbitration proceedings, each Party shall continue to perform its
        obligations under this Agreement. For purposes of this Paragraph (n) the
        term "pendency of the arbitration proceeding" shall mean the period
        starting on the date on which arbitration proceedings are commenced by a
        Party in accordance with Paragraph (c) of this Schedule 10.10 and ending
        on the date on which the Arbitrator delivers its final determination in
        writing to the Parties.



                                       -4-