Exhibit 10.5
LICENSE AGREEMENT
License Agreement effective this _____ day of _____ 1998 ("Effective
Date") by and between AFFYMETRIX, INC. a ________________ corporation, having a
place of business at 0000 Xxxxxxx Xxxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000
("Affymetrix", as that term is more fully defined in Paragraph 1.2 hereof) and
LLC, a limited liability company formed under the laws of Delaware, having a
place of business at 0000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxx
00000-0000 ("Newco").
R E C I T A L S
I. LLC is an Affiliate (as that term is hereafter defined) of
Affymetrix and a joint venture of Affymetrix and Xxxxxxx Xxxxxxx, Inc. a
Delaware corporation ("BCI"). BCI, as successor in interest of Xxxxxxx
Instruments, Inc., is the licensee of that certain License Agreement revised on
April 17, 1996 by and between Xxxxxxx Instruments, Inc. and Isis Innovation
Limited (the "Isis License").
II. BCI, on even date herewith, in accordance with that certain Asset
Purchase Agreement attached hereto as Exhibit A (the "AP" Agreement), sold and
delivered to Affymetrix and Affymetrix purchased and took from BCI, all of the
right, title and interest in and to certain Acquired Assets, including the BCI
Technology (as those terms are defined in the AP Agreement) that BCI possessed
and had the right to transfer. Included within the BCI Technology was the Isis
License.
III. Part of the consideration for BCI's sale of the Acquired Assets to
Affymetrix under the AP Agreement was the establishment of LLC as an Affiliate
of Affymetrix and the licensing of LLC under certain of Affymetrix' now owned or
hereafter acquired applications for
patent and patents relating to the making and using of Array Chips (as that term
is hereafter defined).
IV. Affymetrix desires to grant LLC licenses under certain of its now
owned or hereafter acquired applications for patent and patents relating to the
making and using of Array Chips and LLC desires to acquire such license.
V. NOW THEREFORE in consideration of the mutual understandings
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties intending to be
legally bound, agree as follows:
ARTICLE 1.0 DEFINITIONS
The following terms, when used herein with an initial capital letter
and without regard to whether they appear in the singular, plural or possessive
form, shall have the following defined meanings:
1.1 "AFFILIATE" shall mean any corporation or other form of limited
liability legal person, partnership, association, joint venture or other form of
business entity controlled by, controlling or under common control with a party
hereto. As used herein, the word and root "control" in the context of a
corporation shall mean the ownership, directly or indirectly, of more than fifty
percent (50%) of the voting shares or other equity interests entitled to vote in
the election of directors of the corporation; and, in the context of any other
form of business entity, the right to receive more than fifty percent (50%) of
the net profits of such entity and the right to a majority interest in the
management and control of such entity; provided that, notwithstanding the
foregoing definition, LLC may not have as an Affiliate entitled to receive the
benefits of the licenses granted under Section 3.1 hereof (a) a corporation
wherein any of the companies listed in Exhibit A is more than a passive investor
in such Affiliate and such passive
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investor does not have the right to manage or control such Affiliate or (b) a
partnership wherein any of the companies listed in Exhibit A is a partner.
1.2 "AFFYMETRIX" shall mean Affymetrix, Inc., its divisions and
Affiliates and its and their permitted successors and assigns.
1.3 "ARRAY CHIPS" shall mean a series of polynucleotides arranged on a
substrate to perform quantitative or qualitative analyses.
1.4 "LLC" shall mean Xxxxxxx Xxxxxxx, Inc., its divisions and
Affiliates and its and their permitted successors and assigns.
1.5 "LLC ARRAY CHIP" shall mean an Array Chip which is sold or used by
LLC and, but for the licenses and rights granted herein, would infringe any
valid claim in an unexpired and non-lapsed patent in the Patent Rights.
1.6 "BACTERIOLOGY FIELD" shall mean and be limited to:
[ ](1)
1.7 "CLINICAL DIAGNOSIS" shall mean a process in which a sample of
fluid or other material collected from individual humans that is used to aid in
diagnosis of one or more human diseases, the results of such process used for
communication to such persons or their physicians or other caregivers for
clinical decisions in connection with such individual humans.
1.8 "EXPRESSION ANALYSES" shall mean an Array Chip used for
determination of the amount of one or more expressed messenger RNA in a sample.
1.9 "GENE" shall mean a nucleic acid sequence or set of sequences
encoding a distinct messenger nucleic acid and protein as well as polymorphic
variants of such sequence;
(1) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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provided that, such polymorphic variants must have at least 99.9% homology with
the underlying gene.
1.10 "LICENSED PRODUCT" shall mean any LLC Array Chip or component
thereof or any product, kit, instrument or system which, but for the licenses
and rights granted herein, would infringe any valid claim in an unexpired and
non-lapsed patent in the Patent Rights.
1.11 "LICENSED PROCESS" shall mean any process, method or procedure the
practice or use of which, but for the licenses and rights granted herein, would
infringe any valid claim in an unexpired and non-lapsed patent in the Patent
Rights.
1.12 "NET SALES" shall mean the gross receipts of LLC from the sale of
LLC Array Chips to an unaffiliated third party, less those of the following
actually incurred by LLC as an element of such sales: transportation, special
packing and crating charges, insurance, custom duties, commissions, returns,
allowances in lieu of actual returned or rejected LLC Array Chips, sales, use
and turnover taxes, and trade, quantity, contract and cash discounts. The value
of LLC Array Chips transferred by LLC to unaffiliated third parties as free
samples or the use of LLC Array Chips by LLC for sales demonstration purposes or
for quality control or other internal, non-revenue generating purposes shall not
be included in the calculation of Net Sales.
In the event a LLC Array Chip is sold in combination with other
apparatus or products, as part of a kit, or in any other combination, and the
LLC Array Chip is not separately valued on the invoice or other document
evidencing such sale, the Net Sales of the LLC Array Chip shall be the then
current list price for the LLC Array Chip when sold separately or, in the
absence of such list price, shall be determined by multiplying the aggregate
selling price of the combination by a fraction the numerator of which shall be
LLC's standard costs for the LLC Array Chip and the
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denominator of which shall be LLC's standard cost for the total combination at
the time of the sale. In the event that both the LLC Array Chip and other
product have separate list prices but are being sold at a combination price
which is less than the total of the separate list prices, then the Net Sales of
the LLC Array Chip shall be determined by multiplying the invoice price charged
for the combination by a fraction, the numerator of which is the list price of
the LLC Array Chip and the denominator of which is the sum of the list prices of
the LLC Array Chip and such other products.
1.13 "PATENT RIGHTS" shall mean all applications for patent (and any
continuation or continuation-in-part of such applications) and patents (and
reissues of such patents), filed or issued in any country of the world, (a)
now owned or controlled by Affymetrix or at any time during [ ]
(2) commencing with the Effective Date owned or controlled by Affymetrix and
(b) relating to or useful in the manufacture or use or processing of Array
Chips; provided that Patent Rights shall not include the specific claims of
any such applications or patents related to: (i) [ ],(3) or (ii) [ ]
,(4) or (iii) [ ],(5) or (iv) [ ],(6) or (v) [ ].(7) For purposes
of this definition, a patent or application for patent is controlled by
Affymetrix if Affymetrix is a licensee under such patent or application and
Affymetrix has the right to grant sublicenses to third parties, in each case
without regard to whether Affymetrix would thereby be responsible for
reporting to and/or paying royalties to such third party as a result or as a
consequence thereof or as a result
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(2) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(3) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(4) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(5) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(6) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(7) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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or consequence of LLC's use of such patent or application. If a patent or
application for patent is controlled by Affymetrix it shall be sublicensed to
LLC at the same royalty rate as Affymetrix pays to its licensor and subject to
the same restrictions and obligations as apply to Affymetrix promptly after
Affymetrix' acquisition of such control.
ARTICLE 2.0 REPRESENTATIONS AND WARRANTIES
Affymetrix represents and warrants that (a) it owns or otherwise has
the right to grant the licenses and rights provided for herein under all of the
applications or patents presently in the Patent Rights, and (b) it will use
commercially reasonable efforts to obtain the right in any license agreement it
hereafter enters with third parties to obtain rights to applications for patent
or patents of such third parties wherein the applications for patent or patent
are useful or necessary for making or using Array Chips and not subject to
exclusions (i)-(v) of the definition of Patent Rights, to pass such license on
to LLC under the same terms and conditions as those granted to Affymetrix by
such third parties.
ARTICLE 3.0 LICENSE GRANT
3.1 LICENSE GRANT - Subject to the remainder of this Paragraph 3.1,
Affymetrix hereby grants to LLC and LLC accepts a royalty bearing,
non-exclusive, world-wide right and license under the Patent Rights (without the
right to grant sublicenses) to (a) make, have made, import, use, sell, lease and
otherwise dispose of Licensed Products in all fields, uses and applications
except for the Bacteriology Field, (b) to practice Licensed Processes, and
(c) to pass on to its direct and indirect customers of Licensed Products the
right to practice Licensed Processes on any instrument or system distributed
by LLC under a LLC trademark. The foregoing license is subject to the
following provisos: (a) the exception as to the Bacteriology
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Field shall be only for so long in time and only to the extent that
Affymetrix is excluded from granting licenses to others in such Field by the
license agreement with [ ](8) in effect as of the Effective Date; and (b) the
right to have Licensed Products made for LLC by third parties shall not
extend to any third party which Affymetrix has informed LLC is, at the time
of LLC's intention to use such third party as a supplier, an infringer of the
Patent Rights and against which Affymetrix is either in negotiation to grant
them a license or against which Affymetrix intends to bring litigation to
halt such infringement either within the next six (6) months or within six
(6) months of the conclusion of any pending litigation against another party
involving the Patent Rights, unless the third party intended supplier ceases
its infringement or takes a license from Affymetrix.
3.1.1 LLC shall notify Affymetrix in writing of any third
party that LLC intends to use as a supplier of LLC Array Chips under the license
of Paragraph 3.1. Affymetrix shall, not later than ten (10) business days after
receipt of such notice, inform LLC, in writing, whether such third party is an
infringer of the Patent Rights and Affymetrix is either in negotiation to grant
such third party a license or Affymetrix intends to bring litigation against
such third party to halt such infringement within the next six (6) months or
within six (6) months of the conclusion of any pending litigation against
another party involving the Patent Rights. If Affymetrix fails to provide such
notice then LLC may use such third party as a supplier of LLC Array Chips under
the license of Paragraph 3.1. If Affymetrix notifies LLC that such third party
is an infringer of the Patent rights but fails to grant a license within six (6)
months of such notice or to bring a lawsuit to halt such infringement within the
time periods of the second sentence
----------------
(8) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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hereof, then LLC may use such third party as a supplier of LLC Array Chips under
the license of Paragraph 3.1.
3.2 PATENT MARKING - LLC shall attach a label or product insert on each
Licensed Product reasonably reflecting patent numbers of issued U.S. patents
covering such Licensed Product and owned by Affymetrix and will reasonably
modify such labels or inserts periodically at the direction of Affymetrix to add
or delete patent numbers.
3.3 NOTIFICATIONS OF NEW PATENT RIGHTS - Affymetrix shall on or about
each anniversary of this Agreement inform LLC of any U.S. patents which have
issued in the preceding twelve (12) months which fall within the definition of
Patent Rights of Paragraph 1.13 and each patent which is controlled by
Affymetrix wherein the agreement granting such control was signed in the
preceding twelve (12) months. Notwithstanding the foregoing or anything in this
License Agreement to the contrary, the failure of Affymetrix to notify LLC of an
addition to the Patent Rights in accordance with this Paragraph 3.3 shall have
no effect on the rights granted to LLC under Paragraph 3.1 and such applications
and patents shall be included in the Patent Rights without regard to whether LLC
does or does not receive such notice.
ARTICLE 4.0 ROYALTIES AND ROYALTY REPORTS
4.1 ROYALTIES - Subject to Paragraph 4.2 and Paragraphs 4.1.1, LLC
shall pay Affymetrix for all of the licenses and rights granted under this
License Agreement, a running royalty of [ ](9) on each LLC Array Chip
used for Expression Analysis and [ ](10) for all other LLC Array Chips,
in each case sold by LLC to an unaffiliated third party or used by LLC on
behalf of an unaffiliated third party. No
----------------
(9) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(10) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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royalty shall be due from LLC to Affymetrix for LLC Array Chips which are: (a)
transferred by LLC to an unaffiliated third party as free samples, or (b) used
by LLC for sales demonstration purposes, or (c) used by LLC for quality control,
testing or any other internal, non-revenue generating purposes.
4.1.1 The royalty of Paragraph 4.1.1 for a LLC Array Chip
used for Expression Analysis shall be the applicable royalty to be paid to
Affymetrix only so long as such royalty, when converted to a percentage of
the actual market selling price (to distributors or end users) of an Array
Chip which is competitive with such LLC Assay Chip and is sold by a party
other than LLC (which party is not infringing the intellectual property
rights of Affymetrix without a license from Affymetrix where Affymetrix is
using reasonable efforts to enforce its patent rights against such party
through litigation) is less than [ ](11). In such event, LLC may require
that the basis of paying royalties be converted from the foregoing fixed
amount of [ ](12) to a percentage [ ](13). LLC shall notify
Affymetrix, in writing, of the occurrence of such event and that the
mechanism described in this Paragraph 4.1.1 should be invoked with respect to
a LLC Array Chip. The parties shall promptly meet and use their best efforts
to negotiate as to whether adjustment in the royalty rate is appropriate, and
if appropriate such new royalty rate. If the parties cannot agree within
ninety (90) days of such notice, all royalties in excess of [ ](14) shall
be placed in escrow and the matter shall be submitted to arbitration for
resolution pursuant to Paragraph 13.2 below. The parties agree that the
following is an
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(11) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(12) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(13) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(14) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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illustration of their intent: If LLC is selling an Array Chip with [ ]
(15), the royalty due to Affymetrix for that LLC Array Chip would be [ ]
(16). If Affymetrix or a third party is selling an Array Chip which is
competitive with the LLC Array Chip at a price to distributors or end users
of [ ](17) the royalty rate paid by LLC, [ ](18) of the
competitive Array Chip would be [ ](19) and there would be no adjustment
in the royalty basis. If the competitive Array Chip is actually selling for
[ ](20) the royalty rate paid by LLC, [ ](21) Array Chip
would be [ ](22) and LLC may require conversion of the royalty for the
LLC Array Chip [ ](23) (not to exceed [ ](24) of such LLC
Array Chip. For purposes of this Paragraph an Array Chip is competitive with
a LLC Array Chip if such Array Chip is directed to the same or substantially
the same set [ ](25) as the LLC Array Chip. If the parties
cannot agree to a royalty percentage, the issue will be submitted to
arbitration in accordance with Article 13.0 hereof.
4.1.2 The royalties herein assume that profits by LLC in association with Array
Chips sales are primarily or exclusively derived from sales of Array Chips. In
the event that material profits are derived primarily from other sources (such
as associated reagent sales),
------------------
(15) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(16) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(17) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(18) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(19) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(20) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(21) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(22) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(23) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(24) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(25) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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the parties shall promptly meet and use their best efforts to negotiate an
alternative definition of Net Sales to account for such sales.
4.2 ROYALTY STACKING - If, at any time during the life of this
License Agreement, LLC discovers that any LLC Array Chip or the use thereof
infringes claims of an unexpired patent or patents other than those in the
Patent Rights LLC may, if it has not already done so, negotiate with the
owner of such patents for a license on such terms as LLC deems appropriate.
Should the license with the owner of such patents require the payment of
royalties or other consideration to such owner then the royalties otherwise
payable under this License Agreement shall be reduced [ ](26) based on
the value of the patents other than those in the Patent Rights relative to
the Patent Rights licensed under this Agreement. The parties shall meet
promptly after LLC takes the license under such other patents to agree on the
relative value of such patents and the amount of royalty reduction. If the
parties cannot agree the issue may be submitted to arbitration in accordance
with Article 13.0 hereof.
4.3 ROYALTY REPORTS - LLC shall, commencing with the calendar quarter
which includes its first sale of a LLC Array Chip and each calendar quarter
thereafter, not later than forty-five (45) days after the close of its
accounting books and records for such quarter, provide to Affymetrix an
accounting report of the type and quantity of each LLC Array Chip sold by LLC
during such calendar quarter and the Net Sales received therefrom. The royalty
due and payable to Affymetrix shall accompany such report.
4.4 BOOKS AND RECORDS - LLC shall keep or cause to be kept books,
records and accounts in accordance with generally accepted accounting principles
consistently applied covering LLC's activities hereunder and containing all
information necessary for the true and
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(26) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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accurate determination of the amounts earned and paid hereunder. LLC shall, not
more than once per year and upon prior reasonable written notice from
Affymetrix, permit a certified public accountant appointed and paid for by
Affymetrix (the "Auditor") and reasonably acceptable to LLC to inspect each LLC
facility manufacturing LLC Array Chips and to review the previous two (2) years
books, records and accounts to verify the amounts earned by Affymetrix and paid
by LLC hereunder. The Auditors shall furnish to both parties reports stating
only its findings during such inspection as to the accuracy, or the nature and
extent of any inaccuracy of such books, records, accounts and payments.
4.4.1 Any deficiency identified by the Auditor between the
amounts actually earned by Affymetrix under this Article 4.0 and the amounts
reported to be earned and paid on by LLC in accordance with Paragraph 4.3
hereof shall, unless disputed by LLC, be paid to Affymetrix within thirty
(30) days of receipt by LLC of the Auditor's report. LLC shall also pay
interest on the undisputed amount at the rate of [ ](27) per month. The
parties agree to diligently negotiate and promptly settle any disputes as to
the amount of royalties earned by Affymetrix and payable by LLC hereunder. If
the deficiency between the amount actually due to Affymetrix as reported by
the Auditor and the amount actually paid to Affymetrix by LLC is greater than
[ ](28) in Affymetrix' favor then LLC shall reimburse Affymetrix for the
actual and reasonable expenses of the Auditor.
4.5 TAXES ON ROYALTIES - All payments provided for in this License
Agreement refer to lawful money of the United States of America. All payments
shall be made by LLC to Affymetrix at the office of Affymetrix designated above
and shall be made
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(27) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(28) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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in the full amounts as herein specified; provided, however, that deduction may
be made from such payments by LLC for amounts required to be withheld and paid
by LLC in respect of any income tax levied or assessed upon such payments by,
and in accordance with the laws of, any foreign government or taxing authority.
Affymetrix shall have the right at any time or from time-to-time to contest by
appropriate proceedings the validity or amount of any such income tax withheld.
If so requested by Affymetrix, LLC will make such payments under protest, and,
on behalf and at the expense of Affymetrix, take such other action and render
all reasonable assistance that may be required by Affymetrix in the prosecution
of any such proceedings. LLC will obtain and forward to Affymetrix tax credit
receipts or vouchers for all income taxes thus withheld and paid by LLC.
4.6 ROYALTIES EARNED IN FOREIGN CURRENCY - In the event that either Net
Sales or the royalties set forth above are initially calculated in a foreign
currency, conversion shall be made in each instance by employing the closing
transfer buying rate for United States dollars quoted by the Wall Street
Journal, for the last business day of the calendar quarter which the payment
covers; provided, however, that if a foreign currency not listed in the Wall
Street Journal is involved, then the closing transfer buying rate quoted by
Citibank (New York) shall be employed in effecting such conversion thereof.
ARTICLE 5.0 CONSTRUCTION OF PATENTS
If a judgment or decree is entered, which becomes final through the
exhaustion of all permissible applications for rehearing or review by a superior
tribunal, or through the expiration of the time permitted for such applications
(hereinafter referred to as an "irrevocable judgment"), on the validity, scope,
enforceability or priority of any claim or claims of any patent or patent
application included in the Patent Rights the construction placed upon any
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such claim or claims by such irrevocable judgment shall be thereafter followed
with respect to acts occurring thereafter.
If such irrevocable judgment holds any claim in the Patent Rights
invalid or unenforceable or is adverse to the patent in the Patent Rights
containing such claim as to inventorship, or construes all applicable claims in
a patent in the Patent Rights so as not to cover one or more LLC Array Chips,
LLC shall be relieved thereafter from payment of royalties under Article 4.0
hereof, as to such LLC Array Chips sold after the date of such irrevocable
judgment covered only by such claim or claims to which such irrevocable judgment
is applicable, and from the performance of those other acts which may be
required by this License Agreement only as to such claim or claims.
ARTICLE 6.0 PROSECUTION OF INFRINGERS
If LLC determines that a third party is infringing a claim of a patent
in the Patent Rights by making, using or selling a product which competes with a
LLC Array Chip then being sold by LLC, it shall notify Affymetrix thereof in
writing. Such notice shall include information in LLC's possession relevant to
such third party and the competing product. Affymetrix shall have ninety (90)
days in which to either obtain the consent of such third party to discontinue
such infringement or to exercise its right to bring an action to cause such
infringement to cease. Affymetrix shall have no obligation to bring an action
for infringement; provided however, if Affymetrix does not obtain the consent of
such third party to cease infringement or does not bring suit against the third
party under the patent, then LLC shall have the right to discontinue paying
royalties under the effected patent for LLC Array Chips until either the third
party discontinues its infringing activity or Affymetrix brings a lawsuit
against the third party for such infringement.
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ARTICLE 7.0 TERM AND TERMINATION
7.1 TERMINATION BY AFFYMETRIX - If LLC shall at any time be in material
breach of this License Agreement, including but not limited to, default on any
payment hereunder, or of the making of any report hereunder, or shall make any
materially false report and should fail to remedy such material breach within
sixty (60) days after written notice thereof by Affymetrix, the latter may, at
its option, terminate this License Agreement by notice to such effect, provided
that such termination shall not release LLC from its obligation to pay
Affymetrix royalties or other sums due and accrued prior to the date of such
termination.
7.2 TERMINATION BY LLC - LLC shall have the right upon three (3) months
prior written notice to Affymetrix to terminate this License Agreement in its
entirety, such surrender being operative to relieve LLC, as of the effective
date of said notice, of all obligation to pay royalties which would otherwise
have accrued thereafter pursuant to this Agreement. Such termination or
surrender shall not relieve LLC of its obligation to pay royalties or other sums
due and accrued prior to the effective date of such notice.
7.3 TERM - Unless previously terminated as provided herein, the life of
this License Agreement and the license granted herein shall run from the
Effective Date to the end of the term of the last expiring patent now or
hereafter included in the Patent Rights.
7.4 CONTESTING VALIDITY - In the event that LLC or its Affiliates
contests the validity of one or more of the licensed patents or applications
within the Patent Rights, the licenses to such patents or applications (and no
others) shall immediately terminate.
ARTICLE 8.0 EXERCISE OF RIGHTS
The failure by one of the parties under this License Agreement to
assert its rights for any breach of this License Agreement shall not be deemed a
waiver of such rights. The rights and
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remedies specified herein, except those specified as exclusive, are in addition
to and shall not restrict any right or remedy either party may have at law or in
equity for any breach of this License Agreement.
ARTICLE 9.0 ASSIGNMENT
LLC may not assign this License Agreement in whole or in part without
obtaining the prior written approval of Affymetrix, except that LLC shall have
the right to assign this License Agreement without the consent of Affymetrix to
any Affiliate and to any successor of its entire business or all or
substantially all of the assets of its entire business; provided that LLC may
not sell such Affiliate or its assets other than as part of a transaction
involving LLC as a whole so long as the assets of such Affiliate include this
License Agreement.
ARTICLE 10.0 [ ](29) LICENSEE
[ ].(30)
ARTICLE 11.0 NOTICES
All notice and payments required or permitted to be given hereunder
shall be in writing and addressed to the respective parties as follows:
If to Affymetrix: Affymetrix, Inc.
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: ____________________
If to LLC: Xxxxxxx Xxxxxxx, Inc.
0000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: President
With a copy to: Xxxxxxx Xxxxxxx, Inc.
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(29) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(30) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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0000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: General Counsel
or such other addresses as may be designated by the respective parties in
writing. A notice shall be deemed given the earlier of the date when actually
received if sent by messenger or facsimile (with notice of receipt in good order
requested and received) or three (3) days after deposit in the United States
registered or certified mail, postage prepaid, and properly addressed.
ARTICLE 12.0 SECTION HEADINGS
Section headings are for convenience only and shall not be construed to
limit or extend the meaning of any portion of this License Agreement.
ARTICLE 13.0 LAW GOVERNING AND CONSTRUCTIONS
13.1 APPLICABLE LAW - This License Agreement shall be governed by and
construed in accordance with the laws of the State of California as if it has
been delivered in California, and all acts performed or required to be performed
hereunder have been performed entirely within such state, not including, however
any conflicts of law rule of California which may direct or refer such
determination to the laws of any other state or country. Neither party shall be
entitled to nor request injunctive or other equitable relief prior to
adjudication on the merits.
13.2 MEDIATION AND ARBITRATION - Any controversy or conflict involving
this License Agreement, its interpretation or the respective rights or
obligations of the parties shall first be submitted to their respective
Vice-Presidents for resolution. If they cannot agree, the controversy shall be
submitted to mediation to be held in a mutually agreeable neutral place. If the
parties still cannot settle the controversy or reach an accommodation, the
matter shall be
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submitted to binding arbitration to be conducted in California at a location to
be mutually agreed in accordance with the following rules:
(a) There shall be a panel of three (3) arbitrators, all of
whom shall be lawyers and at least two (2) of which shall be competent to fully
understand the technology relating to Array Chips. If the parties cannot agree
on the selection of the three (3) then each shall pick one (1) arbitrator and
the two (2) so chosen shall select the third.
(b) All disputes which are not specifically raised by the
parties in the arbitration process shall be forever waived.
(c) The arbitration proceeding shall be governed by (i) the
rules and understandings set forth in this Paragraph 13.2 or as hereafter agreed
upon in writing by the parties, and (ii) to the extent not inconsistent with
such rules and understandings, by the Commercial Arbitration Rules of the
American Arbitration Association.
(d) The parties agree to refrain from filing a lawsuit with
regard to any aspect of their controversy and to abide by and perform any award
rendered by the arbitrators. The parties further agree that a judgment of a
Court having jurisdiction may be entered upon the award and an execution may be
issued for its collection.
(e) At least two (2) of the panel of arbitrators must agree on
each point in controversy for an award to be rendered.
(f) The arbitration hearing shall be convened within
forty-five (45) days of request therefor by either party. The request shall be
in writing and sent in accordance with Article 11.0. The hearing shall be
limited to three days: Each party shall have a maximum of eight (8) hours to put
on its main case and four (4) hours for rebuttal. Neither party shall
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engage in extended cross-examination or other tactics which have the effect of
substantially altering this allocation.
(g) The parties agree to exchange all documents they intend to
produce at the hearing at least thirty (30) days in advance of the opening of
the arbitration hearing. There will be no taking of depositions, service of
interrogatories or any other form of discovery other than producing documents
relevant to the proceedings and neither party may compel the appearance of the
other party's employees, officers, directors or consultants.
(h) The arbitrator's decision must be rendered within thirty
(30) days after completion of the arbitration hearing.
(i) A transcript may, at the option of the parties, be made.
Either party may, at its expense, tape record or video tape the proceedings.
(j) All applicable common law or statutory privileges such as
attorney-client or attorney work product shall be applicable to the arbitration
proceedings.
(k) Either party may, at its option, use prepared testimony as
long as the witness whose testimony is so presented is available to the other
party for cross-examination.
(l) Each party shall bear its own expenses for the arbitration
and they shall each share equally in the expenses and fees of the arbitration
panel.
ARTICLE 14.0 MISCELLANEOUS
14.1 Nothing in this License Agreement shall be construed as conferring
any right to use in advertising, publicity, or other promotional activities any
name, trade name, trademark, or other designation of either party hereto without
the express written approval of the other party.
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14.2 Affymetrix makes no warranties as to the validity or scope of any
of the Patent Rights, or that any manufacture, sale, use, or other disposition
of the products licensed hereunder will be free from infringement of patents,
utility models, and/or design patents of third parties. Nothing in this License
Agreement shall be considered as conferring any warranty or representation as to
the usefulness, marketability, or merchantability of any products sold within
the scope of the licenses hereunder. Affymetrix and LLC agree to hold the other
harmless from any personal injury or products liability claims made as a result
of the sale of products licensed hereunder.
14.3 The Parties will retain the terms of this License Agreement in
strict confidence, except as may be required by regulatory agencies or courts,
and will then use all reasonable precautions to maintain the terms of this
License Agreement confidential.
14.4 LLC and Affymetrix represents that they are familiar with the
Export Administration Regulations comprising the compilation of official
regulations and policies governing the export licensing of commodities and
technical data promulgated by the United States Department of Commerce, Bureau
of International Commerce, Office of Export Administration. Notwithstanding any
other provisions of this License Agreement, and each assures the other that with
respect to all information and licenses furnished by or under this License
Agreement, that it will comply with such official regulations.
14.5 In the event that any provision of this License Agreement is held
invalid or unenforceable for any reason, such unenforceability shall not affect
the enforceability of the remaining provisions of this License Agreement, and
all provisions of this License Agreement shall be construed so as to preserve
the enforceability hereof.
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14.6 This License 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.
14.7 This License Agreement has been drafted on the basis of mutual
understanding after considerable negotiation and neither party shall be
prejudiced as being the drafter thereof.
ARTICLE 15.0 ENTIRE AGREEMENT, MODIFICATIONS, ETC.
This instrument contains the entire and only agreement between the
parties relative to the subject matter hereof and supersedes all previous
negotiations, representations, undertakings and agreements both written and oral
heretofore made between the parties as to the subject matter. Any
representation, promise or condition in connection herewith not specifically
incorporated herein shall not be binding upon either party.
No modification, renewal, extension, waiver, cancellation or
termination of this License Agreement or of any of the provisions herein
contained shall be valid until and unless made in writing and signed on behalf
of the respective parties by duly authorized officers thereof.
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IN WITNESS WHEREOF, the parties have respectively caused this License
Agreement to be executed on the dates hereinafter indicated.
Xxxxxxx Xxxxxxx, Inc. Affymetrix, Inc.
By: By:
------------------------ -------------------------
Title: Title:
--------------------- ----------------------
Date: Date:
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Exhibit A
The following companies and their subsidiaries and Affiliates:
[ ](31)
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[ ](32)
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[ ](33)
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[ ](34)
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[ ](35)
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[ ](36)
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[ ](37)
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[ ](38)
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(31) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(32) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(33) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(34) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(35) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(36) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(37) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(38) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
