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EXHIBIT 10.13
CUSTOM INSTRUMENT DEVELOPMENT
AND COMMERCIALIZATION AGREEMENT
between
The ▇.▇. ▇▇▇▇▇▇▇ Pharmaceutical Research Institute, a Division of Ortho-
▇▇▇▇▇▇ Pharmaceutical, Inc., PE Biosystems Division of The ▇▇▇▇▇▇-▇▇▇▇▇
Corporation and ACLARA BioSciences, Inc.
As of October 1, 1998
Signed March, 1999
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Table of Contents
SECTION TITLE PAGE #
RECITALS.......................................................................................................... 1
1. Definitions.................................................................................................. 2
2. Description and Elements of the Project...................................................................... 10
2.1 Goals, Level of Effort and Cooperation.................................................................. 10
2.1.1 Goals......................................................................................... 10
2.1.2 Notice of Achievement of Goals................................................................ 11
2.1.3 Cooperation and Obligation to use Commercially Reasonable Efforts............................. 11
2.1.4 Minimum Number of FTEs........................................................................ 12
2.2 Research Plan........................................................................................... 12
2.3 Milestones.............................................................................................. 12
2.4 Functional Requirements................................................................................. 12
2.5 Certain Responsibilities of PRI......................................................................... 13
3. Reports...................................................................................................... 13
4. Steering Committee and Project Structure; Third Party Licenses............................................... 13
4.1 Steering Committee...................................................................................... 13
4.1.1 Steering Committee Structure and Role......................................................... 13
4.1.2 Steering Committee Proceedings................................................................ 14
4.2 Project Structure....................................................................................... 15
4A. Third Party Licenses and Steering Committee Approval of Third Party Licenses................................. 15
5. Deliverables................................................................................................. 17
5.1 Prototypes.............................................................................................. 17
5.2 Commercial Instruments.................................................................................. 17
5.3 Microfluidic Chips...................................................................................... 19
5.3.1 Purchase Rights............................................................................... 19
5.3.1.1 Pricing............................................................................. 19
5.3.1.2 Pricing Assumptions................................................................. 20
5.3.2 Inability or Determination not to Manufacture Chips; License to PRI........................... 20
5.3.3 Expiration of License......................................................................... 22
5.3.4 Minimum and Maximum Quantities................................................................ 22
5.3.5 Use of Chips.................................................................................. 23
5.3.6 Supply Agreement.............................................................................. 23
5.4 General Terms of Sale................................................................................... 23
5.5 Post Delivery Installation, Training, Support and Service............................................... 24
5.5.1 Basic Prototype Support and Service........................................................... 24
5.5.2 Extent of Support, Training and Service for Prototypes........................................ 25
5.5.3 Support For Commercial Instruments............................................................ 26
5.6 Quarterly Reports and Final Report...................................................................... 26
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6. Project Funding and Levels of Effort.............................................................. 26
7. Exclusive Right................................................................................... 27
8. Intellectual Property............................................................................. 28
8.1 Intellectual Property Ownership and Rights................................................... 28
9. Responsibility for Certain Matters, Indemnification............................................... 29
9.1 Injury to Employees; Responsibility for Certain Matters...................................... 29
9.2 Indemnity by PRI in connection with Use of Devices and Substances............................ 30
9.3 Patent and Copyright Indemnification......................................................... 31
10. Confidentiality................................................................................... 32
11. Term and Termination.............................................................................. 33
12. Relationship of the Parties....................................................................... 36
13. Publicity......................................................................................... 37
14. No Implied Licenses or Other Intellectual Property Rights......................................... 37
15 Limitation of Liability........................................................................... 37
16. No Guarantees or Warranties....................................................................... 37
17. Several Liability of PE and ACLARA................................................................ 38
18. Other Work........................................................................................ 38
19. Prohibition on Hiring............................................................................. 38
20. Force Majeure..................................................................................... 38
21. Expenses.......................................................................................... 38
22. Severability...................................................................................... 38
23. Performance of Work by Affiliates of PE........................................................... 39
24. Low Throughput Devices............................................................................ 39
25. Due Authority and Execution....................................................................... 41
26. Documentation..................................................................................... 41
27. Dispute Resolution................................................................................ 41
27.1 Steering Committee........................................................................... 41
27.2 Other Controversies and Claims............................................................... 41
28. Notices........................................................................................... 42
29. Counterparts...................................................................................... 43
30. Waiver............................................................................................ 43
31. No Third Party Beneficiaries...................................................................... 43
32. Miscellaneous..................................................................................... 43
Exhibit 2.2.1 Current Molar Consumption of Screening Targets, Chemical Libraries and Substrates................. 45
Exhibit 2.2 Research Plan..................................................................................... 46
Exhibit 2.3 Project Milestones................................................................................ 49
Exhibit 5.3 Statement of Year 2000 Conformity A Year 2000 Readiness Disclosure................................ 51
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CUSTOM INSTRUMENT DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
This Development and Commercialization Agreement ("Agreement"), effective as of
October 1, 1998 (the "Effective Date"), is by and between The ▇.▇. ▇▇▇▇▇▇▇
Pharmaceutical Research Institute, a Division of Ortho-▇▇▇▇▇▇ Pharmaceutical,
Inc., a Delaware corporation (hereinafter referred to as "PRI"), having a
business address at ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, PE Biosystems
Division of The ▇▇▇▇▇▇-▇▇▇▇▇ Corporation, having a business address at ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter referred to as "PE"), and
ACLARA BioSciences, Inc., a Delaware corporation have a business address at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (hereinafter referred to as
"ACLARA"). PRI, PE and ACLARA are referred to in this Agreement individually or
collectively as Party or Parties, as the case may be.
RECITALS
A. PE and ACLARA collectively have expertise in the separation and
analysis of biological molecules, drug discovery instrumentation and automation,
and in the design, development and manufacture of devices, plastics and polymers
for electric field driven fluidics on microchannels and the detection and
quantitation thereof.
B. PE, ACLARA and PRI each represent that as of the date of execution of
this Agreement, to the best of each of their knowledge, respectively, there are
no patents that would prevent PE or ACLARA from making, using, or selling the
devices contemplated in this Agreement.
C. PRI has expertise in the high throughput screening of compounds for
drug discovery and has been investigating and will continue to investigate
alternative systems for such high throughput screening for drug discovery.
D. PerSeptive Biosystems, Inc., a Center of Excellence of PE, and PRI
are parties to a Custom Instrument Development and Feasibility Agreement dated
as of January 31, 1997, as amended (the "PE Feasibility Agreement") and certain
letter agreements dated May 21, 1998 and December 23, 1998 providing for the
payment of certain funds (the "Interim Research and Activities Funding and
Initial Funds Agreements"), and ACLARA and PRI are parties to a Feasibility
Agreement dated February 14, 1997 and an Amended and Restated Feasibility
Agreement dated as of March 26, 1998 (the "ACLARA Feasibility Agreement"),
(collectively, the "Feasibility Agreements"), pursuant to which, among other
things, PE and ACLARA performed research and development work and explored and
developed technology relevant to
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the design, development and manufacture of devices for electric field driven
fluidics on microchannels for the high throughput screening of compounds for
drug discovery.
E. PRI has elected to enter into this Agreement with PE and ACLARA,
pursuant to which, subject to the terms and conditions of this Agreement, PE
and ACLARA will undertake the project (the "Project"), as more fully described
herein.
F. PRI on the one hand, and PE and ACLARA on the other, intend to
negotiate a Microfluidic Chip supply agreement, as more fully set forth in
Section 5.3.6, setting forth terms and conditions called for by this Agreement
and other terms and conditions to be negotiated (the "Microfluidic Chip Supply
Agreement").
AGREEMENT
NOW, THEREFORE, in consideration of the above premises and the covenants
set forth in this Agreement, the Parties agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have been
meanings ascribed to them below.
1.1 "Affiliate" shall mean any corporation, firm, partnership or other
entity, whether de jure or de facto, which directly or indirectly owns, is
owned by or is under common ownership with a Party to this Agreement, as
the case may be, to the extent of at least fifty percent of the equity (or
such lesser percentage which is the maximum allowed to be owned by a
foreign corporation in a particular jurisdiction) having the power to vote
on or direct the affairs of the entity.
1.2 "Chip Price Time Periods" shall have the meaning set forth in Section
5.3.1.
1.3 "Commercial Instrument" shall mean an HTS Chip Device that PE
determines in its sole discretion is suitable for Commercial Sale to
general customers with PE's customary limited warranties, and that has been
designated as a "Commercial Sale Ready" instrument in accordance with PE's
customary policies and procedures, and that substantially meets the
Functional Requirements.
1.4 "Developments" shall have the meaning set forth in Section 1.16.
1.5 "Effective Date" shall have the meaning set forth in the first
paragraph of this Agreement.
1.6 "Exclusive Right" shall have the meaning set forth in Section 7.
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1.7 "Exclusive Right Period" shall mean the period commencing as of the
Effective Date and ending on (i) the date this Agreement is terminated if
this Agreement is terminated prior to September 30, 2000, (ii) September
30, 2001 if this Agreement is not terminated prior to September 30, 2000
and (a) the Term of the Project has not been extended pursuant to Section
11, or (b), if the Term of the Project has been extended pursuant to
Section 11, and the Goals of the Project have not been achieved during
such extension, or (iii) if this Agreement is not terminated prior to
September 30, 2000 and the Term of the Project has been extended pursuant
to Section 11, and the Goals of the Project have been achieved during such
extension, the date that is one year after the last day of the Term of the
Project, but in any event no later than March 31, 2002. Notwithstanding
the foregoing, if this Agreement is terminated by PRI pursuant to Section
11.3, and PRI has paid and pays all sums due and owing up to the effective
date of termination, the Exclusive Right Period shall be (A) the six month
period beginning with the effective date of termination if the notice of
termination is given on or prior to September 30, 1999 or (B) the one year
period beginning with the effective date of termination if the notice of
termination is given on or after October 1, 1999 but prior to the end of
the Term of the Project, but in any event the Exclusive Right Period shall
end no later than March 31, 2002.
1.8 "Extended Special Rights Period" shall have the meaning set forth in
Section 5.3.1.1(iii).
1.9 "Feasibility Agreements" shall have the definition set forth in
Whereas Clause D above.
1.9A "force majeure" shall have the meaning set forth in Section 20.
1.10 "Functional Requirements" shall have the meaning set forth in Section
2.4.
1.11 "Fully Burdened Manufacturing Cost" shall mean the "fully burdened
manufacturing cost" of a product or service as calculated in accordance
with general accepted accounting principles and the generally applied
principles, policies and procedures of the Party finally manufacturing the
product or performing the service. In general, fully burdened
manufacturing cost shall include the following:
(i) Material Cost, which shall mean the prices paid for raw material
components and purchased finished goods which are purchased from
outside vendors as well as any freight and duty where applicable.
Material Cost includes the quantity of the components included in the
▇▇▇▇ of material times the purchase price and the waste factor (i.e.,
scrap percentage) included in the ▇▇▇▇ of materials. It also includes
the normal quality assurance sample quantity which is included in the
▇▇▇▇ of materials.
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(ii) Direct Labor Costs, which shall mean the standard labor hours
required for an operation according to standard operating procedures multiplied
by the direct labor rate for work centers within the relevant manufacturing
operating unit.
(iii) Overhead costs, which shall mean other costs associated with the
operating unit(s) manufacturing a product, provided, however, that such Overhead
Costs shall exclude costs associated with unused manufacturing capacity (unless
such unused manufacturing capacity is allocated principally to the manufacture
of the product in question) and any administrative costs (except as provided
below) other than indirect labor of the manufacturing department specifically
attributable to the product in question. PE and ACLARA agree that they shall
allocate manufacturing capacity reasonably, based upon business factors and
projections, and not for the purpose of creating idle manufacturing capacity to
artificially increase the amount of Overhead Costs. Overhead Costs shall include
expenses associated with quality assurance, manufacturing and engineering
associated with the operating unit(s) manufacturing product and shall include
depreciation and property taxes associated with the plant(s) manufacturing a
product. These costs shall be allocated to each product line in such operating
unit(s) or plant(s) whichever is applicable, based on specific criteria
consistent with the standard operating procedures for each product and work
center overhead rates of the Party performing the work determined and allocated
in a manner consistently applied within and across its operating units. Overhead
Costs shall also include the fully loaded allocation of the facility costs (such
as, without limitation, rent, taxes, heat, electricity and maintenance)
dedicated to manufacture the product and the allocated costs of manufacturing
administration.
(iv) Manufacturing Variances, which shall include:
(1) Purchase Price Variance, which shall mean the difference
between the actual price paid the vendor versus the standard cost
of such material, times the quantity received.
(2) Spending Variance, which shall mean the difference between
actual department spending and the budgeted spending included in
Fully Burdened Manufacturing Cost for the relavent manufacturing
operating unit.
(3) Absorption volume variances, which shall mean the difference
between actual product hours earned (or units produced) and the
hours budgeted for the period (or projected production units
used) in the
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development of Fully Burdened Manufacturing Costs times the
standard labor and overhead content of those units.
(4) Material usage, which shall mean the difference between the
actual quantity of component raw materials or work-in-process
used in the production of work-in-process or finished goods
versus the standard quantity included in the ▇▇▇▇ of materials
times the standard cost of the component or work-in-process item.
(5) Rework, which shall mean the additional standard cost of
components or work-in-process items used to turn rejected
inventory into usable inventory. No labor or overhead rate is
assigned to rework orders, only the additional value of the
inventory which is issued to the other. Additionally, no
production/absorption credit is generated for rework orders since
the credit was already generated the first time the production
occurred.
(v) The purchase of any capital item reasonably required by PE or
ACLARA to manufacture shall be PE's or ACLARA's obligation and
responsibility, as the case may be, except to the extent the
depreciation or amortization thereof is, according to generally
accepted accounting principles, properly included in manufacturing
cost.
(vi) During such periods as Microfluidic Chips and/or Commercial
Instruments are being manufactured for general commercial sale to the
public, but not at any other time, PE's and ACLARA's costs associated
with failed batches or batches that fail to meet Product Specification
in excess of the "yield factor" established from time to time in
connection with the manufacture of Microfluidic Chips or Commercial
Instruments, as the case may be, except where such failure is
attributable to PRI, shall not be included in the definition of
Standard Manufacturing Cost.
(vii) In the event that a Party, at its option, does not implement a
standard costing system, then the Parties will agree to a definition
for Fully Burdened Manufacturing Cost that makes reasonable allowances
for the above factors and meets generally accepted accounting
procedures.
1.12 "Fully Burdened Chip Manufacturing Cost".
1.12.1 If Microfluidic Chips are manufactured or finally assembled
and processed by ACLARA or PE, Fully Burdened Chip Manufacturing Cost
shall mean the Fully Burdened Manufacturing Cost of a Microfluidic
Chip, plus an appropriate portion of total manufacturing company's G&A
costs and interest expense allocated to the chip manufactured for PRI
incurred during the calendar quarter in which the chip furnished to
PRI was manufactured. The
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formula for determining the amount of G&A costs and interest expense to be added
to the price of each chip shall be set forth in the Microfluidic Chip Supply
Agreement, which formula shall incorporate the following factors: (i) G&A costs
shall mean costs not directly applicable to the production of product, excluding
R&D, such as, without limitation, executive compensation, general accounting,
secretarial, public relations, human resources and legal, and similar costs
having to do with the overall, general administration of the organization as a
whole; and (ii) interest expense shall mean interest and finance charges that
are recorded as such on the company's books in accordance with GAAP guidelines.
The determination of which such costs to include in G&A costs and interest
expense shall be agreed to by the Parties, with the advice and counsel of their
outside accountants. The determination of the basis for allocating such costs,
whether by proportion to costs, headcount, or otherwise, to Microfluidic Chips
manufactured for PRI shall also be determined by agreement of the Parties. G&A
costs and interest expense shall be estimated for each upcoming quarter based on
the immediately prior quarter's experience, and the change in per chip price
during such upcoming quarter shall be determined using such estimates and the
number of chips to be manufactured during such quarter estimated by PRI pursuant
to this Agreement. Within 30 days after the end of each quarter, or as soon
thereafter as is practical, the per chip price during the immediately previous
quarter shall be finally determined based on actual G&A costs and interest
expense incurred, and the actual number of chips manufactured. Any amounts paid
by PRI for chips in excess of the amount due based on actual G&A costs, interest
expense and number of chips manufactured shall be credited against future
invoices for chips purchased, or paid in cash to PRI if no further chips are
scheduled to be delivered within 120 days after the end of the quarter in
question. If amount are owed by PRI on account of underpayments, the amount owed
will be paid within 30 days after receipt of an invoice therefor from PE or
ACLARA. In no event shall the amount added to chip price by G&A costs and
interest expense exceed (i) [*] during any Chip Price Time Period in which the
maximum stated dollar cost per ship is [*], (ii) [*] during any Chip Price Time
Period in which the maximum stated dollar cost per chip is [*], or (iii) [*]
during any Chip Price Time Period in which the maximum stated dollar cost per
chip is [*]. Nothing in this Section 1.12 shall be deemed to increase the
maximum stated dollar chip prices set forth in Section 5.3.1, which shall remain
as set forth in Section 5.3.1 irrespective of the definition of Fully Burdened
Chip Manufacturing Cost.
1.12.2 If the manufacture and final assembly of Microfluidic Chips are wholly
contracted out, so that the third party manufacturer thereof furnishes ACLARA or
PE as the case may be, with completed Microfluidic Chips ready for customer use
with no further manufacturing, assembly or processing required, Fully Burdened
Manufacturing Cost and Fully Burdened Chip
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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Manufacturing Cost shall mean the price paid by ACLARA or PE, as the case
may be, to the manufacturer for a Microfluidic Chip, plus costs of
transportation and insurance, FOB PE's or ACLARA's, as the case may be,
first point of receipt.
1.13 "FTEs" shall mean full time employee equivalents of labor, based on a
standard work day. One FTE shall be one person working one day, or eight hours
worked collectively by more than one person. One FTE for a year shall be one
person working each work day in a year, exclusive of holidays and vacation time
determined in accordance with PE's and ACLARA's, as the case may be, customary
policies and procedures. FTEs may be performed by employees, consultants,
contractors or other persons paid for by PE or ACLARA.
1.14 "High Throughput Screening" or "HTS" shall mean methods utilizing
Microfluidic Chips in which (i) [*] of candidate compounds are contacted with
the target, the result of which contact [*], said activity being determined
based upon subsequent analysis [*], or (ii) [*] of candidate compounds are
contacted with the target, the result of which contact [*] being determined
based upon [*].
1.15 "HTS Chip Device" shall mean a microfluidic high throughput screening
instrument developed as part of the Project, which may consist of one or more
components and peripherals, capable of performing approximately one hundred
thousand (100,000) individual assays per instrument per [*] day, that uses
Microfluidic Chips to perform High Throughput Screening for drug discovery.
1.15A "Initial Funding Agreement" shall have the meaning set forth in Whereas
Clause D.
1.16 "Intellectual Property" shall mean inventions, discoveries, improvements,
proprietary materials, compounds, biological substances, data, test results,
Know-how and trade secrets, whether or not patentable, including any negative
results (collectively, "Developments"), including all intellectual property
rights worldwide arising under statutory or common law, and whether or not
perfected with respect to Developments, including, without limitation, all (1)
patents, patent applications and patent rights (collectively, "Patent Rights");
(2) rights associated with works of authorship including copyrights, copyright
applications, copyright registrations, mask works, mask work applications, and
mask work registrations; (3) rights relating to the protection of trade secrets
and confidential information; (4) any right analogous to those set forth in
this definition and any other proprietary rights relating to intangible
property (other than trademark, trade
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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dress, or service ▇▇▇▇ rights); (5) divisions, continuations, renewals,
reissues, continuing prosecution, and extensions of the foregoing (to the extent
applicable) now existing, hereafter filed, issued or acquired; and (6) including
foreign equivalents of (1), (2), (3), (4) and (5) above.
1.17 "Joint Development" shall have the meaning set forth in Section 8.1.2.
1.18 "Know-how" shall mean confidential and/or proprietary substances,
materials, technical information, techniques, processes, methods, data, assays
and other information in a Party's possession that is not generally available to
the public, which are useful in connection with the Project.
1.19 "Low throughput Device" shall mean a microfluidic screening instrument,
which may consist of one or more components and peripherals, capable of
performing under normal operation up to [*] individual assays per instrument per
not less than [*] day, that uses Microfluidic Chips to perform screening for
drug discovery.
1.19A "Make Functional," "Making Functional," or "Made Functional" shall mean
setting up an HTS Chip Device for operation in accordance with normal and
customary procedures, and successfully performing the tests and procedures
customarily performed when installing for customer use instruments containing
fluid handling systems, or comparable tests and procedures relevant to an HTS
Chip Device established by PE in its reasonable discretion.
1.19B "Major Matter Notice" shall have the meaning set forth in Section 27.1.
1.20 "Microfluidic Chip" shall mean a device made of a substrate that [*], that
employs electric field driven fluidics combined with electrophoretic separation
in microchannels formed in such substrate that is intended to be used with HTS
Chip Devices or Low Throughput Devices, and that is developed as part of the
Project, and any improvements thereto that are developed by ACLARA or PE and are
incorporated and function as intended in a prototype thereof on or before [*].
The term Microfluidic Chip and improvements thereto shall exclude, without
limitation, increased or reduced capacity chips not developed as part of the
Project. For example, if a [*] assay point Microfluidic Chip is developed as
part of the Project, and after the end of the Term of the Project PE and/or
ACLARA develop a [*] assay point chip that would otherwise fall within the
definition of a Microfluidic Chip, the [*] assay point chip shall not be deemed
a Microfluidic Chip within the meaning of this Agreement. However, a [*] assay
point Microfluidic chip that has been improved as set forth above after the
termination of the Project up to [*] would be included within the definition of
a Microfluidic Chip.
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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1.20A "Microfluidic Chip Supply Agreement" shall have the meaning set forth in
Recital Clause F.
1.21 "Milestones" shall mean the Project milestones set forth in Exhibit 2.3,
as they may be modified from time to time by the Steering Committee, and any
new Project milestones established by the Steering Committee.
1.21A "Milestone Completion Notice" shall have the meaning set forth in Section
2.3.
1.22 "Most Favored Price" shall mean a price no higher than the lowest price
paid by a customer prior to the date of receipt by PE (or ACLARA if the order
is placed directly with ACLARA) of an order for a product or service (a) that
is not an agency, department, division or other manifestation of a country,
federal, state or local government or (b) that did not receive a special price
based on a quantity discount or other special terms and conditions, unless PRI
purchases at least a substantially similar quantity on substantially the same
terms and conditions, in a transaction in which no consideration of material
value other than cash was exchanged for the product or service. Prices paid for
products or services for demonstration purposes, or demonstration products or
services provided for free or de minimus consideration, shall be excluded from
any calculation of Most Favored Price.
1.22A "Party" and "Parties" shall have the meaning set forth in the first
paragraph of this Agreement.
1.22B "Patent Rights" shall have the meaning set forth in Section 1.16.
1.22C "PE/ACLARA Extension Notice" shall have the meaning set forth in Section
11.1.
1.22D "PRI Extension Notice" shall have the meaning set forth in Section 11.1.
1.23 "Project" shall mean the collaborative effort between PE, ACLARA and PRI
to accomplish the Goals of the Project set forth in Section 2.1 of this
Agreement, in accordance with and pursuant to this Agreement.
1.24 "Prototype Completion Notice" shall have the meaning set forth in Section
5.1.
1.25 "Prototype HTS Chip Device" shall mean an HTS Chip Device developed to
the point of a prototype instrument, but not developed or certified as a
Commercial Instrument, that is functionally capable, when operated by trained
personnel under reasonable operating conditions, of performing with one or more
types or designs of Microfluidic Chips an assay in each of the following
categories: [*]
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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[*], at an assay throughput of approximately 100,000 assays per [*] day
with only reasonable process interruptions consistent with the prototype
nature of the instrument, that otherwise materially satisfies the
Functional Requirements. In the event that PRI determines to accept and
pay for Substitute Prototype Devices pursuant to Section 6.4 below, each
such Substitute Prototype Device shall be deemed to be Prototype HTS Chip
Device within the meaning of this Agreement. For the purposes of this
Agreement, Low Throughput Devices shall not be deemed to be Substitute
Prototype Devices.
1.26 "Research Plan" shall have the meaning set forth in Section 2.2.
1.27 "Special Rights Period" shall mean the period beginning with the
date that a Commercial Instrument is first offered for sale, and ending
[*] after such date. A Commercial Instrument shall be deemed to have been
first offered for sale on the date the availability of a Commercial
Instrument is first announced to the public by any means and a Commercial
Instrument is in fact available for sale.
1.28 "Steering Committee" shall have the meaning set forth in Section
4.1.1.
1.29 "Substitute Prototype Devices" shall have the meaning set forth in
Section 6.4.
1.30 "Term of the Project" shall mean the original [*] term of the
Project set forth in Section 11.1, and, if the original [*] term of the
Project is extended by PRI, or by PE and ACLARA, the "Term of the Project"
shall mean the original [*] term of the project plus such extended term.
If the Project is terminated by a Party, the "Term of the Project" shall
mean the period beginning as of October 1, 1998 and ending on the
effective date of termination.
1.31. "Unit Based Royalty" shall have the meaning set forth in Section 4A.
2. Description and Elements of the Project.
2.1 Goals, Level of Effort and Cooperation.
2.1.1 Goals. The goals of the Project ("Goals of the Project") are (i) to
design, develop, produce, and deliver to PRI [*] Prototype HTS Chip
Devices and (ii), to develop and produce one or more Microfluidic Chip
types capable of performing an assay in each of the following categories:
[*], at an assay throughput of approximately 100,000 assay points per [*]
hour day per instrument, with an approximately [*] fold reduction in
consumption, on a per assay, molar basis, of screening targets, chemical
libraries and substrates, as compared with the consumption of such
targets, libraries and substrates for substantially similar assays
currently performed by PRI, such current molar
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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consumption being those set forth on Exhibit 2.2.1. Any modifications of or
additions to the Goals of the Project must be approved by the Steering
Committee.
2.1.2 Notice of Achievement of Goals. No later than 30 days after the end of
the Term of the Project, PE and ACLARA shall notify PRI in writing whether the
Goals of the Project have been achieved, and shall provide to PRI reasonable
data and information demonstrating that the Goals of the Project have been
achieved. The delivery to PRI of the Prototype Completion Notice, as defined in
Section 5.1, may serve as PE's and ACLARA's statement that the Goals of the
Project have been achieved. If PRI disagrees that the Goals of the Project have
been achieved, it shall so respond to PR and ACLARA in writing within 10 working
days from the date of receipt of the notice of achievement of goals from PE and
ACLARA, and in such response PRI shall state in reasonable detail why PRI
believes the Goals of the Project have not been achieved. If PRI does not send
such response within said 10 day period, the Goals of the Project shall be
deemed to have been achieved. Notwithstanding anything continued in this Section
2.1.2 to the contrary, if PE and ACLARA deliver and PRI accepts the first two
Prototype HTS Chip Devices as provided in Section 5.1 below, or Substitute
Prototype Devices as provided in Section 6.4, the Goals of the Project shall be
deemed to have been achieved.
2.1.3 Cooperation and Obligation to use Commercially Reasonable Efforts. The
Parties agree that the successful execution of the Project will require the
collaborative use of the areas of expertise of PRI, PE and ACLARA, the free flow
of Project related information, and the prompt support, input and feedback of
PRI. PE, ACLARA and PRI will use commercially reasonable efforts, and will
cooperate and work together, to achieve the Goals of the Project and to achieve
such objectives and perform such tasks as are set forth in the Research Plan and
to achieve the Milestones. Without limiting the generality of the foregoing, PRI
will cooperate with PE and ACLARA toward accomplishing the Goals of the Project,
and respond as promptly as reasonably possible to PE's and ACLARA's requests for
materials, information, data and feedback. PE and ACLARA will use commercially
reasonable efforts to keep PRI up to date on the progress of the Project through
quarterly reports, site visits by PRI, and telephone and video conferences as
needed on reasonable request by a Party. In this connection PE and ACLARA
personnel shall be reasonably available to meet with PRI personnel, or discuss
issues by telephone or video conference (if feasible), at mutually agreeable
times and places during the Project in order to discuss progress and results,
provided that such meetings will be scheduled and reasonably limited so as to
not interfere with PE's and ACLARA's performance of the Project. Each Party will
attempt to accommodate any reasonable request of the other Party to send or
receive personnel for purposes of exchanging information and generally
achieving the Goals of the Project. To facilitate
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communication and the obtaining of information, PRI may communicate at its
discretion with PE and ACLARA individually.
2.1.4 Minimum Number of FTEs. PE and ACLARA have been performing work toward the
Goals of the Project since October 1, 1998, and they collectively agree,
effective the date of execution of this Agreement, or as promptly as feasible
thereafter, to allocate and expend not less than an average of [*] FTEs per
working day during the balance of the Term of the Project toward achieving the
Goals of the Project. Fewer or more than [*] FTEs may be expended during a given
time period, provided that the average number of FTEs devoted during such date
and the end of the original [*] Term of the Project shall be not less than
[*] FTEs per working day. A reasonable number of such FTEs shall be performed by
employees who are devoted substantially full time to the Project, and such FTEs
shall include, to the extent appropriate to the state of the Project, FTEs with
relevant experience and expertise. PE and ACLARA shall be deemed to have
satisfied their obligations set forth in this Agreement to use commercially
reasonable efforts if they collectively have allocated and expended at least an
average of [*] FTEs per working day on accomplishing the Goals of the Project.
PE and ACLARA may allocate more than [*] FTEs to the project in each of their
sole discretion, but shall not be required to do so, and, unless otherwise
agreed in writing, will not be compensated by PRI for doing so.
22. Research Plan. Attached as Exhibit 2.2 is a research plan (the "Research
Plan") setting forth anticipated phases of the Project and the objectives of
each phase. The Research Plan may be amended from time to time by the Steering
Committee.
2.3 Milestones. Attached hereto as Exhibit 2.3 are Project Milestones. PE and
ACLARA shall use commercially reasonable efforts to achieve each Milestone, and
such additional Milestones, if any, as may be established by the Steering
Committee, on or before the date indicated for each milestone. Any modifications
of or additions to the Milestones must be approved by the Steering Committee. In
the event that PE or ACLARA believe that any Milestone has been achieved, it
shall so notify PRI in writing and shall provide PRI reasonable data and
information demonstrating that the Milestone has been achieved (a "Milestone
Completion Notice"). If PRI disagrees, it shall so respond to PE and ACLARA in
writing within 10 working days from the date of receipt of the Milestone
Completion Notice from PE and ACLARA, and in such response shall state in
reasonable detail why PRI believes the Milestone has not been achieved. If PRI
does not send such response within said 10 working day period, the Milestone
shall be deemed to have been achieved.
2.4 Functional Requirements. Promptly after the execution of this Agreement,
the Parties shall confer to establish functional requirements for the HTS Chip
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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Device (the "Functional Requirements") at such level of detail as PE and
ACLARA may reasonably request and as may be determined by the Steering
Committee, with a goal of establishing the Functional requirements by
April 1, 1999. Criteria for the Functional Requirements, and any changes
thereto, will include consideration of design alternatives, feasibility,
and commercial reasonableness. The Functional Requirements shall be deemed
established when approved by the Steering Committee. Any changes to the
Functional Requirements after they are established must be approved by the
Steering Committee.
2.5 Certain Responsibilities of PRI. Without limiting other PRI
responsibilities, in connection with the Project, PRI shall be responsible for
providing PE and ACLARA the following at its cost:
(i) sufficient information regarding PRI's database and data handling
systems, including format and structure, to permit PE and ACLARA to
adapt its software so that data can be transferred to PRI's data
handling system.
(ii) reasonable assay data, assay reagents, materials and other Know-how
and assay support; and reasonable pharmacology support and reagents
necessary to accomplish the Goals of the Project.
3. Reports. Within 30 days after the end of each calendar quarter, beginning
with the calendar quarter ending [*], PE and ACLARA will furnish PRI with a
quarterly written report summarizing the results of the Project to date, which
will include PE's and ACLARA's assessment of whether each Milestone is likely to
be completed on the scheduled milestone date. Beginning with the report for the
quarter ending [*], such reports shall include, to the extent known and if
capable of being estimated, the then current estimates, for Microfluidic Chips,
of Fully Burdened Manufacturing Cost and Fully Burdened Chip Manufacturing Cost.
At the discretion of the Steering Committee, a quarterly presentation or other
presentation given to PRI after the end of a quarter may constitute the
quarterly report for a quarter.
4. Steering Committee and Project Structure; Third Party Licenses
4.1 Steering Committee.
4.1.1. Steering Committee Structure and Role. The Parties shall establish
a Steering Committee (the "Steering Committee") consisting of three
representatives of each of PRI, PE and ACLARA, or such other number from
each Party as all three Parties may agree upon. Each Party shall appoint
its representatives, and shall inform the other Parties of its
representatives in writing. Substitutes or alternates may be appointed at
any time by notice in writing to the other Parties. The role of the
Steering Committee will be to monitor the Project and provide a formal
mechanism for communication, exchange of information, status updates and
discussing and reviewing recommendations
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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relating to various Project matters, including the Goals of the Project
and general Project direction and integration, to approve the designation
by PRI of the particular assays of each category set forth in Section
2.1.1 to which Microfluidic Chip design will be directed, to establish the
Functional Requirements, and to approve changes to the Research Plan,
Milestones and Functional Requirements. The Steering Committee will meet
at least quarterly. The Steering Committee will also meet at such other
times as may be reasonably requested by any Party. A representative from
ACLARA will serve as Chairperson of the Steering Committee through the
period ending December 31, 1999, and a representative from PE will serve
as the Chairperson from and after January 1, 2000. PRI will have the right
to approve the Steering Committee Chairperson, which approval will not be
unreasonably withheld or delayed.
4.1.2 Steering Committee Proceedings. Meetings of the Steering Committee
may be in person, or by video conference or by teleconference, at times and
places agreeable to all of the Parties. Each Party shall be represented at
each meeting of the Steering Committee by at least one of its Steering
Committee members. At Steering Committee meetings, at least one member of
each of PRI, PE and ACLARA shall constitute a quorum. Decisions of the
Steering Committee may act without a formal meeting by a written memorandum
signed by at least one member from each of the Parties. The Steering
Committee will require the unanimous vote of all three Partners. The
Steering Committee may invite other representatives of the Parties to
attend the meetings, but only the designated representatives of the Parties
shall be members of the Steering Committee and shall have the power to
represent a Party with respect to any formal action of the Steering
Committee. A recording secretary, who need not be a member of the Steering
Committee, shall be appointed at each meeting to record and distribute
formal actions of the Steering Committee. Draft minutes will be circulated
to all members of the Steering Committee for review, comment and approval,
and will be issued in final form only with the approval of all three
Parties, which shall be evidenced by the signature of at least one member
of the Steering Committee from each Party on the minutes. At the
commencement of each Steering Committee meeting, each Party shall designate
one of its members present as the individual having the power to act for
such Party with respect to all formal actions of the Steering Committee at
such meeting, and such person shall have the power to cast votes or
otherwise act for such Party at the meeting. If the members of a Party
present at a meeting do not designate one among them to act for such Party,
the member of such Party having the highest overall corporate title shall
be the member having the power to act for such Party. Each Party shall bear
all expenses of their representatives. A disagreement of the Steering
Committee relating to the Project that cannot be resolved by the Steering
Committee may be designated a major matter pursuant to Section 27.1 and we
be subject to the dispute resolution process set forth in Section 27.1,
unless otherwise expressly provided in this Agreement.
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4.2 Project Structure. The Chairperson of the Steering Committee shall
serve as the overall manager of the Project, and shall have responsibility
for overall Project coordination. PE and ACLARA each will appoint a site
director, who will coordinate the work of their respective companies with
the Chairperson of the Steering Committee.
4A. Third party Licenses and Steering Committee Approval of Third Party
Licenses.
4A.1 If during the Term of the Project PRI, PE or ACLARA believe that the
acquisition of Intellectual Property from a third party is necessary or
desirable for the development or manufacture of Prototype HTS Chip Devices,
Commercial Instruments or Microfluidic Chips, PRI, PE or ACLARA, as the
case may be, may present the matter to the Steering Committee. If the
Steering Committee agrees that such Intellectual Property should be
obtained, any royalties payable for the right to use such Intellectual
Property that are calculated on a per unit basis, whether on the
manufacture, use or sale of the unit in question or otherwise (herein
called "Unit Based Royalties"), shall be included in Fully Burdened
Manufacturing Cost and Fully Burdened Chip Manufacturing Cost. However,
notwithstanding anything contained in this Agreement to the contrary, in
determining pricing of Microfluidic Chips to PRI pursuant to Section
5.3.1.1 below, [*] shall be applied to any such Unit Based Royalties,
rather only the actual cost thereof shall be included. For example, if a
price payable by PRI for Microfluidic Chip was [*] Fully Burdened
Manufacturing Cost, and all components thereof except the Unit Based
Royalty were [*], and the Unit Based Royalty component was [*], the price
payable by PRI would be [*] per chip (that is, [*]). The Steering Committee
shall have the right to approve any terms and conditions of any such
License that are applicable to the Exclusive Right Period. Any payments
required to obtain rights to any such third party Intellectual Property
other than Unit Based Royalties, such as, for example, any fixed up front
payment not based on unit sales, shall not be included as a part of Fully
Burdened Manufacturing Cost or Fully Burdened Chip Manufacturing Cost, and,
as between PRI on the one hand and PE and ACLARA on the other, shall be
paid by PE and ACLARA.
4A.2 If during the Term of the Project PE and ACLARA determine that it is
necessary or desirable for the development or manufacture of Prototype HTS
Chip Devices, Commercial Instruments or manufacture of Prototype HTS Chip
Devices, Commercial Instruments or Microfluidic Chips to license or
otherwise obtain the rights to any third party Intellectual Property and so
inform the Steering Committee, but PRI does not agree, and PE and ACLARA
none-the-less proceed to license or otherwise obtain the right to use such
Intellectual Property, (i) PE and ACLARA may afford PRI the benefit of such
Intellectual Property, in which case [*] with respect thereto shall be
included as part of Fully Burdened Manufacturing Cost and Fully Burdened
Chip Manufacturing Cost (but in determining pricing of Microfluidic
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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Chips to PRI pursuant to Section 5.3.1.1 below, no multiple of such [*]
shall be applied, rather, only the actual amount thereof shall be
included), or (ii) PE and ACLARA may elect that PRI shall not be entitled
to the benefit of such Intellectual Property, and PRI shall not have the
right to obtain any Prototype HTS Chip Device, Commercial Instrument or
Microfluidic Chip with respect to which any such [*] is payable,
notwithstanding anything contained in this Agreement to the contrary.
Nothing in this Section 4A.2 shall be deemed to relieve PE and ACLARA from
their obligation to use commercially reasonable efforts to achieve the
Goals of the Project, as set forth in this Agreement.
4A.3 If at any time after the end of the Term of the Project but before the
end of the Extended Special Rights Period, any third party threatens or
commences legal proceedings on the basis that, or claims that, the
manufacture, use, importation, sale or other distribution of Commercial
Instruments or Microfluidic Chips infringes patent claims or other rights
in Intellectual Property owned or licensed by it, or to which it otherwise
has rights, and if PE and/or ACLARA determine that they wish to obtain a
license or other right to use such Intellectual Property, PE and/or ACLARA
shall so inform PRI. If PE and ACLARA conclude in their sole discretion
that obtaining a license or other right to use such Intellectual Property
is necessary to settle or resolve the claim or legal proceeding, prior to
execution of any such license or other agreement, they will deliver to PRI
in writing a copy of the license or other agreement by which rights to such
Intellectual Property are to be obtained and request PRI's approval of such
license or other agreement. If PRI responds to PE and ACLARA in writing
within 30 days of its receipt of the copy of such license or other
agreement that it approves same, such license or other agreement shall be
deemed a license of Intellectual Property from a third party that has been
approved by the Steering Committee, and any Unit Based Royalties payable on
account thereof shall be included in Fully Burdened Manufacturing Cost and
Fully Burdened Chip Manufacturing Cost, and otherwise subject to the terms
set forth above in Section 4A.1. If PRI responds in the negative, or does
not respond within said 30 day period, PRI shall not be entitled to the
benefit of the Intellectual Property which is the subject of such license
or other agreement, and shall not have the right to obtain any Prototype
HTS Chip Device, Commercial Instrument or Microfluidic Chip with respect to
which any such Unit Based Royalty is payable, notwithstanding anything
contained in this Agreement to the contrary.
4A.4 If PRI obtains the right to manufacture Microfluidic Chips or
otherwise manufactures or has manufactured Microfluidic Chips pursuant to
this Agreement, PRI shall pay or reimburse PE and/or ACLARA, as the case
may be, [*] payable by PRI or by PE and/or ACLARA, as the case may be, for
the exercise of any rights with respect to which [*] are to be included as
part of Fully Burdened Manufacturing Cost or Fully Burdened Chip
Manufacturing Cost, or which PRI
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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has agreed to pay pursuant to Sections 4A.1, 4A.2 or 4A.3 above, including
without limitation for manufacture, sale, import, or use, with respect to
Microfluidic Chips manufactured by or for PRI.
5. Deliverables.
5.1 Prototypes. PE and ACLARA, by employing at least the FTEs required by this
Agreement, will use commercially reasonable efforts to develop,
manufacture, assemble, deliver and install and Make Functional [*]
Prototype HTS Chip Devices to PRI on or before the end of the Term of the
Project, or promptly thereafter, at a location in the United States
designated by PRI. PE and ACLARA shall determine in their sole discretion,
and shall notify PRI in writing on or before the end of the Term of the
Project, as to whether development of the Prototype HTS Chip Device,
including Microfluidic Chips, has been completed {such notice is herein
called the "Prototype Completion Notice"}. If PE and ACLARA furnish such
notice during the Term of the Project, then PE and ACLARA shall deliver,
install and Make Functional [*] Prototype HTS Chip Devices to PRI as soon
as feasible during or after the expiration of the Term of the Project. In
the event that a Commercial Instrument is not available on or before [*],
but a Prototype HTS Chip Device was completed and [*] Prototype HTS Chip
Devices were delivered to PRI, installed and Made Functional pursuant to
this Agreement, and if the experience of the Parties with the [*] delivered
prototypes demonstrate to the Parties that they function as intended with
commercially reasonable levels of service and support, PE and ACLARA will
deliver [*] additional Prototype HTS Chip Devices to PRI on or before [*],
at such location or locations in the Continental United States or, with
respect to up to [*] of such devices, Europe, as may be designated by PRI,
at a time or times to be agreed upon by the Parties. If PRI designates a
location in Europe for any of such additional devices, PRI shall be
responsible for obtaining and paying for any necessary approvals and
permits for importation, and shall reimburse PE and ACLARA the costs of
insurance and transportation of such device(s) to the designated
location(s) in Europe, and for travel time of the installer(s) and initial
trainer(s) to and from Europe.
5.2 Commercial Instruments. If PE has completed the development of a
Commercial Instrument on or before [*]:
(i) If requested by PRI by written notice given to PE during the Special
Rights Period, PE shall deliver, install and Make Functional to PRI up to
[*] standard Commercial Instruments, exclusive of options and accessories
that are offered by PE as optional items, at no cost to PRI, no later than
three months after PRI delivers written notice to PE of its desire to
obtain such Commercial Instrument or Instruments. PRI shall not be required
to request all [*] Commercial Instruments at one time, but may request one
or more any time during the Special Rights Period. If PRI desires any
optional items, it may purchase same
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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at the lower of [*] off list price or the Most Favored Price therefor. Each
such Commercial Instrument shall be accompanied, delivered, installed and Made
Functional, and accepted by PRI, subject and pursuant to PE's then customary
limited warranties and other terms and conditions applicable to the retail sale
of Commercial Instruments.
(ii) PRI shall have the right, by written notice given to PE during the Special
Rights Period, to purchase from PE up to an additional [*] Commercial
Instruments, including options offered to the public, at a price to PRI equal to
the lower of (a) [*] of PE's Fully Burdened Manufacturing Cost of the instrument
and any options selected or (b) the Most Favored Price therefor, such
instruments to be delivered, installed and Made Functional no later than three
month after PRI delivers written notice to PE of its desire to obtain such
Commercial Instrument or Instruments. PRI shall not be required to request all
[*] such Commercial Instruments at one time, but may request [*] any time during
the Special Rights Period. Each such Commercial Instrument shall be accompanied
by and accepted by PRI pursuant to PE's then customary limited warranties and
other terms and conditions applicable to the retail sale of Commercial
Instruments.
(iii) PRI shall have the right, during the Special Rights Period and during the
period ending [*] years after the last day of the Special Rights Period, but in
any event not after [*], to purchase up to [*] additional Commercial Instruments
at the Most Favored Price therefor.
(iv) PE shall have the right to substitute a Commercial Instrument for one or
both of the Prototype HTS Chip Devices delivered to PRI pursuant to Section 5.1
above, upon not less than 60 days prior written notice to PRI, by delivering,
installing and Making Functional the Commercial Instrument at the same location
as the Prototype HTS Chip Device for which the Commercial Instrument is being
substituted. Any such substitute Commercial Instrument shall be provided to PRI
without cost to PRI, and shall be accompanied and accepted by PRI pursuant to
PE's then customary limited warranties and other terms and conditions
applicable to the retail sale of Commercial Instruments. If requested in
writing by PE, PRI shall return to PE the Prototype HTS Chip Device for which
the commercial grade instrument is being substituted, and transfer title
thereto, to PE in its then "as is" condition, within 30 days after receipt of
the substituting Commercial Instrument, at PE's cost. PRI may remove at its
cost any additions or modifications made by it to the prototypes prior to
returning same to PE. Notwithstanding anything contained in this Agreement to
the contrary, whether or not PE requires PRI to return any of the prototypes,
neither PE nor ACLARA shall have any obligation to provide support or service
with respect to any Prototype HTS Chip Device for which a Commercial Instrument
has been substituted after the date of installation of the substituting
Commercial Instrument
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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to PRI. A Commercial Instrument substituted pursuant to this Section 5.2
(iv) shall not reduce PRI's rights under Section 5.2 (i), (ii) or (iii)
above.
5.3 Microfluidic Chips.
5.3.1 Purchase Rights.
5.3.1.1 Pricing. If PE and ACLARA furnish the Prototype Completion Notice
during the Term of the Project, and PRI accepts the first [*] Prototype
HTS Chip Devices or Substitute Prototype Devices and pays the [*] called
for by Section 6.4 below, PRI will have the right to purchase Microfluidic
Chips at the prices set forth below:
(i) during the Exclusive Right Period and until the earlier of
the date that is six months after the end of the Exclusive Right
Period or the beginning of the Special Rights Period, at the lower
of (a) [*] or (b) [*] per Microfluidic Chip,
(ii) during the Special Rights Period at the lower of (a) [*] times
Fully Burdened Manufacturing Cost (subject to Section 4A with
respect to any Unit Based Royalties), (b) [*] per Microfluidic Chip,
(c) [*] of retail list price for Microfluidic Chips in effect at the
time the order is placed or (d) the Most Favored Price therefor,
(iii) for a period of [*] years after the end of the Special Rights
Period (the "Extended Special Rights Period"), for the lower of (a)
[*] Fully Burdened Manufacturing Cost (subject to Section 4A with
respect to any Unit Based Royalties), (b) [*] per Microfluidic Chip,
(c) [*] of retail list price for Microfluidic Chips in effect at the
time the order is placed or (d) the Most Favored Price therefor,
(iv), during the one year period after the end of the Extended
Special Rights Period, the Most Favored Price therefor, and
(v), if PE and ACLARA furnish the Prototype Completion Notice
during the Term of the Project, but the Special Rights Period does
not commence on or before the date that is six months after the end
of the Exclusive Right Period, during the period beginning with the
date that is six months after the end of the Exclusive Right Prior
and ending on the earlier of the first day of the Special Rights
Period or the date that is 18 months after the end of the Exclusive
Right Period, PRI shall have the right to purchase Microfluidic
Chips at the lower of (a) [*] times Fully Burdened Manufacturing
Cost (subject to Section 4A with respect to any Unit Based
Royalties) or (b) [*] per Microfluidic Chip.
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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In all cases the determination of price shall be made as of the date an order is
placed by PRI, provided that if a Microfluidic Chip is ordered during one of the
five time periods provided for above (the "Chip Price Time Periods") and
pursuant to said order is scheduled to be delivered during a subsequent time
period, the price for such chip shall be the price applicable to the period that
would result in the higher price, provided that the maximum time between order
dates and delivery dates for [*] or less Microfluidic Chips, as set forth in the
Microfluidic Chip Supply Agreement, does not exceed 90 days. If different types
of Microfluidic Chips are produced, and Fully Burdened Manufacturing Cost, Fully
Burdened Chip Manufacturing Cost, retail list price or the Most Favored Price is
different for different types of Microfluidic Chips, each such cost or price
shall be calculated independently for each type of Microfluidic Chip. In
calculating retail Microfluidic Chip prices, if reduced retail prices are
generally available to the public for bulk purchases, the retail price to PRI
for such bulk purchases shall be such bulk purchase price generally available to
the public. PE will be the distributor of the Microfluidic Chips to PRI, unless
the Parties otherwise agree in writing. PRI will provide PE (or ACLARA, if PE is
not the distributor of the Microfluidic Chips) with reasonably estimated
Microfluidic Chip requirements starting at least six months prior to the
scheduled date for the end of the Term of the Project. Such estimates will be
updated quarterly thereafter.
5.3.1.2 Pricing Assumptions. It is understood and agreed that the pricing for
Microfluidic Chips set forth in Section 5.3.1.1 above is based on the assumption
that the Microfluidic Chip is a single use, disposable 96 well plate equivalent
chip. The maximum stated dollar price for a Microfluidic Chip to be paid by PRI
pursuant to Section 5.3.1.2, but not the multiple of manufacturing cost, the
discount off retail or the Most Favored Price, shall be adjusted proportionately
if the Microfluidic Chip is not a single use, disposable 96 well plate
equivalent chip. For example, if a Microfluidic Chip sold to PRI is a 48 well
plate equivalent chip, that stated maximum dollar price per Microfluidic Chip
shall be reduced proportionately to [*], respectively. If the Microfluidic Chip
sold to PRI is a 384 well plate equivalent chip, the stated maximum dollar price
per Microfluidic Chip shall be increased proportionately to [*], respectively.
5.3.2 Inability or Determination not to manufacture Chips; License to PRI.
5.3.2.1. Notwithstanding anything contained in this Section 5.3 to the contrary,
(i) PE and ACLARA shall not be required to manufacture and supply Microfluidic
Chips to PRI if manufacture or supply is prevented by reasons of force majeure;
and (ii) PE and ACLARA shall have the right to decline to manufacture and supply
Microfluidic Chips to PRI at any time, at PE's and ACLARA's sole discretion, in
the event that (a) Fully Burdened Chip Manufacturing Cost is or is reasonably
estimated to be more than the maximum dollar price of [*], respectively, set
forth in Section 5.1.1 above for any calendar quarter of the
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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Chip Price Time Period to which the maximum dollar price is applicable, or (b)
at any time after the end of the Exclusive Right Period, PE or ACLARA are not
manufacturing or having manufactured, or have ceased to manufacture or offer
Microfluidic Chips for general commercial sale to the public, except that PRI
shall remain entitled to purchase at the applicable price set forth in Section
5.3.1 any Microfluidic Chips that PE and ACLARA may have available in inventory
after the manufacture thereof has been terminated, that have not been committed
to any third party, and are otherwise available for sale to PRI, at the time an
order therefor is placed by PRI. PE and ACLARA shall exercise their right to
decline to manufacture and supply Microfluidic Chips to PRI by sending at least
30 days prior written notice to such effect to PRI, in which case, effective
the date set forth in such notice, PE and ACLARA shall be relieved of their
obligations set forth in section 5.3.1 above. PRI shall not order any chips
during the foregoing 30 day notice period, unless PE and ACLARA otherwise
agree. PE and ACLARA will notify PRI in writing when Microfluidic Chips are
being sold by PE or ACLARA as a commercial product generally available to the
public.
5.3.2.2. If PE and ACLARA exercise a right not to manufacture Microfluidic
Chips, or if PE and ACLARA have failed to meet PRI's reasonably projected volume
requirements for Microfluidic Chips, despite PE's and ACLARA's commercially
reasonable efforts, for at least forty five (45) days after PRI has given PE and
ACLARA notice of such failure (which notice may not be given unless and until
such failure has in fact incurred), PRI shall have the right to manufacture its
requirements for Microfluidic Chips itself, or have such Microfluidic Chips
manufactured by a third party, for internal drug discovery purposes, and PE and
ACLARA shall grant to PRI and its Affiliates, and PRI and its Affiliates shall
have, a limited, non-exclusive, non-transferable and non-sublicenceable license
(i) to use Developments and other Intellectual Property owned or licensed by PE
or ACLARA, or PE and ACLARA, that is necessary to manufacture Microfluidic Chips
in the form manufactured or required by this Agreement to be manufactured by
ACLARA or PE prior to the date that PRI obtains the right to manufacture same
pursuant to this Agreement, to manufacture or have manufactured such chips and
(ii) under Intellectual Property owned by PE or ACLARA, or PE and ACLARA, to use
such Microfluidic Chips with Prototype HTS Chip Devices or Commercial
Instruments for internal drug discovery purposes. The right and license granted
by this Section 5.3.2.2 shall be irrevocable, unless the reason for PE and
ACLARA's failure to meet PRI's reasonably projected volume requirements is by
reason of force majeure, in which case PE or ACLARA may revoke such right and
license by giving PRI not less than six (6) months' prior written notice,
provided PE and ACLARA resume manufacture of Microfluidic Chips for PRI pursuant
to this Agreement. It is expressly understood and agreed that all Microfluidic
Chips manufactured by or for PRI pursuant to and under the rights granted by
this Section 5.3.2.2 may only be used with Prototype HTS Chip Devices or
Commercial Instruments obtained
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by PRI pursuant to this Agreement, and only for internal drug discovery
purposes.
5.3.2.3 In consideration of the licenses granted pursuant to Section 5.3.2.2
above, PRI shall pay PE and ACLARA (collectively, not to each) a royalty of [*]
of PRI's Fully Burdened Manufacturing Cost of each chip used or manufactured by
PRI during any period in which PRI has a right to manufacture Microfluidic
Chips. In the event that PRI has Microfluidic Chips manufactured by a third
party during any such period, PRI's Fully Burdened Manufacturing Cost shall be
deemed to be the price paid by PRI to the third party for such chips, less costs
of insurance and transportation of such chips to PRI's initial point of receipt.
5.3.2.4 Notwithstanding anything contained in this Section 5.3.2 to the
contrary, if PE and/or ACLARA are required to pay royalties, fees or other
compensation to a third party for or in connection with any license or other
rights granted to PRI pursuant to Section 5.3.1 above, PRI shall pay [*] of
such royalties, fees or other compensation if the obtaining of such rights was
approved by the Steering Committee. If the obtaining of such rights was not
approved by the Steering Committee, PRI shall not be required to pay or
reimburse PE or ACLARA any such royalties, fees or other compensation, and the
amount(s) thereof shall not be included as components of Fully Burdened
Manufacturing Cost or Fully Burdened Chip Manufacturing Cost.
5.3.3 Expiration of License. Notwithstanding anything contained in this
Agreement to the contrary, unless and except to the extent as may be otherwise
set forth in the Microfluidic Chip Supply Agreement, any licenses granted in
Section 5.3.2.2 above, and PRI's rights to manufacture Microfluidic Chips, shall
expire [*] years after the last day of the Term of the Project, unless (i)
during the [*] period immediately preceding the end of such [*] year period PE
and/or ACLARA did not sell any Commercial Instruments and (ii) as of the end of
such [*] year period PE and/or ACLARA are not in the business of manufacturing
Microfluidic Chips, and PE and ACLARA have not notified PRI in writing prior to
such date that they or either of them is capable, and ready, willing and able if
PRI and PE and/or ACLARA can agree on prices and terms and conditions of
manufacture and sale, to manufacture or have manufactured Microfluidic Chips for
PRI of the type required by this Agreement to be supplied to PRI (that is, one
or more types of Microfluidic Chips capable of performing one assay of each of
the four assay types listed in Section 2.1.1) or the type actually manufactured
by or for PRI for any commercially significant period during the year preceding
the end of such [*] year period.
5.3.4 Minimum and Maximum Quantities. Notwithstanding anything contained in
this Section 5.3 to the contrary, if PE and ACLARA furnish the Prototype
Completion Notice during the Term of the Project and PRI accepts the first [*]
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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Prototype HTS Chip Devices or Substitute Prototype Devices and pays the [*]
called for by Section 6.4 below and PRI has the right to purchase Microfluidic
Chips pursuant to Section 5.3 of this Agreement, PRI agrees to purchase (i) not
less than [*] Microfluidic Chips during the Exclusive Right Period, at the rate
of not less than [*] Microfluidic Chips during each three month period of the
Exclusive Right Period, (ii) not less than [*] Microfluidic Chips per year
during the Special Rights Period, at the rate of not less than [*] Microfluidic
Chips during each three month period of the Special Rights Period, and (iii) not
less than [*] Microfluidic Chips per year during the Extended Special Rights
Period, at a rate of not less than [*] Microfluidic Chips during each three
month period of the Extended Special Rights Period. Also notwithstanding
anything contained in this Agreement to the contrary, except with the express
written consent of PE and ACLARA, PRI shall have no right to purchase from PE
and/or ACLARA, and PE and ACLARA shall not be required to sell PRI, more than
[*] Microfluidic Chips during the Exclusive Right Period and any period
thereafter up to the Special Rights Period; more than [*] Microfluidic Chips per
year during the Special Rights Period, or more than [*] Microfluidic Chips per
year during the Extended Special Rights period.
5.3.5 Use of Chips. All Microfluidic Chips manufactured or furnished to PRI
pursuant to this Agreement shall be used only by PRI and its Affiliates on
Prototype HTS Chip Devices, Commercial Instruments or Low Throughput Devices
acquired by PRI pursuant to this Agreement for internal drug discovery purposes.
5.3.6 Supply Agreement. Microfluidic Chips will be purchased by PRI
pursuant to a Microfluidic Chip Supply Agreement containing the terms set forth
above in this Section 5.3, and other terms and conditions intended to be
negotiated by the Parties prior to the end of the Term of the Project. Such
Supply Agreement shall also set forth other appropriate terms and conditions
relating to the manufacture of Microfluidic Chips by PRI or a third party,
maintaining Intellectual Property relating to the manufacture of Microfluidic
Chips and making necessary Know how and other information available to PRI and
any third party manufacturer, qualifying a third party manufacturer for the
manufacture of Microfluidic Chips at an appropriate time or times in accordance
with reasonable and customary procedures, the providing by PE and ACLARA, as
appropriate, of reasonable assistance to PRI and any third party manufacturer
in implementing manufacturing Know-how, and confidentiality and use provisions
relating to Intellectual Property to protect PE's and ACLARA's rights therein.
5.4 General Terms of Sale. Commercial Instruments and Microfluidic Chips
shall be furnished or sold to PRI in accordance with PE's standard terms and
conditions of sale, provided that in any event all prices shall be F.O.B. PE's
manufacturing plant, freight and insurance prepaid and added to the invoice, and
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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it is agreed that any purchase price payable by PRI does not include any
federal, state or local taxes that may be applicable. When PE has the legal
obligation to collect such taxes, the appropriate amount shall be added to PRI's
invoice and paid by PRI. If PE's general terms and conditions of sale for
Commercial Instruments do not include a warranty or other certification or
statement as to Year 2000 compliance, the delivery of Commercial Instruments
pursuant to this Agreement shall include delivery to PRI of a Statement of Year
2000 Conformity in the form or substantially in the form of the Statement of
Year 2000 Conformity attached as Exhibit 5.4. PE and ACLARA, as the case may be,
will provide to PRI reasonable documentation supporting its calculation of Fully
Burdened Manufacturing Cost and Fully Burdened Chip Manufacturing Cost upon
written request from PRI given no more than once in any twelve month period. If
PRI manufactures Microfluidic Chips pursuant to this Agreement and royalties are
due PE and ACLARA thereon, PRI will provide to PE and ACLARA reasonable
documentation supporting its calculation of Fully Burdened Manufacturing Cost
and Fully Burdened Chip Manufacturing Cost, or its cost of purchase from its
third party manufacturer; upon written request from PE or ACLARA given no more
than once in any twelve month period. No more frequently than once a year, at a
mutually agreeable time and place, PRI shall have the right to have a certified
independent accountant, reasonably satisfactory to PE and ACLARA, examine the
accounting books and records of PE and/or ACLARA, whichever is the manufacturer
of the product the pricing of which is the subject of the review, to review the
manner of calculation of Fully Burdened Manufacturing Cost or Fully Burdened
Chip Manufacturing Cost, as the case may be. Any such audit shall be conducted
under reasonable confidentiality provisions required by PE or ACLARA, as the
case may be. In the event that PRI manufacturers or has manufactured
Microfluidic Chips pursuant to the provisions of this Agreement, PE and ACLARA
shall have the right to audit PRI's accounting books and records relating to the
Manufacture of Microfluidic Chips, or purchase of Microfluidic Chips from a
third party, on the same terms and conditions set forth in this Section 5.4 as
are applicable to PRI's audit rights.
5.5 Post Delivery Installation, Training, Support and Service.
5.5.1 Basic Prototype Support and Service. PE and ACLARA will install, use
commercially reasonable efforts to Make Functional, and provide to PRI support
and training in the use of, and during the [*] period after delivery of each of
such [*] prototypes will provide service on, each of the first [*] Prototype HTS
Chip Devices delivered pursuant to the first sentence of Section 5.1 above,
including initial system installation and initial operational training to assist
PRI in the utilization of such devices, training and support in the use and
implementation of the assays developed as part of the Project and in the use of
the associated Microfluidic Chips, all to the extent set forth in Section 5.5.2
below, at no cost to PRI, except reimbursement of reasonable travel, meals and
lodging expenses after the third site visit by PE personnel to provide any such
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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services with respect to either of the first [*] prototypes. PE and ACLARA
shall be responsible for the cost of travel, meals and lodging for the first
three prototype site visits. For the purposes of the preceding sentence, the
visit for the initial installation of and to Make Functional each Prototype HTS
Chip Device, and any site visit made at the instigation of PE or ACLARA, as the
case may be, without being requested by PRI, shall not be included as a site
visit with regard to reimbursement of travel, meals and lodging. If Commercial
Instruments are not available for purchase by PRI at the end of the [*] period
referred to in the preceding sentence, until such time, if ever, as Commercial
Instruments are available, PE shall continue to provide service on each of the
first [*] Prototype HTS Chip Devices for a period not to exceed under any
circumstances [*] years after the end of each such [*] period at [*] of Fully
Burdened Manufacturing Cost of performing the service, until Commercial
Instruments are available for purchase by PRI. If any of the [*] additional
Prototype HTS Chip Devices in addition to the first [*] are delivered pursuant
to Section 5.1, PE and ACLARA (i) will install and Make Functional such
additional prototypes at no cost to PRI, and (ii) will provide service, but not
support and training, at no cost to PRI except reimbursement for reasonable
travel, meals and lodging expenses, on each such additional prototype from the
date of delivery of the prototype to the end of the [*] period following the
delivery of the [*] Prototype HTS Chip Devices delivered pursuant to the first
sentence of Section 5.1, but in any event for a period of not less than three
(3) months after delivery of each additional Prototype HTS Chip Device; and, for
any balance remaining of the one year period after delivery of each such
additional Prototype HTS Chip Device, will provide service on each such
prototype for [*] of Fully Burdened Manufacturing Cost of performing the
service. After the expiration of the periods of support, training and service
provided for in this Section 5.5.1, neither PE nor ACLARA shall have any
obligation to provide further support, training or service to PRI, except
service and support as provided in this Agreement for any Commercial Instruments
that are delivered to or purchased by PRI pursuant to this Agreement, unless the
Parties otherwise agree in writing.
5.5.2 Extent of Support, Training and Service for Prototypes. PE and ACLARA
shall provide the support, training and service called for by this Agreement at
the location of the Prototype HTS Chip Devices, provided that neither PE nor
ACLARA shall be required to travel outside of the continental United States to
provide support, service or training, except, if PRI so requests as set forth
herein, to up to two locations in Europe. PE and ACLARA each shall have
available one full-time engineer employed by them designated to provide support
as provided herein to PRI during the Exclusive Right Period, and such employees
will be generally available during business hours during the Exclusive Right
Period to respond to telephone inquiries. PRI shall seek to resolve issues
through telephone inquiries first, before requesting on-site visits. Exclusive
of the time required for initial installation and to Make Functional, PE and
ACLARA
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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collectively shall not be required to provide during the period ending [*]
after the delivery of the [*] Prototype HTS Chip Device to PRI more than an
aggregate of 40 days of support, training and/or service at all PRI
locations collectively, of which no more than ten days shall be required
during the first month after delivery of the first prototype delivered to
PRI, no more than five days during each of the next four months, and no
more than three days during each month thereafter, until the expiration of
the [*] period following delivery of the [*] prototype delivered to PRI.
Thereafter, excluding the time for installing and to Make Functional the
[*] additional Prototype HTS Chip Devices, PE and ACLARA shall not be
required to spend more than one day per month at a PRI location to satisfy
its requirement to provide support, training and service. The Parties shall
work cooperatively to schedule installation, and on site support and
training, at mutually convenient times. PE and ACLARA shall provide PRI
with reasonable amounts of telephone support for prototypes. Service
provided by PE with respect to Prototype HTS Chip Devices shall be on a
commercially reasonable best efforts basis, shall be as reasonably
requested by PRI, and shall be of a kind and extent customarily afforded by
PE pursuant to its standard service agreement for commercial grade
instruments that include fluid handling systems.
5.5.3 Support For Commercial Instruments. During the Special Rights
Period, PE and ACLARA shall provide to PRI, at Fully Burdened Manufacturing
Cost, support and service on Commercial Instruments delivered or purchased
by PRI pursuant to this Agreement at least as comprehensive as PE provides
to customers of Commercial Instruments who purchase PE's basic Commercial
Instrument service plan. During the [*] period after the end of the
Special Rights Period, PRI shall have the right to purchase any service
contract on Commercial Instruments offered generally to the public by PE at
a Most Favored Price.
5.6 Quarterly Reports and Final Report. PE and ACLARA shall deliver to
PRI the quarterly reports (and any interim quarterly reports requested by
PRI) called for by Section 3 above, and, within 60 days after the last day
of the Term of the Project, shall deliver to PRI a final report summarizing
the results and achievements of the Project.
6. Project Funding and Levels of Effort. In consideration of the work to be
performed by PE and ACLARA, PRI shall pay PE and ACLARA collectively the
aggregate sum of [*], of which [*] has previously been paid pursuant to the
Initial Funds Agreement, in accordance with the following schedule:
6.1 [*] within ten days after the signing of this Agreement;
6.2 [*] on each of April 1, 1999, July 1, 1999 and October 1, 1999;
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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6.3 [*] on each of January 1, 2000, April 1, 2000 and July 1,
2000; and
6.4 [*] within 30 days after the delivery and installation of the [*]
Prototype HTS Chip Devices to be delivered to PRI pursuant to this
Agreement; or if prototype HTS chip devices that do not meet all the
requirements of Prototype HTS Chip Devices are offered to PRI by PE as
substitutes for Prototype HTS Chip Devices, and PRI in its sole discretion
determines to accept same, within 30 days after delivery and installation
of the second substitute prototype HTS chip device. The decision as to
whether to accept any such substitute prototype HTS chip devices
("Substitute Prototype Device") shall be in PRI's sole discretion.
All payments due from PRI under this Agreement, including the payments called
for by this Section 6 and any royalty payments due from PRI, shall be made by
PRI directly to PE, in the full amount of the payment due. PE shall be
responsible for distributing payments received as between itself and ACLARA.
Payments made will be nonrefundable, and all payments due under this Section 6
shall be made, except only payments due after the effective date of termination
of this Agreement, if this Agreement has been terminated pursuant to the
provisions of this Agreement. PE and ACLARA shall not be required to
collectively exceed the level of effort specified in Section 2.1.4 above, and
PRI shall not be required to fund the Project in excess of the amount specified
above. Nothing herein contained shall be construed to prevent PE and ACLARA from
exceeding such level of effort at their own expense, if they wish to do so in
their sole discretion. PE and ACLARA agree to provide PRI access, upon
reasonable advance request, to reasonable documentation customarily maintained
by them evidencing the FTEs expended by them on the Project.
7. Exclusive Right. Provided that (i) PRI has paid all funds scheduled to be
paid under Section 6 through and including the payment to be made on [*], and
provided that if the [*] Prototype HTS Chip Devices to be delivered pursuant to
the first sentence of Section 5.1 have been delivered and installed (or
Substitute Prototype Devices in lieu thereof have been delivered and installed
as provided in Section 6.4) and PRI has paid PE the [*] to be paid upon
such event, or (ii) PRI has terminated this Agreement on account of the failure
of PE and ACLARA to achieve a Milestone as set forth in Section 11.3 below, PRI
shall have the exclusive right (the "Exclusive Right") during the Exclusive
Right Period, except as to PE and ACLARA and their respective Affiliates for
purposes other than the commercial screening of compounds for drug discovery, to
obtain and use HTS Chip Devices (and functional equivalents thereof) and
Microfluidic Chips used with HTS Chip Devices (but specifically excluding,
without limitation, Low Throughput Devices and Microfluidic Chips used with Low
Throughput Devices) for the High Throughput Screening of compounds for drug
discovery employing any of the assay categories described in Section 2.2.1, and
during the Exclusive Right Period neither PE or ACLARA shall sell, donate or
otherwise distribute HTS Chip Devices (or any functional equivalents, but
excluding Low Throughput Devices) to any third party for High Throughput
Screening of
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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compounds for drug discovery employing any of the assay categories described in
Section 2.1.1.
8. Intellectual Property
8.1. Intellectual Property Ownership and Rights
8.1.1 All data and test results generated during the performance of the
Project (except data relating directly to PRI's proprietary drugs and drug
candidates, which data will be owned solely by PRI), shall be jointly owned by
PRI, PE and ACLARA, and PE and ACLARA shall be free to use such jointly owned
data and the results of the Project, except as otherwise expressly set forth in
this Agreement, for such purposes as each of them desires. PRI shall be free to
use such jointly owned data and the results of the Project only for internal
research and development purposes for high throughput screening of compounds for
drug discovery; provided, however, that PRI shall not be entitled to use such
data or results for the manufacture, assembly or fabrication of HTS Chip
Devices or Microfluidic Chips, or components thereof, except that PRI may use
same solely insofar as such use is necessary or useful in connection with the
manufacture by it or its third party manufacturer of Microfluidic Chips under
the conditions and as set forth in Section 5.3 above, or as is necessary or
useful to repair Prototype HTS Chip Devices and Commercial Instruments.
8.1.2. Each Party shall have sole and exclusive ownership of all right,
title and interest on a worldwide basis in and to any Intellectual Property
developed solely by such Party or its consultants or agents, as a result of work
on the Project or work performed pursuant to the Feasibility Agreements, with
full rights to license or sublicense without accounting to any other Party,
subject only to the rights expressly granted to one or more other Parties under
this Agreement. If one Party make a Development jointly with another Party as a
result of work on the Project or work performed pursuant to the Feasibility
Agreements (a "Joint Development"), the ownership thereof shall be as set forth
in this Section 8.1.2. PRI shall own all Intellectual Property, including
without limitation, Patent Rights and Know-how with respect to all Joint
Developments that constitute or relate to composition or synthesis of
inhibitors, activators, modulators, or any other potential drug candidate.
Subject to PRI's rights granted in this Agreement, PE and ACLARA shall own all
Intellectual Property, including without limitation Patent Rights and Know-how,
with respect to, relating to or constituting all Joint Developments that do not
relate to inhibitors, activators, modulators, or any other potential drug
candidates, including with limitation, any Joint Developments that are
incorporated into or relate to or arose of the development of Prototype HTS Chip
Devices, HTS Chip Devices or Microfluidic Chips or any component or predecessor
component thereof.
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8.1.3 PRI shall own any Prototype HTS Chip Devices, Commercial Instruments and
Microfluidic Chips delivered to PRI pursuant to this Agreement.
8.1.4 PRI shall have and will receive a [*] license to use on, or in connection
with the use of, all Prototype HTS Chip Devices and Commercial Instruments
received or purchased by PRI pursuant to this Agreement, and Microfluidic Chips
used with such devices and instruments, any Developments made PE or ACLARA, as
well as any Joint Developments made by PE and ACLARA, as a result of work on the
Project during the term of this Agreement and the Feasibility Agreements to
perform assays of the types described in Section 2.1.
8.1.5 The provisions of this Section 8 shall supercede and replace Section 4 of
the PerSeptive Feasibility Agreement and Section 4 of the ACLARA Feasibility
Agreement.
8.1.6 Right to Intellectual Property as between PE and ACLARA shall be governed
by a separate agreement between PE and ACLARA.
9. Responsibility for Certain Matters, Indemnification.
9.1 Injury to Employees; Responsibility for Certain Matters. The Parties
recognize and agree that instruments and devices, including components thereof,
particularly in experimental and prototype form, and chemicals and other
materials used in connection therewith, may be dangerous, toxic or otherwise
hazardous. Each Party shall be solely responsible for the use, and the
consequences of use, resulting from the receipt or use by it of tangible or,
except as otherwise expressly set forth herein, intangible property such as
Intellectual Property, obtained from another Party or created or generated as a
result of the work on the Project, and each Party shall be solely responsible
for the health and safety of its own employees, agents and consultants in
connection with, and shall bear all risk to its employees, agents and
consultants resulting from, their use of instruments and devices delivered or
purchased, or possessed or used, and chemicals and other substances possessed or
used, pursuant to or in connection with the Project, except to the extent injury
or damage is caused by the gross negligence or willful misconduct of a Party.
Each Party agrees that it will indemnify and hold the other Parties and their
Affiliates harmless from and against any and all liability, damage, loss or
expense, including without limitation reasonable attorney's fees and expenses of
litigation or arbitration, incurred by or imposed upon any other party or its
Affiliates, in connection with any claims, suits, actions, demands or judgments
for personal or other injury to any of its employees, agents or consultants, or
damage or destruction to property, arising out of or in connection with the
performance of the Project, even if arising from the negligence of a Party,
except to the extent such claims, suits, actions, demands or judgments result
from the gross negligence or willful misconduct of
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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the Party or Affiliate seeking indemnification hereunder. In addition, each
Party hereby releases the other Parties from any claims, including, without
limiting the generality of the term "claims," claims for property damage,
resulting from the use, and the consequences of use, of tangible or, except as
otherwise expressly set forth herein, intangible property such as Intellectual
Property, obtained from another Party or created or generated as a result of the
work on the Project, except for liabilities and claims resulting from the gross
negligence or willful misconduct of a Party. Each Party acknowledges that it is
familiar with Section 1542 of the California Civil Code, which reads as follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor."
Each Party acknowledges and agrees that it is releasing unknown claims and
waives all rights that it has or may have under Civil Code Section 1542 or under
any other statute or common law principle of similar effect.
9.2 Indemnity by PRI in connection with Use of Devices and Substances. To the
fullest extent permitted by law, except solely with respect to Claims (as
defined below) arising from the infringement of intellectual property rights of
third parties not constituting or relating to particular applications of HTS
Chip Devices or Microfluidic Chips of which PE or ACLARA had actual knowledge
and as to which PE or ACLARA breached its warranty set forth in Section 9.3.1
below, PRI agrees to indemnify and hold PE and ACLARA, and their Affiliates,
harmless from and against any and all claims, demands, obligations, costs,
expenses (including reasonable attorney's fees and expenses) and liabilities
(collectively, "Claims") including; without limitation, those arising from
violations of local, state, or federal food and drug, environmental, health and
safety and other laws, codes and regulations, arising out of the possession by
PRI of Prototype HTS Chip Devices, HTS Chip Devices, Commercial Instruments,
Microfluidic Chips, or other instruments or components thereof or chemicals or
other substances delivered to or used by PRI in connection with the Project, or
created or generated by PRI or any of its Affiliates as a result of work
performed in connection with the Project, or arising out of the use by PRI or
any of its Affiliates of any of the foregoing, including without limitation the
loss, operation or failure to operate of any of the foregoing, even if caused in
part by the negligence of PE or ACLARA or their Affiliates, as the case may be,
except to the extent resulting from the gross negligence or willful misconduct
of PE or ACLARA, or their Affiliates, as the case may be.
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9.3 Patent and Copyright Indemnification.
9.3.1 Neither PRI, PE nor ACLARA warrant the validity or enforceability of any
Intellectual Property relating to any products. PE and ACLARA, however, shall
each warrant severally, but not jointly and severally, that at the time of
delivery to or purchase by PRI of any Prototype HTS Chip Devices, Commercial
Instruments or Microfluidic Chips pursuant to this Agreement, PE or ACLARA, as
the case may be, shall not have actual knowledge of violation of any patents or
patent applications or other intellectual property rights owned by third parties
which would prevent PRI from using such products to conduct the assays developed
pursuant to the Project, except to the extent PRI is otherwise informed in
writing by PE or ACLARA at or prior to the time of such delivery or purchase.
PRI agrees to promptly inform PE and ACLARA in writing in the event that it
receives actual knowledge of any claim that any such devices or Microfluidic
Chips, or the use thereof by PRI, infringes the intellectual property rights of
any third party.
9.3.2 PE as to Prototype HTS Chip Devices, HTS Chip Devices excluding
Microfluidic Chips and Low Throughput Devices and PE and ACLARA as to
Microfluidic Chips, shall have the sole and exclusive right to evaluate any
suit, claim or proceeding brought against PRI alleging that any such product
obtained or purchased by PRI from PE or ACLARA infringes any Intellectual
Property of others with respect to which PE and/or ACLARA breached its warranty
set forth in Section 9.3.1 above and to take any and all legal action PE or
ACLARA, as the case may be, shall deem appropriate with respect thereto at PE
and/or ACLARA's expense. PRI shall have the right to participate and be
represented in any such suit by its own counsel at its own expense, but PRI
shall not agree to, and neither PE nor ACLARA shall have any liability for, any
settlement, compromise or dismissal of such suit, or costs incurred in
connection therewith, without PE's or ACLARA's consent, as the case may be, such
consent not to be unreasonably withheld or delayed. Should the use of HTS Chip
Devices or Microfluidic Chips by PRI be enjoined for reasons other than the use
by PRI of any such devices for a particular application of HTS Chip Devices or
Microfluidic Chips as to which PRI has afforded PE and ACLARA an indemnity
pursuant to Section 9.2 above, or if PE or ACLARA believes that the use of any
such products may infringe the Intellectual Property of others, PE may, at its
option, require PRI to discontinue the use of the allegedly infringing product
and, if the product is a Prototype HTS Chip Device, Commercial Instrument or
Microfluidic Chip that has been purchased by PRI for consideration in addition
to the consideration provided for in Section 6 of this Agreement, shall either
(i) substitute an equivalent non-infringing product (and PRI shall promptly
return the infringing or allegedly infringing product to PE at PE's expense,
(ii) modify the product so that it no longer infringes but remain equivalent,
(iii) obtain for PRI, at PE's own expense for Prototype HTS Chip Devices and
Commercial Instruments, and at ACLARA's expense for Microfluidic Chips, the
right to
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continue use of such product, or (iv) refund the purchase price for such
product (or repurchase the Prototype HTS Chip Device for $25,000 in the
case of a Prototype HTS Chip Device). It is expressly understood and agreed
that neither PE nor ACLARA shall have any responsibility or liability for
the use by PRI of any such device or Microfluidic Chip for any particular
application of HTS Chip Devices or Microfluidic Chips as to which PRI
affords PE and ACLARA an indemnity pursuant to Section 9.2 that infringes
the Intellectual Property of any third party. The foregoing states the
entire liability of PE and ACLARA for Intellectual Property infringement
resulting from PRI's ownership, possession or use of Prototype HTS Chip
Devices, Commercial Instruments or other HTS Chip Devices and Microfluidic
Chips provided pursuant to this Agreement.
9.3.3 PRI shall promptly in writing notify PE as to Prototype HTS Chip
Devices, HTS Chip Devices excluding Microfluidic Chips and Low Throughput
Devices, and PE and ACLARA as to Microfluidic Chips, of any suit, claim or
proceeding brought against PRI or any of its Affiliates alleging that any
such product obtained or purchased by PRI from PE or ACLARA infringes any
Intellectual Property of others.
9.3.4 Neither PE nor ACLARA shall have any obligations to PRI under this
Section 9 if infringement results from alteration or modification by PRI
not expressly authorized in writing by PE and ACLARA of Prototype HTS Chip
Devices, Commercial Instruments or other HTS Chip Devices or Microfluidic
Chips.
9.3.5 During the Term of this Agreement and during the Exclusive Right
Period, each Party agrees to promptly notify the other Parties in writing
in the event such Party receives notice of infringement or misappropriation
of any alleged rights asserted by any third party in connection with the
ownership, manufacture, sale, importation or use of Prototype HTS Chip
Devices, Commercial Instruments or Microfluidic Chips.
10. Confidentiality.
10.1 Any proprietary or confidential information or materials belonging to
or generated by a Party or data generated by a Party in performing work in
connection with the Project ("Disclosing Party") which is furnished or
disclosed to or observed by (herein collectively "disclosed") another Party
("Receiving Party") in connection with the Project or negotiations
undertaken in connection with this Agreement (hereinafter "Confidential
Information") will be maintained by Receiving Party as confidential and
held in trust by Receiving Party for the exclusive benefit of Disclosing
Party. Such Confidential Information: (a) will be used by the Receiving
Party solely for the conduct of the Project and any such negotiations; and
(b) will not be disclosed by the Receiving Party to anyone except its
employees and consultants (and those of Affiliates of PRI, PE and
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ACLARA who are bound by the obligations set forth in this Section
10 or obligations substantively equivalent thereto), on a
need-to-know basis, unless previously authorized in writing by the
Disclosing Party. The foregoing restrictions on use and disclosure
shall not apply to any information which: (i) was known to the
Receiving Party prior to its being disclosed hereunder, with
such knowledge being obtained without any obligation of
confidentiality to the Disclosing Party; (ii) is public knowledge
at the time of its being disclosed, or subsequently becomes public
knowledge through no act or omission by or on behalf of the
Receiving Party; (iii) is lawfully disclosed or made available to
the Receiving Party by a third party having no obligation to the
Disclosing Party to maintain the confidentiality of such
information; or (iv) is disclosed to the extent required by law or
legal process, provided that the Receiving Party takes reasonable
and lawful actions to avoid or minimize the extent of such
disclosure and notifies the Disclosing Party as promptly as
feasible of the requirement for such disclosure so that the
Disclosing Party may take actions to prevent or minimize the
extent of such disclosure. The provisions of this Section 10 shall
remain effective for a period of ten (10) years from the
termination or expiration of this Agreement and shall survive the
termination or expiration of this Agreement.
10.2 Each Party represents to the others that all of its employees
and all of the employees of its Affiliates, and any consultant to
such Party or Affiliate, participating in the Project or otherwise
having access to any other Party's Confidential Information are
bound by written agreements to maintain Confidential Information in
confidence and not to use such information except as permitted
herein. Each Party agrees to use its best efforts to enforce
confidentiality obligations to which its employees and consultants
(and those of its Affiliates) are obligated to prevent unauthorized
disclosure or use of Confidential Information of another Party
hereto.
11. Term and Termination.
11.1 Unless earlier terminated or extended in accordance with the
following provisions, the term of the Project shall be the [*]
period commencing as of [*] and ending [*], unless extended by
written agreement of the Parties. PE and ACLARA shall have the
right to extend the term of the Project for up to an aggregate of
[*], by giving PRI written notice of their determination to extend
the original [*] term of the Project at least fifteen days prior to
[*] (the "PE/ACLARA Extension Notice"). Any such PE/ACLARA
Extension Notice may be given more than once as long as the
aggregate of all extensions is no later than [*]. Each such
PE/ACLARA Extension notice will state the date, not later than [*],
to which the Term of the Project is extended. If PE and ACLARA do
not deliver a Prototype Completion Notice to PRI on or before [*],
or, if the Term of the Project has been extended by PE and ACLARA
pursuant to
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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the proceeding sentence to any date earlier than [*], on or before the end of
the extended term of the Project, PRI shall have the right to extend the Term of
the Project for a period of up to [*] additional months, but in any event to no
later than [*], by delivering written notice (the "PRI Extension Notice") after
[*] but before [*] to PE and ACLARA of its election to so extend the Term of the
Project, or, if PE and ACLARA have extended the Term of the Project as set forth
above, by delivering such PRI Extension Notice to PE and ACLARA at any time
prior tot he last day of the extended Term of the Project. In such event, the
Term of the Project shall be extended to the earlier of the date that PE and
ACLARA deliver the Prototype Completion Notice or the date specified in the PRI
Extension Notice, but in no event to later than [*]. During such extended term,
PE and ACLARA shall be relieved of their obligation to allocate [*] FTEs to the
Project set forth in Section 2.1.4, but rather, during any such extended Term of
the Project, shall be required to allocate such reasonable number of FTEs as
they feel is necessary to accomplish the Goals of the Project, but not more than
[*] FTEs, unless they wish to allocate more in each of their sole discretion. If
the Term of the Project has been extended by PRI pursuant to a PRI Extension
Notice, but PE and ACLARA have not agreed, on or prior to [*], that the
application of the number of months of additional commercially reasonable
efforts for which PRI has the right to extend the Term of the Agreement and the
application of [*] FTEs of effort with then existing employees of PE and ACLARA
is likely to result in the Goals of the Project being achieved during the
extended Term of the Project, PRI shall pay PE and ACLARA, at the rates set
forth in this Agreement, for [*] of the FTEs expended by PE and ACLARA during
any period of the extended Term of the Project occurring on or after [*] and PE
and ACLARA shall continue to work on accomplishing the Goals of the Project as
set forth in this Agreement. If the Steering Committee has agreed to such
matter, PRI shall not be required to so reimburse PE and ACLARA. The question of
whether such additional effort is likely to result in the achievement of the
Goals of the Project shall be a matter brought before, discussed by and, if
possible, determined by the Steering Committee at a meeting that may be called
by any Party and that shall be held within the two month period ending on the
last day of the Term of the Project. If all three Parties are not unanimous in
their determination of such question, or the question has not been decided by
the last day of the Term of the Project, the question shall be referred to the
General Manager of PE's PerSeptive Biosystems Center of Excellence, the
President of ACLARA and the President of the ▇.▇. ▇▇▇▇▇▇▇ Pharmaceutical
Research Institute, for resolution. If the matter is not resolved by such
individuals by the 10th day after the end of the Term of the Project, PE and
ACLARA shall be deemed not to have agreed that the application of such number of
months of additional commercially reasonable effort is likely to result in the
Goals of the Project being achieved during the extended Term of the Project,
and, accordingly, PRI shall be required pay PE and ACLARA [*] of the FTEs
expended by PE and ACLARA during any
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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period of the extended Term of the Project occurring on or after [*], as set
forth above.
11.2 If the Term of the Project has been extended pursuant to Section 11.1
above, but the Goals of the Project are not achieved during such extended term,
the Parties shall meet promptly after the expiration of the extended Term of the
Project to discuss and consider whether they wish to further extend the Term of
the Project, whether PRI and/or PE and ACLARA wish to provide further funding
therefor, or what other arrangements they may wish to make. No party shall have
any obligation beyond those set forth in this Agreement to agree to continue to
work or to agree to continue funding, or to agree to any other matter.
11.3 PRI shall have the right to terminate this Agreement on not less than
forty five (45) days prior written notice to PE and ACLARA if any Milestone is
not achieved prior to the end of the ninety (90) day period following the
originally scheduled date for the achievement of the Milestone. Such notice may
be given at any time during the period beginning forty five (45) days after the
Milestone date in question and ending on the fifteenth day after the end of the
last day of the applicable 90 day notice period, unless PE and ACLARA notify PRI
in writing that in their opinion the Milestone in question is not likely to be
achieved on or before the expiration of such 90 day period, in which case PRI
shall be required to give such notice of termination within thirty (30) days
after its receipt of such opinion. If PRI does not give such notice of
termination during the period set forth in the preceding sentence, PRI shall be
deemed to have irrevocably waived its right to give such notice and terminate
this Agreement, but only with respect to the Milestone in question, without
modifying any other Milestone or date for accomplishing such Milestone.
11.4 Except as otherwise specifically provided in this Agreement, either PRI on
the one hand, and PE and ACLARA on the other, may terminate this Agreement upon
written notice to the other in the event of any default by the other, which
default is not cured within 30 days after receipt of written notice thereof by
the non-defaulting Party.
11.5 Either PRI on the one hand, or PE and ACLARA on the other, may terminate
this Agreement by written notice to the other Parties in the event that PRI on
the one hand, or both PE and ACLARA on the other, file in any court or agency
pursuant to any statute or regulation of any state or country, a petition in
bankruptcy or insolvency or for reorganization or for an arrangement or for the
appointment of a receiver or trustee of the Party or of its assets, or if PRI on
the one hand, or both PE and ACLARA on the other, propose(s) a written agreement
of composition or extension of its debts, or is served with an involuntary
petition against it, filed in any insolvency proceeding, and such petition is
not dismissed within sixty days after the filing thereof, or if PRI on the one
hand, or both PE and ACLARA on the other, propose or is (are) a party to any
dissolution or
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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liquidation, or if PRI on the one hand, or both PE and ACLARA on the
other, make an assignment for the benefit of creditors. All rights to
Intellectual Property and licenses granted by PE and/or ACLARA under or
pursuant to this Agreement are, for all purposes of Section 365(n) of
Title 11 of the U.S. Code ("Title 11"), licenses of rights to intellectual
property as defined in Title 11. If a case is commenced by or against
Licensor under Title 11, then, unless and until this Agreement is rejected
as provided in Title 11, Licensor (in any capacity, including
debtor-in-possession) and its successors and assigns (including, without
limitation, a Title 11 trustee) shall either perform all of the
obligations provided in this Agreement to be performed by Licensor or
provide to the licensed Party (hereinafter referred to as "Licensee") all
such intellectual property (including all embodiments thereof) held by
Licensor and such successors and assigns to the extent it is reasonably
feasible to do so, as Licensee may elect in a written request, immediately
upon such request. If a Title 11 case is commenced by or against Licensor,
and this Agreement is rejected as provided in Title 11 and Licensee elects
to retain its rights hereunder as provided in Title 11, then Licensor (in
any capacity, including debtor-in-possession) and its successors and
assigns (including, without limitation, a Title 11 trustee) shall provide
to Licensee all such intellectual property (including all embodiments
thereof) held by Licensor and such successors and assigns, to the extent
it is feasible to do so, immediately upon Licensee's written request
therefor. All rights, powers and remedies of Licensee provided herein are
in addition to and not in substitution for any and all other rights,
powers and remedies now or hereafter existing at law or in equity
(including, without limitation, Title 11) in the event of the commencement
of a Title 11 case by or against Licensor. Licensee, in addition to the
rights, powers and remedies expressly provided herein, shall be entitled
to exercise all other such rights and powers and resort to all other such
remedies as may now or hereafter exist at law or in equity (including
Title 11) in such event.
11.6. Upon termination of this Agreement, unless the Parties otherwise
agree, all Parties shall be relieved of any further covenants and
obligations set forth in this Agreement, provided that termination of this
Agreement for any reason shall not relieve either Party from any payment
obligation accrued prior to the date of such termination; and further
provided that the convents and obligations set forth in the following
Sections of this Agreement shall survive in accordance with their
respective terms: Sections 7 (but only if this Agreement is terminated by
PRI for failure to reach a Milestone), 8.1.1, 8.1.2, 9.1, 9.2, 10, 12, 14
through 19, inclusive, 21, 22, 25, 26, 27, 28 and 31.
12. Relationship of the Parties. The relationship between PRI, PE and ACLARA
under this Agreement is that of parties to an arms length negotiated contract
and, with respect to the work hereunder, PE and ACLARA each shall be deemed to
be an independent contractor. Nothing in this Agreement is intended or is to be
construed so as to create between any Party to this Agreement the relationship
of partners or joint
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ventures, or to establish any Party as the employee or agent of any other
Party. No Party hereto has any express or implied right or authority under this
Agreement to make any statements or commitments of any kind or to assume or to
create any obligations on behalf of or in the name of any other Party, or to
bind any other Party hereto to any contract, agreement or undertaking with any
third party or any other Party hereto.
13. Publicity. The Parties contemplate announcing the execution and delivery
of this Agreement shortly after its signing, and may announce or disclose the
successful completion of Milestones. However, no Party shall issue any such
announcement or any other publicity, news releases or other public
announcements, written or oral, whether relating to performance under this
Agreement or the existence of any arrangement between the Parties, without
consulting with the other Parties to this Agreement and obtaining their prior
written approval of such publication, which approval shall not be unreasonably
withheld or delayed.
14. No Implied Licenses or Other Intellectual Property Rights. Other than
expressly stated herein, no licenses or other intellectual property rights
either by estoppel, implication or otherwise, are granted herein.
15. Limitation of Liability. IN NO EVENT SHALL PRI, PE OR ACLARA BE LIABLE,
WHETHER IN CONTRACT, TORT, WARRANTY, OR UNDER ANY STATUTE (INCLUDING WITHOUT
LIMITATION ANY TRADE PRACTICE, UNFAIR COMPETITION OR OTHER STATUTE OF SIMILAR
IMPORT) OR ON ANY OTHER BASIS, FOR, INDIRECT, PUNITIVE, MULTIPLE, INCIDENTAL,
EXEMPLARY, CONSEQUENTIAL OR SPECIAL DAMAGES WHATSOEVER, WHETHER OR NOT
FORESEEABLE AND WHETHER OR NOT A PARTY IS ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, INCLUDING, WITHOUT LIMITATION, DAMAGES ARISING FROM OR RELATED TO LOSS
OF USE, LOSS OF DATA, FAILURE OR INTERRUPTION IN THE OPERATION OF ANY EQUIPMENT
OR SOFTWARE, BUSINESS INTERRUPTION, DELAY IN REPAIR OR REPLACEMENT, FOR LOSS OF
REVENUE OR PROFITS, LOSS OF GOODWILL, LOSS OF BUSINESS OR OTHER ECONOMIC LOSS.
16. No Guarantees or Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN
THIS AGREEMENT, NO PARTY MAKES ANY REPRESENTATION, WARRANTY OR GUARANTY WITH
RESPECT TO ANY TECHNOLOGY, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF
THIS AGREEMENT AND HEREBY DISCLAIMS WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE AND NONINFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE
FOREGOING. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, IT IS EXPRESSLY
UNDERSTOOD AND AGREED THAT NO PARTY MAKES ANY WARRANTY, REPRESENTATION OR
GUARANTEE THAT THE GOALS OF THE PROJECT, OR ANY OBJECTIVES OR MILESTONES, WILL
BE ACHIEVED. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NEITHER PE NOR
ACLARA SHALL HAVE ANY OBLIGATION TO DEVELOP, MARKET OR SELL, OR
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USE ANY EFFORTS TO DEVELOP, MARKET OR SELL, COMMERCIAL INSTRUMENTS. THE DECISION
AS TO WHETHER TO SEEK TO DEVELOP, MARKET OR SELL COMMERCIAL INSTRUMENTS SHALL
BE IN PE'S AND ACLARA'S SOLE DISCRETION.
17. Several Liability of PE and ACLARA. PE's and ACLARA'S liability to PRI
hereunder shall be several, but not joint and several. Each of PE and ACLARA
shall be liable, as and to the extent set forth in this Agreement, to PRI for
breach of Agreement, but PE shall not be liable or responsible for any breach
by ACLARA of any of ACLARA's obligations under this Agreement and ACLARA shall
not be responsible or liable for any breach by PE of any of PE's obligations
under this Agreement.
18. Other Work. The Parties hereto understand and agree that nothing in this
Agreement is intended to preclude any Party from designing, developing,
manufacturing or selling, or otherwise dealing with, instruments and devices,
including devices for electric field driven fluidics on microchannels, and
nothing herein shall be construed as prohibiting, inhibiting or limiting any
Party's right to do so or from carrying out such businesses as a Party elects,
subject only to the express provisions of this Agreement as to Prototype HTS
Chip Devices, Commercial Instruments, Microfluidic Chips and functional
equivalents.
19. Prohibition on Hiring. During the Team of the Project and for a period of
two years thereafter, neither PRI nor any of its Affiliates, nor PE and ACLARA
or any of their respective Affiliates shall, without the employer Party's
express written consent, solicit directly or indirectly or hire any person who
is or within six months of the date of any solicitation or hiring was an
employee of PRI, PE or ACLARA, as the case may be, whether such person is
solicited or sought to be hired as an employee, investigator, independent
contractor or otherwise.
20. Force Majeure. No Party to this Agreement will be liable for any failure
to perform any of its obligations hereunder, except the payment of money,
during any period in which such performance is prevented or delayed by fire,
flood, war, riot, embargo, organized labor stoppage, earthquake, acts of civil
and military authorities or any other acts beyond its reasonable control
(collectively, "force majeure"), provided that the Party suffering such delay
promptly notifies the other Party of the delay.
21. Expenses. Except for the payments provided for in Section 6 or as
otherwise expressly set forth herein, each Party shall bear its own expenses in
attending and participating in meetings, and generally in carrying out work on
the Project.
22. Severability. If any provisions of this Agreement, or any application
thereof to any person, place or circumstance, shall be held by a court of
competent jurisdiction to be invalid, unenforceable or void, the remainder of
this Agreement and such provisions as apply to other persons, places and
circumstances shall remain in full force.
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23. Performance of Work by Affiliates of PE. It is understood and agreement
that work performed by PE under this Agreement may be performed by or under the
direction of Affiliates if PE, including and in particular PerSeptive
Biosystems, Inc., a Center of Excellence of PE.
24. Low Throughput Devices.
24.1 ACLARA and PE, or either of them, may proceed with the development,
and ultimately the commercialization, of Low Throughput Devices. Without
intending to limit any other rights PE and/or ACLARA may have, the
Parties agree that PE and/or ACLARA shall be free to do so, without
obligation or constraint under this Agreement or the Feasibility
Agreements, and that PRI's only rights therein or with respect thereto
shall be as set forth in this Paragraph 24. Neither PE nor ACLARA shall
have any obligation to develop Low Throughput Devices, and the decision
as to whether or not to do so, or to proceed with commercialization,
shall be in each of PE's and ACLARA's absolute and sole discretion.
24.2 If PE and/or ACLARA develop and offer to the public Low Throughput
Devices for commercial sale, and if this Agreement is not terminated
prior to September 30, 2000, and if the Goals of the Project are not
achieved and PRI declines to accept Substitute Prototype Devices in lieu
of Prototype HTS Chip Devices as provided in Section 6.4, PRI shall have
the following rights with respect to Low Throughput Devices and
Microfluidic Chips used therewith:
(i) By written notice given to PE on or before December 31, 2003, the
right to obtain up to [*] Low Throughput Devices [*] PRI (except payment
or reimbursement of transportation and insurance, FOB manufacturing
facility), and three additional Low Throughput Devices at [*] of PE's
Fully Burdened Manufacturing Cost, all such instruments to be in the base
form and configuration first announced to the public, exclusive of options
and accessories that are offered by PE as optional items. If PRI desires
any optional items, it may purchase same at [*] off list price. Each such
Low Throughput Devices shall be accompanied and delivered, and accepted by
PRI, subject and pursuant to PE's then customary limited warranties and
other terms and conditions applicable to the retail sale of commercial Low
Throughput Devices. If PE's general terms and conditions of sale for Low
Throughput Devices do not include a warranty or other certification or
statement as to Year 2000 compliance, delivery of Low Throughput Devices
pursuant to this Agreement shall include a Statement of Year 2000
Conformity in the form or substantially in the form of the Statement of
Year 2000 Conformity attached as Exhibit 5.4.
(ii) If PRI has obtained or purchased Low Throughput Devices in exercise
of the rights afforded under Subsection (i) of this Section 24.2, the
right to purchase
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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Microfluidic Chips, for use only with the maximum of [*] Low Throughput Devices
obtained or purchased in exercise of such rights, during the period beginning
with the acquisition of the first such Low Throughput Device and ending [*] for
the most Favored Price therefor. In all cases the determination of price shall
be made as of the date an order is placed by PRI. Microfluidic Chips purchased
pursuant to this Section 24.2(ii) will be purchased by PRI pursuant to a
microfluidic chip supply agreement containing the terms set forth above in this
Section 24.2(ii), and other terms and conditions to be negotiated by the
Parties.
(iii) If PRI has obtained or purchased Low Throughput Devices in exercise of the
rights afforded under Subsection (i) of this Section 24.2, (a) during the period
beginning with the acquisition of the first such Low Throughput Device and
ending [*], PE and ACLARA shall provide to PRI, at Fully Burdened Manufacturing
Cost, support and service on such Low Throughput Devices at least as
comprehensive as PE provides to commercial customers of Low Throughout Devices
who purchase PE's basic commercial instrument service plan applicable to Low
Throughput Devices. During calendar years [*], PRI shall have the right to
purchase any service contract on commercial Low Throughput Devices offered
generally to the public by PE at a Most Favored Price, for service on any Low
Throughput Devices obtained or purchased by PRI in exercise of the rights
afforded under Section 24.2(i) above.
(iv) Commercial Low Throughput Devices and Microfluidic Chips furnished or sold
to PRI pursuant to this Section 24.2 shall be furnished and sold as set forth
in this Section 24, and as set forth Section 5.4 of this Agreement.
(v) Notwithstanding anything contained in this Section 24.2 to the contrary,
PRI shall not have a right to purchase Low Throughput Devices or Microfluidic
Chips from PE and ACLARA except during periods that such devices and chips are
being sold by PE or ACLARA as a commercial product generally available to the
public or, as to any particular type of Microfluidic Chips that may be
available in inventory, PE and ACLARA have on hand an inventory of such chips
not committed to any third party and otherwise available for sale to PRI. PE
and ACLARA will notify PRI in writing when Low Throughput Devices and
Microfluidic Chips therefor are being sold by PE or ACLARA as a commercial
product generally available to the public. PE will be the distributor of such
devices and chips to PRI, unless the Parties otherwise agree in writing. PRI
will provide PE with reasonably estimated chip requirements with at least six
months lead time to the extent feasible. Estimates will be updated quarterly.
24.3 If PE and/or ACLARA develop and offer to the public Low Throughput Devices
for commercial sale prior to the end of the Term of the Project, PRI shall have
the right to buy [*] Low Throughput Devices at [*] of Fully Burdened
Manufacturing Cost, such right to expire on [*]. If PRI
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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purchases Low Throughput Devices in exercise of the right granted in the
preceding sentence, and then obtains the right to acquire Low Throughput
Devices pursuant to Section 24.2(i), the number of Low Throughput Devices
that PRI has a right to acquire at [*] of Fully Burdened Manufacturing
Cost under Section 24.2(i) shall be reduced by the number of Low Through
Devices acquired in exercise of the right granted by the preceding
sentence.
25. Due Authority and Execution. PE and ACLARA, severally but not jointly and
severally, represent and covenant that the execution, delivery and performance
of this Agreement have been duly authorized by all necessary corporate actin,
and that to the best of each of its knowledge and belief, the execution,
delivery and performance of this Agreement does not and will not conflict with
or contravene any provision of any charter document or by-law, or any other
agreement or obligation to which PE or ACLARA, as the case may be, is bound. PRI
represents and covenants that the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action, and that
to the best of its knowledge and belief the execution, delivery and performance
of this Agreement do not and will not conflict with or contravene any provision
of any charter document or by-law, or any other agreement or obligation to which
PRI is bound.
26. Documentation. At the request of any Party, the other Party or Parties
shall execute and deliver such bills of sale, assignments, licenses and other
documents as may be necessary to fully vest in the Party entitled thereto all
right, title and interest to which it is entitled pursuant to this Agreement.
27. Dispute Resolution.
27.1 Steering Committee. If the Steering Committee is unable to come to
unanimous agreement on any matter presented to it by a Party which any
Party declares and notifies the other Parties in writing is a major matter
as to which the Steering Committee as been unable to come to agreement (a
"Major Matter Notice"), such matter shall be referred to the General
Manage of PE's PerSpective Biosystems Center of Excellence, the President
of ACLARA and the President of the ▇.▇. ▇▇▇▇▇▇▇ Pharmaceutical Research
Institute, for resolution. If the matter is not resolved by such
individuals within fifteen (15) days from the date of the Major Matter
Notice, and the Steering Committee had previously taken a position on such
matter (such as having approved the Research Plan, Functional Requirements
or Project Milestones), the matter shall remain in status quo.
27.2 Other Controversies and Claims. Any claim arising out of or relating
to this Agreement or the validity, enforcement, or breach thereof, shall
be first referred to the General Manager of PE's PerSeptive Biosystems
Center of Excellence, the President of ACLARA and the President of the
▇.▇. ▇▇▇▇▇▇▇ Pharmaceutical Research Institute, for resolution. If such
individuals cannot
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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resolve the matter by agreement of the Parties within fifteen (15) days of
the matter being referred to them by any Party, the controversy or claim
may be referred to arbitration upon written request by any Party given to
the other Parties, and, if referred to arbitration, settled by arbitration
before a single arbitrator in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA") then pertaining,
except where those rules conflict with this provision, in which case this
provision controls. The Parties hereby consent to the jurisdiction of the
Federal District Court for the Northern District of California for the
enforcement of these provisions and the entry of judgment on any award
rendered hereunder. Should such court for any reason lack jurisdiction, any
court with jurisdiction may enforce this clause and enter judgment on any
award. The arbitrator shall be an attorney specializing in business
litigation who has at least 15 years of experience with a law firm of over
25 lawyers or who was a judge of a court of general jurisdiction. The
arbitration shall be held in San Francisco, California and the arbitrator
shall apply the substantive law of State of California, except that the
interpretation and enforcement of this arbitration provision shall be
governed by the Federal Arbitration Act. Within 30 days of initiation of
arbitration, the Parties shall reach agreement upon and thereafter follow
procedures assuring that the arbitration will be concluded and the award
rendered within no more than six months from selection of the arbitrator.
Failing such agreement, the AAA will designate and the Parties will follow
such procedures. Each Party has the right before or during the arbitration
to seek and obtain from the appropriate court provisional remedies such as
attachment, preliminary injunction, replevin, etc., to avoid irreparable
harm, maintain the status quo or preserve the subject matter of the
arbitration. THE ARBITRATOR SHALL NOT AWARD ANY PARTY INDIRECT, PUNITIVE,
MULTIPLE, INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, AND,
WITHOUT LIMITING THE GENERALITY OF SECTION 15 OF THIS AGREEMENT, EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY RIGHT TO SEEK SUCH DAMAGES.
28. Notices. All notices required to be sent by a Party under this Agreement
shall be deemed given: (i) when sent by confirmed facsimile or telecopy; (ii)
one business day after being sent by commercial overnight courier with written
verification of receipt; or (iii) when received after being mailed, postage
prepaid, by certified or registered mail, return receipt requested, to the
Party being notified, at the respective addresses set forth in the first
paragraph of this Agreement, or at such other address which may hereinafter be
designated in writing. All such notices shall be addressed to "President or
General Counsel." Fax numbers for notices shall be as follows, unless changed
by a Party by written notice:
PRI Fax No. ▇▇▇-▇▇▇-▇▇▇▇
PE Fax No. ▇▇▇-▇▇▇-▇▇▇▇
ACLARA Fax No. ▇▇▇-▇▇▇-▇▇▇▇
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Copies of all notices to PRI shall be sent as provided above to:
Office of the General Counsel
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No: ▇▇▇-▇▇▇-▇▇▇▇
29. Counterparts. This Agreement may be executed in one or more counterparts,
each of which when executed shall be an original, but all of which taken
together shall constitute one of the same instrument.
30. Waiver. The delay or failure of any Party at any time or times to require
performance of any provisions of this Agreement shall in no manner affect the
rights at a later time to enforce the same. No waiver by any Party of any
condition or of the breach of any term contained in this Agreement, whether by
conduct, or otherwise, in any one or more instances, shall be deemed to be, or
considered as, a further or continuing waiver of any such condition or of the
breach of such term or any other term of this Agreement.
31. No Third Party Beneficiaries. No third party, including any employee or
consultant of any Party to this Agreement, shall have or acquire any rights by
reason of this Agreement.
32. Miscellaneous. This Agreement sets forth the entire understanding of PE,
PRI and ACLARA concerning the subject matter hereof and supersedes any prior or
contemporaneous agreements relating thereto, including, without limitation,
the Feasibility Agreements. This Agreement may not be amended except by a
writing duly signed on behalf of PE, PRI and ACLARA. This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective legal
representatives, successors and permitted assigns. No Party may assign its
rights or obligations hereunder without prior written consent of the other
Parties, which consent shall not be unreasonably withheld or delayed. Section
and subsection headings are inserted for convenience of reference only and do
not form a part of, and shall not be used in the construction or interpretation
of, this Agreement. This Agreement shall be governed by the laws of the State
of California, U.S.A., without regard to its choice or conflict of law
principles.
[Signature page follows.]
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IN WITNESS WHEREOF, and intending to be legally bound, the Parties hereto have
caused this Agreement to be executed by their duly authorized representatives
as of the first date written above.
THE ▇.▇. ▇▇▇▇▇▇▇
PHARMACEUTICAL RESEARCH
INSTITUTE, A DIVISION OF ORTHO-
THE ▇▇▇▇▇▇-▇▇▇▇▇ CORPORATION ▇▇▇▇▇▇ PHARMACEUTICAL, Inc.
(PE BIOSYSTEMS DIVISION)
By: /s/ [signature illegible] By: /s/ [signature illegible]
----------------------------- ------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ Name: [Illegible]
--------------------------- -----------------------------
Title: Vice President Title: President
--------------------------- ----------------------------
Date: Date: March 23, 99
---------------------------- ----------------------------
ACLARA BIOSCIENCES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Title: President, CEO
---------------------------
Date: March 24, 1999
----------------------------
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EXHIBIT 2.2.1
CURRENT MOLAR CONSUMPTION OF SCREENING TARGETS,
CHEMICAL LIBRARIES AND SUBSTRATES
[*]
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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EXHIBIT 2.2
RESEARCH PLAN
[*]
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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[*]
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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[*]
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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EXHIBIT 2.3
PROJECT MILESTONES
[*]
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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[*]
[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.
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EXHIBIT 5.4
STATEMENT OF YEAR 2000 CONFORMITY
A YEAR 2000 READINESS DISCLOSURE
The (product) has been functionally tested and found to perform successfully in
accordance with PE Biosystem's internal quality test plan requirements for Year
2000 compliance which utilize, as their basis, the British Standards
Institution's (BSI) DISC PD2000-1(1), A definition of Year 2000 Conformity
Requirements, which states, as more fully set forth therein: Year 2000
conformity shall mean that neither performance nor functionality is affected by
dates prior to, during and after the year 2000 In particular.
Rule 1. No value for current date will cause any interruption in
operation.
Rule 2. Date-based functionality must behave consistently for dates
prior to, during and after year 2000.
Rule 3. In all interfaces and data storage, the century in any date must
be specified either explicitly or by unambiguous algorithms or
inferencing rules.
Rule 4. Year 2000 must be recognized as a leap year.
This Year 2000 Readiness Disclosure does not extend to dates beyond the year
2019, is limited to the product listed above, and specifically excludes any Year
2000 related compliance problems which are introduced or caused by (i) any
hardware not developed by PE, (ii) any computer BIOS, (iii) any computer
operating system, or (iv) any application software not developed by PE
Biosystems.
In the event that this Year 2000 Readiness Disclosure is incorrect, PE
Biosystems will, at its option, repair or replace any defective components or
software, provide conforming software upgrades, notify the customer of a
commercially reasonable workaround, or provide a pro-rated refund of the
purchase price upon return of the product. The foregoing sets forth the
customer's sole and exclusive remedy for any Year 2000 non-conformance. This
Year 2000 Readiness Disclosure is subject in all respects to, and is limited
by, PE Biosystems' standard product warranties and limitations of remedies and
liability as set forth in PE Biosystems' standard terms and conditions of sale.
This Year 2000 Readiness Disclosure is PE Biosystems' sole statement regarding
Year 2000 conformance and supercedes and replaces any statement, certification,
verification, representation, warranty, or other agreement that is more
extensive than, contrary to, or inconsistent with, this statement.
________________
Signature
Title, etc.
(1) DISC PD2000-1, A definition of Year 2000 Conformity Requirements. DISC is
a part of the British Standards Institution, BSI, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
(2) ▇▇▇▇▇▇-▇▇▇▇▇ has defined the Year 2019 as the upper limit for assuring
Year 2000 Compliance.
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