SUPPLY AGREEMENT
X. Xxxxxxxx-Xx Xxxxx Ltd,
Xxxxxxxx-Xx Xxxxx Inc.,
Syntex (U.S.A.) Inc.
and
Affymetrix, Inc.
The symbol "**" is used throughout this exhibit to indicate
that a portion of the exhibit has been omitted and filed
separately with the commission.
CONTENTS
1 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3 PROBE ARRAY AND INSTRUMENT SUPPLY. . . . . . . . . . . . . . . . . . . 6
4 EXCLUSIVITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5 COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6 INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . 14
7 PROJECT COORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . 15
8 CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9 WARRANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10 INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
11 TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . 18
12 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
EXHIBIT A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2
This supply agreement ("Agreement") is effective as of August 15, 1997
("Effective Date") between Affymetrix, Inc. ("AFFX") a California corporation
having its principal place of business at 0000 Xxxxxxx Xxxxxxxxxx, Xxxxx Xxxxx,
Xxxxxxxxxx 00000, and X. Xxxxxxxx-Xx Xxxxx Ltd, a Swiss corporation having a
principal place of business at Xxxxxxxxxxxxxxxxx 000, 0000 Xxxxx, Xxxxxxxxxxx,
and Xxxxxxxx-Xx Xxxxx Inc., a New Jersey Corporation having its principal place
of business at 000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, XXX, and
Syntex (U.S.A.) Inc., a Delaware corporation having its principal place of
business at 0000 Xxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx, 00000, acting through
its Roche Bioscience division (all collectively referred to as "Roche").
1 INTRODUCTION
1.1 AFFX has research, development, and manufacturing capabilities and
facilities, and has developed certain rights relevant to DNA probe
array based technology.
1.2 Roche has research and development capabilities, and facilities to
conduct research and development activities in the area of
pharmaceutical research.
1.3 AFFX and Roche desire to enter into an agreement whereby AFFX will
supply Roche with DNA probe arrays for use in Roche's research and
development activities.
In consideration of the mutual covenants and promises contained in this
Agreement, AFFX and Roche agree as follows:
2 DEFINITIONS
2.1 "Affiliate" shall mean any corporation, company, partnership, joint
venture and/or firm which is controlled by or controls a Party or is
under 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 by the terms of this Agreement. For purposes of this
Section, "control" shall mean, in the case of corporations (or
equivalents of corporations), direct or indirect ownership of at least
50% of the stock having the right to vote for directors of such
corporation or, in the case of partnerships, at least 50% of the
ownership interest in such partnership. Genentech, Inc., South San
Francisco, California, USA, shall not be considered an Affiliate of
Roche unless Roche elects in writing at its sole option to have
Genentech, Inc. be an Affiliate of Roche.
3
2.2 "Chip Improvement Inventions" shall mean all inventions for which
patent applications are filed that are conceived or first reduced to
practice by an employee or contractor of a Party during performance of
a Chip Project or using the Probe Arrays supplied hereunder, and
specifically relating to probe array manufacturing techniques, probe
array layouts, probe array packaging techniques, probe array assay
techniques (but only insofar as such assay techniques relate to
processes after nucleic acid extraction and are directly related to
arrays of nucleic acid probes), and probe array software analysis
techniques relating to the extraction of data from probe arrays and
storing such data in a computer file, but not including software
analysis techniques for later processing of such data. Chip
Improvement Inventions shall not include, for example, expression data
or discoveries resulting therefrom, targets identified through the use
of the Probe Arrays, or correlations between genetic sequences and
function.
2.3 "Chip Project" shall refer to the design and manufacture of a Lot of
Probe Arrays for a particular Target Sequence, as specified by Roche
pursuant to this Agreement.
2.4 "Collaborator" shall mean a third party involved in a Roche
Collaboration, but only to the extent of such Roche Collaboration.
2.5 "Committee" shall mean the individuals designated by Roche and AFFX to
serve on a coordinating committee as outlined in Section 7.
2.6 "Confidential Information" shall mean all information and materials,
patentable or otherwise, of a Party disclosed by or on behalf of such
Party to the other Party and which derive value to a Party from not
being generally known, 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 plans, including any negative developments.
2.7 "Fabrication Verification Criteria" shall mean the criteria set forth
in Exhibit A.
2.8 "Lot" shall refer to [**] Probe Arrays directed to a particular
Target Sequence. AFFX shall have a right, upon seven (7) months
written notice to Roche, to vary the size of a Lot upwards or
downwards, provided that the size of a Lot may not be increased
above [**] Probe Arrays without the prior written consent of Roche.
Standard Configuration Expression Probe Arrays and Other Standard
Probe Arrays may be purchased in their standard minimum quantities.
2.9 "Party" shall mean AFFX or Roche. "Parties" shall mean AFFX and
Roche.
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[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
2.10 "Probe Arrays" shall mean a solid support having an array of
oligonucleotides with known location and sequence fabricated pursuant
to this Agreement.
2.11 "Resupply Term" shall mean the period of time beginning at the end of
the Term of this Agreement, and extending up to 3 years from the end
of the Term of this Agreement.
2.12 "Roche's Area Of Interest" shall mean the use of Probe Arrays [**].
For purposes of clarity, [**] within the scope of this Agreement.
Roche's Area of Interest shall include Roche Collaborations [**].
Roche's Area Of Interest [**].
2.13 "Roche Collaboration(s)" shall mean a bona fide scientific
collaboration between Roche or any of its Affiliates and a third party
under a written contract and research plan in a specified area, in
which a) such third party receives the biological materials and/or
proprietary information of Roche and/or its Affiliates, or in which
Roche and/or its Affiliates obtains the biological materials and/or
proprietary information of the third party, and b) Roche obtains
significant proprietary rights if significant intellectual property is
generated in the collaboration, and c) the collaboration is within
Roche's normal (as of the Effective Date) business model (For
purposes of this Agreement, "Roche's normal business model" shall
include, for example, pharmaceutical and diagnostics research,
development, and marketing, but does not include nucleic acid
hybridization services or database distribution businesses.), and d)
in which Roche and its collaborator provide significant scientific
input to the collaboration in addition to data obtained from the Probe
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[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
Arrays where "significant scientific input" includes, for example,
material input to experimental design, material contributions to
experimental execution, and/or material data analysis activities, and
e) in which, at the time the gene expression information is generated,
such gene expression information is generated primarily for use by
Roche for the purpose of researching, developing and/or
commercializing particular molecules, classes of molecules, or
therapeutic areas. Roche will not enter into arrangements with third
parties whereby such third party is, in effect, given broad access to
i) the Probe Arrays or, ii) data resulting from use of the Probe
Arrays. By way of example, Roche Collaborations shall not include
business relationships based, in significant part, on a contract in
which Roche provides contract services for a third party involving use
of the Probe Arrays on a fee-for-service or similar basis. Roche
Collaborations shall not provide for the access of the Probe Arrays to
a company that engages in a bona fide business in the sale of probe
array based assays or services. A Roche Collaboration shall include
work with academic investigators provided that:
2.13.1 [**]
2.13.2 [**]
2.13.3 [**]
2.14 "Standard Configuration Expression Probe Arrays" shall mean Probe
Arrays that are generally made available to third parties based on a
single mask set design for use in expression monitoring experiments
which are sold at standard catalog prices or which are broadly
available to any third party that is willing to pay to AFFX fixed fees
set by AFFX. "Other Standard Configuration Probe Arrays" shall include
genotyping probe arrays and
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[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
resequencing probe arrays then made available by AFFX generally to
third parties in its standard price list.
2.15 "System(s)" shall mean fluidics station(s), work station(s), probe
array reader(s), and associated software, such software licensed to
Roche, and such fluidics station(s) and probe array reader(s) sold to
Roche.
2.16 "Target Sequence" shall mean a set of sequences specified by Roche to
AFFX for which Roche desires to have AFFX perform a Chip Project.
2.17 "Term" shall mean the period beginning on the Effective Date and
ending on December 31, 2000. The Term may be extended pursuant to
Sections 5.2 or 5.6 below.
3 PROBE ARRAY AND INSTRUMENT SUPPLY
3.1 During the Term, Roche may identify Target Sequences for Chip
Projects. AFFX will be obligated to produce and supply to Roche
Probe Arrays for all Target Sequences identified to AFFX before the
end of the Term for up to [**] thereafter. AFFX will use
reasonable efforts to perform Chip Projects for greater numbers of
Target Sequences if Roche indicates it will use such greater chip
design capacity and the limits in this Section will be modified
accordingly provided that in no event will the limits above be
increased by more than [**]. In no event will AFFX be required to
supply Probe Arrays that have larger numbers of probes or longer
probes than those normally furnished commercially to third parties
for similar uses. In addition, upon reasonable advance notice to
AFFX that Roche reasonably expects to use greater capacity for
Probe Array design, AFFX will reasonably expand its Probe Array
design capabilities to accommodate such increased demand by Roche.
Prices of Probe Arrays reflected in Section 5 reflect such Probe
Array specifications for arrays up to [**]. AFFX will provide
Roche with Probe Arrays with greater [**] and/or with other
commercially available improvements to AFFX' current expression
probe array technology; provided that in the event that arrays are
to be provided during the course of this Agreement with more than
[**] or with other commercially available improvements to AFFX'
current expression probe array technology, AFFX will provide Roche
with reasonable quotes for such Probe Arrays, provided that such
pricing must be reasonably reflective of the prices AFFX charges to
other entities for such Probe Arrays
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[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
under similar commercial terms, if such probe arrays are sold to third
parties, and if such Probe Arrays are not sold to third parties, such
pricing must be reflective of the prices charged to third parties of
those chips most similar in nature to those to be provided to Roche.
3.2 Roche will identify the Target Sequence for a Custom Chip Project
to AFFX by delivering to AFFX: 1) a diskette identifying the Target
Sequence in "Intelligenetics" or "GenBank" format, and 2) an
identification of [**] and 4) a good faith estimate of the number
of Lots of Probe Arrays needed by Roche for the Target Sequence and
the expected timing for production of such Lots as specified in
Section 3.4, and 5) an initial firm order for at least one Lot of
Probe Arrays directed to the Target Sequence, and 6) the shipping
location of the Probe Arrays. Probe Arrays may be ordered only in
full Lots (it being understood that Standard Configuration
Expression Probe Arrays and Other Standard Probe Arrays may be
purchased in their standard lot size). Roche may request that the
Probe Arrays meet specifications suggested by Roche and not
provided for herein, in which case AFFX will respond in good faith
as to whether such additional specifications can reasonably be met
and, if applicable, any price increase to meet such additional or
modified specifications.
3.3 AFFX will promptly confirm receipt of the Target Sequence within
three (3) business days. If the information received by AFFX does
not include the information required in paragraph 3.2 above, AFFX
will advise Roche of any additional needed information within five
(5) business days of receipt of a Target Sequence. Upon AFFX
confirming receipt of complete Target Sequence information, AFFX
will proceed to design, lay out, produce masks, and manufacture
Probe Arrays for the Target Sequence according to the following
schedule: a) for resupply of previously ordered Probe Arrays, AFFX
will deliver such Probe Arrays within [**] of receipt of a firm
order, and b) for initial orders, AFFX will deliver such Probe
Arrays within [**] of receipt of the complete information specified
in Section 3.2. In no event will AFFX be obligated to provide more
than [**] thereafter. AFFX will make reasonable efforts to supply
Probe Arrays ordered by Roche in quantities greater than specified
above. In addition, upon reasonable advance notice to AFFX that
Roche will use greater capacity for Probe Array manufacturing, AFFX
will reasonably
8
[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
expand its Probe Array manufacturing capabilities to accommodate such
increased demand by Roche and the limits in this Section will be
modified accordingly provided that in no event will the limits above
be increased by more than [**]. It is understood that the Roche
forecasts and supply limitations above will not be impacted by the
test probe arrays provided at no cost in Section 3.4 or 3.10. Roche
will include forecasts for test probe arrays to be purchased by Roche,
but the supply limitations above will not be impacted by such
purchased test probe arrays.
3.3.1 Before the end of the Resupply Term, Roche may order additional full
Lots of Probe Arrays for a particular Custom Chip Project. The
Parties agree that this paragraph shall not obligate AFFX to store
masks beyond the Resupply Term, provided that prior to destroying any
masks, AFFX shall notify Roche in writing and all such masks for Xxxxx
Xxxx Projects will, upon request of Roche, be given to Roche. No
license is conveyed to Roche by way of the transfer of masks; such
masks are transferred only for storage purposes.
3.4 On the first day of each month during the term of this Agreement,
Roche will provide a reasonable, good faith forecast of Probe
Arrays to be designed, supplied, and resupplied by AFFX during the
following [**] period. The forecast will be provided according to
a mechanism and on forms to be agreed upon in good faith by the
Parties. The [**] of such forecast shall constitute a firm
commitment for initial orders and resupply of the Probe Arrays
specified in each such [**] forecast, and AFFX will be provided
with Target Sequences for new Chip Projects, if any, for such [**]
of such forecast. The [**] of such forecast shall constitute a firm
order for the quantities of Probe Arrays specified therein, but not
the particular designs, and Roche need not specify the particular
designs to be ordered. The [**] of such forecast shall constitute
a firm order for at least [**] of the quantities of Probe Arrays
specified in such forecast, but not the particular designs, and
Roche need not specify the particular designs to be ordered. In
the event that actual orders are less than such firm orders, Roche
shall compensate AFFX as though such firm orders were met. The [**]
of forecast shall be for planning purposes only, but will be made
in good faith by Roche. AFFX will make good faith efforts to supply
and design Probe Arrays in quantities greater than have been
previously forecast in the [**] by Roche, but will not be obligated
to do so, and Roche will be obligated to reimburse AFFX for any
non-cancelable orders of equipment which are reasonably incurred by
AFFX in scaling its production facilities to meet the forecasts of
Roche. In no event will Roche be required to pay such
non-cancelable costs unless AFFX notifies Roche of the need for
such increased production capacity, and provides Roche with
reasonable estimates of the magnitude of such non-cancelable costs.
If requested by one of the Parties, the Committee will negotiate
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[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
in good faith to modify the above forecasting procedure to reasonably
accommodate the business needs of the other Party. During each
calendar month in which Roche purchases at least one (1) Lot of Probe
Arrays, AFFX will provide to Roche a lot of AFFX' standard test probe
arrays (in a lot size equal to the lot size of custom Probe Arrays)
for purposes of and only for purposes of sample quality control and
training at Roche at no additional charge. Additional standard test
probe arrays may be acquired for [**] each at Roche's option.
3.5 Probe Arrays will be packed in AFFX' standard shipping packages to the
address specified by Roche. Deliveries will be F.O.B. AFFX' facility.
AFFX will ship via a carrier selected by Roche or, if none is
specified by Roche, AFFX will select the carrier. Title and risk of
loss of damage for deliveries will pass to Roche upon AFFX' actual
delivery of the Probe Arrays to the carrier for shipment to Roche.
Roche will pay all shipping costs. Roche will advise AFFX if
insurance is desired on any shipments of Probe Arrays, and will
reimburse AFFX for all such insurance charges.
3.6 Roche may not 1) transfer the Probe Arrays provided by AFFX pursuant
to this Agreement except as to Collaborators in Roche's Area of
Interest, or 2) transfer data generated therewith to any third party,
other than to Collaborators in Roche's Area of Interest or Affiliates,
or 3) provide services to any third party, other than to Affiliates,
using the Probe Arrays provided by AFFX pursuant to the Agreement, or
4) allow any third party, other than Affiliates to use the Probe
Arrays provided by AFFX under this Agreement, except as to
Collaborators in Roche's Area of Interest, or 5) use the Probe Arrays
delivered hereunder outside of Roche's Area of Interest, or 6) reuse
the Probe Arrays, or 7) use such Probe Arrays in diagnostic or other
settings requiring FDA or other regulatory agency approval unless
Roche obtains such approval and such Probe Arrays are to be used in a
clinical trial. Roche will allow AFFX reasonable, periodic (but not
more than quarterly) access to the Systems to ensure compliance with
the prohibition against reuse.
3.7 Roche and AFFX expect that during the Term they will periodically
cooperate in the experimental manufacture of designs of Probe Arrays
that are more complex than those provided for herein or which might
otherwise be expected to have experimental features. Such Probe
Arrays will be provided upon the concurrence of both Parties but will
not be required to meet the Fabrication Verification Criteria.
3.8 During the Term and the Resupply Term of the Agreement, Roche may
purchase Standard Configuration Expression Probe Arrays and Other
Standard Probe Arrays within the volume forecasts set forth herein and
at the prices provided herein (it being understood that the design
fees will not be applicable to such Standard Configuration Expression
Probe
10
[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
Arrays or Other Standard Probe Arrays). [**]
3.9 [**] Systems will be provided to Roche and installed at no
additional cost during the first year from the Effective Date. [**]
Such Systems will be delivered according to a phase in program to
be mutually agreed upon by the Parties. During the Term and the
Resupply Term, Roche and its Affiliates may purchase (or, in the
case of software, license) additional Systems in order to fully
utilize the Probe Arrays purchased hereunder. Standard warranty
service will be provided. In the United States such warranty
service will be for the longer of a) [**], or b) the standard
warranty service period in the United States. In Europe and Japan
such warranty service will be for a period of the longer of a) [**],
or b) the standard warranty service period in Europe and Japan.
The Systems will be installed according to a reasonable schedule
agreed to by Roche and AFFX, but in no event after [**], except
that the System to be installed in [**].
3.10 AFFX will provide Roche with reasonable training in the use of the
Probe Arrays at up to [**] Roche facilities for [**] per facility
at the time of installation of the System at such facility. In
addition it is expected that [**] Roche employees per site will
spend [**] at AFFX in a single training program in which Roche will
contribute samples prepared according to AFFX protocols. Such
training programs at AFFX will have the "train the trainer" format
such that such Roche personnel will be capable of training further
Roche personnel. AFFX will provide a lot of test chips at the time
of installation of the Systems at each of the [**] referred to in
Section 3.9 for training purposes at no charge. In addition, AFFX
will provide test probe arrays for use in training at AFFX and test
probe arrays for training by Roche at Roche at a price of [**] per
test probe
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[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
array. Roche will not use such test probe arrays for substantive data
acquisition, and will provide reasonable forecasts of the needed
number of test probe arrays to be purchased by Roche.
3.11 Upon written request of Roche probe sequences will be provided to
Roche from AFFX for up to approximately [**] on a Probe Array
design delivered hereunder in those cases where Roche [**]. AFFX
will consider in good faith a request by Roche for greater numbers
of probes in the event Roche has a reasonable need for such greater
numbers in its expression monitoring experiments. Roche will only
use the probes thus provided for analysis of Roche's Probe Array
experiments and shall not deconstruct AFFX' probe design
algorithms, or use such probes in assays other than those supplied
by AFFX. In addition AFFX will, for quality assurance purposes,
provide the Committee (as defined below) with agreed documentation
verifying that AFFX has correctly identified probes complementary
to genes selected by Roche in a Target Sequence.
4 EXCLUSIVITY
4.1 During and after the Term of this Agreement, AFFX will not sell or
transfer the specific probe arrays designed for Roche for a Chip
Project without prior written permission of Roche. Roche may
choose, at its sole option and at any time during the Term, to
allow AFFX to transfer the probe arrays designed for Roche for a
Chip Project to third parties, in which case Roche will notify
AFFX. AFFX may, at its sole option, choose to adopt such probe
array designs as a commercial design that will be made available to
third parties, in which case AFFX will provide Roche written
notification of such election. At such time as AFFX makes such
election, [**]. If AFFX elects to adopt a probe array design as a
commercial design to third parties, AFFX will not provide probe
arrays of such design to third parties until [**] after the later
of (a) the date the first Lot of Probe Arrays of such design is
delivered to Roche or (b) the date of notification of AFFX's
election under this Section 4.1.
4.2 AFFX and its Affiliates may make, have made, and use Probe Arrays
designed for the Chip Project for the purposes of improving its
technology for manufacturing and using DNA
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[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
probe arrays and for no other purposes except as permitted by Roche
pursuant to Section 4.1, provided that the provisions of Section 8
will apply to any such use.
4.3 Until the end of the Resupply Term, Roche will not buy probe arrays
directed to a Target Sequence from a third party when such third party
probe array infringes or would infringe the patent or copyright rights
of AFFX or its Affiliates. In order to enforce this provision AFFX
must provide a) reasonable and prompt written notice to Roche of such
infringement upon AFFX becoming aware of such use of AFFX proprietary
rights, and b) reasonable evidence of such infringement. This
paragraph shall not confer on Roche or any third party any rights
under the patent rights of AFFX.
5 COMPENSATION
5.1 Subject to Section 5.2 below, Roche shall pay to AFFX a non-refundable
fee of [**] according to the following payment schedule:
[**]
5.2 In the event that AFFX is unable to fabricate its anticipated Probe
Arrays containing approximately [**] in a manner that meets the
Fabrication Verification Criteria by [**] (assuming Roche
appropriately delivers a Target Sequence to AFFX), [**] and the end
of the initial Term of this Agreement (before renewal or entry to
the Resupply Term) as defined in Section 2.17 shall be moved back
by one half the number of such days, and all payments for extension
of the Term pursuant to Sections 5.6 and 5.7 shall be moved back by
one half the number of such days. In each successive
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[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
quarter until AFFX is able to provide such [**] arrays, the next
quarterly payment shall be similarly deferred and the initial Term
shall be similarly extended. By [**] the Committee will meet and
Roche will advise the Committee, in writing, if it reasonably
believes AFFX has not consistently and on a reasonably timely basis
delivered high density Probe Arrays [**], indicating the specific
deficiencies in orders on which quantity commitments of such Probe
Arrays were not met, along with notification that it intends to
terminate this Agreement. If AFFX does not, by [**], provide to
Roche such Probe Arrays Roche may thereafter terminate this
Agreement by providing written notice by [**], and this Agreement
will, upon such notification, be terminated.
5.3 For each Chip Project, Roche will pay to AFFX a non-refundable
design fee of [**] upon delivery of the first Lot of Probe Arrays
which meet the Fabrication Verification Criteria for each Chip
Project, provided however that in the event AFFX generates designs
for a third party at less than [**] under similar commercial terms,
AFFX will give Roche the benefit of such lower rate.
5.4 For each Probe Array delivered to Roche or its Affiliates that meet
the Fabrication Verification Criteria, Roche will pay a fixed fee of
[**], provided, however, that in the event that Standard Configuration
Expression Probe Arrays are made available to third parties at a rate
less than [**] under similar commercial terms, AFFX will give Roche
the benefit of such lower rate. Other Standard Configuration Probe
Arrays will be made available at the price set for Probe Arrays herein
or the catalog price for such Other Standard Configuration Probe
Arrays, whichever is less.
5.4.1 AFFX will maintain a running record of the average variance from
the delivery times specified in Section 3.3. In the event that
the average delivery time in any calendar quarter for Probe Arrays
delivered to Roche is more than [**] more than the times specified
in Section 3.3, the price of all Probe Arrays scheduled to be
delivered during the next quarter shall be decreased by [**] for
each business day that such average is more than [**] late.
5.5 The prices otherwise set forth herein include [**] new Systems in
configurations generally sold/licensed by AFFX to third parties.
Such Systems will be sold/licensed pursuant to such standard
commercial terms and conditions, except that the financial terms
will be as provided herein. Additional Systems will be
sold/licensed to Roche at standard commercial prices, which are
currently [**] per system. If Systems are made available
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[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
to third parties by AFFX under substantially the same terms and
conditions as this Agreement but for lower prices, AFFX will extend to
Roche such lower prices.
5.6 Roche may extend the Term of this Agreement for up to two years (in
one year increments) upon written notification to AFFX prior to twelve
months before the end of the Term of the Agreement. Upon Roche's
extension of the terms for such additional one or two years, Roche
will pay to AFFX an additional annual fee of [**]. For purposes
of clarity in this Section, Roche may elect, at its option, to such
extension for either one or two years, or may elect to extend for one
year and, thereafter, elect to extend for a second year by notifying
AFFX of such second extension twelve months before the end of the
first extension. Such fee will be payable in installments as follows
if the Term is extended one year:
[**]
and the following additional fees will be payable if the Term is
extended an additional one year:
[**]
5.7 In the event that Roche wishes to provide for the supply of Probe
Arrays during the Resupply Term that have been ordered by Roche
before the end of the Term, Roche may do so upon payment of an
extension fee of [**] per year for up to 3 years. Such payments
will be made in quarterly installments. Notice of such extension
must be given 1 year before the end of the Term of this Agreement
or the then current Resupply Term. Such payment will be due at the
beginning of each contract year during the Resupply Term. During
the Resupply Term, Roche may order, and AFFX will supply, only
those Probe Arrays that have been ordered by Roche during the Term,
as well as Standard Configuration Expression Probe Arrays and/or
Other Standard Probe Arrays (if any). During the Resupply Term,
Probe Arrays will be sold to Roche at [**] per Probe Array [**].
As to those Probe Arrays that represent [**] genes, Roche will
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[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
additionally pay a fee representing the information content of such
Probe Arrays. The information content fee for the Resupply Terms will
be determined as follows. [**]
[**]
[**]
5.8 All amounts referred to in this Section 5 will be invoiced by AFFX
when due. All Probe Arrays will be deemed accepted unless they are
returned to AFFX within 30 days of delivery to Roche, with written
explanation of the basis on which such Probe Arrays have been
returned. All payments will be made to AFFX thirty (30) days from the
date of invoicing by AFFX. Late payments shall bear interest at the
rate of (i) the average one month London Interbank Offered Rates as
reported by Datastream from time to time plus one (1) percent; or (ii)
or the highest rate allowed by law, whichever is less. All payments
in this Agreement will be made in the form a check or wire transfer to
AFFX in U.S. Dollars.
6 INTELLECTUAL PROPERTY
6.1 Any invention made during the course of and as part of this Agreement
shall be owned according to inventorship of the relevant applications,
provided that Roche agrees to assign to AFFX at AFFX' cost all Chip
Improvement Inventions. Roche agrees to communicate periodically
technology improvements and developments relating to probe array
technology to the Committee.
6.2 In exchange of Roche assigning to AFFX all Chip Improvement Inventions
AFFX agrees with the following:
6.2.1 AFFX grants Roche and its Affiliates a royalty free, irrevocable
immunity from suit under any Chip Improvement Invention assigned to it
pursuant to Section 6.1, provided that no
16
[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
rights in AFFX background technology are provided herein. This
Section will apply to AFFX and its successors in interest.
6.2.2 During the Term and the Resupply Term, AFFX will supply Roche at
Roche's request with probe arrays based on Chip Improvement Inventions
assigned by Roche to AFFX, taking into account [**].
6.3 Roche agrees to negotiate in good faith for at least non-exclusive
access to AFFX under reasonable terms and conditions to all Roche
owned inventions that are directed to particular genetic sequences
that were discovered through use of the Probe Arrays delivered
hereunder, and such access will only be granted in the field of probe
arrays. Such access will be negotiated to include commercially
reasonable royalty payments, and need only be provided if legally
licensable at the time the invention is made.
6.4 AFFX grants to Roche a non-exclusive, royalty free, right and
license to use the GeneChip software in association with the Probe
Arrays. Such license will be for use of the GeneChip software on
the workstations provided with the Systems during the Term of this
Agreement and during the Resupply Term, if applicable. Additional
copies may be purchased at [**] per copy. [**] GeneChip software
delivered with the Systems will be updated periodically during the
Term to be maintained in its then current commercially available
form. Support delivered with the Systems will be provided to Roche
through a single individual designated by Roche at each of such
facilities. Software will be licensed subject to conventional
software license terms and conditions.
6.5 The software provided to Roche pursuant to this Agreement will include
AFFX' standard GeneChip software packages. AFFX agrees [**].
7 PROJECT COORDINATION
17
[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
7.1 AFFX will provide Roche with up to [**] of support as outlined in
this Section at no additional charge during the Term of this
Agreement.
7.2 Support will be provided in the form of at least one project manager
who will coordinate and schedule all substantive interactions with
Roche in performance of this Agreement. In addition, support will be
provided in the form of a scientific liaison professional and at least
one instrumentation support professional.
7.3 If Roche desires, additional support will be provided to Roche in
the form of additional funded FTEs at the rate of [**] per year for
up to [**]. The cost of support above the [**] will be invoiced
each quarter by AFFX and, in the event that the support
requirements are expected to exceed the included level of [**] in
the next quarter, AFFX will provide Roche with reasonable notice
and justification for the need for such support.
7.4 The parties will form the Committee to aid in coordinating the
performance of this Agreement. The Committee will have general
responsibility for directing the day to day performance of this
Agreement pursuant to the terms of this Agreement. The Committee
shall be composed of such representatives of AFFX and Roche as each
shall respectively appoint, including the AFFX designated project
manager, 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. The site of such
meetings shall alternate between the offices of AFFX and Roche, 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. 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
senior management (not on the Committee) of AFFX and Roche 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
senior management, either Party may request that the more suitable of
the two proposed solutions as finally submitted by the Parties be
reasonably reviewed and acted upon by the Head of Global Roche
Research. If AFFX is not satisfied with the decision of the Head of
Global Roche Research, AFFX may choose to arbitrate the issue(s) in
accordance with Section
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[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
12.5. The Parties shall use reasonable efforts to otherwise use
reasonable efforts to continue performance of this Agreement during
any such dispute.
8 CONFIDENTIALITY
8.1 For a period of 5 years from disclosure to the other Party, each Party
shall maintain the Confidential Information of the other Party in
confidence (including the terms of this Agreement), and shall not
disclose, divulge, or otherwise communicate such Confidential
Information of the other, or use it for any purpose, except as
permitted or contemplated by this Agreement, and in order to carry out
the terms and objectives of this Agreement. The Parties will use
reasonable precautions to prevent and restrain the unauthorized
disclosure of such Confidential Information of the other Party. The
provisions of this paragraph shall not apply to Confidential
Information which:
8.1.1 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
8.1.2 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,
provided that if such Confidential Information is provided to the
receiving Party by a third party rightfully in possession of the
Confidential Information, but with restrictions on disclosure, the
receiving Party may use such Confidential Information in accordance
with such restrictions of the third party;
8.1.3 either before or after the date of the disclosure to the receiving
Party becomes published or generally known to the public through no
fault or omission of the receiving Party or its Affiliates;
8.1.4 is required to be disclosed by the receiving Party or its Affiliates
to comply with applicable laws, to comply with a court order, 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;
8.1.5 is independently developed by the receiving Party or its Affiliates
without reference to the Confidential Information.
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8.2 AFFX may not publish the results of use of the Probe Arrays without
approval of Roche. Roche may at its option publish results of the use
of the Probe Arrays. Subject to the limitations of Section 3 above
Roche may publish the results of its research at its sole discretion.
In the event that Roche chooses to publish such results, if AFFX
scientists have contributed to such work, authorship will be according
to scientific input and AFFX will cooperate in such publications. If
it is decided that publications will be made pursuant to this Section,
AFFX and Roche will provide the other Party draft versions of all
publications reporting results of the use of the Probe Arrays, and
will provide at least 60 days for technical review thereof, and to
allow for removal of Confidential Information.
9 WARRANTY
9.1 Both Parties to this Agreement represent and warrant that they have
the full right and authority to enter into and perform this Agreement.
9.2 AFFX warrants that the Probe Arrays delivered hereunder do not
incorporate the trade secret or copyright rights of a third party.
AFFX warrants that the Probe Arrays have not been the subject of
patent assertions, or independently identified as presenting patent
issues by AFFX, other than those disclosed to Roche legal counsel or
otherwise licensed for use in the Probe Arrays. AFFX DISCLAIMS ALL
OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING,
BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. [**]. Roche understands that
the risks of loss herein are reflected in the price of the Probe
Arrays and that the terms would have been different if there had
been a different allocation of risk.
10 INDEMNITY
10.1 AFFX will settle or defend any suit or proceeding brought against
Roche [**]
20
[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
For this paragraph to apply the indemnified Party must inform
the indemnifying Party within [**] days of any claim or suit being
made or brought, and give the indemnifying Party the full
authority, information, and assistance necessary to settle or
defend such suit or proceeding. The indemnifying Party shall not
be bound in any manner by any settlement made without its prior
written consent. [**] This paragraph states the entire liability
for infringement of intellectual property rights and is in lieu of
all other warranties, express or implied except as stated in
Section 9.2.
11 TERM AND TERMINATION
11.1 This Agreement shall extend until the end of the Term, except that
AFFX will be obligated to continue to supply Probe Arrays pursuant to
Section 5.7 until the end of the Resupply Term.
11.2 Upon breach, the nonbreaching Party shall be entitled (but not
required) to terminate this Agreement. To terminate this Agreement,
the nonbreaching Party shall provide written
21
[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
notice to the other Party. Such notice shall specifically state that
the nonbreaching Party intends to terminate this Agreement. In the
event that the other Party remains in breach sixty (60) days after
such written notice by the nonbreaching Party, this Agreement shall be
terminated, and in the event of breach by AFFX, future payments under
Section 5.1, 5.6, and the annual fees in Section 5.7 will not be
payable.
11.3 Upon termination of this due to expiration of the Term or termination
by a Party for breach pursuant to Section 5.2 or 11.2, Roche may
continue to use the Systems provided herein on Probe Arrays previously
purchased by Roche within their specified shelf life. Roche
understands that no license is conveyed implied for use of the Systems
herein for Probe Arrays other than those manufactured or licensed by
AFFX.
11.4 Upon termination of this Agreement, the following provisions will
survive: 3.6, 4.1, 6, 8, 9.2, 10, and 12,
12 MISCELLANEOUS
12.1 Roche UNDERSTANDS THAT THE PROBE ARRAYS DELIVERED HEREUNDER ARE NOT
FDA APPROVED. Roche AGREES NOT TO USE THE PROBE ARRAYS DELIVERED
HEREUNDER IN ANY CLINICAL OR OTHER SETTING REQUIRING FDA REVIEW OR
APPROVAL EXCEPT THAT Roche MAY USE THE PROBE ARRAYS IN CLINICAL TRIALS
WHEN IT OBTAINS ALL REQUIRED FDA OR OTHER REGULATORY APPROVALS
REQUIRED FOR USE IN SUCH TRIALS. Roche WILL INDEMNIFY AFFX FOR ANY
CLAIMS MADE BY A PATIENT ARISING FROM THE USE OF THE PROBE ARRAYS.
12.2 Neither Party nor any of its Affiliates shall originate any news
relating to this Agreement without the prior written approval of the
other Party, which approval shall not be unreasonably withheld, except
as otherwise required by law.
12.3 Neither Party shall assign any rights or obligations of this
Agreement, except to a party who acquires all or substantially all of
the relevant assets of the assigning Party by merger or sale, of
assets or otherwise.
12.4 This Agreement shall be construed according to the laws of California
without regard to conflict of law provisions.
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12.5 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. 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 Palo Alto, California. 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 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. 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.
12.6 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.
12.7 This Agreement and the documents referred to herein are the full
understanding of the Parties with respect to the subject matter hereof
and supersede all prior understandings and writings relating to the
subject matter herein. No waiver alteration or modification of any of
the provisions herein shall be binding unless in writing and signed by
the Parties by their respective officers.
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12.8 The headings in this Agreement are for convenience only and shall not
be considered in construing this Agreement.
12.9 In the event that any provision of this Agreement is held by a court
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 provision(s) held to be
unenforceable.
12.10 This Agreement shall be binding on and inure to the benefit of the
Parties and their successors and permitted assigns.
12.11 None of the provisions of this Agreement shall be for the benefit of
or enforceable by any third party.
12.12 Any notice required under this Agreement shall be made by overnight
mail or courier to the addresses below
If to Roche:
Xxxxxxxx-Xx Xxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000, XXX
ATTN: Corporate Secretary
with a copy to:
X. Xxxxxxxx-Xx Xxxxx Ltd
Xxxxxxxxxxxxxxxxx 000
XX 0000 Xxxxx, Xxxxxxxxxxx
ATTN: Corporate Law
and:
Roche Bioscience, a division of Syntex (U.S.A.) Inc.
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: President
and:
Roche Bioscience, a division of Syntex (U.S.A.) Inc.
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0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: Legal Affairs
If to AFFX:
Affymetrix, Inc.
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: President
12.13 The Parties shall not be liable for delay or nonperformance if
performance is rendered impracticable by the occurrence of any
condition beyond the reasonable control of a Party, if such Party has
used reasonable 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 the occurrence.
12.14 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.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their properly and duly authorized officers or representatives as set forth
below.
Affymetrix, Inc.
-------------------------
By:
----------------------
Date:
--------------------
X. Xxxxxxxx-Xx Xxxxx Ltd Xxxxxxxx-Xx Xxxxx Inc.
------------------------- ------------------------
By: By:
---------------------- ------------------------
Date: Date:
-------------------- ------------------------
X. Xxxxxxxx-Xx Xxxxx Ltd
-------------------------
By:
----------------------
Date:
--------------------
Syntex (U.S.A.) Inc.
-------------------------
By:
----------------------
Date:
--------------------
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EXHIBIT A
Fabrication Verification Criteria
Probes will be laid out by AFFX on substrates according to AFFX' most recent,
reliable layout software. [**]
During the Term of the Agreement, these Fabrication Verification Criteria will
be reasonably modified by the Parties in accordance with improved verification
criteria. In addition, AFFX will provide the specific protocols used by AFFX in
quality assurance to Roche at any time during the Term so that Roche may ensure
proper fabrication of the Probe Arrays.
27
[**] = Indicates portion redacted pursuant to the Confidential Treatment
Request.
