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COLLABORATION AGREEMENT
between
BIOMERIEUX ▇▇▇▇▇, INC.
and
AFFYMETRIX, INC.
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[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
COLLABORATION AGREEMENT
AGREEMENT effective as of September 1, 1996 (the "Effective Date") between
AFFYMETRIX, INC., a California corporation having its principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter
referred to as "AFFX") and BIOMERIEUX ▇▇▇▇▇, INC., a Missouri corporation,
having its principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ (hereinafter referred to as "BMX").
INTRODUCTION
BMX plans to develop DNA probe-based diagnostic systems for a wide variety
of indications, including, but not limited to, microbiology, [ * ], and
genetic screening. The systems will make use of disposable reagent kits which
incorporate DNA probe arrays. BMX intends that this system ultimately be self-
contained and fully automated including sample preparation, amplification,
detection, data analysis and reporting of results. However, BMX may initially
offer a system which is not self-contained or fully automated in order to
achieve early product launch. BMX desires to use AFFX Licensed Core Technology,
as defined below, for detection and identification of bacterial and fungal
micro-organisms and certain viral agents and for determination of the
susceptibility of those micro-organisms and agents to treatment, for use in
Clinical Diagnosis in the Licensed Field, as defined below, with such additional
options for the [ * ] and [ * ] fields as are provided herein.
AFFX has research and development facilities and experienced scientists,
engineers, technical associates and assistants and other personnel and has
rights to and has developed certain AFFX Licensed Core Technology that can be
applied to clinical diagnostics and related areas.
BMX has research and development facilities and experienced scientists,
engineers, technical associates and assistants and other personnel which enable
it to conduct research and development activities in clinical diagnostics and
related areas defined in this Agreement.
AFFX has agreed to manufacture DNA Probe Arrays pursuant to a Manufacturing
Agreement of even date herewith.
Accordingly, AFFX and BMX desire to enter into a collaboration, and, in
consideration of the mutual covenants and promises contained in this Agreement
and other good and valuable consideration, AFFX and BMX agree as follows:
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ARTICLE I. DEFINITIONS
As used in this Agreement, the following terms, whether used in the
singular or plural, shall have the following meanings:
1.1 "Affiliate" of a Party means at any time any corporation or other
active business entity which controls, is controlled by or is under common
control with a Party. For purposes of this Section 1.1, "control" shall mean
direct or indirect ownership of at least 50% of the voting interest or income
interest in a corporation or entity, or such other relationship as, in fact,
constitutes actual control. As of the Effective Date, AFFX represents that it
has no Affiliates actively engaged in business, and BMX represents that the
Affiliates of BMX actively engaged in business are listed in Schedule 6 hereto.
1.2 "AFFX Collaboration Technology" shall mean all Collaboration
Technology developed solely by AFFX employees and/or consultants.
1.3 "AFFX Licensed Core Technology" means Know-how and Copyrights of AFFX
developed during or before the Collaboration, together with any improvements and
related developments which do not constitute Collaboration Technology which are
reasonably useful or necessary or required to develop, use, manufacture,
maintain, incorporate in disposable reagent kits, read and interpret diagnostic
results obtained through use of, DNA Probe Arrays developed in the Collaboration
or based on specifications derived from prototypes so developed, and which AFFX
has the right to legally license hereunder (subject to any third party royalty
commitments), and the patents listed as owned by,
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licensed to or otherwise available to AFFX that are set forth on Schedule 2
attached hereto and made a part hereof as well as all continuations in whole or
in part, divisions, reissues, reexaminations, and foreign counterparts thereof,
and any improvements thereof licensable hereunder before June 1, 2002 and which
do not constitute Collaboration Technology. AFFX will not unreasonably delay
filing to avoid capture by this Agreement. The foregoing shall include
technology licensed by AFFX from third parties for which AFFX has the right to
make the grants herein, subject to reimbursement by inclusion in Fully Loaded
Manufacturing Cost of any out-of-pocket cost of AFFX. In addition, AFFX
Licensed Core Technology shall include such improvements and developments to be
made available pursuant to Section 2.4 hereof.
1.4 "Agreed Budget" and "Agreed Workplan" mean, respectively, the budget
and Workplan for each Contract Year during the Collaboration for collaborative
research to be conducted at AFFX under this Agreement, as reviewed and approved
by the Committee pursuant to Section 2.5. The initial Agreed Budget and Agreed
Workplan are set forth in Schedule 1, to this Agreement.
1.5 "Bacteriology Field" means the field of only (i) detection and/or
identification of bacterial and fungal microorganisms, and (ii) the
determination of antibiotic resistance of such bacterial and fungal
microorganisms, both for use in the Clinical Diagnosis of human disease.
1.6 "BMX Collaboration Technology" shall mean Collaboration Technology
developed solely by BMX employees and/or consultants.
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1.7 "Clinical Diagnosis" means a process in which a sample of fluid or
other material collected from humans is used to aid in diagnosis of one or more
human diseases for communication to such persons or their physicians or other
caregivers for clinical decisions and other clinical uses in connection with
such humans.
1.8 "Collaboration" means the research and development program jointly
conceived, planned, organized, controlled and performed by AFFX and BMX pursuant
to this Agreement.
1.9 "Collaboration Technology" means the Patents, Know-how and Copyrights
developed by the Parties pursuant to the Collaboration. Such technology shall
include and be limited to all technology developed by AFFX pursuant to Agreed
Workplans or otherwise with funding from BMX hereunder and all technology
developed by BMX relating to the adaptation of AFFX Licensed Core Technology for
use in BMX diagnostic instrumentation and systems as the same exist or may be
developed. Such technology does not include the AFFX Licensed Core Technology
as it exists or may be developed outside of the Collaboration, and does not
include the BMX instrumentation and system as it exists or may be developed, nor
the BMX patents and applications referred to in Section 12.2(c).
1.10 "Confidential Information" means all information and materials,
patentable or otherwise, of a Party which is disclosed by or on behalf of such
Party to the other Party, including, but not limited to, DNA sequences, vectors,
cells substances, formulations, techniques, methodology, equipment, data,
reports, know-how, preclinical and clinical trials and the results thereof,
sources of supply, patent positioning and business
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plans, including any negative developments, which do not fall within any of the
exceptions set forth in Section 8.2 of this Agreement, whether or not related to
the Collaboration.
1.11 "Contract Year" means any year commencing on the Effective Date and
ending on a day prior to an anniversary of the Effective Date during the term of
this Agreement.
1.12 "Copyrights" means copyrights of a Party (whether solely or jointly
owned or licensed to such Party), to the extent the same is licensable hereunder
and related to the subject matter of the Collaboration.
1.13 "Development Coordinating Committee" or the "Committee" means the
committee defined in Section 2.2 to aid in coordinating the Collaboration.
1.14 "DNA Probe Array" means any DNA probe array (including, as applicable,
any RNA probe array) designed for use in Clinical Diagnosis in the Licensed
Field.
1.15 "Full-Time Equivalent" or "FTE" means the equivalent of a full-time
technical employee's work time over a 12-month period (including normal
vacations and holidays); the portion of a Full-Time Equivalent year devoted by a
technical employee to the Collaboration shall be determined by dividing the
number of days during any 12-month period devoted by such employee to the
Collaboration by the total number of working days during the 12-month period
(including in each case an appropriate portion of normal vacations and
holidays). As used in this Section 1.15, a "technical employee" shall include
any scientist, engineer, technical associate or assistant and/or other personnel
(whether an employee or consultant) assigned to the Collaboration.
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1.16 "Fully Loaded Manufacturing Cost" means (a) costs [ * ] including
but not limited to, [ * ] on account of the manufacture of the Licensed DNA
Probe Arrays to the extent that [ * ] plus [ * ] being determined in
accordance with United States generally accepted cost accounting practices,
and shall additionally include amounts [ * ] if the Parties so elect.
1.17 "High Density Probe Array" means (i) a DNA Probe Array having a
Probe density of equal to or greater than [ * ] Probes per square centimeter
(Probes/cm(2)), or (ii) a DNA Probe Array having such lesser number of
Probes/cm(2), such Probe Array the subject of an applicable Valid Patent
Claim included in the AFFX Licensed Core Technology issued to AFFX for the
United States, by the European Patent Office of the European Union or for
Japan, or (iii) a DNA Probe Array having fewer
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Probes/cm(2) than included in (i) or (ii) above based on or derived from a
Licensed DNA Probe Array or on prototypes thereof developed in connection with
the Collaboration wherein the Probes are selected making substantial and
material use of information derived from use of DNA Probe Arrays supplied to BMX
by AFFX hereunder or pursuant to the Manufacturing Agreement, which use requires
and is pursuant to the license granted hereby.
1.18 "Joint Collaboration Technology" means the Collaboration Technology
which is jointly developed by employees and/or consultants of AFFX and BMX.
1.19 "Know-How" means unpatented information, patentable or otherwise, of a
Party (whether solely or jointly owned or licensed to such Party) in which such
Party has any proprietary rights recognized under applicable trade secret or
other law, to the extent the same is licensable hereunder and related to the
subject matter of the Collaboration.
1.20 "Licensed Diagnostic Assay" means a disposable diagnostic assay or
reagent kit for use in Clinical Diagnosis, which assay or kit incorporates a
Licensed DNA Probe Array supplied by AFFX to BMX pursuant to the Manufacturing
Agreement or permissibly manufactured by BMX in accordance with Section 3.5 of
the Manufacturing Agreement.
1.21 "Licensed Diagnostic Product" means (i) a Licensed Diagnostic Assay or
(ii) any Other Licensed Diagnostic Product.
1.22 "Licensed DNA Probe Array" means any High Density DNA Probe Array
developed in the Collaboration, or based on specifications derived from
prototypes so developed, in all cases the manufacture, use, sale or importation
of which is subject to
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the AFFX Licensed Core Technology or AFFX Collaboration Technology licensed to
BMX hereunder.
1.23 "Licensed Field" means the field which encompasses only (i) the
Bacteriology Field and (ii) the field of detection, identification and/or
determination of resistance to treatment of four viral agents commonly included
in bacteriology testing, to be elected by BMX in accordance with Section 4.5,
for use only in Clinical Diagnosis. [ * ] Research product applications are
specifically excluded from the Licensed Field.
1.24 "Major Market Country" shall have the meaning set forth in Section
5.7(c)(i).
1.25 "Manufacturing Agreement" means the Manufacturing Agreement entered
into by the Parties concurrently herewith, as the same may be modified, amended
or supplemented from time to time.
1.26 "Net Sales" means, with respect to any Licensed Diagnostic Assays for
a given period, the aggregate of [ * ]. No
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[ * ] except as permitted pursuant to clauses (a), (b), (c) and (d) of the
foregoing sentence. Net Sales shall not include any transfer between BMX and
any of its Affiliates for resale. In the event that BMX or any of its
Affiliates shall make any transfer of Licensed Diagnostic Assays to third
parties for other than monetary value in whole or in part, such transfer
shall be considered a sale hereunder for accounting and royalty purposes.
Net Sales for any such transfers shall be determined on a country-by-country
basis and shall be the [ * ]
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[ * ] Notwithstanding the foregoing, no transfer of Licensed Diagnostic Assays
for test or developmental purposes or as samples shall be considered a part
of Net Sales unless such transfer is for monetary value.
1.27 "Other Licensed Diagnostic Product" means any instrument, reader,
software, peripheral equipment or other product(s), excluding Licensed
Diagnostic Assays and DNA Probe Arrays, used in connection therewith in the
Licensed Field in connection with Licensed Diagnostic Assays to permit,
facilitate or otherwise effect interpretation or diagnosis, or otherwise to
carry out related operations or maintenance, which incorporates or is otherwise
subject to AFFX Licensed Core Technology or AFFX Collaboration Technology
licensed to BMX hereunder.
1.28 "Party" means AFFX or BMX; "Parties" means AFFX and BMX.
1.29 "Patents" or "Patent Rights" means patents and patent applications of
a Party (whether solely or jointly owned or licensed to such Party), to the
extent the same is licensable hereunder and subject to any applicable
limitations.
1.30 "Probes" means oligonucleotides selected for use in the DNA Probe
Arrays.
1.31 "Project Director" means either of the senior scientists for the
Collaboration designated from time to time by AFFX or BMX.
1.32 "Related Funded Activities" are as defined in Section 3.3 of this
Agreement.
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1.33 "Valid Patent Claim" means a claim of an unexpired Patent which shall
not have been withdrawn, canceled or disclaimed, nor held invalid or
unenforceable by a court of competent jurisdiction in an unappealed or
unappealable decision, or the claim of a Patent application which claims
priority to a date not more five (5) years earlier.
1.34 "Workplan" means any plan for collaborative research to be conducted
under this Agreement, as provided in Section 2.5. Initial Workplans are set
forth in Schedule 1 to this Agreement.
ARTICLE II. THE COLLABORATION
2.1 PURPOSE. The purpose of the Collaboration shall be to collaborate on
the further development and application of AFFX's existing AFFX Licensed Core
Technology for use in and/or with Licensed Diagnostic Assays in the Licensed
Field and otherwise as provided herein. The initial focus of the Collaboration
shall be to develop Licensed DNA Probe Arrays for use in Licensed Diagnostic
Assays in conjunction with the Other Licensed Diagnostic Products which read and
interpret such assays, for use in the Licensed Field. BMX shall contribute its
expertise in the general area of clinical diagnostics and its significant
resources to adapt and apply AFFX Licensed Core Technology and Collaboration
Technology and diligently develop the Licensed Diagnostic Assays for the
Licensed Field. The Collaboration and its purpose may be extended pursuant to
the options provided in Section 5.3, subject to the terms thereof.
2.2 COMMITTEE. The parties will form the Development Coordinating
Committee (the "Committee") to aid in coordinating
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their joint collaborative effort to adopt and develop AFFX Licensed Core
Technology for use in diagnostic systems of BMX for use in Clinical Diagnostics
in the Licensed Field. BMX will propose specific products for development in
accordance with the terms of this Agreement. The Committee will have general
responsibility for directing the research effort of the Collaboration and
monitoring the work done and costs incurred pursuant to the Collaboration for
such products. The Committee shall be composed of such representatives of AFFX
and BMX as each shall respectively appoint, and each Party by its
representative(s) shall cast one vote on the Committee. A quorum shall consist
of at least one Committee representative from each Party. The Committee shall
act only with the concurring votes of both Parties. A Party's representatives
shall serve at the discretion of such Party and may be substituted for or
replaced at any time by such Party. The Committee shall meet at least quarterly
per Contract Year during the term of the Collaboration. The site of such
meetings shall alternate between the offices of AFFX and BMX, or be arranged by
video conference (or any other site mutually agreed upon by the Parties). The
proceedings of all meetings of the Committee shall be summarized in writing and
sent to both Parties.
2.3 FACILITIES. The Collaboration shall be conducted at and/or
coordinated from the facilities of each Party under the supervision and
direction of its Project Director. Each Party shall be responsible for the
administrative management and fiscal control of the activities for the
Collaboration conducted from its facilities.
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2.4 COMMITMENT. The development portion of the Collaboration will entail
an initial commitment of each party of not less than three (3) years. Following
completion of the initial commitment, AFFX will continue to collaborate, at the
expense of BMX in accordance with the annual Agreed Budgets and Workplans (and
otherwise in accordance with the Manufacturing Agreement) in the ongoing efforts
of BMX to develop and place on the market Licensed Diagnostic Assays and such
Other Licensed Diagnostic Products as may be required for their use. In this
connection, and pursuant to the Manufacturing Agreement as applicable AFFX shall
use reasonable efforts, on a timely basis, to advise BMX of such improvements
and developments included in AFFX Licensed Core Technology and to make the same
available to the Collaboration and for inclusion in Licensed Diagnostic
Products, and further shall use reasonable efforts to obtain for BMX, in the
event it becomes necessary for BMX to assume any responsibilities for
manufacture, the right to use any third-party intellectual property necessary
for such manufacture to the extent and on the same terms as the same is
available to AFFX. The Parties recognize that in certain cases third parties
may decline to allow such extension of rights, in which case the Parties will
consult so as to obtain a reasonable solution.
2.5 AGREED BUDGETS AND WORKPLAN. In consultation with AFFX
representatives, BMX representatives will prepare, for each Contract Year,
Workplans for work to be done at BMX and AFFX facilities in pursuit of the
collaboration and will prepare for such period a budget for work to be done at
AFFX ("Budget"). Such annual Workplans and Budget shall be submitted to the
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Committee sufficiently in advance to allow adequate discussion and comment and
shall be approved by the Committee at least three (3) months prior to the
commencement of the Contract Year to which they pertain. All Workplans
including the work to be performed at BMX facilities shall be subject to review
by the Committee; and the Workplan and Budget relating to work at AFFX shall be
subject to written approval by the Committee (the "Agreed Budget" and "Agreed
Workplan"). The Agreed Budget and Agreed Workplan for the first Contract Year
and the Workplan for work to be done at BMX for the first Contract Year are
annexed hereto as Schedule 1. Within a given Contract Year, all material
changes to the Agreed Budget and Agreed Workplan and the Workplan for work to be
done at AFFX shall require the written consent of both Parties, which consent
shall not be unreasonably withheld. The Parties acknowledge that it may be
necessary to make changes to Workplans during the course of the Collaboration
and will consider in good faith any changes required for technical reasons or to
avoid waste or unnecessary expenditures.
2.6 REPORTS. AFFX and BMX shall each provide the Committee and the other
Party with written progress reports summarizing the technical progress of the
Collaboration on a quarterly basis within thirty (30) days after the end of each
consecutive three (3) month period during each Contract Year so long as the
Collaboration continues. AFFX shall similarly keep the Committee and BMX
informed of all improvements and developments of the AFFX Licensed Core
Technology that may be relevant to the Collaboration; provided, however, that
AFFX shall not be obligated to report any manufacturing technology to BMX under
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this provision. Each Party shall also provide the Committee and the other Party
with additional oral progress reports as requested from time to time by the
Committee or the other Party. The Parties will further report on a mutual basis
to track know-how ownership and use, determine whether and when know-how may
have entered the public domain, determine ownership of Collaboration Technology
and resolve similar matters of mutual concern.
2.7 STAFFING. Each Party shall, as soon as practicable, assemble a team
of scientists, engineers, technical associates, consultants, and/or assistants
and shall designate a Project Director of its own to manage its activities in
the Collaboration, including its implementation of applicable Workplans.
(a) AFFX shall initially make available a minimum of [ * ] Full-Time
Equivalent ("FTE") scientific staff, whether employees or consultants, to the
Collaboration, and in consultation with the Committee AFFX shall use good
faith efforts to make available such additional scientific staff, services
and facilities as the Agreed Budget and Agreed Workplan currently in effect
may require, subject to reimbursement at the FTE funding level set forth in
Section 3.1 and subject further to reasonable recognition of the other plans,
obligations and programs of AFFX to the extent implementation of such plans,
obligations and programs is reasonably consistent with the burdens and
obligations of AFFX hereunder. BMX shall use all reasonable efforts to avoid
requests for additional staff or reductions in staff that cause irregular
fluctuations of Collaboration staff at
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AFFX. BMX shall give twelve (12) months notice of any reduction in AFFX
staffing for the Collaboration. To the extent that such twelve (12)-month
notice is not given, BMX shall pay at the pre-notice FTE support level for the
time equal to the difference between the notice period and twelve (12) months.
AFFX shall not be obligated to assign any staff to the Collaboration that are
not being funded in accordance with the Agreed Budget.
(b) BMX will carry out a collaborative effort to adapt and develop
its diagnostic technology and systems for use with AFFX Licensed Core Technology
in the Licensed Field. BMX may, with reasonable advance notice and with the
approval of the Committee, arrange that members of its own scientific staff work
directly with AFFX employees at AFFX facilities and request AFFX to assign
additional qualified staff to the Collaboration, all at BMX expense. The
Parties expect that at least one BMX employee will be stationed at AFFX for such
efforts. The Parties recognize that such individuals may be required to execute
an adequately protective confidentiality agreement in such connection, which
agreement shall otherwise be in a form reasonably acceptable to the parties and
shall include restrictions on communication by such BMX employee of appropriate
information to BMX.
2.8 INSPECTION. BMX shall have the right to arrange for its employees and
consultants involved in the Collaboration, and other designated employees as it
deems appropriate, to visit AFFX's facilities at BMX's expense to make all
appropriate inquiries and inspections with respect to the Collaboration,
including verification of compliance with applicable provisions
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of Article 2 and Section 3.5, and to discuss the implementation of any
applicable Workplan in detail with AFFX's technical personnel. BMX may also
request that certain employees and consultants of AFFX travel to BMX facilities
at BMX expense in order to assist BMX in such inquiries and inspections within
Agreed Budgets, and AFFX, in its reasonable discretion, shall endeavor to
accommodate such requests. AFFX shall have an independent right, at its
expense, to arrange for its employees and consultants involved in the
Collaboration to visit BMX's facilities and discuss AFFX concerns including any
applicable Workplan and implementation thereof with BMX's technical personnel.
All such visits by either Party to the facilities of the other shall be on
mutually convenient dates and during mutually convenient business hours and
shall not unreasonably interrupt the operations of the other Party, provided,
however, that such other Party shall use reasonable efforts to accommodate such
visits.
2.9 PATENT ASSIGNMENT AND CONFIDENTIALITY AGREEMENTS. Each Party shall
require each of its employees and consultants assigned to the Collaboration to
execute an agreement for the assignment of inventions and for the protection of
Confidential Information in such reasonable form as may from time to time be
used by such Party and approved by the other Party.
2.10 RESOLUTION OF IMPASSE. In the event that the Committee is unable to
reach a decision by unanimous action with respect to any matter and such
inability continues for a period of forty-five (45) days after the date on which
the matter is first submitted to the Committee, each Party shall refer the
matter to
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the chief operating or executive officers of AFFX and BMX for resolution. Each
Party shall set forth in writing a proposed solution to the impasse and, if a
compromise solution is not achieved within fifteen (15) days after the date on
which the matter is referred to the chief operating or executive officers,
either Party may request that the more suitable of the two proposed solutions as
finally submitted by the Parties be determined and adopted (without alteration)
pursuant to arbitration as provided in Section 14.1. Any such arbitration shall
be on an expedited basis. The Parties shall use reasonable efforts to maintain
the Collaboration pending conclusion of the arbitration and the arbitrators may
direct by interim award or otherwise how applicable time periods of the
Collaboration and of this Agreement may be adjusted to permit protection of the
rights of the Parties hereunder.
ARTICLE III. FUNDING
3.1 COLLABORATION FUNDING. BMX shall fund the research work at AFFX
pursuant to the Agreed Budget and Agreed Workplan on an annual basis at a
level of not less than [ * ] FTEs at AFFX's facility for a period of not less
that [ * ] years. BMX may request that AFFX assign additional qualified
staff to the Collaboration, and AFFX shall endeavor to meet such requests,
subject to reasonable notice and increased funding to cover added FTEs. BMX
shall fund the technical support development efforts at AFFX at an initial
rate equal to [ * ] per budgeted FTE per Contract Year in accordance with the
Agreed Budget and Agreed Workplan. BMX may request that such
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FTE support be based on fractional time of individuals at AFFX. The Parties
recognize that BMX's FTE support requirements at AFFX will vary, and that
from year to year BMX's budgeted support may vary by [ * ] BMX shall
increase its funding at the foregoing rate to meet any additional
requirements of an Agreed Budget and Agreed Workplan in excess of [ * ]. The
yearly budgeted amount shall be paid to AFFX in equal monthly installments,
the first such installment being payable upon execution of this Agreement and
the remaining installments being payable on the first day of each month
during each Contract Year thereafter. AFFX shall devote such FTE resources
as are required to perform its respective tasks in the Agreed Workplan, up to
the AFFX FTE resources as in the Agreed Budget, subject to further assignment
by the Committee in the event of over allocation of resources. After the
first two (2) years of the Collaboration and annually thereafter, the rate of
funding per FTE shall be adjusted, as necessary, to reflect the actual FTE
cost to AFFX. AFFX will obtain concurrence from its independent auditors as
to any such change in costs, if required by BMX. Additional resources shall
be allocated, subject to reasonable notice, as necessary to accommodate
Agreed Workplans, at the expense of BMX. BMX shall also fund at its sole
expense its own FTEs and all development efforts at BMX facilities in
furtherance of the Collaboration.
3.2 DIRECT EXPENSES AND CAPITAL FUNDING FOR EQUIPMENT. BMX shall
reimburse AFFX for any project specific direct expenses (such as manufacture of
Additional DNA Probe Arrays, except to the extent otherwise provided under
Section 4.2 herein) and any
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capital equipment required originally for the Collaboration (costing over
$10,000) as authorized by the Committee, provided that such expenses have not
otherwise been or will not otherwise be reimbursed. For example, AFFX and
BMX may mutually agree on direct reimbursement for an item of capital
equipment (excluding DNA Probe Array manufacturing assets) to be used in the
development phase or may decide to load such costs into the cost per Licensed
DNA Probe Array, but not both. If BMX and AFFX agree to reimburse such
equipment through loaded costs of the DNA Probe Arrays, BMX shall reimburse
any unreimbursed costs if use of such equipment is discontinued before
recovery of the cost of such equipment provided that such discontinuance is
otherwise than for fault of AFFX. In the absence of agreement as to a
different mode of reimbursement, such an authorized capital expenditure
required for development work shall be directly reimbursed. Capital
expenditures and costs related to manufacture shall be paid or financed by
AFFX and shall be [ * ] In the event a given capital asset may have utility
during both the development and manufacturing phases or may be useful both
for purposes of the Collaboration and other activities of AFFX the Parties
shall negotiate in good faith the manner in which relevant costs shall be
borne and allocated. In the absence of agreement, each Party shall set forth
a proposed allocation of the relevant costs between the development and
manufacturing phases, and such proposals shall be submitted for arbitration
on an expedited basis as provided in Section 14.1. The arbitrator shall
select one proposal without alteration, which proposal
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shall be adopted by the Parties. Any investment in equipment at BMX facilities
shall be borne solely by BMX.
3.3 RELATED ACTIVITIES. Subject to the determination of the Committee
that such activities are related to the objectives of the Collaboration, up to
twenty-five percent (25%) of each Contract Year's total FTE funding at AFFX
shall be allocated by the Committee to fund technology development activities
which indirectly support the Collaboration (the "Related Funded Activities");
provided, however, that in no event shall such allocation exceed the funding
allocable to one FTE.
3.4 OTHER EXPENDITURES. Except as provided in Sections 3.1 and 3.2
hereof, each Party shall bear its own expenses in connection with the
Collaboration.
3.5 MILESTONE PAYMENTS. BMX will pay to AFFX a nonrefundable payment of
[ * ] within thirty (30) days of signing this Agreement. Additional
payments, totalling [ * ] in the aggregate, shall be paid within thirty (30)
days of notice of completion of each of the following milestones, or in the
case where BMX is the first Party aware of the completion of the milestone,
then thirty (30) days after such completion, which milestones may be met and
for which the payment shall become due without regard to any particular order:
(a) [ * ] upon completion of [ * ] as determined in accordance with
criteria set forth in Schedule 3;
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(b) [ * ] upon agreement by the Committee regarding [ * ] Such
payment shall in no event be made later than six (6) months after the
Effective Date of this Agreement;
(c) [ * ] upon achievement of [ * ] Such payment will be made in
ten (10) months if [ * ] within three (3) months after the Effective Date;
(d) [ * ] upon [ * ]
(e) [ * ] upon the [ * ]
(f) [ * ] upon
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[ * ] whichever is first;
(g) [ * ] upon receipt of [ * ] and
(h) [ * ] upon receipt of [ * ]
Any late payments of amounts due hereunder shall bear interest at the rate of
[ * ] percentage points above the prime interest rate quoted by the Bank of
America on the unpaid amounts for the period of late payment.
ARTICLE IV. DEVELOPMENT OBLIGATIONS
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4.1 GENERAL OBLIGATIONS. BMX shall have responsibility for over-all
system planning and development, including, without limitation, instrument
development, integrated device development, amplification technology
development, DNA Probe Array packaging, regulatory approval and marketing, and
shall use commercially reasonable efforts to commercialize products pursuant to
this Agreement. In a manner responsive to over-all planning needs, AFFX shall
assume primary responsibility for DNA Probe Array manufacturing process
development and DNA Probe Array production, and the Parties shall share the
tasks of Probe selection, DNA Probe Array design, optimization and assay
development. BMX will have primary responsibility for all other aspects of the
development. Drawing on the work of this Collaboration and subject to
priorities by the Committee, BMX shall be free to develop Specifications for all
products within the Licensed Field and to arrange for manufacture, according to
the Manufacturing Agreement, of the corresponding Licensed DNA Probe Arrays
under the Manufacturing Agreement.
4.2 SUPPLY OF DNA PROBE ARRAYS. During the development phase of the
Collaboration and for use by BMX and AFFX in the Collaboration's development
efforts, AFFX shall provide, at no additional charge to BMX, [ * ] DNA Probe
Arrays per each fully funded AFFX FTE in the first Contract Year, [ * ] DNA
Probe Arrays for each fully funded AFFX FTE in the second Contract Year, and
[ * ] DNA Probe Arrays for each fully funded AFFX FTE in the third and each
subsequent Contract Year, for use in connection with research and development
pursuant to the Collaboration. Such DNA Probe Arrays
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shall be packed by AFFX for shipment as diced wafers as reasonably directed
by BMX and reasonably acceptable to AFFX. During the development phase BMX
may purchase additional DNA Probe Arrays ("Additional DNA Probe Arrays") for
such use [ * ] and AFFX shall use reasonable efforts to comply with
requested schedules for delivery. DNA Probe Arrays and Additional DNA Probe
Arrays shall be supplied in batch sizes of not less than one hundred (100)
DNA Probe Arrays per order. AFFX shall not be obligated to supply more than
[ * ] Additional DNA Probe Arrays [ * ] in any Contract Year, or in the
aggregate more than [ * ] Additional DNA Probe Arrays, and any greater
numbers shall be supplied [ * ] DNA Probe Arrays required for clinical trials
of BMX products will be supplied pursuant to the Manufacturing Agreement [ * ]
BMX and its designated Affiliates shall have the right to use the DNA Probe
Arrays supplied under this Section in the Licensed Field for internal DNA
Probe Array diagnostic product research (excluding research as to the matters
referred to in Section 5.6), product development, process development and
manufacturing purposes in furtherance of the Collaboration. Except for
transfers to Affiliates contemplated by the foregoing sentence, BMX shall
have no right to sell or transfer the DNA Probe Arrays, including, without
limitation, Additional Probe Arrays, provided under this Section 4.2 to third
parties without the express written permission of AFFX. It is understood
that BMX intends to work
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with a nonaffiliated collaborator to develop amplification, related technology
and assays for use in association with Licensed Diagnostic Assays, and AFFX will
permit the use of Licensed DNA Probe Arrays in such work, together with such
exchange of information as may be reasonably necessary therefor, subject to
AFFX' reasonable requirements as to preservation of confidentiality.
4.3 TRANSITION FROM DEVELOPMENT TO MANUFACTURE. The Collaboration shall
continue as provided herein during the term of initial commitment and the term
of any Agreed Budget and Agreed Workplan and thereafter, unless terminated
pursuant to Section 9.2. The DNA Probe Arrays and prototypes for such arrays
developed in the Collaboration shall serve as the basis for specifications for
manufacture of Licensed DNA Probe Arrays, as provided in the Manufacturing
Agreement.
4.4 BMX SUPPLY. If requested by AFFX, BMX will supply automated readers
and related products (or major components thereof to be provided at BMX' sole
reasonable discretion) developed in the Collaboration for use in agreed
markets as mutually determined and outside the Licensed Field or other fields
of activity of BMX or its Affiliates in accordance with normal commercial
terms and conditions on the basis of an arm's length transfer price which
shall reflect [ * ] together with an additional [ * ] to be negotiated in
good faith by the Parties, substantially equivalent to the royalty, if any,
to be received
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by AFFX in connection with sale of AFFX High Density Probe Assays, based on
similar considerations of cost savings in manufacture and product transfer
price, and taking into account whether or not there are BMX Patent Rights
covering such products. In no event will BMX be expected to supply readers
for use in the Licensed Field or for use in the [ * ] or [ * ] field,
regardless of the outcome of negotiations as to those Fields under Sections
5.3 and 5.4. In connection with any sale of such readers and other products
to AFFX, and subject to disclaimer of indemnity to the extent of any matter
within the Scope of AFFX Licensed Core Technology which may be incorporated
therein, BMX shall indemnify AFFX for any infringement of any third party
intellectual property rights resulting from the manufacture and/or sale of
any such readers or other product to AFFX or the use or sale by AFFX of such
reader or other product in the manner authorized above by BMX, up to the
amount of the payments received.
4.5 VIRAL AGENT ELECTION. Within [ * ] of the Effective Date of this
Agreement, BMX shall notify AFFX in writing of the [ * ] viral agents of
those typically included in bacteriology test panels that it is electing for
incorporation into the Licensed Field, such viral agents to be selected from
those listed on Schedule 4 hereto. If BMX has not selected [ * ] viral
agents within such period, AFFX shall be free to transfer rights to any
unselected agents to third parties and shall have no further obligation to
BMX with regard thereto.
ARTICLE V. OWNERSHIP; TECHNOLOGY RIGHTS
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5.1 OWNERSHIP OF COLLABORATION DEVELOPMENTS. AFFX shall own all AFFX
Collaboration Technology. Such ownership shall be subject to the license and
rights as provided in Sections 5.2(a) and (b). BMX shall own all BMX
Collaboration Technology. Such ownership shall be subject to the license and
rights as provided in Section 5.2(c). AFFX and BMX shall own jointly all Joint
Collaboration Technology, subject to the provisions of Section 5.2(d) and (e).
5.2 LICENSES.
(a) Subject to the provisions of Sections 5.5-5.7 regarding
exclusivity and other matters, AFFX hereby grants BMX the following licenses for
the Licensed Field only, which shall be exclusive, subject to Sections 5.5 and
5.7, for the Bacteriology Field and non-exclusive for the balance of the
Licensed Field:
(i) A worldwide license under the Patent Rights, Know-How and
Copyrights included in AFFX Licensed Core Technology and AFFX Collaboration
Technology to import, use, distribute and sell (and copy and display in
connection therewith as applicable) Licensed DNA Probe Arrays, and to
incorporate or cause the incorporation of such Licensed DNA Probe Arrays,
through processes of manufacture, into Licensed Diagnostic Assays, and to
manufacture and have manufactured Licensed Diagnostic Assays (other than the
Licensed DNA Probe Array component thereof except that such manufacturing
license shall extend to such Licensed DNA Probe Array component under the
limited circumstances provided in the Manufacturing Agreement), and to use,
import, distribute and sell (and to copy and display in connection therewith as
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applicable) Licensed Diagnostic Assays. Such licenses are subject to the
royalties provided in Sections 6.1 and 6.2 as applicable. Except as explicitly
provided in this subsection, no manufacture or have manufactured rights are
included as to DNA Probe Arrays.
(ii) With respect to Other Licensed Diagnostic Products that are
to be used (A) solely with High Density Probe Arrays supplied by AFFX or
permissibly made by BMX under this Agreement or the Manufacturing Agreement or
(B) with High Density Probe Arrays and with one or more DNA Probe Arrays that
have [ * ] or fewer Probes/cm(2) and are not otherwise included as a High
Density Probe Array, a worldwide, license in the Licensed Field (i) under the
Patent Rights included in the AFFX Licensed Core Technology and the AFFX
Collaboration Technology to make, have made, use, import, distribute and sell
and (ii) under the Know-how and Copyrights included in the AFFX Licensed Core
Technology and AFFX Collaboration Technology to make, have made, copy, display,
distribute, use, import and sell, all such Other Licensed Diagnostic Products
solely for use in the Licensed Field.
(iii) With respect to Other Licensed Diagnostic Products that
are to be used solely with a DNA Probe Array that has [ * ] or fewer
Probes/cm(2) and is not included as a High Density Probe Array ("Low Density
Probe Array"), AFFX agrees to grant BMX a nonexclusive, worldwide license in
the Licensed Field (A) under the Patent Rights included in the AFFX Licensed
Core Technology and the AFFX Collaboration Technology to make, have made,
use, import, distribute and sell and (B) under the Know-how
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and Copyrights included in the AFFX Licensed Core Technology and the AFFX
Collaboration Technology to make, have made, copy, display, distribute, use,
import and sell, all such Other Licensed Diagnostic Products for use with such
Low Density Probe Arrays solely for use in the Licensed Field on terms to be
negotiated in good faith by the Parties, such terms not to be less favorable to
BMX than those contained herein, any applicable compensation or royalty for such
use not to exceed such royalty rates as may from time-to-time be applicable for
sale of Licensed Diagnostic Assays.
(iv) With respect to any DNA Probe Array that is not a High
Density Probe Array, and that has more than [ * ] and is otherwise not a High
Density Probe Array, AFFX will negotiate in good faith with BMX if requested
an extension of the definition of High Density Probe Array hereunder to
include such probe array and to arrange for manufacture of the same subject
to AFFX' reasonable ability to expand its manufacturing capacity to include
such product, all on terms which are substantially similar to and not more
onerous for either Party than the terms and conditions applicable hereunder
in respect of High Density Probe Arrays. With respect to any of the foregoing
Licenses, BMX shall have the right to sublicense only its Affiliates provided
that any such Affiliate must agree to abide by all of the terms of this
Agreement. The term of such licenses shall continue on a product-by-product
and country-by-country basis until the expiration of the last to expire
Patent of the AFFX Licensed Core Technology and AFFX Collaboration Technology
encompassed in such
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Licensed Diagnostic Assay in the country in question and during the life of any
subsequently issued AFFX patent included in the AFFX Licensed Core Technology
and AFFX Collaboration Technology and so encompassed in such Licensed Diagnostic
Assays in the country in question, and thereafter on a continuing basis in
respect of any Know-how or Copyright thereof embodied in the Licensed Diagnostic
Assay or its manufacture or use. All licenses may be terminated for breach
and/or limited or modified for lack of diligence as set forth in this Article 5.
(b) In addition to the foregoing license under Section 5.2(a) above,
AFFX grants BMX, (i) with respect to AFFX Collaboration Technology, a
nonexclusive, worldwide, research-use only license to use the AFFX Collaboration
Technology (A) outside of the Licensed Field for BMX's own research purposes
pertaining to Clinical Diagnostics, and (B) for the Licensed Field for BMX's
purposes pertaining to this Collaboration and research and development in
furtherance thereof; provided, however, that such license shall not include any
rights under AFFX Licensed Core Technology or any rights to research or develop
technology relating to the manufacture of Licensed DNA Probe Arrays; and
provided that such research license may be sublicensed only to Affiliates or in
connection with the research authorized hereby; and (ii) with respect to the
AFFX Core Technology and the AFFX Collaboration Technology, a limited
nonexclusive, worldwide research use only license to use High Density Probe
Arrays referred to in Section 1.17(i) and (ii) to select probes for and only to
select probes for development of High Density Probe Arrays referred to in
Section 1.17(iii) for the Licensed Field
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all for internal purposes of BMX and its Affiliates, not on a contract basis for
third parties.
(c) With respect to any BMX Collaboration Technology, BMX hereby
grants to AFFX (i) for the Licensed Field, a nonexclusive, worldwide,
research-use only license to use BMX Collaboration Technology in the
Collaboration and as permitted under the Manufacturing Agreement; and (ii) a
nonexclusive license for use of the BMX Collaboration Technology outside the
Licensed Field for uses which do not compete with the activities of BMX and its
Affiliates. Such license under subsection (ii) shall be subject to any
additional restrictions provided in Section 5.11 in the event AFFX exercises its
rights under such section and shall be sublicensable only with and for use with
AFFX's AFFX Licensed Core Technology (and subject to the same limitations
imposed on any concomitant license of such technology) to copy, display,
distribute, make, have made, use, import and sell DNA Probe Arrays and products
and services associated with and dependent upon use of such probe arrays. Such
license shall be royalty free to AFFX except that AFFX shall be responsible for
the payment of any royalty obligation incurred by BMX in connection with such
use by AFFX.
(d) With respect to Joint Collaboration Technology, the Parties shall
each have plenary rights in common to use such technology within and without the
Licensed Field and to sublicense the same for such use to their Affiliates;
provided, however, that, with respect to Joint Collaboration Technology as
specifically applied to design and function of Licensed DNA Probe Arrays
(Specific DNA Probe Technology), BMX shall have rights in
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the Licensed Field only within the scope of its license grants under Section 5.2
hereof and to sublicense the same to its Affiliates and AFFX shall have the sole
right to use and license or sublicense such Specific DNA Probe Technology
outside the Licensed Field; and provided further, that, in the event AFFX
exercises its rights under Section 5.11 hereof, its use of any Collaboration
Technology shall be subject to the limitations there provided. Except as
provided above as to Specific DNA Probe Technology, BMX hereby grants AFFX the
exclusive right to license Joint Collaboration Technology to third parties (so
subject to Section 5.11) outside of the Licensed Field, subject to (i) the
provisions of Section 5.2(e), (ii) BMX's right to share in revenues from such
license as may be agreed to in good faith by the Parties, and (iii) the
obligation to consult with BMX as to the grant and terms of such license. In
the event that AFFX does not pursue any licensing opportunity brought to its
attention by BMX within [ * ] then BMX shall have the right to
pursue such opportunity and share revenues therefrom in accordance with the good
faith agreement of the Parties. In the absence of agreement as to sharing of
revenue, the matter shall be resolved as provided in Section 2.10 hereof, except
that each Party shall set forth its proposal for such sharing and, if agreement
is not reached, the more suitable proposal shall be determined and adopted
without change from such Party's final proposal pursuant to arbitration as
provided in Section 14.1 hereof.
(e) With respect to grant of license of Joint Collaboration
Technology to third parties for use outside the
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Licensed Field, in cases where BMX's Patent Right(s) or Know-how other than
Joint Technology dominate such technology, the Parties agree as follows:
(i) if such Joint Collaboration Technology is proposed to be
licensed principally for use with AFFX Licensed Core Technology, then AFFX shall
have primary responsibility for negotiating the terms and conditions of any such
license but shall consult with BMX as to the grant and terms of such license;
(ii) if such Joint Collaboration Technology is proposed to be
licensed for any other use then BMX shall have primary responsibility for
negotiating the terms and conditions of any such license but shall consult with
AFFX as to the grant and terms of such license.
In all cases under (i) and (ii) above each Party shall be entitled to share in
revenues from the license as may be agreed in good faith by the Parties, and
absent such agreement, sharing shall be determined as provided in the last
sentence of Section 5.2(d). In no event shall either Party grant a license of
technology of the other Party (other than Joint Collaboration Technology as
provided above) without such other Party's consent.
5.3 OPTION FOR NON-EXCLUSIVE LICENSES IN THE [ * ] AND [ * ] FIELDS.
Subject to pre-existing agreements, AFFX grants BMX non-exclusive options (the
"Options") to enter into non-exclusive licenses under AFFX Licensed Core
Technology (and Collaboration Technology, as applicable) to expand BMX's
products for Clinical Diagnosis (and otherwise subject to the limitations of the
Licensed Field except as expanded to include [ * ] and [ * ] as specified
herein) that would use Licensed DNA Probe Arrays to
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include categories of products for [ * ] (not otherwise included in the
license granted hereby) ([ * ] Option") and products for the testing of [ * ]
(for any condition, except for the diagnosis of [ * ] to the extent that such
rights have been previously granted on an exclusive basis to a third party)
([ * ] Option"). Exercise of each Option shall be conditional upon AFFX and
BMX executing a definitive agreement with regard to the relevant field,
including a mutually acceptable work plan (and an appropriate budget, license
fees, milestones and royalties no greater, in each case, than those agreed to
for the exclusive license in the Bacteriology Field) not later than [ * ]
after AFFX shall have sent BMX a substantive proposal in such regard. Prior
to conclusion of any definitive agreement or any payment for the extension of
the right to exercise an option as provided below, AFFX shall, at the request
of BMX, disclose the existence and extent of any other agreements with third
parties, or known third party rights or claims to which any option rights
would potentially be subject. If a definitive agreement has not been signed
under either Option by the end of the Initial Option Period, BMX may elect to
extend either Option or both Options for a one-year period by paying [ * ]
per Option extended on or before the end of the Initial Option Period. If,
however, an agreement with respect to one such Option is concluded on or
prior to the end of the Initial Option Period, the right to exercise the
other Option will be automatically extended six (6) months from the end of
the Initial Option Period (the "Second
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Option Period"), and the right to exercise such other Option may be further
extended for a one-year period by paying [ * ] on or before the end of the
Second Option Period.
5.4 INDUSTRIAL TESTING AND OTHER FIELDS. Subject to pre-existing
agreements and within AFFX's sole discretion, AFFX shall give reasonable
consideration to requests by BMX to expand the definition of Licensed Field to
include the use of AFFX Licensed Core Technology and AFFX Collaboration
Technology in conjunction with Licensed DNA Probe Arrays for Industrial Testing
applications (food, pharmaceuticals, cosmetics), upon reasonable commercial
terms, including without limitation, license fees, milestone payments, royalties
and appropriate manufacturing arrangements. The Parties may also carry out good
faith discussions as to extension of the Collaboration to other fields and for
other applications as they may deem to be in their respective best interests.
5.5 EXCLUSIVITY OF LICENSE. Except as otherwise provided herein, the
license granted BMX pursuant to Section 5.2(a) shall be the exclusive license of
the AFFX Core Technology and the AFFX Collaboration Technology for assays
containing DNA Probe Arrays for Clinical Diagnosis in the Bacteriology Field,
except for fluorescence readers sold to hospitals (to the extent rights have
been granted to a third party) for which the license shall be nonexclusive (such
exclusivity being subject to the conditions set forth below), and nonexclusive
in the balance of the Licensed Field. BMX may not assign its license rights and
may grant sublicenses only to Affiliates.
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5.6 LIMITATIONS OF LICENSE. It is expressly understood that AFFX does not
grant and has not granted BMX any license under any AFFX Licensed Core
Technology or AFFX Collaboration Technology or any other AFFX technology or
intellectual property rights, either express or implied, for research supply
products, or to conduct any basic genomic research (e.g., gene expression, gene
discovery, gene sequencing, marker discovery, functional discovery, or gene
mapping, or polymorphism screening) with the Licensed DNA Probe Arrays (while
the parties recognize that chips that are made for diagnostic purposes may
incidentally result in genetic discoveries), or to manufacture or have a third
party manufacture any DNA probe arrays, except as explicitly provided here and
in the Manufacturing Agreement. BMX may not sublicense or assign the rights
herein except as expressly provided herein.
5.7 TERMS AND CONDITIONS OF EXCLUSIVITY.
(a) To retain its exclusivity in the Bacteriology Field, BMX shall
use reasonable commercial efforts, comparable to those applied to its sole
developments of its own major products, in the development, marketing and sales
of Licensed Diagnostic Assays hereunder. The provisions below are to be
considered as specific requirements for BMX to retain its exclusivity and not as
an exhaustive description of the diligence obligations.
(b) BMX shall have the following specific diligence obligations
(provided that AFFX shall have fulfilled preconditions to BMX's meeting such
requirements, including disclosure in full to BMX in a timely fashion of the
results of any research and development work for which it is responsible and
which is relevant to fulfillment of such BMX obligations).
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Initially, the exclusivity of the license in the Bacteriology Field shall
continue for [ * ] (or any extension of such time
period to which the Parties mutually agree) from the Effective Date of this
Agreement, except that such license shall become nonexclusive upon failure of
BMX to meet any of the following development milestones within the time period
indicated (or any extension of such time period to which the Parties mutually
agree). All such time periods are to be measured from the Effective Date of
this Agreement.
MILESTONES TIME PERIOD
(i) [ * ] [ * ]
(ii) [ * ] [ * ]
(iii) [ * ] [ * ]
(iv) [ * ] [ * ]
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MILESTONES TIME PERIOD
(v) [ * ] [ * ]
The time periods indicated may be extended by the Committee and shall be
extended as necessary where BMX's inability to comply results from failure of
AFFX to fulfill preconditions that would have reasonably been necessary for BMX
to meet the foregoing milestones.
(c) In the event BMX maintains the exclusivity of its license in
accordance with the foregoing milestones, such exclusivity shall continue during
the remaining term of the license, except that such license shall become
non-exclusive upon failure by BMX to meet any of the following criteria unless
such failure is reasonably attributable to failure by AFFX to fulfill its supply
obligations under the Manufacturing Agreement or other AFFX obligations
hereunder:
(i) BMX shall have launched and be diligently marketing a
Licensed Diagnostic Assay in three of the following four countries by [ * ]
Japan, France, Italy and Germany (together with the United States,
hereinafter referred to as the "Major Market Countries");
(ii) BMX shall have made appropriate applications by [ * ] to
the United States Food and Drug Administration for approval of a Licensed
Diagnostic Assay;
(iii) BMX shall attain the following minimum worldwide Net Sales
of all Licensed Diagnostic Assays (in the
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aggregate, "Worldwide Aggregate Net Sales") during the calendar years set forth
below:
Minimum
Calendar Net
Year Sales
-------- -------
2001 $ [ * ]
2002 [ * ]
2003 [ * ]
2004 [ * ]
2005 [ * ]
2006 [ * ]
2007 [ * ]
(provided, however, that if actual Worldwide Aggregate Net Sales in any [ * ]
calendar years between 2001 and 2007 fall short of the minimum sales set
forth above, but are not less than [ * ] of such minimum sales, BMX shall
have the right to maintain exclusivity by payment to AFFX of an amount that
is equal to [ * ] of the difference, in dollars, between the minimum
Worldwide Net Sales figure and the actual Worldwide Aggregate Net Sales for
the calendar year in question).
5.8 SPECIFIC TESTS. Notwithstanding any termination of exclusivity in the
Bacteriology Field which is due solely to failure to meet the criteria of
Section 5.7(c)(iii) above, the exclusivity of BMX's rights Licensed Diagnostic
Assays to the specific Licensed DNA Probe Arrays it is diligently selling in the
Bacteriology Field at the time of such termination shall continue during the
term of the license, provided that and so long as BMX is continuing to sell such
product with reasonable diligence.
(a) AFFX shall retain the sole right and no license is granted herein
to supply instruments and components, including, without limitation, DNA Probe
Arrays based on AFFX Licensed Core
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Technology, to third parties for "home brew" tests for targets in the
Bacteriology Field in countries in which BMX is not diligently marketing a
Licensed Diagnostic Assay that is configured substantially in such manner as to
be approvable in the USFDA (or, in the case of the United States, is approved by
the USFDA), if the same were to be offered for commercial sale in the United
States. BMX shall have no obligation to sell readers, instruments or other
products to AFFX for this purpose. AFFX shall act reasonably at all times to
ensure its reasonable ability to terminate such supply in the country in
question no later than such time as BMX shall commence the diligent marketing
thereof a Licensed Diagnostic Assay that is substantially so configured as to be
approvable by the USFDA for such target(s) that is a comparable substitute in
performance and end-use for the "home brew" product concerned. Upon notice that
BMX is commencing such marketing, AFFX shall reasonably endeavor promptly to
terminate any such supply, provided that BMX will make such comparable
substitute configured as above for sale in such country. Subject to the
foregoing, AFFX shall not be obligated to terminate any such existing supply
arrangement in such manner as to cause breach or default of such arrangement by
AFFX. Upon commencement of such marketing as above, and except to the extent of
any "home brew" supply arrangement which has not yet been terminated, in each
case BMX shall then be accorded exclusivity with respect to such test(s) in the
Bacteriology Field in accordance with the terms of this Article 5.
5.9 ASSAYS SUBJECT TO THIRD PARTY RIGHTS. If BMX retains its exclusivity
in the Bacteriology Field after [ * ]
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AFFX may, from time to time, request that BMX endeavor to include in one or
more of its Licensed Diagnostic Assays an assay whose manufacture, use or
sale is subject to intellectual property rights of a third party. If such
request concerns an assay within the Bacteriology Field which the parties
reasonably agree would have worldwide sales in excess of [ * ] per year
("Significant Assay") and would not compete with any assay already included
or projected for inclusion in such Licensed Diagnostic Assays, BMX shall use
reasonable efforts to seek, with the cooperation of AFFX, to obtain all
licenses requisite for such assay or, if necessary, to develop an alternative
means to make, use and sell such assay. If within [ * ] following such
request BMX is unable or unwilling to make arrangements for development of
such assay, the Parties will further consult, and, if AFFX so requests, BMX
will make a limited and partial waiver of the exclusivity of its license in
the Bacteriology Field solely to the extent necessary to permit development
of such an assay by a third party under a separate license from AFFX and
supply of DNA Probe Arrays therefor by AFFX. The terms and limitations of
such waiver shall be set forth in writing by BMX and BMX shall retain all
rights to develop or cause the development of such a product at a later time,
if it should obtain the necessary rights from the third party or otherwise.
Any waiver of exclusivity in the Bacteriology Field for purposes of
introduction of a product under this section shall not be deemed to
constitute a loss of exclusivity in such Field for the purposes of any other
section of this Agreement.
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5.10 OTHER ASSAYS. In the event AFFX desires at any time during the term
of this Agreement to develop or have a third party develop an assay in the
Bacteriology Field that is not provided for in Section 5.8 and is not developed
by BMX (such as where, for example, there may be an interest to have an assay
developed to demonstrate clinical utility in a selected market), whether or not
such assay is covered by any third party intellectual property rights, and AFFX
can reasonably demonstrate that (i) the assay addresses only a limited
geographic or otherwise selected market portion of the potential markets for the
assay that would not compete significantly with any assay that is marketed, is
being developed by or is projected to be developed by BMX, and (ii) BMX has no
existing bona fide plans to develop such an assay, and (iii) AFFX presents a
reasonable plan for development of such an assay by itself or in conjunction
with a third party, and a reasonable level of detail regarding such product and
the plan for development and funding of same, then BMX shall make a limited and
partial written waiver in the manner described above, permitting development of
such assay by AFFX or a third party under a separate license from AFFX, in
accordance with such plan without prejudice to subsequent introduction of such a
product by BMX provided, however, that if for any reason BMX elects not to make
such a waiver, then BMX shall promptly generate, and provide to AFFX, a
development plan for expeditiously and diligently developing and marketing the
assay that is the subject of the waiver request, on a priority level at least as
high as the other similar products then-currently under development, and fund
such development within the Collaboration.
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In connection with any such BMX plan, AFFX shall be prepared to make available
to BMX cooperative arrangements and related benefits substantially as favorable
as any that were to be offered to a third party under the plan for development
originally presented by AFFX. If BMX fails to expeditiously develop such a plan
and fund such development in reasonably timely fashion taking account of all
relevant commitments hereunder, BMX shall be deemed to have granted the
foregoing waiver of exclusivity, and AFFX shall be free to develop such assay
with a third party and supply DNA Probe Arrays therefor under a separate license
from AFFX. Any waiver of exclusivity in the Bacteriology Field for purposes of
introduction of a product under this section shall not be deemed to constitute a
loss of exclusivity in such Field for the purposes of any other section of this
Agreement. BMX shall have no obligation to sell readers, instruments or other
products to AFFX for this purpose. Such supply relationship between AFFX and
such third party shall be rendered non-exclusive as to BMX and BMX may exercise
its applicable rights hereunder and under the Manufacturing Agreement as related
to Licensed DNA Probe Arrays pertaining to such assay if so requested by BMX
upon notice that BMX represents in good faith that it would commence the
diligent marketing of a Licensed Diagnostic Assay for such target(s) that is a
comparable substitute in performance and end-use for the assay concerned.
Subject to the foregoing, AFFX shall not be obligated to take any action with
respect to such supply arrangement so as to cause breach or default of such
arrangement by AFFX. Upon commencement of marketing by BMX of the assay
concerned or an assay which is a
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comparable substitute in performance or end-use therefor and except to the
extent of any continuing third party arrangements as aforesaid with respect to
the assay developed pursuant to the AFFX proposal, in each case BMX shall then
again be accorded exclusivity with respect to such test(s) in the Bacteriology
Field in accordance with the terms of this Article 5.
5.11 LOSS OF RIGHT TO INTRODUCE NEW ASSAYS AND OTHER PRODUCTS.
(a) In the event that, BMX decides to market no broad-ranged
Licensed Diagnostic Assay, (i.e., an assay capable of testing for [ * ]
hereinafter referred to as a "Broad-Ranged Assay") in the Bacteriology Field
in all or any of the three major world regions of the United States, Europe
or Asia (the "Regions"), but still desires to sell Licensed Diagnostic
Products (other than Broad Ranged Assays in the Bacteriology Field and
Region), BMX's license to the Licensed Diagnostic Products it is then
developing shall thereafter be non-exclusive in such Region(s), and BMX shall
have no further right to make, have made, use, import, distribute or sell, or
have AFFX manufacture, New Licensed Diagnostic Products using AFFX Licensed
Core Technology or AFFX Collaboration Technology in the Region concerned. A
product shall be considered a "New Licensed Diagnostic Product" (as such term
is used herein) unless, at the time of the applicable loss of the rights with
respect to New Licensed Diagnostic Products, such product or an earlier
version thereof which differs only
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evolutionarily from such product was being sold by BMX in any Region or was in
clinical trials or subsequent stages of development, or an application for
regulatory approval had been filed in a Major Market Country.
(b) In addition, BMX shall lose all rights under its license to make,
have made, use, import, distribute or sell, or have AFFX manufacture, New
Licensed Diagnostic Products using AFFX Licensed Core Technology or AFFX
Collaboration Technology as of the close of any calendar year referred to below
in which it shall fail to meet the following worldwide sales for such year:
Minimum Number
Calendar of Licensed Diagnostic
Year Assays
--------- -----------------------
2001 [ * ]
2002 [ * ]
2003 [ * ]
2004 [ * ]
2005 [ * ]
2006 [ * ]
2007 [ * ]
and, for each year thereafter until the end of the calendar year 2010, minimum
requirements of Licensed DNA Probe Arrays equal to the minimum of such sales for
the preceding calendar year plus [ * ] of such minimum.
(c) To maintain its licenses of AFFX Licensed Core Technology in
respect of its Licensed Diagnostic Assays hereunder, notwithstanding any
termination of exclusivity, BMX shall continue to have an obligation of
reasonable diligence in the circumstances respecting such Licensed Diagnostic
Assays as it shall continue to be permitted to sell, comparable to the diligence
it normally exercises in connection with other
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comparable products. In the event of lack of such reasonable diligence in
respect of any such assay or of Licensed Diagnostic Assays in general, AFFX may
call upon BMX to relinquish its license for such product or products, as
applicable, but in such circumstances any loss of license rights shall be
subject to a reasonable phase-out permitting orderly fulfillment of third-party
obligations and business expectations.
5.12 ENTRY BY AFFX. Beginning on the seventh anniversary of the Effective
Date, AFFX may exercise the right to make, use and sell diagnostic products
including DNA Probe Arrays in the Bacteriology Field using AFFX's AFFX Licensed
Core Technology on a co-exclusive basis with BMX, upon repayment by AFFX to BMX
of one-half of the total amount of R&D support and one-half of the total amount
of milestone payments received from BMX under this Agreement. In such case,
AFFX shall have no right to sublicense, except to Affiliates. AFFX will in no
case commence research or development work related to any such product until
after July 1, 1999. This provision is not intended to give AFFX any rights or
license to BMX intellectual property or instrumentation. AFFX shall have no
right to use any technology developed at BMX's expense (other than the Related
Funded Technology) in connection with the Collaboration in competing products or
systems serving the same diagnostic purpose and market as the BMX products
resulting from the Collaboration. In the event that AFFX converts BMX's license
to a co-exclusive license as described in this provision, (i) the provisions and
requirements of Section 5.10 shall cease to be applicable and (ii) the minimum
Worldwide Aggregate Net Sales referred to above in Section 5.7(b)(iii) for
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maintaining exclusivity shall be reduced by one-half on a going-forward basis,
and, if BMX fails to meet such reduced minimums, its license shall be converted
from co-exclusive to non-exclusive.
5.13 PATENT MARKING, LICENSE LEGEND AND TRADEMARKS. BMX shall mark each
Licensed Diagnostic Assay and Other Licensed Product (i) with appropriate patent
and copyright notices, (ii) with notices that the Licensed Diagnostic Assays are
licensed for one-time use only and only in the Licensed Field, and not for
research purposes, and (iii) with a trademark and other logo of AFFX, all in
accordance with reasonable instructions to be provided by AFFX, and reasonably
acceptable to BMX. BMX shall notify AFFX when such notice must be provided for
each product release.
ARTICLE VI. ROYALTIES
6.1 ROYALTIES PAYABLE TO AFFX IN RESPECT OF SALE OF AFFX HIGH DENSITY
PROBE ARRAYS.
(a) For the license to AFFX Licensed Core Technology and AFFX
Collaboration Technology under Section 5.2(a)(i), AFFX shall receive a royalty
based on the applicable royalty rate described below as applied to Net Sales of
Licensed Diagnostic Assays by BMX and its Affiliates to non-Affiliated third
parties, such sales being broken down by category depending upon the type of
Licensed DNA Probe Array included in such Licensed Diagnostic Assays. For each
quarter the applicable royalty rate shall be computed based on a fraction
consisting of (A) [ * ]
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[ * ] as the numerator over (B) the denominator consisting of the Net Sales
of the applicable Licensed Diagnostic Assays for such quarter expressed as a
percentage (the "Cost Ratio") for that particular product. If the Cost Ratio
is greater than or equal to [ * ] there shall be no royalty. If the Cost
Ratio is greater than or equal to [ * ] but less than [ * ] the royalty rate
shall be [ * ] less [ * ] of the Cost Ratio. If the Cost Ratio is greater
than or equal to [ * ] but less than [ * ], the royalty rate shall be [ * ]
less [ * ] of the Cost Ratio. If the Cost Ratio is less than [ * ] the
royalty rate shall be [ * ] the Cost Ratio. Upon expiration or loss of
exclusivity pursuant to Section 5.7, the royalty for such Licensed Diagnostic
Assays under Section 5.2(a)(i) during the remainder of the royalty term shall
be reduced by [ * ]
(b) The Parties recognize that the above royalty structure is based
on the assumption that BMX's dominant or sole source of profit in the Licensed
Field is on disposable kits. Should BMX's business model change such that a
significant profit source of BMX is in the distribution of instrumentation,
software, data or otherwise, the Parties will confer to modify the above royalty
structure accordingly.
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6.2 ROYALTY TERM. The royalty obligation shall continue during the life
of any patent upon any invention included by way of patent or application in the
licensed AFFX Licensed Core Technology and during the life of any subsequently
issued AFFX patent included therein the claims of which cover the applicable
Licensed Diagnostic Assay. In any event, royalties shall be payable on a
product-by-product basis in each of the three major Regions for a minimum of ten
(10) years from first sale of a Licensed Diagnostic Assay in a major country of
each such Region, and in respect of any product as to which BMX has rights
hereunder related to Know-how for the duration of such rights, provided that
such Know-how is secret and substantial, and provided further that after the
above-mentioned ten (10) year period and expiration of Patents in any territory,
the royalty rate then applicable shall be reduced by [ * ] and provided
further that if the only remaining AFFX Licensed Core Technology used in
connection with the product consists of Copyright(s), the royalty rate for use
thereof shall be a reasonable rate for such use to be agreed by the Parties.
6.3 REPORTS AND PAYMENT. BMX shall deliver to AFFX within sixty (60) days
after the end of each calendar quarter a written report showing its computation
of royalties due upon Licensed Diagnostic Assays under this Agreement upon Net
Sales by BMX and its Affiliates during such calendar quarter. All Net Sales
shall be segmented in each such report according to sales of applicable
categories of Licensed Diagnostic Assays by BMX and each Affiliate, as well as
on a country-by-country basis, including the rates of exchange used to convert
such royalties to United
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States Dollars from the currency in which such sales were made. Such
calculation shall be made in accordance with the internal accounting procedures
of bioMerieux S.A. as of the Effective Date and described in Schedule 7 hereto.
Subject to the provisions of Section 6.4 of this Agreement, simultaneously with
the delivery of each such report, BMX shall tender payment in United States
Dollars of all royalties shown to be due therein. The balance remaining unpaid
fifteen (15) days after the due date shall bear interest at the rate of [ * ]
percentage points above the prime interest rate quoted by the Bank of America on
the unpaid balance.
6.4 TAXES. Any and all taxes imposed or levied on account of royalties
payable under this Agreement which are required to be withheld by BMX or its
Affiliates shall be withheld by BMX and its Affiliates, as the case may be, and
shall be paid to the proper taxing authority. Proof of payment shall be secured
and sent to AFFX by BMX as evidence of such payment. Such taxes shall be
deducted from the royalty that would otherwise be remittable by BMX and its
Affiliates.
6.5 RECORDS. BMX shall keep, and shall require all its Affiliates to
keep, for a period of at least three years, full, true and accurate books of
account and other records containing all information and data which may be
necessary to ascertain and verify the royalties payable hereunder. During the
term of this Agreement and for a period of three years following its
termination, AFFX shall have the right from time to time (not to exceed once
during each calendar year) to inspect in confidence, or have an agent,
accountant or other representative inspect in
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confidence, such books, records and supporting data. If the inspection
report discloses an underpayment of [ * ] or more in the amounts due, the
cost of such inspection shall be borne by BMX and the underpaid amount shall
be paid to AFFX within thirty (30) days of such reporting.
6.6 SPECIAL ARRANGEMENT AS TO CERTAIN THIRD PARTY ROYALTIES. The Parties
acknowledge that the practice of the Know-how that is within the scope of the
AFFX Core Technology as such scope is described on Schedule 6.6 hereto may
involve the use of proprietary rights of third parties. The Parties shall
endeavor to find a means of practicing such Know-how which does not fall within
the ambit of any such third party rights or otherwide maintain such costs at a
low level.
ARTICLE VII. PATENT PROSECUTION AND INFRINGEMENT RIGHTS
7.1 RESPONSIBILITY FOR PATENTING OF TECHNOLOGY.
(a) Except as otherwise provided in this Agreement, AFFX shall have
the right to seek or continue to seek or maintain patent protection on any AFFX
Collaboration Technology and any Joint Collaboration Technology in any country,
in reasonable consultation with BMX and consistent with ownership and rights as
herein agreed. If AFFX elects not to seek or continue to seek or maintain
patent protection on any such AFFX Collaboration Technology or Joint
Collaboration Technology in any country, BMX shall have the right, at its
expense, (i) to require AFFX to file, procure or maintain any patent or patent
application encompassed within AFFX Collaboration Technology, in AFFX's name, in
such countries and (ii) to require AFFX to or to file, procure
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and maintain in such countries patents on Joint Collaboration Technology. AFFX
agrees to advise BMX of all significant decisions taken with respect to this
section in a timely manner in order to allow BMX to protect its rights under
this Section. Except as otherwise provided in this Agreement, BMX shall have
the right to seek or continue to seek or maintain patent protection on any BMX
Collaboration Technology in any country. Each Party shall bear all costs
incurred by it in exercising the foregoing rights.
(b) Each Party shall provide the other Party with copies of all
substantive communications from all patent offices regarding applications or
patents on any Joint Collaboration Technology promptly after the receipt
thereof. Each Party shall provide the other Party with copies of all proposed
substantive communications to such patent offices regarding applications or
patents on any Joint Collaboration Technology in sufficient time before the due
date in order to enable the other Party an opportunity to comment on the content
thereof.
(c) Each Party shall make available to the other Party or its
authorized attorneys, agents or representatives, such of its employees whom the
other Party in its reasonable judgment deems necessary in order to assist it in
obtaining patent protection for the Joint Collaboration Technology. Each Party
shall sign or use its reasonable efforts to have signed all legal documents
necessary to file and prosecute patent applications or to obtain or maintain
patents at no cost to the other Party.
7.2 INFRINGEMENT.
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(a) Each Party shall promptly report in writing to the other Party
during the term of this Agreement, with respect to the Licensed Diagnostic
Products and the subject matter of the Collaboration, any (i) known infringement
or suspected infringement of any of the Patent Rights, (ii) known infringement
or suspected infringement of any of the Copyrights, or (iii) unauthorized use or
misappropriation of Know-How or Confidential Information by a third party of
which it becomes aware, and shall provide the other Party with all available
evidence supporting said infringement, suspected infringement or unauthorized
use or misappropriation.
(b) Each Party shall have the right to initiate an infringement or
other appropriate suit against any third party who at any time has infringed, or
is suspected of infringing, any of such Party's solely owned Patent Rights or
Copyrights or of using without proper authorization all or any portion of such
Party's solely owned Know-How. Except as provided in subsection (d) below, AFFX
shall have the first right to initiate an infringement or other appropriate suit
against any third party who at any time has infringed, or is suspected of
infringing, any of the Patent Rights constituting Joint Collaboration Technology
or Copyrights constituting Joint Collaboration Technology or of using without
proper authorization all or any portion of the Know-How constituting Joint
Collaboration Technology. With respect to any suit involving such Joint
Collaboration Technology, AFFX shall give BMX sufficient advance notice of its
intent to file said suit and the reasons therefor, and shall provide BMX with an
opportunity to make suggestions and comments
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regarding such suit. AFFX shall keep BMX promptly informed, and shall from time
to time consult with BMX regarding the status of any such suit and shall provide
BMX with copies of all documents filed in, and all written communications
relating to, such suit.
(c) AFFX shall have the sole and exclusive right to select counsel
for any suit involving the Joint Collaboration Technology referred to in
subsection (b) above and shall, except as provided below, pay all expenses of
the suit, including without limitation attorneys' fees and court costs. BMX,
in its sole discretion, may elect, within sixty (60) days after the
commencement of such litigation, to contribute a fixed percentage of up to
[ * ] of the costs incurred by AFFX in connection with such litigation,
including, without limitation, reimbursement of AFFX's expenses hereunder.
If it so elects, any damages, royalties, settlement fees or other
consideration received by AFFX or any of its Affiliates for past infringement
or misappropriation as a result of such litigation shall be shared by the
Parties pro-rata based on their respective sharing of the costs of such
litigation. In the event that BMX elects not to contribute to the costs of
such litigation, AFFX and/or its Affiliates shall be entitled to retain any
damages, royalties, settlement fees or other consideration for past
infringement or misappropriation resulting therefrom. If necessary or
desirable, BMX shall join as a party to the suit but shall be under no
obligation to participate except to the extent that such participation is
required as the result of being a named party to the suit. If AFFX requires
BMX to join in such suit and BMX has not elected to contribute to the costs
of such
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suit, AFFX shall indemnify and defend BMX against any claims or damages arising
out of the initiation of such suits or any claims for injunctive relief against
such third party infringers. BMX shall have the right to participate and be
represented in any such suit by its own counsel at its own expense. BMX shall
offer reasonable assistance to AFFX in connection therewith at no charge to AFFX
except for reimbursement of reasonable out-of-pocket expenses, including
salaries of BMX's personnel, incurred in rendering such assistance. BMX shall
have the right to participate and be represented in any such suit by its own
counsel at its own expense.
(d) In the event that AFFX elects not to initiate an infringement or
other appropriate suit involving the Joint Collaboration Technology pursuant to
subsection (b) above, AFFX shall promptly advise BMX of its intent not to
initiate such suit, and BMX shall have the right, at its expense, of initiating
an infringement or other appropriate suit against any third party who at any
time has infringed, or is suspected of infringing, any of the Patent Rights
constituting Joint Collaboration Technology or Copyrights constituting Joint
Collaboration Technology or of using without proper authorization all or any
portion of the Know-How constituting Joint Collaboration Technology. In
exercising its rights pursuant to this subsection (d), BMX shall have the sole
and exclusive right to select counsel and shall, except as provided below, pay
all expenses of the suit including without limitation attorneys' fees and court
costs. AFFX in its sole discretion, may elect, within sixty (60) days after the
commencement of such litigation, to contribute a fixed percentage
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of up to [ * ] of the costs incurred by BMX in connection with
such litigation, including, without limitation, reimbursement of BMX's expenses
hereunder. If it so elects, any damages, royalties, settlement fees or other
consideration received by BMX or any of its Affiliates for past infringement or
misappropriation as a result of such litigation shall be shared by the Parties
pro rata based on their respective sharing of the costs of such litigation. In
the event that AFFX elects not to contribute to the costs of such litigation,
BMX and/or its Affiliates shall be entitled to retain any damages, royalties,
settlement fees or other consideration for past infringement or misappropriation
resulting therefrom. If necessary or desirable, AFFX shall join as a party to
the suit but shall be under no obligation to participate except to the extent
that such participation is required as a result of being a named party to the
suit. At BMX's request, AFFX shall offer reasonable assistance to BMX in
connection therewith at no charge to BMX except for reimbursement of reasonable
out-of-pocket expenses, including salaries of AFFX's personnel, incurred in
rendering such assistance. If BMX requires AFFX to join in such suit and AFFX
has not elected to contribute to the costs of such suit, BMX shall indemnify and
defend AFFX against any claims or damages arising out of the initiation of such
suits or any claims for injunctive relief against such third party infringers.
AFFX shall have the right to participate and be represented in any such suit by
its own counsel at its own expense.
7.3 CLAIMED INFRINGEMENT.
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(a) In the event that a third party at any time provides written
notice of a claim to, or brings an action, suit or proceeding against, either
Party or any of their respective Affiliates, including claims made to BMX by
distributors or customers, claiming infringement of its patent rights or
copyrights or unauthorized use or misappropriation of its know-how, based upon
an assertion or claim arising out of the development, use, manufacture,
importation, distribution and/or sale of Licensed Diagnostic Products, such
Party shall promptly upon learning thereof notify the other Party of the claim
or the commencement of such action, suit or proceeding, enclosing a copy of the
claim and/or all papers served. Each Party agrees to make available to the
other Party its advice and counsel regarding the technical merits of any such
claim at no cost to the other Party.
(b) EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE FOREGOING
STATES THE ENTIRE RESPONSIBILITY OF THE PARTIES IN THE CASE OF ANY CLAIMED
INFRINGEMENT OR VIOLATION OF ANY THIRD PARTY'S PATENT RIGHTS OR COPYRIGHTS OR
UNAUTHORIZED USE OR MISAPPROPRIATION OF ANY THIRD PARTY'S KNOW-HOW.
ARTICLE VIII. CONFIDENTIAL INFORMATION
8.1 TREATMENT OF CONFIDENTIAL INFORMATION. Each Party hereto shall
maintain the Confidential Information of the other Party in confidence, and
shall not disclose, divulge or otherwise communicate such Confidential
Information to others, or use it for any purpose, except as permitted or
contemplated by this Agreement or pursuant to, and in order to carry out, the
terms and objectives of this Agreement, and hereby agrees to exercise
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every reasonable precaution to prevent and restrain the unauthorized disclosure
of such Confidential Information by any of its directors, officers, employees,
consultants, collaborators, subcontractors, agents, Affiliates, Distributors or
Sublicensees. Each party agrees to use reasonable efforts to maintain in
confidence the Know-how licensed to or communicated to the Other Party;
provided, however, that the foregoing shall not limit either party from
disclosing its confidential information under appropriate terms of
confidentiality to third party licensees as appropriate (but only if and to the
extent AFFX can disclose such confidential AFFX information without making any
disclosure of BMX confidential information).
8.2 RELEASE FROM RESTRICTIONS. The provisions of Section 8.1 shall not
apply to any Confidential Information disclosed hereunder which:
(a) was known or used by the receiving Party or its Affiliates prior
to its date of disclosure to the receiving Party, as evidenced by the prior
written records of the receiving Party or its Affiliates or was independently
developed by employees or consultants of the receiving party who had no access
to such Confidential Information of the disclosing party; or
(b) either before or after the date of the disclosure to the
receiving Party is lawfully disclosed without restriction on disclosure to the
receiving Party or its Affiliates by an independent, unaffiliated third party
rightfully in possession of the Confidential Information; or
(c) either before or after the date of the disclosure to the
receiving Party becomes published or generally known to
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the public through no fault or omission on the part of the receiving Party or
its Affiliates; or
(d) is required to be disclosed by the receiving Party to comply with
applicable laws, to defend or prosecute litigation or to comply with
governmental regulations, provided that the receiving Party provides prior
written notice of such disclosure to the other Party and takes reasonable and
lawful actions to avoid and/or minimize the degree of such disclosure.
8.3 PUBLICATIONS. The following restrictions shall apply with respect to
the disclosure in scientific journals or publications or oral communications at
any trade show or conference by any Party or any of its Affiliates or any
employee or consultant of any Party or any of its Affiliates of Confidential
Information of the other Party relating to the Collaboration:
(a) a Party (the "publishing Party") shall provide the other Party
with an advance copy or summary of any proposed publication or communication
(which may be in draft form) and such other Party shall have a reasonable
opportunity to recommend any changes it reasonably believes are necessary to
preserve patent rights, copyrights or know-how belonging in whole or in part to
AFFX or BMX, and the incorporation of such recommended changes shall not be
unreasonably refused; and
(b) if such other Party informs the publishing Party, within thirty
(30) days of receipt of an advance copy or summary of a proposed publication or
communication, that such publication in its reasonable judgment could be
expected to have a material adverse effect on any patent rights, copyrights or
know-how
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belonging in whole or in part to AFFX or BMX, the publishing Party shall, to the
extent permitted by its agreements with its employees and consultants, delay or
prevent such publication as proposed. In the case of inventions, the delay
shall be sufficiently long, but not less that ninety (90) days, to permit the
timely preparation and filing of a patent application or application(s) for a
certificate of invention on the information involved.
ARTICLE IX. TERMINATION
9.1 TERM OF AGREEMENT. Unless earlier terminated in accordance with the
provisions of this Article IX, this Agreement shall remain in effect until the
later of (a) the expiration of the licenses granted in Section 5.2(a) of this
Agreement or (b) the supply obligations set forth in the Manufacturing
Agreement.
9.2 TERMINATION OF COLLABORATION. AFFX may cause the development portion
of the Collaboration to terminate, without prejudice to the licenses granted by
this Agreement and the other provisions hereof, and without prejudice to the
Manufacturing Agreement, upon six (6) months prior notice to BMX, provided that
no such termination shall be effective until the completion of the term of the
initial commitment as described in Section 2.4 and the substantial fulfillment
of AFFX's obligations under any Agreed Budget and Agreed Workplan; provided,
however, that without the written consent of BMX AFFX shall not terminate the
development portion of the collaboration at such time or in such manner as to
prevent the formulation of such specifications as may be reasonably necessary to
permit implementation of the
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Manufacturing Agreement as contemplated hereby. In the event that AFFX
terminates the Collaboration pursuant to this Section 9.2 upon completion of the
initial commitment as described in Section 2.4 and, notwithstanding request by
BMX for continuation of the Collaboration for an additional Contract Year fails
to negotiate in good faith such continuation, then the Collaboration shall cease
without prejudice to the other obligations of the Parties as provided in Section
9.1; provided, however, that the licenses to AFFX under BMX's Collaboration
Technology shall also terminate. BMX may cause the development portion of the
Collaboration to terminate upon six (6) months prior notice to AFFX provided
that termination occurs after completion of the initial commitment as described
in Section 2.4 and the substantial fulfillment of BMX'S obligations under any
Agreed Budget and Agreed Workplan. Such termination by BMX as permitted hereby
shall be without prejudice to the licenses granted hereby, which shall continue
in effect.
9.3 TERMINATION BY BMX. In the event that, at any time prior to first
launch by BMX of a Licensed Diagnostic Assay in the Bacteriology Field in a
Major Market Country, BMX decides not to continue to support the Agreed Budget
and Agreed Workplan (and provided that BMX and AFFX are unable to agree on
appropriate modifications to such Budget and Workplan), BMX shall promptly so
notify AFFX in writing that it wishes to terminate the Collaboration and this
Agreement and all licenses to AFFX technology hereunder shall terminate. In the
event of such termination, to the extent BMX has not already funded its minimum
commitment under Section 3.1 or under any Agreed Budget, as
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applicable, BMX shall pay such amounts to AFFX, together with such additional
amount as may be necessary to assure that AFFX receives funding at the level
previously agreed by BMX for a 12-month period following notice of termination,
and AFFX shall be free to use such funds on its own behalf or otherwise without
any obligation to BMX.
9.4 TERMINATION OF AGREEMENT FOR BREACH. Each Party shall be entitled
(but not required) to terminate this Agreement by written notice to the other
Party in the event that the other Party shall be in default of any of its
material obligations hereunder or if the other Party shall have materially
breached a covenant, representation or warranty made in this Agreement, and
shall fail to remedy any such default or breach within forty-five (45) days
after notice thereof by the non-breaching Party; provided, however, that in the
event of any dispute as to the existence of a default or the adequacy of remedy
thereof the Party charged with breach or failure to remedy may require that the
right to terminate be determined in arbitration pursuant to Section 14.1 and in
the event the arbitrator(s) determine there were reasonable grounds for the
Party so charged to dispute termination and that such Party acted in good faith,
the arbitrator(s) may afford reasonable opportunity to cure upon such terms as
they may direct. Any notice by a Party of termination pursuant to this section
shall specifically state that the non-breaching Party intends to terminate this
Agreement in the event that the breaching Party shall fail to remedy the
default. Upon termination of this Agreement pursuant to this Section 9.4, all
licenses and sublicenses granted pursuant to this Agreement shall
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terminate. The election by a Party to terminate this Agreement shall be without
prejudice to any other rights a Party may have with respect to such putative
breach.
9.5 SURVIVAL OF OBLIGATIONS: RETURN OF CONFIDENTIAL INFORMATION. Upon
any termination of this Agreement, neither Party shall be relieved of any
obligations incurred prior to such termination. Notwithstanding any termination
of this Agreement, the obligations of the Parties under Article 9 and Sections
6.3, 7.3, 10.1, Article 8 and Section 14.1, as well as under any licenses which
are maintained in effect and any other provisions which by their nature are
intended to survive any such termination, shall survive and continue to be
enforceable. Upon any termination of this Agreement, each Party shall promptly
return to the other Party all written Confidential Information, and all copies
thereof, of the other Party which is not covered by a license surviving such
termination, except for one copy thereof that may be retained by a Party's legal
department for archival purposes.
ARTICLE X. INDEMNIFICATION AND LIABILITY LIMITATIONS
10.1 PRODUCT LIABILITY INDEMNIFICATION.
(a) Except to the extent otherwise provided herein and in the
Manufacturing Agreement, BMX agrees to defend AFFX [ * ]
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[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
[ * ] The indemnity set forth in the foregoing sentence shall not apply in
the case of any Losses attributable to (i) [ * ]
(b) Except to the extent otherwise provided herein and in the
Manufacturing Agreement, AFFX agrees to defend BMX and [ * ]
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[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
[ * ] The indemnity set forth in the foregoing sentence shall not apply in
the case of [ * ]
10.2 INDEMNIFICATION OF BMX. Except to the extent otherwise provided
herein and in the Manufacturing Agreement, and [ * ] AFFX agrees to defend
BMX [ * ]
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[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
[ * ]
In addition to the foregoing indemnification, in the event of
substantial and extended inability of AFFX to practice the AFFX Licensed Core
Technology or to deliver Licensed DNA Probe Arrays due to circumstances as to
which BMX would be indemnified under subsection (i) above, the Parties shall
consult in good faith and, absent cure within a reasonable time, BMX shall be
free to terminate this Agreement and the Manufacturing Agreement.
10.3 PROCEDURE FOR INDEMNIFICATION. In the event of any such claim against
an indemnified party or its Affiliates or any of their agents, directors,
officers or employees, the indemnified party shall promptly notify the
indemnifying party in writing of the claim and the indemnifying party shall
manage and control, at its sole expense, the defense of the claim and the
settlement, the indemnified party shall cooperate with the indemnifying party
and may, at its option and expense, be represented in any such action or
proceeding. The parties shall consult as to any proposal for settlement of an
indemnified claim
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and neither party shall agree to any settlement which materially prejudices the
interests of the other party without the prior written consent of such other
party which shall not be unreasonably withheld. The indemnifying party shall
not be liable for any settlements, litigation costs or expenses incurred by the
indemnified party without the indemnifying party's written authorization.
ARTICLE XI. EXPORT
11.1 ACKNOWLEDGMENT. The Parties acknowledge that the export of technical
data, materials or products is subject to the exporting Party receiving the
necessary export licenses and that the Parties cannot be responsible for any
delays attributable to export controls which are beyond the reasonable control
of either Party. The Parties agree that regardless of any disclosure made by
the Party receiving an export of an ultimate destination of any technical data,
materials or products, the receiving Party will not reexport either directly or
indirectly, any technical data, material or products without first obtaining the
applicable validated or general license from the United States Department of
Commerce, United States Food and Drug Administration and/or any other agency or
department of the United States Government, as required. The receiving Party
shall provide the exporting Party with any information, materials,
certifications or other documents which may be reasonably required in connection
with such exports under the Export Administration Act of 1979, as amended, its
rules and regulations, the Federal Food, Drug and Cosmetic Act and other
applicable export laws.
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11.2 WRITTEN ASSURANCE. Without limitation of the foregoing, and in
support of maintaining a general license for the export of technical data under
this Agreement, a Party receiving an export agrees to not knowingly export or
reexport any technical data or materials furnished to such Party under this
Agreement, any part thereof or any direct product thereof, directly or
indirectly, without first obtaining permission to do so from the United States
Department of Commerce, the United States Food and Drug Administration and/or
other appropriate United States governmental agencies, into any country to which
restrictions apply.
ARTICLE XII. REPRESENTATIONS AND WARRANTIES
12.1 REPRESENTATIONS AND WARRANTIES OF AFFX. AFFX represents and warrants
to BMX as follows:
(a) POWER AND AUTHORITY. The execution and delivery of this
Agreement and the Manufacturing Agreement and the performance of the
transactions contemplated hereby and thereby have been duly authorized by all
appropriate corporate action, and AFFX has all requisite power and authority
to enter into this Agreement and the Manufacturing Agreement and to perform its
obligations hereunder and thereunder, and each of this Agreement and the
Manufacturing Agreement constitutes a valid and binding obligation of AFFX,
enforceable against AFFX in accordance with its terms.
(b) NO BREACH. The performance by AFFX of any of the terms and
conditions of this Agreement on its part to be performed does not and will not
constitute a breach of any other
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agreement or understanding, whether written or oral, to which it or any of its
Affiliates is a party.
(c) RIGHTS TO INTELLECTUAL PROPERTY.
(i) Set forth on Schedule 2 is a listing, to the extent known as
of the date hereof, identifying the Patents of AFFX (such Patents, along with
associated Know-how and Copyrights referred to as the "AFFX IP") to be utilized,
in the Collaboration and in connection with the Manufacturing Agreement.
(ii) AFFX owns or has the right to use pursuant to license,
sublicense, agreement or permission all the AFFX IP.
12.2 REPRESENTATIONS AND WARRANTIES OF BMX.
(a) POWER AND AUTHORITY. The execution and delivery of this
Agreement and the Manufacturing Agreement and the performance of the
transactions contemplated hereby and thereby have been duly authorized by all
appropriate corporate action, and BMX has all requisite power and authority
to enter into this Agreement and the Manufacturing Agreement and to perform its
obligations hereunder and thereunder, and each of this Agreement and the
Manufacturing Agreement constitutes a valid and binding obligation of BMX,
enforceable against BMX in accordance with its terms.
(b) NO BREACH. The performance by BMX of any of the terms and
conditions of this Agreement on its part to be performed does not and will not
constitute a breach of any other agreement or understanding, whether written or
oral, to which it or any of its Affiliates is a party.
(c) RIGHTS TO INTELLECTUAL PROPERTY.
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(i) Set forth on Schedule 5 is a listing, to the extent known as
of the date hereof, identifying the Patents of BMX (such Patents, along with
associated Know-how and Copyrights to the extent deemed applicable to the
purposes of the Collaboration referred to as the "BMX IP") to be utilized to the
extent that BMX deems it useful, in the Collaboration and in connection with the
Licensed Diagnostic Products.
(ii) BMX owns or has the right to use pursuant to license,
sublicense, agreement or permission all the BMX IP.
ARTICLE XIII. MISCELLANEOUS
13.1 PUBLICITY. Neither Party, nor any of its Affiliates, shall originate
any publicity, news release or other public announcement, written or oral,
relating to this Agreement or the existence of an arrangement between the
Parties, without the prior written approval of the other Party, which approval
shall not be unreasonably withheld, except as otherwise required by law.
13.2 ASSIGNMENT. Except as otherwise provided in this Agreement, neither
this Agreement nor any of the rights or obligations hereunder may be assigned by
either Party without the prior written consent of the other Party, except that
either Party may assign to an Affiliate, or to a party who acquires all or
substantially all of the relevant business relating to the subject matter of
this Agreement by merger, acquisition, sale of assets or otherwise.
13.3 GOVERNING LAW. This Agreement shall be governed by and interpreted
in accordance with the laws of California
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(without regard to its or any other jurisdiction's choice of law principles)
except that any arbitration hereunder shall be subject to the federal law
applicable to arbitration.
13.4 FORCE MAJEURE. In the event that either Party is prevented from
performing or is unable to perform any of its obligations under this Agreement
due to any act of God; fire; casualty; flood; war; strike; lockout; failure of
public utilities; injunction or any act, exercise, assertion or requirement of
governmental authority; epidemic; destruction of production facilities; riots;
insurrection; inability to procure or use materials, labor, equipment,
transportation or energy; or any other cause beyond the reasonable control of
the Party invoking this Section 13.4 if such Party shall have used its best
efforts to avoid such occurrence, such Party shall give notice to the other
Party in writing promptly, and thereupon the affected Party's performance shall
be excused and the time for performance shall be extended for the period of
delay or inability to perform due to such occurrence.
13.5 WAIVER. The waiver by either Party of a breach or a default of any
provision of this Agreement by the other Party shall not be construed as a
waiver of any succeeding breach of the same or any other provision, nor shall
any delay or omission on the part of either Party to exercise or avail itself of
any right, power or privilege that it has or may have hereunder operate as a
waiver of any right, power or privilege by such Party.
13.6 NOTICES. Any notice or other communication in connection with this
Agreement must be in writing and if by mail,
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by certified mail, return receipt requested, and shall be effective when
delivered to the addressee at the address listed below or such other address as
the addressee shall have specified in a notice actually received by the
addressor.
If to AFFX: Affymetrix, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
If to BMX: bioMerieux ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-2395
Attention: President
13.7 CALENDAR AND BUSINESS DAYS. Unless otherwise expressly stated to be
business days, all references to days shall mean calendar days; provided,
however, that if the last date or the deadline for the giving of notice or
performance of any other act or fulfillment or satisfaction of any condition set
forth in this Agreement shall fall on a day which is not a business day, then
the time for the giving of such notice or performance of such act or fulfillment
or satisfaction of such condition shall be extended to the next business day.
As used herein, the term "business days" shall mean all days other than
Saturdays, Sundays or state or federal holidays.
13.8 NO AGENCY. Nothing herein shall be deemed to constitute either Party
as the agent or representative of the other Party, or both Parties as joint
venturers or partners for any purpose. Each Party shall be an independent
contractor, not an employee or partner of the other Party, and the manner in
which a Party renders its services under this Agreement shall be within such
Party's sole discretion. Neither Party shall be responsible for the acts or
omissions of the other Party, and
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neither Party will have authority to speak for, represent or obligate the other
Party in any way without prior written authority from the other Party.
13.9 ENTIRE AGREEMENT. This Agreement, the Manufacturing Agreement and
the Schedules, Annexes and Exhibits hereto and thereto (which Schedules, Annexes
and Exhibits are deemed to be a part of this Agreement and the Manufacturing
Agreement for all purposes) contain the full understanding of the Parties with
respect to the subject matter hereof and supersede all prior understandings and
writings relating thereto. No waiver, alteration or modification of any of the
provisions hereof shall be binding unless made in writing and signed by the
Parties by their respective officers thereunto duly authorized.
13.10 HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not be considered in construing this
Agreement.
13.11 SEVERABILITY. In the event that any provision of this Agreement is
held by a court or arbitral panel of competent jurisdiction to be unenforceable
because it is invalid or in conflict with any law of any relevant jurisdiction,
the validity of the remaining provisions shall not be affected, and the rights
and obligations of the Parties shall be construed and enforced as if the
Agreement did not contain the particular provisions held to be unenforceable.
13.12 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their successors and permitted
assigns.
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13.13 THIRD PARTIES. None of the provisions of this Agreement shall be for
the benefit of or enforceable by any third party.
13.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
ARTICLE XIV. ARBITRATION
14.1 ARBITRATION. In the event of any controversy or claim relating to,
arising out of or in any way connected to any provision of this Agreement
("Dispute"), the Parties shall seek to settle their differences amicably between
themselves. Any unresolved Dispute shall be finally resolved by final and
binding arbitration, subject to the patent exception referred to below (the
"Patent Exception"). Whenever a Party shall decide to institute arbitration
proceedings, it shall give written notice to that effect to the other Party.
The Party giving such notice shall refrain from instituting the arbitration
proceedings for a period of ten (10) days following such notice to allow the
Parties to attempt to resolve the Dispute between themselves. If the Parties
are still unable to resolve the dispute, the Party giving notice may institute
the arbitration proceeding under the rules of the International Chamber of
Commerce ("ICC Rules"). Arbitration shall be held in Chicago, Illinois. The
arbitration shall be conducted before a single arbitrator mutually chosen by the
Parties, but if the parties have not agreed upon a single arbitrator within
fifteen (15) days after notice of the
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institution of the arbitration proceeding, then the arbitration will be
conducted by a panel of three arbitrators. In such case, each Party shall
within thirty (30) days after notice of the institution of the arbitration
proceedings appoint one arbitrator. The presiding arbitrator shall then be
appointed in accordance with ICC Rules. All arbitrator(s) eligible to conduct
the arbitration must undertake in writing as a condition of service to render
their opinion(s) promptly after the final arbitration hearing. No arbitrator
(nor the panel of arbitrators) shall have the power to award punitive damages or
any award of multiple damages under this Agreement and such awards are expressly
prohibited. Decisions of the arbitrator(s) shall be final and binding on the
Parties. Notwithstanding the foregoing, if within ten (10) days of the first
occasion when the Parties' representatives meet with the arbitrator(s) a Party
give notice by written designation of any matter relating solely to the validity
or scope of any Patent as being subject to the Patent Exception referred to
above, the matter so designated shall be set aside by the arbitrator(s) and
shall not be decided by them, provided that the matter so designated constitutes
a matter of which a United States District Court would have jurisdiction
pursuant to 28 U.S.C. Section 1338(a), whether by way of action for declaratory
judgement or otherwise, and provided further that such matter is submitted by
the designating Party for decision by such court upon a complaint filed within
thirty (30) days of such designation, to be decided as such court may determine.
In such case, the non-designating Party may elect (no later than the date on
which it files its answer to the complaint
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in the District Court) to refer the entire matter in controversy to such court,
but if such Party does not make such election the arbitrator(s) shall proceed to
decide the remaining matter before them to the extent feasible and shall take
such other action in such regard as they deem appropriate. Judgment on the
award of the arbitrator(s) may be entered in any court having jurisdiction
thereof. Except to the extent entry of judgment and any subsequent enforcement
may require disclosure, all matters relating to the arbitration, including the
award, shall be held in confidence by the Parties.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as a sealed instrument in their names by their properly and duly
authorized officers or representatives as of the date first above written.
AFFYMETRIX, INC. bioMERIEUX ▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------- -------------------------------
Its: President Its: President
----------------------------- -------------------------------
Date: October 14, 1996 Date: September 26, 1996
----------------------------- -------------------------------
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[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
Schedule 1
Initial Agreed Budget and Agreed Workplan
WORKPLAN FOR [ * ]
Overview The agreement between bioMeriux and Affymetrix includes the objective
of developing a new integrated DNA probe based diagnostic system for launch in
major markets and submission to FDA by [ * ]. This workplan details the
early phases of the work to establish the Product Concept and Technical
Feasibility. It is intended to complement the parallel Workplan for the
Mycobacterial Chip.
Concept/feasibility - [ * ]
Product Concept - The first objective of the concept/feasibility stage is to
formulate, and then test with marketing studies, a product concept for the first
generation system by [ * ]. This market concept will include:
[ * ]
A broad concept "goal" has been set as follows and will be refined through
technical studies and market feedback during this concept/feasibility phase.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Feature [ * ]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Menu [ * ]
--------------------------------------------------------------------------------
[ * ]
--------------------------------------------------------------------------------
Contamination control [ * ]
--------------------------------------------------------------------------------
Multidetection [ * ]
--------------------------------------------------------------------------------
First result available [ * ]
--------------------------------------------------------------------------------
Throughput [ * ]
--------------------------------------------------------------------------------
Automation and sample prep [ * ]
--------------------------------------------------------------------------------
Disposable [ * ]
--------------------------------------------------------------------------------
Quantification [ * ]
--------------------------------------------------------------------------------
Target market [ * ]
--------------------------------------------------------------------------------
Target launch date [ * ]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
[ * ]- The second objective of the concept/feasibility phase is to
[ * ]
Technical approach - [ * ] will all be tested and scored.
[ * ]
[ * ]- The third objective of the concept/feasibility phase [ * ]
Technical Approach - [ * ] and cost will be estimated.
[ * ]
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[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
[ * ]
Technical Approach - [ * ] will be studied.
Concept/Feasibility Demonstration - [ * ]
The goal of the concept/feasibility phase is define the different elements of
[ * ] The project aims to demonstrate a level of feasibility as described
below, on or before [ * ]
[ * ]
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[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
Schedule 2
AFFX Licensed Patents
[ * ]
-4-
[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
Schedule 3
[ * ] Milestone 3.5(a) Performance Criteria
Milestone: [ * ] as follows:
1. [ * ]
2. [ * ]
3. [ * ]
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[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
Schedule 4
Viral Agent Candidates
[ * ]
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[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
Schedule 5
BMX Collaboration Related Patents
[To be provided in good faith by BMX within one (1) week of the Effective Date
and included herein.]
[ * ]
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[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
Schedule 6
[ * ]
-8-
[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
Schedule 7
Currency Exchange
The currency exchange rates used to covert Net Sales made in currencies
other than the United States dollar by Affiliates of BMX shall be as follows.
1. Net Sales of Affiliates of BMX that are made in [ * ] (for which BMX
will provide AFFX copies in English at AFFX' request), shall be calculated,
and the Net Sales in such month converted using such conversion rate.
Royalty reports shall state the aggregate Net Sales for the applicable
quarter in U.S. dollars as so calculated, and shall state the conversion
rates applicable for each month in such quarter.
2. Net Sales of Affiliates of BMX that are made neither in [ * ] in the
manner set forth in paragraph 1. Royalty reports shall state the aggregate
Net Sales of each country for the applicable quarter in U.S. dollars as so
calculated, and shall state the conversion rates applied in each month to
calculate the [ * ] if available, or otherwise the [ * ] or another
applicable rate.
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS.................................................... 3
1.1 "Affiliate"....................................................... 3
1.2 "AFFX Collaboration Technology"................................... 3
1.3 "AFFX Licensed Core Technology"................................... 3
1.4 "Agreed Budget" and "Agreed Workplan"............................. 4
1.5 "Bacteriology Field".............................................. 4
1.6 "BMX Collaboration Technology".................................... 5
1.7 "Clinical Diagnosis".............................................. 5
1.8 "Collaboration"................................................... 5
1.9 "Collaboration Technology"........................................ 5
1.10 "Confidential Information"........................................ 5
1.11 "Contract Year"................................................... 6
1.12 "Copyrights"...................................................... 6
1.13 "Development Coordinating Committee".............................. 6
1.14 "DNA Probe Array"................................................. 6
1.15 "Full-Time Equivalent"............................................ 6
1.16 "Fully Loaded Manufacturing Cost"................................. 7
1.17 "High Density Probe Array"........................................ 7
1.18 "Joint Collaboration Technology".................................. 8
1.19 "Know-How"........................................................ 8
1.20 "Licensed Diagnostic Assay"....................................... 8
1.21 "Licensed Diagnostic Product"..................................... 9
1.22 "Licensed DNA Probe Array"........................................ 9
1.23 "Licensed Field".................................................. 9
1.24 "Major Market Country"............................................ 9
1.25 "Manufacturing Agreement"......................................... 9
1.26 "Net Sales"....................................................... 10
1.27 "Other Licensed Diagnostic Product"............................... 11
1.28 "Party"........................................................... 11
1.29 "Patents" or "Patent Rights"...................................... 11
1.30 "Probes".......................................................... 12
1.31 "Project Director"................................................ 12
1.32 "Related Funded Activities"....................................... 12
1.33 "Valid Patent Claim".............................................. 12
1.34 "Workplan"........................................................ 12
ARTICLE II. THE COLLABORATION............................................ 12
2.1 Purpose........................................................... 12
2.2 Committee......................................................... 13
2.3 Facilities........................................................ 14
2.4 Commitment........................................................ 14
2.5 Agreed Budgets and Workplan....................................... 15
2.6 Reports........................................................... 16
2.7 Staffing.......................................................... 16
2.8 Inspection........................................................ 18
2.9 Patent Assignment and Confidentiality Agreements.................. 19
2.10 Resolution of Impasse............................................. 19
ARTICLE III. FUNDING...................................................... 20
3.1 Collaboration Funding............................................. 20
3.2 Direct Expenses and Capital Funding for Equipment................. 21
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[ * ] Confidential Treatment Requested
by Affymetrix, Inc.
TABLE OF CONTENTS
(continued)
Page
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3.3 Related Activities................................................ 22
3.4 Other Expenditures................................................ 23
3.5 Milestone Payments................................................ 23
ARTICLE IV. DEVELOPMENT OBLIGATIONS....................................... 25
4.1 General Obligations............................................... 25
4.2 Supply of DNA Probe Arrays........................................ 26
4.3 Transition from Development to Manufacture........................ 28
4.4 BMX Supply........................................................ 28
4.5 Viral Agent Election.............................................. 29
ARTICLE V. OWNERSHIP; TECHNOLOGY RIGHTS................................... 29
5.1 Ownership of Collaboration Developments........................... 30
5.3 Option for Non-exclusive Licenses in the [ * ] and [ * ] Fields... 37
5.4 Industrial Testing and Other Fields............................... 38
5.5 Exclusivity of License............................................ 39
5.6 Limitations of License............................................ 39
5.7 Terms and Conditions of Exclusivity............................... 39
5.9 Assays Subject to Third Party Rights.............................. 44
5.10 Other Assays...................................................... 45
5.11 Loss of Right to Introduce New Assays and Other Products.......... 47
5.12 Entry by AFFX..................................................... 50
5.13 Patent Marking, License Legend and Trademarks..................... 50
ARTICLE VI. ROYALTIES..................................................... 51
6.1 Royalties Payable to AFFX in Respect of Sale of AFFX High Density
Probe Arrays...................................................... 51
6.2 Royalty Term...................................................... 52
6.3 Reports and Payment............................................... 53
6.4 Taxes............................................................. 54
6.5 Records........................................................... 54
6.6 Special Arrangement as to Certain Third Party Royalties........... 55
ARTICLE VII. PATENT PROSECUTION AND INFRINGEMENT RIGHTS................... 55
7.1 Responsibility for Patenting of Technology........................ 55
7.2 Infringement...................................................... 56
7.3 Claimed Infringement.............................................. 61
ARTICLE VIII. CONFIDENTIAL INFORMATION ................................... 61
8.1 Treatment of Confidential Information............................. 61
8.2 Release from Restrictions......................................... 62
8.3 Publications...................................................... 63
ARTICLE IX. TERMINATION................................................... 64
9.1 Term of Agreement................................................. 64
9.2 Termination of Collaboration...................................... 64
9.3 Termination by BMX................................................ 65
9.4 Termination of Agreement for Breach............................... 66
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TABLE OF CONTENTS
(continued)
Page
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9.5 Survival of Obligations: Return of Confidential Information...... 67
ARTICLE X. INDEMNIFICATION AND LIABILITY LIMITATIONS...................... 68
10.1 Product Liability Indemnification................................. 68
10.2 Indemnification of BMX............................................ 70
10.3 Procedure for Indemnification..................................... 71
ARTICLE XI. EXPORT........................................................ 71
11.1 Acknowledgment.................................................... 71
11.2 Written Assurance................................................. 72
ARTICLE XII. REPRESENTATIONS AND WARRANTIES............................... 73
12.1 Representations and Warranties of AFFX............................ 73
12.2 Representations and Warranties of BMX............................. 73
ARTICLE XIII. MISCELLANEOUS............................................... 75
13.1 Publicity........................................................ 75
13.2 Assignment....................................................... 75
13.3 Governing Law.................................................... 75
13.4 Force Majeure.................................................... 75
13.5 Waiver........................................................... 76
13.6 Notices.......................................................... 76
13.7 Calendar and Business Days....................................... 77
13.8 No Agency........................................................ 77
13.9 Entire Agreement................................................. 77
13.10 Headings......................................................... 78
13.11 Severability..................................................... 78
13.12 Successors and Assigns........................................... 78
13.13 Third Parties.................................................... 78
13.14 Counterparts..................................................... 78
ARTICLE XIV. ARBITRATION.................................................. 79
14.1 Arbitration....................................................... 79
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