Exhibit 10.14
August 28, 1998
VIA FEDERAL EXPRESS
Xx. Xxxxx Xxxxx, President
Affymetrix, Inc.
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Dear Xx. Xxxxx:
This letter, with your signature below, will constitute an Agreement between
Xxxxxxx Xxxxxxx, Inc. ("BCI") and Affymetrix, Inc. ("Affymetrix") to (i) amend
certain provisions of the agreements signed by the parties on July 31, 1998 as
well as attach certain schedules and exhibits to those agreements that were not
fully completed or not available at the time of such signing; and, (ii) conclude
negotiations with respects to the Limited Liability Company Operating Agreement
("Operating Agreement") which is Exhibit E to the Asset Purchase Agreement and
the Management Agreement referred to in the Operating Agreement. Upon full
execution and delivery of this letter, the amendments, schedules, exhibits and
the Operating Agreement and Management Agreement, as modified by this letter,
shall each become effective. We have agreed as follows:
1. ASSET PURCHASE AGREEMENT
a. Definitions: "BCI Technology". The parties confirm that Schedule 1,
attached to this Letter Agreement, shall constitute "Schedule 1"
referred to in the definition of "BCI Technology". BCI hereby confirms
that Schedule 1 contains all of the information necessary to complete
Schedule 4 of the Asset Purchase Agreement (which Schedule is referred
to in Section 4(e) of the Asset Purchase Agreement), and the parties
hereby agree that Schedule 1 shall also constitute "Schedule 4" for
the purposes of such agreement.
b. Definitions: "Exclusive License". The parties confirm that Exhibit B,
attached to this Letter Agreement, shall constitute "Exhibit B"
referred to in the definition of "Exclusive License".
c. Paragraph 3(a), line 2 - after "Exhibit G" insert "without charge or
cost to Seller,".
d. Paragraph 3(f), line 2 - after "efforts" insert "in light of
commercial opportunity".
e. Paragraph 4(i), line 15 - after "Paragraph 2(c)" insert "and all
agreements relating to the transaction contemplated in this Agreement
shall be rescinded and of no force or effect."
2. LICENSE AGREEMENT, EXHIBIT D TO THE ASSET PURCHASE AGREEMENT
a. Heading, line 2 - insert (in the blank space) "California".
b. Heading, line 6 - change "Newco" to "LLC".
c. Paragraph 1.1, lines 12 and 15 - after "Exhibit A" insert (and their
successors and affiliates)".
d. Paragraph 1.4 - delete in its entirety.
e. Paragraph 1.13 - rewrite the first two (2) lines as follows: "Patent
Rights" shall mean all applications for patent (and any divisional,
continuation, continuation-in-part or substitute of such applications)
and patents (and reissues and reexaminations of such patents)."
f. Paragraph 3.1, line 8 - change "LLC (both occurrences) to "BCI".
g. Section 3.1.1 - replace the third sentence with the following;
"If Affymetrix notifies BCI that such third party is an infringer of
the Patent Rights and (i) Affymetrix fails to grant a license within
[____________](1) of such notice or (ii) fails to bring litigation to
halt such infringement either within the [_________](2) or within
[________](3) of the conclusion of any pending litigation against
another party involving the Patent Rights, unless the third party
intended supplier ceases its infringements or takes a license from
Affymetrix, then BCI may use such third party as a supplier of BCI
Array Chips under the license of Paragraph 3.1."
h. Section 4.4.1 - delete the second sentence and replace it with the
following:
"BCI shall also pay interest on the amount that is withheld and
finally paid to Affymetrix at the rate of [ ](4) per
month from the date that such amount is due under the Agreement."
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(1) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(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.
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i. Article 6.0, line 9 - after "patent" insert "within the
[__________](5) or within [___________](6) of the conclusion of any
pending litigation against another party involving the Patent
Rights."
j. Article 10.0, line 4 - after "notify BCI" insert "an independent
accounting firm selected by BCI (the "Auditor")"
After line 13 - insert:
"The Auditor shall use such information only for the purposes of
determining whether Affymetrix is in compliance with its obligations
under this Article 10.0. The Auditor shall not be permitted to
disclose any information provided hereunder to BCI except with respect
to a license reported hereunder with which the Auditor disagrees with
an Affymetrix determination (as described in the following sentence)."
k. Article 11, line 7 - change "BCI" to "LLC" line 14 - change
"President" to "General Manager"
3. LIMITED LIABILITY COMPANY OPERATING AGREEMENT, EXHIBIT E TO THE ASSET
PURCHASE AGREEMENT
a. Heading, line 3 - insert (in the blank space) "California".
b. Definition of "Affymetrix" insert (in the blank space) "California".
c. Definition of "Unit" - delete the first line and substitute in its
place "the shares of the Company".
d. Section 6.4 - add the following as clause (f):
"(f) enter, propose to enter or commit the Company to enter into any
Terminating Capital Transactions."
e. Section 6.8 - delete lines 5-9 and substitute in it place the
following:
"Affymetrix shall not [ ](7); provided, that
if the law or regulations of any country where such Affiliate is
domiciled prohibit one hundred percent (100%) ownership of a domestic
Person by a foreign Person or tax incentives in the country of
domicile require domestic
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(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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participation in the Person to receive the benefit of the tax
incentive, then, in such case the Affiliate may have access to the
Isis Agreement and the patents which are the subject thereof so long
as Affymetrix owns the maximum percentage allowed by such law or
regulation or the maximum percentage that still enables Affymetrix to
receive the benefit of such tax incentive."
f. Section 8.2 - delete lines 1-6; replace it with the following:
"Affymetrix specifically acknowledges that its duty to maintain the
Isis Agreement in full force and effect and to maintain the status of
Company as an Affiliate of Affymetrix with full and unrestricted
access to the licenses provided for under the Isis Agreement are
essential and material elements of this Agreement and a material part
of the consideration to BCI. Accordingly, Affymetrix agrees to and
shall, at all times during the term of the Isis Agreement (a) fully,
completely and".
g. Add the following as Section 10.5:
"Section 10.5. APPROVAL FOR MEMBER ADMISSIONS, ASSIGNMENTS, TRANSFERS
AND SUBSTITUTIONS. Notwithstanding anything else in Articles 6, 9 or
10 to the contrary, except as provided in this Section 10.5, the
admission of any new Members to the Company, whether as an Assignee,
Additional Person or Substituted Member or otherwise, shall be subject
to the prior written approval of Affymetrix, provided that Affymetrix
will not withhold its approval, except as to third parties who are in
litigation with Affymetrix or are infringing its intellectual property
rights, provided that legal action is taken by Affymetrix against such
infringers within 6 months of notice to Affymetrix by BCI that BCI
want them to become a Member. If Affymetrix does not take legal action
against such third party within such 6 months, then Affymetrix shall
consent to their becoming a new Member to the Company. For the
avoidance of doubt, however, each of BCI and Affymetrix may transfer
all of its rights and obligations under this Agreement and in the
Company without the consent of the other (or any other Member), but
only if such transfer is to a third party acquiring all or
substantially all of the assets of BCI or Affymetrix as the case may
be."
h. Exhibit A
(i) Under "Name and Address", the description currently set forth
opposite "Affymetrix" is hereby deleted and replaced with the
following "Affymetrix, Inc. 0000 Xxxxxxx Xxxxxxxxxx, Xxxxx
Xxxxx, Xxxxxxxxxx 00000".
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(ii) Under "Contribution" the following shall be inserted: (a) for
Affymetrix, "[___________];(8) provided that, LLC complies with
Paragraph 5.3 of the Isis Agreement"; and (b) for BCI,
"[__________]".(9)
(iii) Under "Percentage Interest" the following shall be inserted
(a) for Affymetrix, "[_______________]",(10) and (b) for BCI,
"[________________]".(11)
(iv) Under "Number of Units" the following shall be inserted (a)
for Affymetrix, "[___________________]";(12) and (b) for BCI,
"[________________]".(13)
4. MANAGEMENT AGREEMENT BETWEEN LLC AND XXXXXXX XXXXXXX
a. Delete Section 8(d) replace it with the following:
"Neither party to this Agreement may transfer or assign this
Agreement, in whole or in part, without the prior written consent of
the other party, provided, that either party may transfer and assign
this Agreement without the consent of the other party to a third party
acquiring all or substantially all of its assets".
5. EXHIBIT G TO THE ASSET PURCHASE AGREEMENT
a. Add the following as new Paragraph 7:
"[________________]."(14)
6. OEM SUPPLY AGREEMENT, EXHIBIT H TO THE ASSET PURCHASE AGREEMENT
a. Paragraph 1.1, lines 12 and 14, after "Exhibit A") insert "(and their
successors and assigns)".
b. Paragraph 2.2.3, line 2 - after "perform" insert [ ](15).
c. Paragraph 3.3, line 1 - after "shall" insert "for each Product sold by
BCI for clinical in vitro diagnostics".
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(8) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(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.
(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.
(15) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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d. Paragraph 5.1.1, line 00 - xxxxx "xxxxxxxxx" xxxxxx ", xx (x) use of a
Product pursuant to BCI instructions, associated products, software or
reagents so long as the Product, in and of itself, does not directly
infringe, and it is only in combination with such instructions,
associated products, software or reagents that such Products does
directly infringe."
7. CONSORTIUM AGREEMENT
a. Heading, line 4 - insert (in the blank space) "California".
b. Article 2, line 1 - after "shall" insert ", without charge or cost to
BCI,".
c. Paragraph 3.1, line 1 - insert (in the blank space) "ninety (90)".
d. Paragraph 3.3, line 3 - after efforts" insert "consistent with
commercial opportunity".
8. OEM SUPPLY AGREEMENT, EXHIBIT B TO THE CONSORTIUM AGREEMENT
a. Paragraph 1.1, lines 12 and 14 - after "Exhibit A" insert "(and their
successors and affiliates").
b. Paragraph 2.2.3, line 2 - after "perform" insert [ ](16).
9. LICENSE AGREEMENT, EXHIBIT C TO THE CONSORTIUM AGREEMENT
a. Heading, line 2 - insert (in the blank space) "California".
b. Paragraph 1.10, line 3 - change "twenty (20) years to
[ ](17).
c. Paragraph 3.3 - delete lines 1-10 and substitute in their place:
"NOTIFICATION OF NEW PATENT RIGHTS. BCI shall, on or about each
anniversary of this Agreement inform Affymetrix of any U.S. patents
which have issued in the preceding twelve (12) months which fall
within the definition of Patent Rights and each patent which is
controlled by BCI wherein the agreement granting such control was
signed in the preceding twelve (12) months.
10. LICENSE AGREEMENT, EXHIBIT D TO THE CONSORTIUM AGREEMENT
a. Paragraph 1.1, lines 12 and 15 - after "Exhibit A" insert "(and their
successors and affiliates)".
b. Paragraph 1.13 - rewrite the first two (2) lines as follows:
"Patent Rights" shall mean all applications for patent (and any
divisional, continuation, continuation-in-part or substitute of such
applications) and patents (and reissues and reexaminations of such
patents),".
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(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.
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c. Section 3.1.1 - replace the third sentence with the following:
"If Affymetrix notifies BCI that such third party is an infringer of
the Patent Rights and (i) Affymetrix fails to grant a license within
[_____________](18) of such notice or (ii) fails to bring
litigation to halt such infringement either within the
[___________](19) or within [____________](20) 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, then BCI may use
such third party as a supplier of BCI Array Chips under the license
of Paragraph 3.1."
d. Section 4.4.1 - delete the second sentence and replace it with the
following:
"BCI shall also pay interest on the amount that is withheld and
finally paid to Affymetrix at the rate of [ ](21) per month
from the date that such amount is due under the Agreement."
e. Article 6.0, line 9 - after "patent" insert "within the
[__________](22) or within [___________](23) of the conclusion of
any pending litigation against another party involving the Patent
Rights."
f. Article 10.0, line 4 - after "notify" delete "BCI" and insert "an
independent accounting firm selected by BCI (the "Auditor")"
After line 13 - insert
"The Auditor shall use such information only for the purposes of
determining whether Affymetrix is in compliance with its obligations
under this Article 10.0. The Auditor shall not be permitted to
disclose any information provided hereunder to BCI except with respect
to a license reported hereunder with which the Auditor disagrees with
an Affymetrix determination (as described in the following sentence)."
11. LICENSE AGREEMENT (STAND ALONE)
a. Paragraph 1.1, lines 12 and 15 - after "Exhibit A" insert "(and their
successors and affiliates)".
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(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.
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b. Paragraph 1.13 - rewrite the first two (2) lines as follows:
"Patent Rights" shall mean all applications for patent (and any
divisional, continuation, continuation-in-part, or substitute of such
applications) and patents (and reissues and reexamination of such
patents),"
c. Section 3.1.1 - replace the third sentence with the following:
"If Affymetrix notifies BCI that such third party is an infringer of
the Patent Rights and (i) Affymetrix fails to grant a license
within [ ](24) of such notice or (ii) fails to bring
litigation to halt such infringement either within the
[___________](25) or within [__________](26) 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, then BCI may use
such third party as a Supplier of BCI Array Chips under the license
of Paragraph 3.1."
d. Section 4.4.1 - delete the second sentence and replace it with the
following:
"BCI shall also pay interest on the amount that is withheld and
finally paid to Affymetrix at the rate of [ ](27) per month
from the date that such amount is due under the Agreement."
e. Article 6.0, line 9 - after "patent" insert "within the
[____________](28) or within [___________](29) of the conclusion of
any pending litigation against another party involving the Patent
Rights."
f. Article 10.0, line 4 - after "notify BCI" inset "an independent
accounting firm selected b BCI (the "Auditor")
After line 13 - insert:
"The Auditor shall use such information only for the purposes of
determining whether Affymetrix is in compliance with its obligations
under this Article 10.0. The Auditor shall not be permitted to
disclose any information provided hereunder to BCI except with respect
to a license reported hereunder with which the Auditor disagrees with
an Affymetrix determination (as described in the following sentence)."
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(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.
(26) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(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.
(29) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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12. BCI ACTIONS WITH RESPECT TO ISIS AGREEMENT. Notwithstanding anything to the
contrary in the Operating Agreement or Management Agreement, BCI shall not
take or fail to take any action that causes the LLC to lose its status as
an Affiliate of Affymetrix during the term of the Isis Agreement.
13. NO LOSSES TO AFFYMETRIX FROM LLC. Notwithstanding anything to the contrary
in the Operating Agreement or Management Agreement, the LLC shall be
managed by BCI so that [ ](30) required to be reflected in
Affymetrix' financial statements.
14. BCI INDEMNITY. Except as to actions taken, approved, consented to or
ratified by the Board of Directors of the Limited Liability Operating
Company, at a meeting at which Affymetrix participated and expressly
agreed, BCI shall indemnify Affymetrix for any liability or damage arising
from the activities of the LLC.
15. AFFYMETRIX CONTRIBUTION TO LLC. The initial contribution to the LLC by
Affymetrix is set forth in Exhibit A to the Operating Agreement.
Notwithstanding anything to the contrary in the Operating Agreement or the
Management Agreement, Affymetrix shall not be required to contribute
additional cash or other property to the LLC at any time without its
consent.
16. TERMINATION OF AFFYMETRIX LETTER OF JULY 31, 1998 (NUSSBACKER TO WAREHAM).
The letter of July 31, 1998 from Xxx Nussbacker to Xxxx Xxxxxxx is
terminated and superceded by this letter.
If the foregoing property sets forth our understanding, please sign both copies
in the space indicated and return one copy to me; the second copy is for your
files.
Very truly yours,
Xxxxxxx Xxxxxxx, Inc.
by:
-----------------------------
title:
----------------------------
Understood and Accepted:
Affymetrix, Inc.
by:
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title:
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(30) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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SCHEDULE 1
[________________ ].(31)
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(31) CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.