MOLECULAR DYNAMICS, INC.
AND
CLONTECH LABORATORIES, INC
RESEARCH, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
SEPTEMBER 11, 1998
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPERATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
RESEARCH, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
THIS RESEARCH, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT ("Agreement"),
effective as of September 11, 1998 ("Effective Date") is made by and between
MOLECULAR DYNAMICS, INC., a Delaware corporation and CLONTECH LABORATORIES,
INC., a California corporation (each, respectively, a "Party" and collectively,
the "Parties").
BACKGROUND
A. MD owns, or has or is developing technology, chemistries,
instrumentation and software for the manufacture and scanning of microarrays of
biological materials including DNA.
B. CLONTECH owns, or has or is developing technologies relating to the
development, selection, manipulation and manufacture of DNA sequences that can
be included into microarrays, technologies relating to hybridization and probe
generation, chemistry and software.
C. CLONTECH and MD desire to jointly develop and manufacture microarrays
of [ * ] and market and sell such jointly developed [ * ] microarrays.
THEREFORE, the Parties agree as follows:
ARTICLE I
DEFINITIONS
"AFFILIATE" means an entity that controls, is controlled by or is under
common control with a Party. For purposes of this definition, "control" shall
mean the possession directly or indirectly, of a majority of the voting power of
such entity (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise); provided that such entity shall
be deemed an Affiliate only so long as such control continues.
"ARRAY SCANNER(s)" means an instrument as listed in Exhibit A hereto, as
developed by MD, and the associated software, specifically having the ability to
rapidly and accurately detect and quantify fluorescently-labeled probes
hybridized or bound to the DNA and/or other biological materials spotted by an
Array Spotter on a glass slide or other substrate.
"ARRAY SPOTTER(s)" means an instrument as listed in Exhibit A hereto, as
developed by MD, and the associated software, specifically having the ability to
spot DNA and other biological materials on a glass slide or other substrate.
"CLONTECH" means Clontech Laboratories, Inc. and its Affiliates.
"CLONTECH IP" means such Intellectual Property Rights and Information
which, during the Term of this Agreement: (i) are owned by CLONTECH or licensed
to CLONTECH as part of Third Party Licenses; (ii) would be infringed by the
development, manufacture, sale, use,
1.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
offer for sale or importation of the Microarrays by MD in accordance with this
Agreement; and (iii) CLONTECH may grant a license or sublicense to MD hereunder
without violating any agreement with a Third Party.
"CUSTOMER" means either: (i) a Third Party or (ii) an Affiliate of CLONTECH
or MD who is an end-user of Microarrays, who purchases Microarrays from CLONTECH
or MD in accordance with this Agreement for use in the Field and in the
Territory.
"DEVELOPMENT PLAN" means the development plan for the Microarrays which
sets forth, without limitation, development and commercialization timelines,
specifications, activities, tasks and other technical and marketing information
relating to the Microarrays and the Project, which plan shall be agreed to by
the Parties and attached hereto as Exhibit B within ninety (90) days of the
Effective Date. The Development Plan may be amended from time to time during
the Term of this Agreement upon written agreement of the Parties.
"FIELD" means the use of the Microarrays in accordance with the following:
(a) the Microarrays may only be used for [ * ] programs, including [ * ]
programs;
(b) the Microarrays may be used only in "[ * ]" studies (meaning
studies which measure the [ * ] of an [ * ] in cells); and
(c) the Microarrays are for [ * ] use only.
For clarification, the Microarrays may not be used for [ * ] for [ * ]
distribution, for [ * ] discovery; nor may the Microarrays be [ * ] to other
parties.
"INFORMATION" means techniques, inventions, practices, methods, knowledge,
know-how, skill, experience and analytical, quality control, marketing,
manufacturing and sales data, whether or not patentable.
"INTELLECTUAL PROPERTY RIGHTS" means trade secrets, patents, copyrights,
know-how and similar rights of any type under the law of any governmental
authority, domestic or foreign, including all applications and registrations
thereto.
"MD" means Molecular Dynamics, Inc. and its Affiliates.
"MD IP" means such Intellectual Property Rights and Information which,
during the Term of this Agreement: (i) are owned by MD or licensed to MD as part
of Third Party Licenses; (ii) would be infringed by the development,
manufacture, sale, use, offer for sale or importation of the Microarrays by
CLONTECH in accordance with this Agreement; and (iii) MD may grant a license or
sublicense to CLONTECH hereunder without violating any agreement with a Third
Party.
2.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
"MECHANICAL FABRICATION METHODS" means any method for the fabrication of
Nucleic Acid Arrays on a solid support by placement of fully synthesized nucleic
acids (clonal polynucleotides or other presynthesized polynucleotides) having
more than [ * ] bases each, solely through mechanically isolated deposition
of such fully synthesized nucleic acids at specific locations on the array.
Without limiting the above, it is understood that the synthesis of an array in
which regions of an array are activated or prepared for placement of materials
by means of controlled direction of electromagnetic energy at a portion of a
support is not a Mechanical Fabrication Method.
"MICROARRAY" means a Nucleic Acid Array jointly developed by CLONTECH and
MD under the Project pursuant to this Agreement, the specifications of which
("Specifications") are set forth in the Development Plan, as such Specifications
may be changed from time to time.
"NUCLEIC ACID ARRAY" means an array of diverse nucleic acids, each
having more than [ * ] bases, at defined locations on a solid support and
fabricated by Mechanical Fabrication Methods, provided that in no part of
such solid support may such diverse nucleic acids be arranged at a [ * ] of
more than [ * ], and all of the nucleic acids in any one Nucleic Acid Array
may represent no more than [ * ] genes.
"PROJECT" means the joint development project undertaken by the Parties
pursuant to this Agreement to develop the Microarrays.
"PROJECT TECHNOLOGY" means any and all inventions, know-how, trade secrets,
formulations, data, technology, processes and information, whether or not
patentable, developed or invented by either Party or by the Parties jointly
pursuant to, in connection with or in furtherance of the Project, and any and
all Intellectual Property Rights therein and thereto.
"TERRITORY" means the [ * ], provided that the Joint Steering Committee
(as defined in Article V) may add additional countries to the definition of
Territory.
"THIRD PARTY(ies)" means any person or entity other than MD or CLONTECH, or
an Affiliate of MD or CLONTECH.
"THIRD PARTY LICENSES" means any and all licenses to Third Party
Intellectual Property Rights which: (i) have been granted to a Party as of the
Effective Date or are thereafter granted to a Party during the Term of the
Agreement; and (ii) would be infringed by the unlicensed manufacture, use, sale,
offer for sale or importation of the Microarrays in the Territory.
ARTICLE II
LICENSES AND INTELLECTUAL PROPERTY RIGHTS
2.1 LICENSE TO CLONTECH. Subject to the terms and conditions of this
Agreement, during the Term, MD grants to CLONTECH a [ * ] (except as
specified below) license, [ * ] with MD, under the MD IP to: (i) develop the
Microarrays in accordance with the Development Plan; (ii) make (only if
permitted by that certain License Agreement dated [ * ] by and between MD and
[ * ] and any
3.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
amendments thereof ("[ * ] Agreement"), use, sell, have sold, offer for
sale and import the Microarrays in the Territory for use in the Field; and (iii)
grant sublicenses to Customers to use the Microarrays in the Territory in the
Field.
2.2 LICENSE TO MD. Subject to the terms and conditions of this
Agreement, during the Term, CLONTECH grants to MD a [ * ] (except as specified
below) license, [ * ] with CLONTECH, under the CLONTECH IP to: (i) develop
the Microarrays in accordance with the Development Plan; (ii) make, use,
sell, have sold, offer for sale and import the Microarrays in the Territory
for use in the Field; and (iii) grant sublicenses to Customers to use the
Microarrays in the Territory in the Field.
2.3 PROJECT TECHNOLOGY. The Parties agree that any Project Technology
shall be owned by the Party which employee(s) invents such Project
Technology, in accordance with United States patent laws with respect to
inventorship. Project Technology that is jointly invented by the employees of
both Parties shall be jointly owned by the Parties ("Joint Inventions").
Decisions regarding the procurement of patents on Joint Inventions shall be
jointly made by the Parties, and the expenses therefor shall be shared
equally by the Parties. Both Parties agree that no assignments, license
grants or any other grant of rights will be made on Joint Inventions without
the written permission of the other Party, said permission not to be withheld
unreasonably. In the case that a Party wishes to assign its ownership
interest in any Joint Invention, it shall notify the other Party in writing
thereof ("Notice") prior to entering into any discussion with a Third Party
concerning assignment of its interest in such Joint Invention. In the event
the other Party wishes to accept assignment of such Party's interest in such
Joint Invention, the Parties shall negotiate in good faith and attempt to
enter into a written agreement for the assignment of the ownership interest
of such Joint Invention for a period of no more than [ * ] days from the date
the Notice is received by the non-assigning Party. If the Parties have not
entered into a written agreement after the expiration of such [ * ] day
period, the Party desiring to assign its ownership interest shall have the
right to assign its ownership interest to a Third Party, provided that the
terms of such transfer to the Third Party may not be more favorable, taken as
a whole, than the terms last offered by the assigning Party to the other
Party.
2.4 THIRD PARTY TECHNOLOGY. Each Party acknowledges that the license
granted to it by the other Party may include rights under Third Party Licenses.
Each Party hereby agrees to abide by the terms and Conditions of such Third
Party Licenses pertinent to such Party as sublicensee of the other Party and
disclosed to such Party during the Term of this Agreement. Breach of the
foregoing covenant by a Party shall be deemed a material breach of this
Agreement by such Party.
2.5 RESERVATION OF RIGHTS. No right, title, or interest is granted,
whether expressly or by implication to any technology or Intellectual Property
Rights owned by either Party, except for the rights and licenses expressly
granted hereunder, and each Party hereby reserves all rights not expressly
granted hereunder. Nor shall anything in this Agreement be deemed to restrict
either Party from exploiting any of its rights not expressly granted to the
other Party hereunder.
2.6 ENFORCEMENT. Each Party agrees to promptly notify each other upon
knowledge of any infringement or misappropriation by a Third Party of the MD IP
or CLONTECH IP the Territory, including Customers who are using the Microarrays
outside the Field. The Parties
4.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
shall consult with each other and agree upon a course of action to xxxxx such
infringement or misappropriation by the Third Party.
2.7 THIRD PARTY PATENT RIGHTS. If a claim, suit or other legal proceeding
is threatened or commenced against MD and/or CLONTECH by a Third Party alleging
that the making, use, selling, offer for sale or importing of the Microarrays
infringes an Intellectual Property Right of the Third Party ("Claim"), or if
either Party becomes aware of any Intellectual Property Rights of a Third Party
that may cover the making, use, selling, offer for sale or importing of the
Microarrays, then each Party will give prompt written notice thereof to the
other Party.
(a) MD shall have the right to defend against or settle any Claim
arising from or relating to the MD IP; provided that: (a) CLONTECH shall
cooperate fully with MD in any defense, settlement or compromise made by MD at
MD's expense; (b) CLONTECH shall not enter into any settlement agreement or
other voluntary resolution of any such Claim without obtaining MD's prior
written consent thereto; and (c) MD shall not enter into any settlement with
such Third Party which would incur any license fees to such Third Party for the
making, using, selling, offer for sale or importation of the Microarrays unless
approved by the Joint Steering Committee pursuant to Section 2.7(iv) below. If
CLONTECH has complied fully with the procedures set forth in this Section
2.7(i)(a)-(b), MD will indemnify and hold CLONTECH harmless from and against any
loss, cost, damage, or other expenses as a result of such Claim.
(b) CLONTECH shall have the right to defend against or settle any
Claim arising from or relating to the CLONTECH IP provided that: (a) MD shall
cooperate fully with CLONTECH in any defense, settlement or compromise made by
CLONTECH at CLONTECH's expense; (b) MD shall not enter into any settlement
agreement or other voluntary resolution of any such Claim without obtaining
CLONTECH's prior written consent thereto; and (c) CLONTECH shall not enter into
any settlement with such Third Party which would incur any license fees to such
Third Party for the making, using, selling, offer for sale or importation of the
Microarrays unless approved by the Joint Steering Committee pursuant to Section
2.7(iv). If MD has complied fully with the procedures set forth in this Section
2.7(ii)(a)-(b), CLONTECH will indemnify and hold MD harmless from and against
any loss, cost, damage, or other expenses as a result of such Claim.
(c) In the event the Parties shall disagree as to whether the Claim
arises from or relates to MD or CLONTECH IP, then the issue shall be decided by
a mutually acceptable independent patent counsel, and the costs incurred in this
regard shall be borne by the losing Party.
(d) If a final injunction is obtained against the making, using or
sale of the Microarrays as a result of a Claim by a Third Party or the Joint
Steering Committee reasonably believes that the Microarrays are likely to become
the subject of a successful claim of infringement, the Joint Steering Committee
shall have the right to direct that: (a) the Microarrays, part thereof, or
method of manufacture or use thereof be modified in such fashion as to avoid any
Third Party Intellectual Property Rights; and/or (b) have a Party or both
Parties enter into a Third Party License to obtain rights under such
Intellectual Property Rights held by such Third Party, in which event any
royalties and/or other payments necessary to obtain or
5.
maintain such Third Party License, including, without limitation, attorneys'
fees and costs in negotiating such Third Party License, shall be included as
Royalty Costs in the Net Revenue calculations provided for in Section 4.5
hereof. In the event that the Joint Steering Committee believes that neither
(a) nor (b) above is a commercially feasible solution, then the Joint Steering
Committee shall notify each Party to cease the making, using, selling, offer for
sale and importation of the Microarrays, in which event this Agreement shall
terminate effective upon the date such notice is delivered.
ARTICLE III
DEVELOPMENT
3.1 OBLIGATIONS OF CLONTECH. CLONTECH hereby agrees to diligently
perform the duties relating to Project as set forth in the Development Plan,
including but not limited to contributing to the Project: (i) its [ * ] of
[ * ] used on CLONTECH's [ * ] as of the Effective Date; (ii) such other [ * ]
that are identified and developed by CLONTECH during the Term of this
Agreement that are useful for the development and manufacture of the
Microarrays; and (iii) other expertise and technology useful for the Project
including but not limited to [ * ] technology. CLONTECH shall commit such
equipment, facilities and scientific and other personnel as required to
perform its duties as set forth in the Development Plan.
3.2 OBLIGATIONS OF MD. MD hereby agrees to diligently perform the
duties relating to Project as set forth in the Development Plan, including
but not limited to contributing to the Project: (i) access to its Array
Spotters and Array Scanners (both [ * ]) at MD's Sunnyvale facilities; and
(ii) and such other technology and expertise useful for the Project,
including but not limited to that relating to [ * ] and [ * ]. MD shall
commit such equipment, facilities and scientific and other personnel as
required to perform its duties as set forth in the Development Plan. In
addition, commencing from the Effective Date and during the Term, at
CLONTECH's request: (a) MD shall [ * ] to CLONTECH [ * ] Array Scanners for
CLONTECH's internal uses at the then prevailing [ * ], or on terms and
conditions as agreed upon by the Parties; and (b) [ * ] to CLONTECH, [ * ],
such number of Array Spotters as shall be reasonably required by CLONTECH for
manufacture of the Microarrays pursuant to this Agreement, provided that: (A)
such Array Spotters may only be used by CLONTECH for the manufacture of the
Microarrays and may not be used by or transferred to Third Parties; (B) the
standard cost of goods of such Array Spotter may be depreciated over [ * ]
months and may be included in MD's [ * ] as defined in Section 4.5; (C)
CLONTECH agrees to abide by any terms and conditions as reasonably set by MD
with regard to the maintenance and use of the Array Spotters; and (D) upon
the expiration or termination of this Agreement for any reason, CLONTECH
shall immediately cease to use and return such Array Spotters to MD at
CLONTECH's expense.
3.3 COOPERATION. Each Party agrees that it will fully cooperate and
assist the other Party with respect to the Project. Each Party shall, at the
request of the other Party, promptly provide such results and data in its
possession relating to the Project or such information
6.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
regarding its activities and progress on the Project as shall be requested by
the other Party from time to time, provided that such information shall be kept
confidential under Article VII.
3.4 OTHER AREAS OF COLLABORATION. Each Party agrees to consider in good
faith such additional areas of collaboration as may be proposed by the other
Party, including but not limited to those areas set forth in Exhibit C hereto.
3.5 PUBLICATION OF DATA. Each Party may request the Joint Steering
Committee (as described in Article V hereto) to approve the publication of any
developments and data resulting from the Project. Unless authorized by the
Joint Development, the Parties agree to keep all data, results and information
relating to or resulting from the Project confidential in accordance with
Section 7.2.
ARTICLE IV
MANUFACTURE, MARKETING AND DISTRIBUTION
4.1 MANUFACTURE. The Parties shall each have certain responsibilities
relating to the manufacture of the Microarrays for sale and distribution
hereunder. CLONTECH shall be responsible for [ * ] of [ * ] of the
Microarrays for the Parties' use in the manufacture of the Microarrays, and
in order to fulfill such responsibilities; CLONTECH agrees to maintain in
effect and good standing during the Term that certain Manufacturing Agreement
dated [ * ] by and between [ * ] and CLONTECH. All other duties relating to
the manufacture of the Microarrays shall be equitably allocated between the
Parties by the Joint Steering Committee in accordance with the respective
expertise or interest of each Party and the activities that are permitted to
be undertaken by each Party in accordance with Third Party Licenses in
effect; provided, however, that MD shall use its commercially reasonable
efforts to extend the rights under the [ * ] Agreement to permit the
manufacture of the Microarrays by CLONTECH pursuant to this Agreement. It is
understood that both Parties will establish core competencies in the
development, optimization and manufacture of Microarrays, and therefore,
during the Term, the Parties will cooperate to equitably allocate
manufacturing responsibilities and further agree to exchange information
regarding manufacture of the Microarrays, including but not limited to
information relating to methods, processes, protocols and procedures
concerning the development, optimization, quality control, production and
manufacture of the Microarrays.
4.2 COMMERCIALIZATION. The Parties agree that commercialization of the
Microarrays shall be in two phases as set forth below:
(a) TEST PERIOD. To facilitate [ * ], product adjustments and
market evaluation, the Parties agree that for the period commencing from the
date Microarrays are first commercially available until [ * ] thereafter
("Test Period"), the Microarrays shall be offered [ * ] to the limited group
of Customers consisting of those [ * ]. During the Test Period, MD and
CLONTECH shall jointly promote, market and educate such Customers in
accordance with a scientifically-
7.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
oriented launch plan ("Launch Plan") devised by the Joint Steering Committee.
All sales made during the Test Period shall be recorded by [ * ], provided
that the revenues from such sales shall [ * ] in accordance with Section 4.5.
On a product-by-product basis, the Joint Steering Committee shall have the
discretion to shorten the Test Period from [ * ] as it deems desirable.
(b) COMMERCIAL SALE PERIOD. After the Test Period, MD and CLONTECH
may each promote, market, sell and distribute the Microarrays to Customers in
the Territory. Each Party shall solely be responsible for its own marketing,
sales and distribution programs relating to the Microarrays and may promote,
sell and distribute Microarrays through any channels selected by such Party,
provided that each Party shall follow any guidelines or rules set by the Joint
Steering Committee. The Parties may, on a case-by-case basis, agree to
co-market and/or co-distribute Microarrays on terms and conditions to be agreed
upon by the Parties in writing.
4.3 PRODUCT MARKINGS AND PACKAGING. The Joint Steering Committee shall
determine all packaging, labels, product literature and advertisements
("Product Materials") for the Microarrays. The Microarrays shall be sold
under a trademark to be agreed to by the Parties ("Combination Xxxx") prior
to first shipment of a Microarray to a Customer, and [ * ] shall [ * ] own
all right, title and interest to such Combination Xxxx and all goodwill
associated therewith. All decisions with respect to registration, use and
enforcement of such Combination Xxxx shall be [ * ] made by [ * ], and all
costs associated therewith shall be [ * ] by [ * ]. Upon expiration or
termination of this Agreement, the Parties shall negotiate and agree upon the
Parties' respective rights to such Combination Xxxx. In addition, the
Product Materials shall be marked with: (i) all patent and other Intellectual
Property Rights notices of MD and/or CLONTECH as applicable to the
Microarrays; (ii) such notices as required for compliance with Third Party
Licenses in the form as approved by the Joint Steering Committee; and (iii)
such MD and CLONTECH trademarks as listed on Exhibit D hereto as determined
by the Joint Steering Committee, provided that the Product Materials will
display, at a minimum, at least one trademark and/or logo of each Party.
Other than expressly permitted herein, no right or license is granted by
either Party to the other to use such Party's name, trademarks or tradenames
without the express written approval the other Party.
4.4 CUSTOMER SUPPORT. Each Party shall be primarily responsible for
providing customer service and support to its own Customers, provided that such
service and support shall conform to the requirements of the plan therefor
("Service and Support Plan") established by the Joint Steering Committee prior
to the first shipment of any Microarray to any Customer by either Party.
Further, each Party shall provide reasonable assistance and support to the other
Party and such other Party's Customers upon request by the other Party or its
Customers, in particular pertaining to the subject of such Party's area of
expertise. It is understood and agreed that each Party will make its reasonable
commercial efforts to provide the equivalent level and quality of customer
service and support to the other Party's Customers as such Party provides to its
own Customers.
4.5 REVENUE SHARING. Each Party shall record all revenue received from
the sale, lease or other transfer of Microarrays on its own income statements.
The Parties agree to
8.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
[ * ] all Net Revenue (whether as net gains or losses) as calculated in
accordance with this Section 4.5 and Generally Accepted Accounting Principles
("GAAP").
As used herein:
"NET REVENUE" means the total gross amounts received by the Parties and
their Affiliates from the sale, lease or other transfer of Microarrays to
Customers minus:
(a) Direct Manufacturing Costs
(b) Manufacturing Overhead Costs;
(c) Royalty Costs; and
(d) returns, packing costs, freight out, taxes or excise duties
imposed, and wholesaler and cash discounts customary in the trade.
"DIRECT MANUFACTURING COSTS" means the direct cost of procuring raw
materials that are identifiable as an integral part of the finished product and
the compensation paid to employees whose time and effort are directly traceable
to the finished product.
"MANUFACTURING OVERHEAD COSTS" means the costs for manufacturing the
finished product which are not included in Direct Manufacturing Costs, such as
maintenance, utilities, rent, capitalized research and development costs,
insurance, depreciation, and property taxes.
"ROYALTY COSTS" means the amount of royalties paid to Third Parties for the
making, using and selling of Microarrays hereunder as required by Third Party
Licenses, which royalties are assessed based on the number of units of
Microarrays sold and which do not include any upfront, lump sum or one time
license fees paid which are independent of the number of units of Microarrays
sold.
The methods for calculating and allocating the above sales and expenses
will be agreed in writing by the accounting departments of each Party for each
quarterly period.
4.6 SALES AND MARKETING COSTS. Unless otherwise agreed to by the Parties,
each Party shall bear its own sales and marketing costs.
4.7 ADJUSTMENT OF [ * ] SHARING. Commencing after the Test Period, a
Party may request that the terms and conditions with respect to [ * ] of the
[ * ] from the sale of Microarrays as set forth in this Agreement be adjusted
if such Party believes in good faith that such terms and conditions create
material [ * ] between the Parties; provided, however, the requesting Party
shall provide the other Party with such request in writing setting forth: (i)
the areas of positive contribution of each Party; (ii) the areas of
misaligned priorities of each Party; and (iii) the [ * ] of the present terms
and condition with supporting documents thereof; and (iv) a proposal of how
to cure the alleged inequities. Upon receipt of the written request by the
non-requesting Party, the Parties shall negotiate in good faith for a period
of no more than ninety (90) days to agree upon a new [ * ] plan; provided,
however,
9.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
in no event shall any new [ * ] plan result in a difference between the [ * ]
received by each party in excess of the ratio of [ * ].
4.8 INVOICE AND SALES REPORT. Each Party shall keep separate and complete
books of account containing records to substantiate the allocation of Net
Revenue between the Parties in accordance with Section 4.5. Each Party shall
within forty-five (45) days after the last day of each calendar quarter provide
the other Party with a written report ("Report") setting forth:
(a) the gross amounts received by such Party for the quarter for the
sale, lease or other transfer of Microarrays; and
(b) a calculation of the Net Revenues and the amount allocable
thereof to other Party in accordance with Section 4.5.
4.9 PAYMENT AND AUDIT. Each Party shall pay to the other Party its
allocated portion of the Net Revenues for each quarter on the same day as the
Report for such quarter is delivered. Each Party ("Auditing Party") shall have
the right, upon reasonable notice to the other Party ("Audited Party"), to have
an independent certified public accountant, selected by such Auditing Party
reasonably acceptable to the Audited Party, audit the Audited Party's records
during normal business hours to verify all records pertaining to the calculation
of the Net Revenues and the amount thereof allocable to the Auditing Party
hereunder; provided, however, that such audit shall not take place more
frequently than once a year and shall not cover records for more than the
preceding four (4) years. The Audited Party shall promptly pay to the Auditing
Party the amount of any underpayment determined in such audit. Any such audit
shall be at the expense of the Auditing Party unless such audit indicates
greater than ten percent (10%) error in payment based on the records and/or
calculations of the Audited Party, in which case such audit shall be at the
expense of the Audited Party and such payment shall bear interest from the date
due at [ * ] plus the prime rate established by the U.S. Federal
Reserve Bank. Each Party shall preserve and maintain all such records and
accounts required for audit for a period of [ * ] years after the calendar
quarter for which the record applies. All information resulting from such
audits conducted pursuant to this Section 4.9 shall be kept confidential
pursuant to Section 7.2.
4.10 MODIFICATIONS TO REPORTING AND PAYMENT SCHEDULE. The Joint Steering
Committee may, from time to time, modify the schedule for the reporting and
payment obligations pursuant to Sections 4.8 and 4.9, including, without
limitation, to require the Report and the payment to be made on a semi-annual
basis.
ARTICLE V
MANAGEMENT
5.1 JOINT STEERING COMMITTEE.
(a) FORMATION AND COMPOSITION. The collaboration and relationship
between the Parties pursuant to this Agreement shall be managed by a Joint
Steering Committee (the "Joint Steering Committee") on which both CLONTECH and
MD shall be equally represented by their respective appointees. The Joint
Steering Committee shall be responsible for providing overall direction,
monitoring progress, managing information exchange between
10.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
the Parties, deciding key strategies and solving problems with respect to
development (including but not limited to product design, development timelines
and allocation of tasks), marketing and sales (including but not limited to
product launch, marketing strategies, pricing, and positioning and promotion
strategies) of the Microarrays. To this end, the Joint Steering Committee may
establish, from time to time, guidelines which shall be followed by the Parties
with respect to the development, manufacture, marketing, and sales of the
Microarrays. The Joint Steering Committee will consist of six (6) members,
three (3) from CLONTECH and three (3) from MD or such greater or fewer number as
the parties may mutually agree upon from time to time, provided that each Party
has equal representation. Each party will inform the other party in writing of
its first appointed members to the Joint Steering Committee no later than thirty
(30) days from the Effective Date. Either Party may remove any of its
representatives and appoint new members to fill any vacancies among its
appointees.
(b) MEETINGS. The Joint Steering Committee shall meet at such
frequency as determined by the Joint Steering Committee, but no less frequently
than once per quarter. The venue shall alternate between the Parties' principle
places of business, unless otherwise agreed to by the Joint Steering Committee.
(c) REPORTS. For the duration of the Project, each Party shall
furnish to the Joint Steering Committee, on a quarterly basis, in confidence
under Article VII, a written report on its progress on the Project, along with
summaries of technical data and results obtained from the Project.
(d) GOVERNANCE. All decisions of the Joint Steering Committee shall
require a majority vote of its members. The Joint Steering Committee shall
strive to reach decisions on a consensus basis. In the event the Joint Steering
Committee is unable to reach a decision on any matter within thirty (30) days
after it is formally presented to the Joint Steering Committee for resolution,
either party may submit such conflict for resolution to the Chief Executive
Officers of CLONTECH and MD. In the event the Chief Executive Officers of
CLONTECH and MD are unable to resolve such conflict within thirty (30) days
after having such conflict submitted to them for resolution, such conflict shall
be submitted to arbitration in San Jose, California administered by the American
Arbitration Association ("AAA") in accordance with the then-current Commercial
Arbitration Rules of the AAA by one (1) impartial arbitrator appointed in
accordance with said rules ("Arbitrator"). The Arbitrator shall apply
California law, without reference to rules of conflict of laws or rules of
statutory arbitration, to the resolution of such conflict. The judgment of the
Arbitrator shall be final and binding on the Parties.
(e) PROJECT MANAGEMENT. It is anticipated that, from time to time,
the Joint Steering Committee will subdivide the Project into smaller
sub-projects ("Sub-projects") in order to facilitate management of the overall
Project. For each such Sub-project, each Party shall appoint one representative
as a co-chair of the Sub-project, who together with the other Party's co-chair,
shall be responsible for managing the Sub-project ("Co-chairs"). The Co-chairs
may be, but are not required to be, members of the Joint Steering Committee.
Each Party will inform the other party in writing of its Co-chair promptly upon
appointment thereof, and each Party shall have the right to replace its Co-chair
from time to time, provided that it promptly notifies the other Party thereof in
writing. The Co-chairs shall report to the Joint Steering Committee for the
duration of the Sub-project.
11.
ARTICLE VI
WARRANTIES
6.1 REPRESENTATIONS AND WARRANTIES OF MD. MD hereby represents and
warrants to CLONTECH as follows:
(a) MD has the corporate power and authority to execute and deliver
this Agreement and to perform its obligations thereunder, and the execution,
delivery and performance of this Agreement have been validly authorized by MD.
(b) MD has the right to grant to CLONTECH the rights and licenses
under the MD IP herein granted.
(c) MD has the right to enter into this Agreement and perform its
obligations hereunder without violating the terms of any agreements with Third
Parties entered prior to the Effective Date.
(d) To the best of MD's knowledge, the MD IP does not infringe any
valid claims of any Third Party patents.
(e) There is no action or proceeding pending or insofar as MD knows,
threatened against MD before any court, administrative agency or other tribunal
which might have a material adverse effect on MD's performance of this
Agreement.
6.2 REPRESENTATIONS AND WARRANTIES OF CLONTECH. CLONTECH hereby
represents and warrants to MD as follows:
(a) CLONTECH has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations thereunder, and the
execution, delivery and performance of the Agreement have been validly
authorized by CLONTECH.
(b) CLONTECH has the right to grant to MD the rights and licenses
under the CLONTECH IP herein granted.
(c) CLONTECH has the right to enter into this Agreement and perform
its obligations hereunder without violating the terms of any agreements with
Third Parties entered prior to the Effective Date.
(d) To the best of CLONTECH's knowledge, the CLONTECH IP does not
infringe any valid claims of any Third Party patents.
(e) There is no action or proceeding pending or insofar as CLONTECH
knows, threatened against CLONTECH before any court, administrative agency or
other tribunal which might have a material adverse effect on CLONTECH's
performance of this Agreement.
6.3 DISCLAIMER OF WARRANTIES. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
12.
AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY TECHNOLOGY,
GOODS, SERVICES, RIGHTS, OR OTHER SUBJECT MATTER OF THIS AGREEMENT, AND EACH
PARTY HEREBY DISCLAIMS ALL IMPLIED WARRANTIES, CONDITIONS OR REPRESENTATIONS OF
ANY KIND, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF PERFORMANCE,
MERCHANTABILITY, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.
6.4 LIMITATION OF LIABILITY. EXCEPT FOR ANY LOSS, LIABILITY, DAMAGE OR
OBLIGATION ARISING OUT OF OR RELATING TO THE DISCLOSURE OF CONFIDENTIAL
INFORMATION IN BREACH OF ARTICLE VII, THE INDEMNITY OBLIGATIONS SET FORTH IN
SECTION 2.7 OR AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, IN NO EVENT
SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY OR ANY OTHER THIRD
PARTY FOR ANY LOST OPPORTUNITY OR PROFITS, COSTS OF PROCUREMENT OF SUBSTITUTE
GOODS OR SERVICES, OR FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR
SPECIAL DAMAGES ARISING OUT OF THIS AGREEMENT, UNDER ANY CAUSE OF ACTION OR
THEORY OF LIABILITY (INCLUDING NEGLIGENCE), AND WHETHER OR NOT SUCH PARTY TO
THIS AGREEMENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THESE
LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY
LIMITED REMEDY.
ARTICLE VII
CONFIDENTIALITY AND PUBLICITY
7.1 PUBLIC RELATIONS AND ANNOUNCEMENTS. The Parties shall agree upon and
issue a press release upon the signing of this Agreement. Thereafter, no Party
shall issue any public announcements concerning the relationship created by this
Agreement without the prior written authorization of the other Party. No
representations shall be made by either Party concerning the other without the
prior consent of the other Party.
7.2 CONFIDENTIALITY. The Parties acknowledge that by reason of their
relationship to each other hereunder, each will have access to certain
information and materials concerning the other's business, plans, customers,
technology, and/or products that are confidential and of substantial value to
that Party, which value would be impaired if such information were disclosed to
Third Parties ("Confidential Information"). For the purposes of this Agreement,
information shall be deemed Confidential Information if such information is
identified as such in writing or with legends or other markings or if
communicated orally, designated as confidential at the time communicated or
within thirty (30) days thereafter. Upon request by either Party, the other
Party will advise whether or not it considers any particular information or
materials to be Confidential Information. Each Party agrees that it will not
use in any way other than expressly authorized or contemplated under this
Agreement, nor disclose to any Third Party, any such Confidential Information
revealed to it by the other Party and will take every reasonable precaution to
protect the confidentiality of such information and with no less restrictive
precautions than it takes to protect its own confidential information. If
Confidential Information is required to be disclosed in response to a valid
order by a court, regulatory authority or other
13.
government body of competent jurisdiction, or if otherwise required to be
disclosed by law, or if necessary to establish the rights of either Party under
this Agreement, the receiving Party shall use commercially reasonable efforts to
provide the disclosing Party with advance notice of such required disclosure to
give the disclosing Party sufficient time to seek a protective order or other
protective measures, if any are available, for such Confidential Information.
Confidential Information does not include information, technical data or
know-how which: (i) is rightfully in the possession of the receiving Party at
the time of disclosure as shown by the receiving Party's files and records
immediately prior to the time of disclosure; (ii) prior or after the time of
disclosure becomes part of the public knowledge or literature, not as a result
of any inaction or action of the receiving Party; (iii) is independently
developed by a Party without the use of any Confidential Information of the
other Party; (iv) is obtained from any Third Party who is authorized to disclose
such data and information without obligation of confidentiality to the
disclosing Party; or (v) is approved for release by the disclosing Party.
7.3 REMEDY. If either Party breaches any of its obligations with respect
to this Article VII, or if such a breach is likely to occur, the other Party
shall be entitled to seek equitable relief, including specific performance or an
injunction, in addition to any other rights or remedies, including money
damages, provided by law.
7.4 AGREEMENT TERMS. Subject to Section 7.1 and the exclusions set forth
in Section 7.2 (i) to (v), the Parties shall treat the terms and conditions of
this Agreement as Confidential Information; provided, however, after written
notification to the other Party, each Party may disclose the existence of this
Agreement and the material terms and conditions hereof under circumstances that
reasonably ensure the confidentiality thereof to: (i) any government or
regulatory authorities, including without limitation the United States Security
and Exchange Commission pursuant to applicable law (excluding, to the extent
legally permitted, disclosure of financial terms in any publicly available
versions of information so-disclosed), (ii) its legal representatives and
advisors (and prospective investors upon approval by the other Party, which
approval shall not be unreasonably withheld), and (iii) to such disclosing
Party's Third Party licensors (excluding financial terms) to the extent required
for compliance with obligations under the Third Party Licenses.
ARTICLE VIII
TERM AND TERMINATION
8.1 TERM. Unless earlier terminated in accordance with this Agreement,
the term of this Agreement shall commence on the Effective Date and continue
in full force and effect for [ * ] years thereafter ("Initial Term").
Thereafter, this Agreement shall be renewed automatically for additional [ * ]
year periods (each a "Renewal Term") unless a Party shall notify the other
Party in writing of its intent to not renew the Agreement no later than
thirty (30) days before the commencement of any Renewal Term. The Initial
Term and any Renewal Terms shall collectively be referred to as the "Term".
8.2 TERMINATION FOR BREACH. The failure by either Party to comply with
any of the material obligations contained in this Agreement shall entitle the
other Party to give the Party in default notice specifying the nature of such
default and stating its intent to terminate this
14.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
Agreement if such default is not cured. If such default is not cured by the
defaulting Party within forty-five (45) days after the receipt of such notice,
the non-defaulting Party may terminate the Agreement upon written notice
thereof, effective upon receipt of such notice by the defaulting Party.
8.3 TERMINATION FOR INSOLVENCY. Either Party may terminate this Agreement
immediately upon delivery of written notice to the other Party (i) upon the
institution by or against the other Party of insolvency, receivership or
bankruptcy proceedings or any other proceedings for the settlement of the other
Party's debts, provided, with respect to involuntary proceedings, that such
proceedings are not dismissed within one hundred and twenty (120) days, (ii)
upon the other Party's making an assignment for the benefit of creditors, or
(iii) upon the other Party's dissolution or ceasing to do business.
8.4 EFFECT OF TERMINATION. Expiration or termination of this Agreement
pursuant to the terms and conditions set forth in this Agreement shall not
relieve the Parties of any right or obligation, including but not limited to any
payment obligations, accruing prior to or upon such expiration or termination.
Upon expiration or termination of this Agreement for any reason, each Party
shall immediately return to the other Party or destroy any Confidential
Information disclosed by the other Party. Except for the provisions of Sections
2.3, 2.7, 3.5, 4.3, 4.9, 6.3, 6.4 and 8.4 and Articles I, VII and IX which shall
survive such expiration or termination, all other rights and obligations of the
Parties shall cease upon expiration or termination of this Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 WITHHOLDING TAXES. Each Party shall be entitled to receive from the
other Party, in cash, the exact amount specified in Section 4.5 of this
Agreement free of any withholding or offsets, except that a Party has the right
to deduct from the payments due the other Party any taxes required to be
withheld on such income by applicable tax laws in the Territory; provided that
such Party shall provide the other Party with appropriate tax receipts for the
deducted amount which the other Party can present to its tax authority and
sufficient for the other Party to receive the corresponding credit to which it
is entitled.
9.2 CURRENCY OF PAYMENTS. All amounts payable to a Party pursuant to this
Agreement shall be made in U.S. Dollars and by wire transfer to the U.S. bank
account(s) specified by such Party from time to time. All sales shall be
computed in the currency in which the sale was made and then converted to U.S.
Dollars. The currency conversion rate shall be the average of the conversion
rates in effect on the last twenty (20) business days of the quarterly period
for which such payment is due, provided that the Parties may agree upon another
method of calculating the conversion rate. The conversion rates to be used in
this Agreement shall be the rates reported in the WALL STREET JOURNAL (Western
Edition). Failure by a Party to timely render payments when due shall be deemed
a material breach of this Agreement.
9.3 COMPLIANCE WITH LAWS. In performing this Agreement, each Party shall
comply with all applicable laws and government regulations at all times,
including but not limited to any
15.
applicable laws and regulations of the U.S. regarding the export or re-export or
release of technology and technical data.
9.4 GOVERNING LAW AND JURISDICTION. All disputes and conflicts arising
from or relating to the subject matter of this Agreement shall be resolved
pursuant to the procedures set forth in this Section 9.4. The Parties shall
endeavor to resolve in good faith any disputes or conflicts arising from or
relating to the subject matter of this Agreement, failing which either Party
shall submit such conflict for resolution to the Chief Executive Officers of
CLONTECH and MD. In the event the Chief Executive Officers of CLONTECH and MD
are unable to resolve such conflict within thirty (30) days after having such
conflict submitted to them for resolution, either Party shall be free to seek
any remedy available under law or equity. This Agreement shall be governed,
controlled, interpreted and deemed by and under the laws of the state of
California and the United States without regard to that body of law known as
conflicts of law; provided that issues of law relating to patents shall be
governed by the laws of the jurisdiction that such patent is in effect. The
exclusive jurisdiction and venue for all actions shall be in the U.S. District
Court for the N. District of California or the State Courts of Santa Xxxxx
County.
9.5 SECTION HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.6 NOTICES. Any notice required or permitted by this Agreement shall be
in writing and in English and shall be sent by prepaid registered or certified
mail, return receipt requested, internationally recognized courier or personal
delivery, addressed to the other Party at the address below or at such other
address for which such Party gives notice hereunder.
Molecular Dynamics, Inc.
Attn: Xxx Xxxxxxx, President & CEO
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Clontech Laboratories, Inc.
Attn: Xxxx Xxxxxx, Director, Marketing
Copy to: Xxxxx X. Xxxxxxxxx, Esq.,
0000 X. Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Such notice shall be deemed to have been given when delivered or, if delivery is
not accomplished by some fault of the addressee, when tendered.
9.7 FORCE MAJEURE. Neither Party shall be considered in default of
performance of its obligations under this Agreement, except any obligation
hereunder to make payments when due, to the extent that performance of such
obligations is delayed by force majeure or contingencies or causes beyond the
reasonable control of such Party or its suppliers, including but not limited to
strike, fire, flood, earthquake, windstorm, governmental acts or orders or
restrictions, failure of suppliers, or any other reason to the extent that the
failure to perform is
16.
beyond the reasonable control and not caused by the negligence or willful
misconduct of the nonperforming Party.
9.8 NONASSIGNABILITY AND BINDING EFFECT. Neither Party shall assign,
charge or encumber any portion of this Agreement without the prior written
approval of the other party, which approval shall not be unreasonably
withheld; provided that, where the assignment is proposed to be made as part
of the transfer of all or substantially all of the assets of the assigning
Party, whether by merger, sale or otherwise, the Parties agree that no
consent by CLONTECH shall be required for an assignment of this Agreement by
MD to [ * ]. Subject to the foregoing sentence, this Agreement shall be
binding upon and inure to, the benefit of the heirs, executors,
administrators, successors and permitted assigns of the Parties.
9.9 PARTIAL INVALIDITY. If any provision of this Agreement is held to be
invalid by a court of competent jurisdiction, then the remaining provisions
shall remain, nevertheless, in full force and effect. The Parties agree to
renegotiate in good faith any term held invalid and to be bound by the mutually
agreed substitute provision in order to give the most approximate effect
intended by the Parties.
9.10 NO WAIVER. No waiver of any term or condition of this Agreement shall
be valid or binding on either Party unless agreed in writing by the Party to be
charged. The failure of either Party to enforce at any time any of the
provisions of this Agreement, or the failure to require at any time performance
by the other Party of any of the provisions of this Agreement, shall in no way
be construed to be a present or future waiver of such provisions, nor in any way
affect the validity of either Party to enforce each and every such provision
thereafter.
9.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
9.12 ENTIRE AGREEMENT. This Agreement, including the Exhibits attached
hereto, constitutes the entire agreement of the Parties with respect to the
subject matter hereof, and supersedes all prior or contemporaneous
understandings or agreements, whether written or oral, between MD and CLONTECH
with respect to such subject matter. No amendment or modification hereof shall
be valid or binding upon the Parties unless made in writing and signed by the
duly authorized representatives of both Parties.
9.13 INDEPENDENT CONTRACTORS. The Parties to this Agreement are
independent contractors. There is no relationship of agency, partnership, joint
venture, employment or franchise between the Parties, and neither Party shall
have any authority to bind the other Party or incur any obligation on the other
Party's behalf.
[Signature Page To Follow]
17.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
The undersigned have executed this Agreement on behalf of CLONTECH and MD,
as applicable, effective as of the Effective Date.
MOLECULAR DYNAMICS, INC. CLONTECH LABORATORIES, INC.
("MD") ("CLONTECH")
By: /s/ Xxx Xxxxxxx By: /s/ Xxxxxxx Xxxx
---------------------------- --------------------------------
Name: Xxx Xxxxxxx Name: Xxxxxxx Xxxx
-------------------------- ------------------------------
Title: President/CEO Title: CEO
------------------------- -----------------------------
18.
EXHIBIT A
LISTING OF ARRAY SPOTTERS AND ARRAY SCANNERS
[ * ]
1.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
EXHIBIT B
DEVELOPMENT PLAN
[ATTACHED]
[ * ]
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
EXHIBIT C
OTHER AREAS OF COLLABORATION
The parties agree to participate in negotiations not covered by this
Agreement, including terms and strategies for a CLONTECH [ * ] for the [ * ].
As used herein, the terms "[ * ]" includes the technology listed in
paragraphs 1 through 4 below, and possibly other technologies deemed
appropriate and agreed to by the parties. The CLONTECH technologies to be
included in the CLONTECH [ * ] shall be negotiated separately, and are
outside the scope of this Agreement.
[ * ]
1.
* Portions of this exhibit have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406.
EXHIBIT D
TRADEMARKS
MD Registered Trademarks: MegaBACE-Registered Trademark-, BioLumin,
FluorImager, ImageQuant, ImageSpace, Molecular Dynamics, the Molecular Dynamics
logo, Personal Densitometer, PhosphorImager, Storm, 3DbyMD, the 3DbyMD logo
Other MD Trademarks: CLSM, FluorSep, Fragment Analysis, MultiProbe, Sarastro,
Xperiment, MTAP, Avalanche, Blizzard, Volcano, ToxArray, FlexArray
CLONTECH Registered Trademarks: ADVANTAGE
Other CLONTECH Trademarks: CLONTECH, TALON, Taqstart, ApoAlert, MTN, SMART,
LIVING COLORS, TET-ON, TET-OFF, 5'-STRETCH, Delta, Atlas, MICRONORTHERN CHIP,
Atlas RNA Chip, PREMIUM RNA & Design, PCR Select, Atlas Vision, CLONCapture,
MARATHON
1.
