INTERNAL USE LICENSE AGREEMENT
Effective as of Nov. 30, 1998 (the "EFFECTIVE DATE"). Affyrnetrix. Inc., a
Delaware corporation ("Affymetrix") and Rosetta Inpharmatics, Inc., a Delaware
corporation ("Licensee") (each a "Party" and together "the Parties"), agree as
follows:
1. DEFINITIONS.
1.1 "ABE," which stands for Array Based Experiment, means a single experiment
involving hybridization of a labeled sample on a Nucleic Acid Array licensed
hereunder and that is covered at the time and place of the experiment by one or
more valid claims of a patent claim within the Licensed Patents. A "valid claim"
shall include a claim that has not been held to be invalid by a final judgement
from which no appeal can be taken. If labeled samples (including the same
sample) are consecutively hybridized to a single Nucleic Acid Array, then the
number of ABEs is equal to the number of consecutive hybridizations. If two
differently labeled samples arc mixed and simultaneously hybridized to a single
Nucleic Acid Array, then there has been one ABE.
1.2 "Affiliate" means any corporation or other business entity controlled by.
controlling, or wider common control with a Party, but only for so long as such
Affiliate remains an Affiliate of a Party, and only if such Affiliate is bound
in writing by the terms of this Agreement. For this purpose, "control" means
direct or indirect beneficial ownership of more than 50% of; (i) the voting
stock or other controlling equity interest in, or (ii) the revenue, of such
corporation or other business. References to Licensee in this Agreement will
include Licensee's Affiliates.
1.3 "Array Maker" means a device used to fabricate Nucleic Add Arrays by
mechanical fabrication methods. For clarity, the parties understand that
"mechanical fabrication" does not include controlled direction of
electromagnetic energy at a portion of a support (e.g. fabrication through
photolithographic synthesis methods), but does include the use of an inkjet
system to place nucleic acids on a support.
1.4 "Licensed Patent(s)" means the U.S. and Foreign Patents (and reissues,
renewals, and extensions thereof) and Patent applications set forth on Exhibit
A. as well as any U.S. or foreign application (including divisionals,
continuations, and continuations-in-part) claiming priority to any of the
foregoing and patents issuing thereon, as well as reissues, renewals, and
extensions thereof.
1.5 "Nucleic Acid Array" means (i) an array fabricated solely by placing only
fully synthesized nucleic acids (clonal polynucleotides or other presynthesized
polynucleotides, with no further fabrication of nucleic acids) at defined
locations on a solid support or (ii) an array fabricated solely by synthesizing
oligonucleotides using an inkjet head to deposit nucleotides at defined
locations on a solid support without using controlled direction of
electromagnetic energy. In the case of both (i) and (ii), all of such nucleic
acids may not represent more than 8,000 genes/expressed sequence tags; provided,
however, during the periods of this Agreement in which Licensee has purchased an
unlimited number of ABEs there shall be no limit on the number of
genes/expressed sequence tags that Licensee may represent on a single Nucleic
Acid Array.
2. LICENSE. During the term of this Agreement, Affymetrix grants Licensee a
nontransferable, nonsublicensable, nonexclusive, worldwide, royalty-bearing
license under the Licensed Patents, to internally use Array Makers and make
(but not have made, sell, import, distribute or lease) and internally use
Nucleic Acid Arrays made from such Array Makers for analyzing the presence,
absence, or level of expressed messenger RNA in cells for academic and
commercial research use only. For clarity, the Parties understand that
diagnostic applications are not being licensed.
2.1 This Agreement does not grant Licensee a license to:
(a) transfer a Nucleic Acid Array to any third party or
(b) provide services to any third party with respect to a Nucleic Acid Array.
For clarity, the Parties understand that biological research activities
involving Nucleic Add Arrays conducted by Licensee within a collaboration that
meets the requirements of Section 2.1(c)(ii) are permitted; or
(c) distribute, license or otherwise make available to a third party any data
or database that is obtained from the use of a Nucleic Acid Array, except as
follows:
i) Licensee may license data obtained from a Nucleic Acid Array to a
third party licensee specifically related to a particular compound,
drug, target, pathway or transcript state of a cell that has been
discovered or analyzed through use of the Nucleic Acid Array, provided
that such third party licensee (or its direct distributors or
sublicensees) pays substantial consideration for the right to develop
and market such compound, drug or target with the bone fide intent to do
so in accordance with such third party licensee's commercial policies in
effect from time to time; or
ii) Licensee may transfer data to a third party when such data is
obtained within a bona fide collaboration with such third party (a
"Collaborator") in which: (A) the Collaborator provides substantial
scientific input to experimental design, (B) the collaborative
relationship is set forth in an agreement signed by the Licensee and
the Collaborator prior to the use of any Nucleic Acid Arrays to
generate such data, and (C) Licensee retains material intellectual
property rights in substantial discoveries or inventions that arise
from such data, including know-how if there are no patent rights
directly associated with such know-how and such know-how has
significant value as compared to other intellectual property arising
from the collaboration. Bona fide collaborations do not include
arrangements whose primary purpose is to give third party access to
data or databases or provide nucleic acid hybridization services, or
iii) Licensee may transfer data to a third party so long as Licensee
receives no consideration or other quid-pro-quo for such transfer and
such data is not made preferentially available to customers of Licensee
(e.g. such transfer cannot be contingent on the third party and
Licensee exchanging other goods, services or intellectual property), or
(d) identify polymorphisms in genes/expressed sequence tags or perform
genotyping analysis.
2.2 Licensee may make the data described in Section 2. l(c)(i)-(iii) (`Permitted
Data") available to third parties only pursuant to written agreements containing
obligations that: (a) are no less restrictive than those in Section 2.1; and (b)
explicitly benefit Affymetrix by providing Affymetrix the right to enforce the
provisions of such agreement that correspond to Section 2.1 hereof in the event
that Licensee does not or cannot enforce such provisions itself and (c) prohibit
such third parties from sublicensing or otherwise further distributing such
Permitted Data except as set forth in Section 2.1 (c)(i). Licensee agrees not to
exceed the scope of the licenses grimed under this Agreement.
* Material has been omitted pursuant to a request for confidential treatment,
and such material has been filed separately with the SEC.
1
3 ROYALTIES. In consideration of Licensee's right to use at least one Licensed
Patent, Licensee will pay to Affymetrix: (a) an annual "Usage Royalty," and (b)
a one-time license issue fee of [***].
3.1 EasyAccess-TM- "Gold" and "Silver" customers are entitled to additional
discounts of [***] from the Usage Royalty, respectively. However, Licensee's
EasyAccess discount shall only apply during those years of this Agreement in
which Licensee has maintained such EasyAccess status fur at least seven
months in such year. In the event Affymetrix substantially redefines the Gold
and Silver EasyAccess marketing programs following the Effective Date,
Affymetrix agrees to offer Licensee discounts similar to those set forth in
this Section consistent with any then-prevailing marketing programs that
require financial commitments similar to the Gold and Silver EasyAccess
programs as of the Effective Date.
3.2 The annual Usage Royalty is set forth in the following table and is based on
the number of ABEs that Licensee is permitted to conduct within a single year
and Licensee's annual research and development budget (including its Affiliates)
as reported in audited financial statements.
LICENSEE ANNUAL R&D BUDGET
Between
# of annual ABEs up [***] [***] [***]
----------------------------------------------------------
[***] [***] [***] [***]
[***] [***] [***] [***]
[***] [***] [***] [***]
[***] [***] [***] [***]
3.3 Unused ABEs cannot be canned over from year-to-year. Nucleic Acid Arrays
that are provided to Licensee by a third party that has been licensed by
Affymetrix to provide such Nucleic Acid Arrays to Licensee shall not be included
in the royalty calculation.
4. PAYMENT. Upon execution of this Agreement. Licensee shall pay the license
issue fee. Licensee agrees to pay an annual Usage Royalty at [***] which
corresponds to [***] ABEs ("Maximum Annual ABEs") for use during each year of
this Agreement.
4.1 If during any year of this Agreement Licensee's ABE usage exceeds its
Maximum Annual ABEs: (a) Licensee shall promptly notify Affymetrix, (b)
Licensee's Maximum Annual ABEs and Usage Royalty shall increase to at least the
next higher volume amount (or higher, if Licensee elects) set forth in the above
table, and (c) the anniversary date of this Agreement shall be deemed to be the
date Affymetrix receives such notice. If Licensee notifies Affymetrix in writing
at least [***] prior to the anniversary date of this Agreement that Licensee
desires to increase or decrease their Maximum Annual ABEs, then Licensee's Usage
Royalty obligation shall be adjusted as set forth in the above table for the
next year.
4.2 During each year of this Agreement. Licensee agrees to pay the annual Usage
Royalty in [***] installments commencing at thc end of the first
calendar quarter that follows the Effective Date. If Licensee's ABE usage
exceeds its Maximum Annual ABE,, all remaining [***] payments due for such
year shall be immediately due and Licensee's first [***] installments for
Licensee's increased Usage Royalty shall be due at the end of the next [***].
4.3 If within one year following the Effective Date Affymetrix has felled to
enter into at least [***] Qualifying Deal [***], then Affymetrix and Licensee
shall meet to discuss readjusting the annual Usage Royalty fee structure, but
in no event shall the annual Usage Royalty fee structure be decreased by more
than [***]. A "Qualifying Deal" shall mean an agreement between Affymetrix
and a licensee with the following criteria (i) the licensee has a R & D
budget of less than [***], and (ii) the license agreement contains an annual
Usage Royalty fee structure and covenants not to xxx that are substantially
similar to the ones set forth in this Agreement or which are more favorable
to Affymetrix than the ones set forth in this Agreement. Any readjustment to
the annual Usage Royalty fee structure shall only persist until Affymetrix
has entered into [***] Qualifying Deal [***], and thereafter, the annual Usage
Royalty fee structure set forth in this Agreement shall be [***].
4.4 In the event Licensee selects a Usage Royalty corresponding to an unlimited
number of annual ABE,, Licensee shall pay Affymetrix an additional annual
royalty of [***] per Datapoint for all ABEs in access of [***] ABEs per year
that arc used in connection with providing data to third parties, where
"Datapoint' shall mean a measurement of the presence, absence, or level of
contiguous sequence of expressed messenger RNA in a single biological sample as
measured by a Nucleic Acid Array.
5.1 AUDIT. On each anniversary of this Agreement, an officer of Licensee will
deliver to Affymetrix a statement certifying (i) that Licensee's ABE usage
did not exceed the Maximum Annual ABE in the preceding year, and (ii) the
number of ABEs used in the preceding year in connection with providing data
to third parties but only if such number exceeds [***], Licensee agrees to
maintain reasonable records to document the number of ABEs that Licensee
uses. Affymetrix may have a nationally recognized accounting firm under
obligations of confidentiality reasonably acceptable to Licensee examine
Licensee's relevant records. At any time during regular business hours end
upon [***]notice, but no more than [***] annually. If such examination
reveals a discrepancy between the royalties payable hereunder and the
royalties actually paid, Licensee will pay all such additional royalties,
together with the maximum interest permitted by law from the date when such
additional royalties would have been due, to Affymetrix [***] days of
receipt of notice from Affymetrix of such discrepancy. Any such examination
will be at Affymetrix' expense; provided that, if a deficiency of more than
[***] is discovered, the examination will be at Licensees expense and
Affymetrix shall not be deemed to have used its annual right to audit
Licensee.
5.2 COVENANTS. licensee covenants not to xxx Affymetrix. or its Affiliates or
customers of either regarding any patented technology related to (1) the
sale, distribution, design, development or manufacturing of nucleic acid
probe arrays made using controlled direction of electromagnetic energy at a
support ("Affymetrix NAPAs") and any array readers/scanners, software,
assays, or packaging which may be used with Affymetrix NAPAs or (ii) the use
of Affymetrix NAPAs provided by Affymetrix or its Affiliates to their
customers and any array readers/scanners, software, assays, or packaging
which may be used by such customers with Affymetrix NAPAs; provided, however,
that such covenant not to xxx does nor extend to: (A) the sale, distribution,
design, development or manufacturing of [***], or (B) the [***], or (C) the
[***], or (D) [***]
* Material has been omitted pursuant to a request for confidential treatment,
and such material has been filed separately with the SEC.
2
6. LIMITATIONS. Nothing in this Agreement will be construed as: (a) a warranty
or representation by Affymetrix as to the validity or scope of the Licensed
Patents; (b) a warranty or representation by Affymetrix that anything made,
used, or discovered under the rights granted in this Agreement does not or will
not infringe third party patents; (c) an obligation to bring actions against
third parties for infringement; (d) conferring the right to use any Affymetrix
trademark or designation; (e) conferring by implication, estoppel, or otherwise
any rights under any Affymetrix patents other than the Licensed Patents or any
rights not specifically granted herein; or (f) an obligation to furnish any
know-how not provided in the Licensed Patents. In no event will either Party be
liable for lost or prospective profits or indirect or consequential damages
resulting from this Agreement eve if the other Party has been advised of the
possibility of such damages.
7. INDEMNITY. Licensee will defend, indemnify, and hold Affymetrix harmless from
and against any liability, demands, damages, expenses and losses for death,
personal injury, illness, or property damage arising out of Licensee's use of
any method or apparatus under the Licensed Patents. As used in this Section 7,
"Affymetrix" includes its trustees, officers, agents, and employees. The
technology licensed hereby is experimental, and Licensee will take all
reasonable precautions to prevent death, personal injury, illness, and property
damages from use thereof.
8. TERMS AND TERMINATION. This Agreement will remain in effect for three years
following the Effective Date, and continue thereafter n renewing one year terms
until terminated by either party by providing notice to the other party at least
60 days prior to the anniversary date hereof. If either Party materially fails
to perform any obligations under this Agreement, the other Party may notify the
defaulting party of the default. If the defaulting Party has not materially
cured the default within 30 days after receiving such notice, the other Party
may terminate this Agreement upon 30 days' notice to the defaulting Party. Such
right to terminate will be in addition to, and without prejudice to the exercise
of, any other remedies available in law or equity. Sections 1, 2.2, 5.1, 6, 7,
9.1, 9.2 and 9.3 will survive termination or expiration of this Agreement.
9. GENERAL. Licensee covenants not to benchmark or otherwise compare performance
metrics such as sensitivity and specificity from Licensee's nucleic acid arrays
to any Affymetrix' nucleic acid arrays and disclose such comparison results to
third parties without the prior approval of Affymetrix which shall not be
unreasonable withheld. Licensee agrees not to disparage Affymetrix' personnel,
products or services. Licensee may not assign this Agreement by acquisition of
Licensee's assets or stock, by operation of law, or otherwise, without
Affymetrix's prior consent. In the event Licensee is acquired, Affymetrix will
not unreasonably withhold its consent to such an assignment. Affymetrix' consent
shall be deemed to have been reasonably withheld if Licensee proposes to merge
with an entity that is a party or an Affiliate of a party to litigation with
Affymetrix; provided, however, the foregoing proviso will not be effective in
the event Affymetrix initiates such litigation for the primary purpose of
preventing the assignment of this Agreement. No assignment of this Agreement
will be valid until the assignee has assumed all obligations under this
Agreement and the Usage Royalty has been adjusted to reflect the assignee's R&D
budget. If any provision of this Agreement is held invalid or unenforceable for
any reason, such unenforceability will not affect the enforceability of the
remaining provisions of this Agreement, and all provisions of this Agreement
will be construed so as to preserve the enforceability hereof. The waiver by
either Party of a breach of any provision of this Agreement by the other Party
will not be construed as a waiver of any succeeding breach of the same or any
other provision, nor will any delay on the part of either Party to exercise any
right that it may have hereunder operate as a waiver of any right by such Party.
In the event there is a dispute between the Parties in connection with this
Agreement, neither Party shall file a claim against the other Party in
connection with such dispute until thirty (30) days following notice to the
other Party and the Chief Executive Officer of each Party shall meet and discuss
potential solutions to such dispute during the thirty (30) days following notice
to the other Party and the Chief Executive Officer of each Party shall meet and
discuss potential solutions to such dispute during the thirty (30) day period.
Affymetrix represents and warrants that it owns or is the legal licensee of the
Licensed patents and that it has the right to enter into this Agreement for the
Licensed Patents.
9.1 NOTICE. All requests, consents, notices, and other communications under this
Agreement will be in writing and will be deemed to have been given upon the
confirmed facsimile transmission or prepaid express mailing to the address
below, or at such address as either Party may from time-to-time designate in
writing to the other Party.
To Affymetrix: Affymetrix, Inc.
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, XX 00000
Attention: General Counsel
To Licensee: Rosetta Inpharmatics, Inc.
00000 000xx Xxxxxx X.X.
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Operating Officer
9.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties relating to the subject matter thereof, and all prior negotiations,
representations, agreements, and understandings are merged into, extinguished
by, and completely expressed by it. This Agreement will be construed in
accordance with the laws of California without regard to its conflict of laws
rules.
9.3 CONFIDENTIALITY. The Parties will keep the terms of this Agreement in
confidence, except as may be required by regulatory agencies or courts or as
required by law, and will then use all reasonable precautions to keep the terms
of this Agreement confidential.
Signature: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------------
Xxxxxxx P.A. Xxxxx, Ph.D.
President and Chief Executive Officer
Affymetrix, Inc.
Date: 30 Nov 98
----------------------------------------------------
Rosetta Inpharmatics, Inc.
Signature: /s/ Xxxx X. Xxxx XX
------------------------------------------------
Name (Print): Xxxx X. Xxxx, XX
--------------------------------------------
Title: Senior VP & COO
---------------------------------------------------
Date: 30 November, 1998
----------------------------------------------------
* Material has been omitted pursuant to a request for confidential treatment,
and such material has been filed separately with the SEC.
3
EXHIBIT A
COUNTRY PATENT/ TITLE OF INVENTION AFFYMETRIX FEATURE STATUS
APPLICATION FILE NO.
NO.
[ * * *]
* Material has been omitted pursuant to a request for confidential treatment,
and such material has been filed separately with the SEC.
COUNTRY PATENT/ TITLE OF INVENTION AFFYMETRIX FEATURE STATUS
APPLICATION FILE NO.
NO.
[ * * *]
* Material has been omitted pursuant to a request for confidential treatment,
and such material has been filed separately with the SEC.
COUNTRY PATENT/ TITLE OF INVENTION AFFYMETRIX FEATURE STATUS
APPLICATION FILE NO.
NO.
[ * * *]
* Material has been omitted pursuant to a request for confidential treatment,
and such material has been filed separately with the SEC.
COUNTRY PATENT/ TITLE OF INVENTION AFFYMETRIX FEATURE STATUS
APPLICATION FILE NO.
NO.
[ * * *]
* Material has been omitted pursuant to a request for confidential treatment,
and such material has been filed separately with the SEC.
