CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
MANUFACTURING AGREEMENT
This Agreement is made by and between Roche Molecular Systems. Inc.
("RMS"). having an office at 0000 X.X. Xxxxxxx 000, Xxxxxxxxxx Xxxxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000, a Delaware corporation, X. Xxxxxxxx-Xx Xxxxx
Ltd. (FHLR), a Switzerland limited liability company (both of which are referred
to herein collectively as "ROCHE") and Clontech Laboratories, Inc. ("CLONTECH"),
Palo Alto, CA, a California corporation, hereafter collectively referred to as
"The Parties."
BACKGROUND
A. RMS owns and has the right to grant immunities from suit to practice
under United States Patent No. B1 4,683,202, which describes and claims, inter
alia, a nucleic acid amplification process known as the polymerase chain
reaction ("PCR") process. FHLR owns and has the right to grant immunities from
suit to practice under the foreign counterpart patents and patent applications
corresponding to and claiming priority from United States Patent No. B1
4,683,202.
B. CLONTECH produces and sells DNA molecules for use in various
biological applications and desires to obtain from ROCHE an immunity from suit
to practice the PCR process in the United States to make DNA molecules and to
sell said molecules worldwide.
X. XXXXX is willing to grant such an immunity from suit to CLONTECH to
practice the PCR process solely to manufacture in the United States and to sell
worldwide, specific, individual double-stranded DNA molecules on the terms and
subject to the conditions provided exclusively in this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, ROCHE and CLONTECH agree as follows:
1. DEFINITIONS
For the purpose of this Agreement, and solely for that purpose, the
terms set forth hereinafter shall be defined as follows:
1.1 "EFFECTIVE DATE" shall mean the date on which the last signatory
to this Agreement executes the Agreement.
1.2 "LICENSED PRODUCTS" shall mean specific, individual DNA molecules
produced by means of any method that practices one or more claims of PCR
Technology, which claims have not expired or been held invalid by a court of
competent jurisdiction from which no appeal has been, or may be, taken.
1.3 "NET SALES REVENUE" shall mean gross invoice price of Licensed
Products to an end user customer less a [*] deduction of [*], which [*]
deduction shall be [*] deduction made from the gross invoice price for sales
of Licensed Products and is in lieu of all other deductions (such as, for
example, recalls, returns, taxes,
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
1.
freight, transportation, insurance, packaging, custom duties, and discounts
granted later than at the time of invoicing).
The NET SALES REVENUE of the Licensed Products sold by CLONTECH to any
person, firm or corporation controlling, controlled by, or under common control
with CLONTECH, or enjoying a special course of dealing with CLONTECH, shall be
determined by reference to the Net Sales Revenue which would be applicable under
this Section 1.3 in an arm's length sale by CLONTECH to a third party other than
such person, firm or corporation. Without the prior written consent of ROCHE,
CLONTECH shall not accept any consideration for the sale of any Licensed
Products other than as will be accurately reflected in Net Sales Revenue.
If Licensed Products are sold in combination with, or as a component of,
other products not licensed hereunder ("Combined Product"), Net Sales Revenue
for the purpose of determining royalties on Licensed Products that are part of a
Combined Product shall be calculated by multiplying Net Sales Revenue for the
Combined Product by the fraction A/B, where A is the invoice price of Licensed
Products sold separately and B is the invoice price of the Combined Product. If
Licensed Products are not sold separately, Net Sales Value for the purpose of
calculating royalties hereunder shall be reasonably determined by agreement of
ROCHE and CLONTECH prior to the first commercial sale of the Combined Product.
1.4 "PCR TECHNOLOGY" shall mean the polymerase chain reaction process
which is one of the amplification processes described and claimed in United
States Patent No. B1 4,683,202 and any reissue or reexamination patents thereof,
and those claims in foreign patents and patent applications which correspond to
issued claims in the above '202 patent.
2. GRANT
2.1 GRANT. Upon the terms and subject to the conditions of this
Agreement, ROCHE hereby grants to CLONTECH, and CLONTECH hereby accepts from
ROCHE, a royalty-bearing, nonexclusive and nontransferable immunity from suit
for the term hereof to (i) practice PCR Technology solely in the United States
solely to make and sell Licensed Products in the United States, its territories
and possessions, and (ii) sell Licensed Products worldwide, directly or through
distributors. It is understood that the rights granted herein do not include
any right to have made the Licensed Products. The Parties understand and agree
that no rights are hereby granted, expressly or by implication, under the U.S.
Patent No. 4,965,188 (the '188 patent, covering the performance of nucleic acid
amplification using a thermostable polymerase). An immunity from suit under the
'188 patent may be obtained by purchase of ROCHE-manufactured polymerase or
polymerase licensed by ROCHE for use in PCR or by contacting the Director of
Licensing, Roche Molecular Systems, Inc.
2.2 LIMITATION ON USE. The PCR Technology may be practiced solely
for the foregoing purpose, and for no other purposes whatever, and no other
right, immunity, or license under the PCR Technology or any other patents or
patent applications of ROCHE is hereby granted expressly, impliedly or by
estoppel. CLONTECH understands and agrees that this Agreement is intended to
grant rights to produce specific, individual double-stranded DNA molecules only
and is not intended to grant CLONTECH or anyone purchasing the DNA
2.
molecules from CLONTECH rights to use such DNA molecules in any activity that
practices the PCR process or any other proprietary process of ROCHE.
2.3 Except as specifically permitted in Section 6.4 hereto, CLONTECH
expressly acknowledges and agrees that the immunity from suit granted hereunder
is personal to CLONTECH alone and that CLONTECH shall have no right to
sublicense, assign or otherwise transfer any or all of its rights under the
foregoing immunity from suit. ROCHE reserves the right to practice the PCR
Technology itself, and to license, assign or otherwise transfer the PCR
Technology to others for any purposes whatsoever.
3. FEES, ROYALTIES, RECORDS AND REPORTS
3.1 ROYALTIES. For the rights and privileges granted under this
Agreement, CLONTECH shall pay to ROCHE the following:
(a) a non-refundable, non-creditable license issuance fee in the
amount of [*], to be paid upon execution of this Agreement;
(b) a non-refundable, fully creditable minimum annual royalty
payment of [*], first accrued on January 30 of the year immediately following
the Effective Date and each successive January 30 thereafter during the term of
this Agreement, which royalty is creditable against earned royalties accruing
under subsection (c) below for that calendar year; and
(c) (i) for direct sales to end users of Licensed Products,
earned royalties equal to [*] percent [*] of the Net Sales Revenue; and (ii)
for sales to distributors, earned royalties equal to [*] percent [*] of the Net
Sales Revenue.
3.2 RECORDS. CLONTECH shall keep full, true and accurate books of
accounts containing all particulars which may be necessary for the purpose of
showing the amounts payable to ROCHE by way of royalty or by way of any other
provision under this Agreement. Such books and the supporting data shall be
open at all reasonable times upon reasonable advance notice, for three (3) years
following the end of the calendar year to which they pertain (and access shall
not be denied thereafter, if reasonably available), to the inspection of ROCHE
or an independent certified public accountant retained by ROCHE for the purpose
of verifying CLONTECH's royalty statements or CLONTECH's compliance in other
respects with this Agreement. In the event that the audit reveals an
underpayment of the royalty by more than [*] percent [*] during any one period
being audited, the cost of the audit shall be paid by CLONTECH.
3.3 REPORTS. CLONTECH shall within thirty (30) days after the first
day of January, April, July and October of each year during the term of this
Agreement, deliver to ROCHE a true and accurate report. This report shall give
such particulars of the business conducted by CLONTECH during the preceding
three (3) calendar months as are pertinent to an accounting for royalty under
this Agreement and shall include at least the following:
(a) the quantities of Licensed Products sold during those three
(3) months, including a breakdown of total Licensed Products sold in the U.S.
and outside the U.S.;
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
3.
(b) compilation of xxxxxxxx thereon, and the allowable
deductions therefrom; a determination of the Net Sales Revenue and the
calculation of total royalties thereon; and
(c) the calculation of net royalty payable to ROCHE. If no
royalties are due, it shall be so reported.
The correctness and completeness of each such report shall be attested to
in writing by the responsible financial officer of CLONTECH's organization or by
CLONTECH's external auditor or by the chairman or other head of CLONTECH's
internal audit committee.
Simultaneously with the delivery of each such report, CLONTECH shall pay to
ROCHE the royalty and any other payments due under this Agreement for the period
covered by such report. All payments due ROCHE hereunder shall be sent by the
due date, together with said royalty report, to the following address:
Roche Molecular Systems, Inc.
X.X. Xxx 00000
Xxxxxx, XX 00000
or to any other address that ROCHE may advise in writing.
3.4 PAYMENTS. All amounts payable hereunder by CLONTECH to ROCHE
shall be payable in United States currency. If CLONTECH shall fail to pay any
amount specified under this Agreement after the due date, the amount owed shall
bear interest at the Citibank NA base lending rate ("prime rate") plus [*], from
the due date until paid, provided, however, that if this interest rate is held
to be unenforceable for any reason, the interest rate shall be the maximum rate
allowed by law at the time the payment is due.
4. PRODUCT PROMOTION AND LABELING
4.1 CLONTECH and its distributors may indicate in promotional and
marketing materials for Licensed Products, including advertising, catalogues and
product inserts, that Licensed Products have been produced using PCR Technology
owned by ROCHE but shall clearly disclaim in such materials that Licensed
Products convey any license to practice under any patents within said
Technology. CLONTECH shall provide ROCHE with copies of any promotional or
marketing material that refers to the PCR process or technology prior to
distribution and ROCHE shall have thirty (30) days to comment on said material.
5. TECHNOLOGY NOTIFICATION
5.1 With respect to any invention, improvement or discovery
(hereinafter referred to as "Discoveries" in this Article) of CLONTECH made
after entering into this Agreement, resulting from work conducted under this
Agreement and being applicable to PCR, if CLONTECH decides to license that
Discovery to third parties, then CLONTECH agrees to provide to ROCHE, unless not
possible due to CLONTECH's pre-existing commitments to third parties relating to
said Discoveries, a reasonable opportunity to negotiate a license to use said
Discoveries in PCR-based diagnostic products and services. Such Discoveries
include, but are
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
4.
not limited to, improvements of the PCR process or in the performance
of PCR-based assays, modifications to or new methods of performing PCR-based
assays, and improvements facilitating automation of the PCR process.
5.2 Any agreement reached between The Parties as a result of
CLONTECH's notification to ROCHE of a Discovery pursuant to Section 5.1 hereto
shall be upon terms and conditions negotiated in good faith by The Parties.
5.3 SURVIVAL. The provisions of this Article 5 shall survive any
termination of this Agreement. Any license granted to ROCHE pursuant to Article
5 shall terminate according to its own terms.
6. TERM; TERMINATION
6.1 TERM. Unless terminated earlier as provided in this Agreement,
the term of this Agreement, and all rights and immunities granted by ROCHE to
CLONTECH hereunder, shall extend for a period of five (5) years from the
Effective Date. Thereafter, the Agreement is automatically extended for the
remainder of the term of the patents included in PCR Technology unless ROCHE
notifies CLONTECH in writing of its intent to terminate the Agreement. After
the expiration of the initial five-year term, RMS may terminate this Agreement
at any time and for any reason, upon giving CLONTECH one year's notice of such
termination.
6.2 AUTOMATIC TERMINATION. The licenses granted hereunder to
CLONTECH shall automatically terminate upon (i) an adjudication of CLONTECH as
bankrupt or insolvent, or CLONTECH's admission in writing of its inability to
pay its obligations as they mature; (ii) as assignment by CLONTECH for the
benefit of creditors; (iii) CLONTECH's applying for or consenting to the
appointment of a receiver, trustee or similar officer's appointment without the
application or consent of CLONTECH, if such appointment shall continue
undischarged for a period of ninety (90) days; (iv) CLONTECH's instituting (by
petition, application, answer, consent or otherwise) any bankruptcy, insolvency
arrangement, or similar proceeding relating to CLONTECH under the laws of any
jurisdiction; or (v) the institution of any such proceeding (by petition,
application or otherwise) against CLONTECH, if such proceeding shall remain
undismissed for a period of ninety (90) days, or the issuance or levy of any
judgment, writ, warrant of attachment or execution or similar process against a
substantial part of the property CLONTECH, if such judgment, writ, or similar
process shall not be released, vacated or fully bonded within ninety (90) days
after its issue or levy.
6.3 BREACH. Upon any breach of or default under a material term of
this Agreement by CLONTECH, ROCHE may terminate this Agreement upon sixty (60)
days' written notice to CLONTECH. Said notice shall become effective at the end
of said sixty-day period, unless during said period CLONTECH fully cures such
breach or default and notifies ROCHE of such cure.
6.4 CHANGE OF CONTROL. ROCHE shall have the right to terminate this
Agreement by written notice to CLONTECH upon any change in the ownership or
control of CLONTECH or of its assets. Termination under this Section shall be
effective immediately upon receipt by CLONTECH of ROCHE's notice of termination.
For such purposes, a "change
5.
in ownership or control" shall mean that [*] or more of the voting stock of
CLONTECH become subject to the control of a person or entity, or any related
group of persons or entities acting in concert, which person(s) or entity(ies)
did not control such proportion of voting stock as of the Effective Date of the
Agreement. Analogously, ROCHE shall have the right to terminate this Agreement
upon any transfer or sale of [*] or more of the assets of CLONTECH to another
party.
6.5 NOTICE BY CLONTECH. CLONTECH may terminate this Agreement at any
time on thirty (30) days' written notice to ROCHE.
6.6 REVERSION OF LICENSES. Upon termination of this Agreement as
provided herein, for any reason, all rights and immunities granted by ROCHE to
CLONTECH hereunder shall revert to or be retained by ROCHE. To the extent ROCHE
has licensed technology or know-how of CLONTECH pursuant to Article 5 hereto,
those licenses shall remain in force according to the terms of those agreements.
6.7 At the date of any termination of this Agreement, CLONTECH shall
cease using PCR Technology to make Licensed Products; provided however, that if
termination is pursuant to Section 6.1 and 6.2, CLONTECH may sell Licensed
Products actually in possession of CLONTECH prior to termination, subject to
CLONTECH's duty of paying ROCHE royalties thereon pursuant to Article 3 and
otherwise complying with the terms of this Agreement.
6.8 SURVIVAL OF OBLIGATIONS. CLONTECH's obligations to report to
ROCHE and to pay royalties to. ROCHE in respect of the Licensed Products shall
survive the termination or expiration of this Agreement for any reason.
7. CONFIDENTIALITY-PUBLICITY
7.1 Except as otherwise specifically provided in Section 4.1,
CLONTECH agrees to obtain ROCHE's approval before distributing any written
information, including but not limited to promotional and sales materials, to
third parties which contains or refers to ROCHE or this Agreement. ROCHE's
approval shall not be unreasonably withheld or delayed and, in any event,
ROCHE's decision shall be rendered within three (3) weeks of receipt of the
written information. Once approved, such materials, or abstracts of such
materials, which do not materially alter the context of the material originally
approved may be reprinted during the term of the Agreement without further
approval by ROCHE unless ROCHE has notified CLONTECH in writing of its decision
to withdraw permission for such use.
7.2 Each Party agrees that any financial, legal or business
information or any technical information disclosed to it (the "Receiving Party")
by the other (the "Disclosing Party") in connection with this Agreement shall be
considered confidential and proprietary and the Receiving Party shall not
disclose same to any Third Party and shall hold it in confidence for a period of
five (5) years and will not use it other than as permitted under this Agreement
provided, however, that any information, know-how or data which is orally
disclosed to the Receiving Party shall not be considered confidential and
proprietary unless such oral disclosure is reduced to writing and given to the
Receiving Party in written form within thirty (30) days after oral disclosure
thereof. Such confidential and proprietary information shall include,
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
6.
without limitation, marketing and sales information, commercialization plans
and strategies, research and development work plans, and technical information
such as patent applications, inventions, trade secrets, systems, methods,
apparatus, designs, tangible material, organisms and products and derivatives
thereof.
7.3 The above obligations of confidentiality shall not be applicable
to the extent:
(a) such information is general public knowledge or, after
disclosure hereunder, becomes general or public knowledge through no fault of
the Receiving Party; or
(b) such information can be shown by the Receiving Party by its
written records to have been in its possession prior to receipt thereof
hereunder; or
(c) such information is received by the Receiving Party from any
Third Party for use or disclosure by the Receiving Party without any obligation
to the Disclosing Party provided, however, that information received by the
Receiving Party from any Third Party funded by the Disclosing Party (e.g.
consultants, subcontractors, etc.) shall not be released from confidentiality
under this exception; or
(d) the disclosure of such information is reasonably needed for
use in connection with performing, offering and selling Licensed Products; or
(e) the disclosure of such information is required or desirable
to comply with or fulfill governmental requirements, submissions to governmental
bodies, or the securing of regulatory approvals.
7.4 With the exception of Section 4.1, each party shall, to the
extent reasonably practicable, maintain the confidentiality of the provisions of
this Agreement and shall refrain from making any public announcement or
disclosure of the terms of this Agreement without the prior consent of the other
party, except to the extent a party concludes in good faith that such disclosure
is required under applicable law or regulations, in which case the other party
shall be notified in advance.
7.5 SURVIVAL OF OBLIGATIONS. The obligations of the parties pursuant
to this Article 7 shall survive the termination or expiration of this Agreement
for any reason.
8. COMPLIANCE
8.1 In exercising any and all rights and in performing its
obligations hereunder, CLONTECH shall comply fully with any and all applicable
laws, regulations and ordinances and shall obtain and keep in effect licenses,
permits and other governmental approvals, whether at the federal, state or local
levels, necessary or appropriate to carry on its activities hereunder. CLONTECH
further agrees to refrain from any activities that would have an adverse effect
on the business reputation of ROCHE. ROCHE will advise CLONTECH of any such
activities and CLONTECH will have thirty (30) days to correct such activity.
7.
9. ASSIGNMENT
9.1 This Agreement or any of the rights granted hereunder shall not
be assigned or transferred by CLONTECH (including without limitation any
purported assignment or transfer that would arise from a sale or transfer of
some or all of CLONTECH's business, whether by way of a sale of assets, merger
or other reorganization or business combination). ROCHE may assign all or any
part of its rights and obligations under this Agreement at any time without the
consent of CLONTECH. CLONTECH agrees to execute such further acknowledgments or
other instruments as ROCHE may reasonably request in connection with such
assignment.
10. NEGATION OF WARRANTIES AND INDEMNITY
10.1 CONSTRUCTION. Nothing in this Agreement shall be construed as:
(a) a warranty or representation by ROCHE as to the validity or
scope of any PCR Technology;
(b) a warranty or representation that the practice of the PCR
Technology for the purposes hereunder is or will be free from infringement of
patents of third parties;
(c) an obligation to bring or prosecute actions or suits against
third parties for infringement;
(d) except as expressly set forth herein, conferring the right
to use in advertising, publicity or otherwise any trademark, trade name, or
names, or any contraction, abbreviation, simulation or adaptation thereof, of
ROCHE;
(e) conferring by implication, estoppel or otherwise any
license, right or immunity under any patents, patent applications or other
rights of ROCHE other than those specified in PCR Technology, regardless of
whether such patents and patent applications are dominant or subordinate to
those in PCR Technology, including without limitation, any patents or patent
applications that claim an oligonucleotide which otherwise would be a Licensed
Product;
(f) an obligation to furnish any know-how not provided or
incorporated in PCR Technology; or
(g) creating any agency, partnership, joint venture or similar
relationship between ROCHE and CLONTECH.
10.2 MERCHANTABILITY OR FITNESS. ROCHE MAKES NO EXPRESS OR IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
10.3 INDEMNITY. CLONTECH acknowledges that PCR Technology is
experimental in nature and agrees to take all reasonable precautions to prevent
death, personal
8.
injury, illness and property damage from the use of such technology. CLONTECH
shall assume full responsibility for its use of the PCR Technology and shall
defend, indemnify and hold ROCHE harmless from and against all liability,
demands, damages, expenses (including attorneys' and expert witness fees and
expenses) and losses for death, personal injury, illness, property damage or any
other injury or damage, including any damages or expenses arising in connection
with state or federal regulatory action in view of the use by CLONTECH, its
officers, directors, agents and employees, of the PCR Technology and CLONTECH's
manufacture, use or sale of Licensed Products, including but not limited to use
by CLONTECH's customers, except that CLONTECH shall not be liable to ROCHE for
injury or damage arising solely because of ROCHE's negligence.
11. GENERAL
11.1 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties as to the subject matter hereof, and all prior
negotiations, representations, agreements and understandings are merged into,
extinguished by and completely superseded by it. This Agreement may be modified
or amended only by a writing executed by authorized officers of each of the
parties.
11.2 NOTICES. Any notice required or permitted to be given by this
Agreement shall be given by postpaid, first class, registered or certified mail,
or by courier, properly addressed to the other party at the respective address
as shown below:
If to ROCHE: Roche Molecular Systems, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Corporate Secretary
with a copy to: Roche Molecular Systems, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Licensing Manager
If to CLONTECH:
-----------------------------------
-----------------------------------
-----------------------------------
Attn:
-----------------------------
Either party may change its address by providing written notice to the other
party. Unless otherwise specified herein, any notice given in accordance with
the foregoing shall be deemed given within four (4) full business days after the
day of mailing, or one full day after the date of delivery to the courier, as
the case will be.
11.3 GOVERNING LAW AND VENUE. This Agreement and its effect are
subject to and shall be construed and enforced in accordance with the law of the
State of New Jersey, U.S.A., except as to any issue which by the law of New
Jersey depends upon the validity, scope or enforceability of any patent within
the PCR Technology, which issue shall be determined in accordance with the
applicable patent laws of the United States. The Parties agree that the
9.
exclusive jurisdiction and venue for any dispute or controversy arising from
this Agreement shall be in the United States District Court for the District of
New Jersey if federal jurisdiction exists, and if no federal jurisdiction
exists, then in the Superior Court of New Jersey.
11.4 SEVERABILITY. Nothing in this Agreement shall be construed so as
to require the commission of any act contrary to law, and wherever there is any
conflict between any provision of this Agreement or concerning the legal right
of The Parties to enter into this contract and any statute, law, ordinance or
treaty, the latter shall prevail, but in such event the affected provisions of
the Agreement shall be curtailed and limited only to the extent necessary to
bring it within the applicable legal requirements.
11.5 If any provision of this Agreement is held to be unenforceable
for any reason, it shall be adjusted rather than voided, if possible, in order
to achieve the intent of The Parties to the extent possible. In any event, all
other provisions of this Agreement shall be deemed valid and enforceable to the
full extent possible.
11.6 HEADINGS. The section headings used in this Agreement are
intended principally for convenience and shall not, by themselves, determine the
rights and obligations of The Parties to this Agreement.
IN WITNESS WHEREOF, The Parties hereto have set their hands and seals and
duly executed this Agreement on the date(s) indicated below, to be effective on
the Effective Date.
ROCHE MOLECULAR, INC. CLONTECH LABORATORIES, INC.
By: /s/ Xxxxxx Xxxxx By: /s/ Xxx Xxxx
------------------------------ ------------------------------
Xxxxxx Xxxxx, Ph.D. Xxxxxxx Xxxx, Ph.D
Title: Vice President, Research Title: President & Chief Executive
& Development Officer
Date: 3/28/98 Date: 5/7/98
---------------------------- ----------------------------
10.
