EXHIBIT 10.22
Product Development and Supply Agreement
N-Mer, Inc.
and
Affymetrix, Inc.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
AGREEMENT
This agreement ("Agreement"), dated as of October 24, 2001, between
Affymetrix, Inc. ("Affymetrix") a Delaware corporation having its principal
place of business at 0000 Xxxxxxx Xxxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000, and
N-Mer, Inc. ("N-Mer") a Delaware corporation having its principal place of
business at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000.
RECITALS
WHEREAS, Affymetrix has research, development, and manufacturing
capabilities and facilities, and has developed certain rights relevant to DNA
probe array based technology.
WHEREAS, N-Mer has certain intellectual property rights, research and
development capabilities, and facilities to conduct research and development
activities for the N-Mer Field.
WHEREAS, Affymetrix and N-Mer desire to enter into an agreement whereby
Affymetrix will supply N-Mer with DNA probe arrays for use in the N-Mer Field.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement, Affymetrix and N-Mer agree as follows:
1 DEFINITIONS
1.1 "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 clarity, an Affiliate shall retain rights pursuant to this
Agreement only for so long as such Affiliate remains an Affiliate of the
designated entity 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 [***] percent ([***]%) of the stock having the right to vote for
directors of such corporation or, in the case of partnerships, at least [***]
percent ([***]%) of the ownership interest in such partnership. In any case,
"control" shall require the right to direct day-to-day management and direction
of the entity. Notwithstanding the foregoing, if local law requires a minimum
percentage of local ownership, control will be established by direct or indirect
beneficial ownership of [***] percent ([***]%) of the maximum ownership
percentage that may, under such local law, be owned by foreign interests. [***].
1.2 "Affymetrix Field" means Probe Array-based products for use in all
applications excluding uses wherein [***] provided that within such Probe Array
or set of Probe Arrays used to assay [***] and intended to be used together, the
collection of probes shall satisfy [***] the following criteria:
(1) All Non-Control Probes are designed based on a
specific reference sequence [***];
(2) Control probes on any array represent less than [***]%
of all
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
1
probes on that array and all other probes are Non-Control Probes;
and
(3) Collectively the sequence of the Informative Probe
Portions of the probes of any [***].
For example, without limiting the foregoing, the Parties agree that "Affymetrix
Field" includes [***].
It is the intent of the Parties that the "Affymetrix Field" and "N-Mer Field"
are mutually exclusive.
1.3 "Affymetrix Work Plan Technology" shall mean the patents, patent
applications, trade secrets and other Information owned or controlled by
Affymetrix that is [***] to perform the Parties' obligations under the Work
Plan.
1.4 "Affymetrix License Agreement" shall mean the License Agreement,
dated as of the date hereof, between Affymetrix and Callida Genomics, Inc.
1.5 "Bacterial Clinical Diagnostics" shall mean the use of Probe Arrays
in the determination of [***] where the results of the assay are reported to a
caregiver or his/her patient for use in a therapeutic decision for that patient.
1.6 "Confidential Information" means any and all non-public and
proprietary Information that is specifically designated as such and that is
disclosed by either Party to the other in any form in connection with this
Agreement and that, if orally disclosed, shall be reduced in writing and
delivered to the receiving Party within thirty (30) days of such disclosure.
1.7 "Control Probe" means a probe within the Probe Array [***].
1.8 "Custom Probe Arrays" shall refer to Probe Arrays the manufacture of
which requires the creation of one or more custom mask designs for particular
probe sequences identified by N-Mer pursuant to Sections 3.1 or 3.2,
specifically for and only for use in the N-Mer Field.
1.9 "Effective Date" shall mean the Closing Date (as such term is
defined in the Preferred Stock Purchase Agreement, dated as of the date hereof,
among Affymetrix, N-Mer, Callida Genomics, Inc. and Hyseq, Inc.).
1.10 "Information" means any data, results, inventories, information,
know-how, processes, machines, trade secrets, techniques, methods, development,
material, or compositions of matter or other information of any type or kind.
1.11 "Informative Probe Portion" of a probe means that portion of a
probe sequence that is [***]; the Informative Probe Portion being characterized
by an Informative Probe Length that is [***].
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
2
1.12 "N-Mer Field" means Probe Array-based products for use in all
applications, excluding the following: (a) uses wherein [***] probes in the
array is [***], and (b) Bacterial Clinical Diagnostics; provided that within
such Probe Array or set of Probe Arrays used to assay a target nucleic acid, the
collection of probes shall satisfy all of the following criteria:
(1) Each Non-Control Probe is designed without use of a
reference sequence [***]; and
(2) Control probes represent less than [***]% of all
probes on any single array and all other probes are Non-Control
Probes.
It is the intent of the Parties that the "Affymetrix Field" and "N-Mer Field"
are mutually exclusive.
1.13 "N-Mer's Area Of Interest" shall mean the use of Probe Arrays and
related reagents, protocols, instrumentation and software supplied hereunder,
solely for use in and licensed for use only in the N-MER Field: a) as a research
tool for internal research and development of applications of, or assays
associated with, Probe Arrays supplied by Affymetrix hereunder, b) pursuant to
the Product Solicitation Agreement, for the distribution or sale of Probe Arrays
supplied pursuant to this Agreement to end users for internal research purposes
or to generate databases for commercial license in accordance with Section 3.6,
or c) in the event that the Product Solicitation Agreement terminates, for the
distribution or sale of Probe Arrays supplied pursuant to this Agreement to end
users for internal research purposes or to generate databases for commercial
license in accordance with Section 3.6.
1.14 "Non-Control Probe" means a probe within the Probe Array that
provides information about the sequence of the target nucleic acid in the
sample.
1.15 "Lot" shall refer to a specified minimum purchase quantity of Probe
Arrays for the particular wafer format of Probe Array specified by N-Mer, and
which will be identified by Affymetrix within [***] of submission of a design of
a Custom Probe Array by N-Mer; provided, however, that a Lot shall not be more
than (i) [***] Probe Arrays in a [***] Probe Array/wafer format for research and
development and (ii) [***] Probe Arrays in a [***] Probe Array/wafer format or
an equivalent proportional number of Probe Arrays in a different Probe
Array/wafer format for commercial purposes. The Project Coordination Committee
shall have a right at the commencement of a design for a Custom Probe Array,
[***], to request Affymetrix to vary the size of a Lot upwards or downwards.
Affymetrix will use [***] efforts to accommodate such request provided such
variance does not [***].
1.16 "New Process Custom Probe Array" shall mean all Custom Probe Arrays
that are not Standard Custom Probe Arrays.
1.17 "Party" shall mean Affymetrix or N-Mer. "Parties" shall mean
Affymetrix and N-Mer.
1.18 "Probe Array" means a single Solid Support having affixed thereto
oligonucleotide, including nucleic acid, probes [***]; provided that [***].
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
3
1.19 "Product Solicitation Agreement" shall mean the agreement of that
name between Affymetrix and N-Mer of even date herewith.
1.20 "Project Coordination Committee" or "PCC" shall have the meaning
assigned to it in Section 6.1.
1.21 "Solid Support" means a nonporous planar surface of a solid
material; [***].
1.22 "Standard Custom Probe Array" shall mean a Custom Probe Array where
the probe sequence at any given position is [***] and where such Custom Probe
Array is fabricated using the same equipment and process as Affymetrix then
standard probe arrays sold to [***] or more Third Parties.
1.23 "System(s)" shall mean fluidics station(s), work station(s), probe
array reader(s), and associated software, such software licensed to N-Mer, and
such fluidics station(s) and probe array reader(s) sold to N-Mer, only for use
with Probe Arrays sold hereunder.
1.24 "Term" shall mean the period beginning on the Effective Date and
ending upon dissolution of N-Mer. For purposes of this agreement, if Affymetrix
exercises the Option (as such term is defined in the Option Agreement, dated as
of the date hereof, among Affymetrix, N-Mer and Callida Genomics, Inc.) such
exercise shall be deemed to be a dissolution of N-Mer.
1.25 "Third Party" shall mean any person or entity other than
Affymetrix, N-Mer, or Affiliates of either.
1.26 "Work Plan" shall mean the plan set forth in Exhibit A, and as may
be amended from time to time in writing by agreement of the Project Coordination
Committee.
2 PRODUCT DEVELOPMENT PLAN
2.1 Performance of Work Plan. Affymetrix and N-Mer shall collaborate
together to develop technology and products as set forth in the Work Plan. N-Mer
shall bear all costs and expenses for the Parties' work required by the Work
Plan. The Parties shall use [***] efforts to perform their respective
obligations in compliance with the Work Plan, including, without limitation, the
schedules set forth therein. Affymetrix shall supply such services at [***]. The
Parties shall exchange Confidential Information as reasonably required to
perform the Work Plan, provided that a Party may disclose Confidential
Information of the other Party (i) solely to employees who need to know such
Confidential Information in order to perform their obligations under the Work
Plan and (ii) to consultants and/or advisors provided that such consultants and
advisors have signed confidentiality agreements at least as strict as the
confidentiality provisions in this Agreement and provided further that such
disclosure shall occur only with the prior written consent of the Party whose
Confidential Information is proposed to be disclosed, which consent shall not be
unreasonably denied, conditioned or delayed. Changes to the Work Plan shall be
subject to the mutual agreement of the Project Coordination Committee, [***].
2.2 License to Perform Work Plan. Affymetrix hereby grants N-Mer a
royalty-free, fully paid-up, worldwide, non-exclusive license, without the right
to grant sublicenses, under the
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
4
Affymetrix Work Plan Technology, solely to perform N-Mer's obligations under the
Work Plan. For purposes of clarity, no right of distribution or sale is provided
under this Section 2.2.
2.3 License Under Affymetrix Work Plan Technology. Affymetrix hereby
grants to N-Mer a royalty-free, fully paid-up, worldwide, non-exclusive license,
without the right to grant sublicenses, under the Affymetrix Work Plan
Technology, solely as required in connection with the use (for development of
products to be sold under the Product Solicitation Agreement), manufacture, and
importation of [***] to be used solely in conjunction with Custom Probe Arrays
made by Affymetrix pursuant to this Agreement. Affymetrix hereby grants to N-Mer
a non-exclusive license (without the right to sublicense), under the Licensed
Patents (as such term is defined in the Affymetrix License Agreement), solely in
the N-Mer Field, and under the Patents-in-Interference (as such term is defined
in the Affymetrix License Agreement), in all fields, excluding Bacterial
Clinical Diagnostics, in each case on the same terms and subject to the same
conditions as the licenses to such Licensed Patents and Patents-in-Interference
granted by Affymetrix under the Affymetrix License Agreement, except that this
license shall be used solely in conjunction with Custom Probe Arrays made by
Affymetrix pursuant to this Agreement.
2.4 Supply of Material and Services. Affymetrix shall supply N-Mer with
Custom Probe Arrays, chip design services, Systems and other reagents and
services as provided in the Work Plan that are necessary for N-Mer to perform
its obligations under the Work Plan. Such supply shall be pursuant to the terms
set forth in Section 3 below.
3 PROBE ARRAY SUPPLY
3.1 Standard Custom Probe Array Design. During the Term, N-Mer may
provide to Affymetrix probe sequences for Standard Custom Probe Arrays. Upon
Affymetrix' receipt of such probe sequences and such [***] related information,
Affymetrix shall use [***] efforts to design, lay out, and procure masks for
such Standard Custom Probe Arrays according to the schedule quoted to N-Mer at
the time N-Mer orders such Standard Custom Probe Arrays pursuant to Section 3.3;
provided, however, that such schedule will identify a time for completion that
is [***]. Affymetrix shall xxxx N-Mer for process development, design and layout
services for Standard Custom Probe Arrays at [***]. Affymetrix will make or
procure masks and xxxx N-Mer at a price equal to [***].
3.2 New Process Custom Probe Array Design. Affymetrix shall use [***]
efforts to develop processes to manufacture New Process Custom Probe Arrays
pursuant to the Work Plan. After Affymetrix determines [***] the feasibility of
the manufacture of New Process Custom Probe Arrays pursuant to the Work Plan,
N-Mer may identify probe sequences for New Process Custom Probe Arrays. Upon
Affymetrix' receipt of such probe sequences and such [***] related information,
Affymetrix shall use [***] efforts to design, lay out, and procure masks for New
Process Custom Probe Arrays according to the schedule quoted to N-Mer at the
time N-Mer orders such New Process Custom Probe Arrays pursuant to Section 3.3;
provided, however, that such schedule shall provide for time periods [***].
Affymetrix shall xxxx N-Mer for design and layout services for New Process
Custom Probe Arrays at [***]. Affymetrix will make or procure masks and xxxx
N-Mer at a price equal to [***].
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
5
3.3 Custom Probe Array Supply.
3.3.1 General. N-Mer shall procure its requirements of Custom Probe
Arrays exclusively from Affymetrix; provided, however, that if
Affymetrix is unable to supply Custom Probe Arrays under the
terms and conditions of this Agreement, N-Mer shall have the
right to [***]; and, provided further, [***]. Affymetrix shall
use [***] efforts to deliver such quantities of the Custom Probe
Arrays specified in a forecast made pursuant to Section 3.4 and
in compliance with specifications [***] pursuant to the Work
Plan. N-Mer shall have the right to purchase Custom Probe Arrays
in any format size commercially available that is sold by
Affymetrix to [***] or more Third Parties at the time of such
purchase by N-Mer.
3.3.2 Standard Custom Probe Arrays. N-Mer shall have the right to order
its requirements of Standard Custom Probe Arrays from Affymetrix,
provided that in such orders N-Mer will identify probe sequences
for each Standard Custom Probe Array [***]. If the information
received by Affymetrix does not include such [***] information,
Affymetrix will advise N-Mer of any and all additional needed
information. Affymetrix shall deliver such Standard Custom Probe
Arrays according to the schedule quoted to N-Mer at the time
N-Mer orders such Standard Custom Probe Arrays; provided,
however, that such schedule will identify a time for completion
that is [***]. Affymetrix shall supply such Standard Custom Probe
Arrays using standard quality control procedures [***].
3.3.3 New Process Custom Probe Arrays. After Affymetrix determines
[***] the feasibility of the manufacture of New Process Custom
Probe Arrays pursuant to the Work Plan, N-Mer shall have the
right to order its requirements of New Process Custom Probe
Arrays from Affymetrix, provided that in such orders N-Mer will
identify probe sequences for each New Process Custom Probe Array
[***]. If the information received by Affymetrix does not include
such [***] information, Affymetrix will advise N-Mer of any and
all additional needed information. Affymetrix shall deliver such
New Process Custom Probe Arrays according to the schedule quoted
to N-Mer at the time N-Mer orders such Standard Custom Probe
Arrays; provided, however, that such schedule shall provide for
delivery periods [***]. Affymetrix shall evaluate and manufacture
New Process Custom Probe Arrays using quality control procedures
that are [***]. To the extent the Project Coordination Committee
agrees on additional quality control procedures applicable to New
Process Custom Probe Arrays, Affymetrix shall use [***] efforts
to comply with all such procedures.
3.3.4 Quantities; Manufacturing Capacity. In no event will Affymetrix
be obligated to provide more than [***] ([***] Probe Array/wafer
format equivalent) Standard Custom Probe Arrays in any [***]
period for research and development purposes, nor more than [***]
([***] Probe Array/wafer format equivalent) Standard Custom Probe
Arrays in any [***] period for distribution to Third Parties
unless mutually agreed to in writing. In no event will Affymetrix
be obligated to provide
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
6
more than the number of New Process Custom Probe Arrays that can
be produced from the use of [***] percent ([***]%) of the
capacity of [***] dedicated manufacturing line selected by
Affymetrix in any [***] period for research and development
purposes and [***] percent ([***]%) of the capacity of [***]
dedicated manufacturing lines in any [***] period for
commercialization purposes. Notwithstanding the foregoing,
Affymetrix shall use [***] efforts to supply additional Custom
Probe Arrays to N-Mer provided that such incremental supply [***]
and, provided further, that if Affymetrix can not reasonably
satisfy such incremental demand for Custom Probe Arrays [***],
then Affymetrix shall use [***] efforts to expand capacity to
supply such additional demand, provided that, to the extent
capital equipment cumulatively costing more than [***] dollars
($[***]) is required by Affymetrix to provide for supply of New
Process Custom Probe Arrays, then: (i) Affymetrix shall so notify
N-Mer in writing of such requirements, including, without
limitation, an itemized list of each piece of such equipment, its
intended use, anticipated cost, and projected delivery date; (ii)
upon N-Mer's written request, Affymetrix shall [***]; and (iii)
Affymetrix shall [***]. Unless otherwise agreed by the Parties,
the "[***] Term" for such N-Mer Equipment shall be the later of
(i) [***] from the procurement by Affymetrix of such N-Mer
Equipment or (ii) the last day of any [***] period after the
[***] period referred to in the preceding clause during which
such N-Mer Equipment [***]. All right, title and interest in, to
and under such N-Mer Equipment shall be [***]. Notwithstanding
anything in this Agreement to the contrary, N-Mer shall have no
right to (i) [***], (ii) [***] or (iii) enter the premises of
Affymetrix. [***]. During the [***] Term, Affymetrix shall use
N-Mer Equipment [***].
3.4 Forecasts. Beginning on the Effective Date and on the [***] during
the Term of this Agreement, N-Mer will provide a [***] forecast of Custom Probe
Arrays to be supplied by Affymetrix during the following [***] period. The
forecast will be provided according to a mechanism and on forms [***]. The [***]
of each such forecast shall constitute a firm order for the Custom Probe Arrays
set forth in [***]; provided, however, that Custom Probe Arrays shall only be
purchased by N-Mer in whole Lot increments and in quantities subject to Section
3.3.4. The [***] of such forecast will be for capacity planning purposes only,
and shall not constitute a firm order by N-Mer nor a commitment by Affymetrix.
Delivery times for all Custom Probe Arrays ordered hereunder will be quoted at
the time Affymetrix receives a firm order for such products and in compliance
with Section 3.3.
3.5 Shipping; Title and Risk of Loss. Affymetrix shall pack Custom Probe
Arrays supplied under this Agreement in Affymetrix' standard shipping packages
and ship to the address specified by N-Mer. Unless otherwise mutually agreed to
in writing deliveries will be [***]. Affymetrix will ship via [***]. Title and
risk of loss or damage for deliveries will pass to N-Mer upon [***]. [***] will
pay all shipping costs, duties, and sales taxes.
[***].
3.6 Permitted Uses. All Custom Probe Arrays purchased pursuant to this
Agreement may only be used within N-Mer's Area of Interest. N-Mer may not, and
will not allow any Third Party to: 1) transfer the Custom Probe Arrays provided
by Affymetrix pursuant to this Agreement to Third Parties other than (i) in the
course of distribution to end users pursuant to
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
7
[***] or (ii) in the event of termination of the Product Solicitation Agreement;
or 2) transfer to any Third Party [***] with Custom Probe Arrays supplied to
N-Mer for [***] purposes under this Agreement; or 3) provide [***] to any Third
Party using the Custom Probe Arrays provided by Affymetrix pursuant to this
Agreement; or 4) allow any Third Party to [***] the Custom Probe Arrays supplied
by Affymetrix to N-Mer under this Agreement except pursuant to distribution in
the event that (i) [***] or (ii) in the event of termination of the Product
Solicitation Agreement; or 5) [***], or otherwise use outside of N-Mer's Area of
Interest, the Probe Arrays delivered hereunder; or 6) [***] the Custom Probe
Arrays delivered hereunder, except that [***] is permitted for work performed
under the Work Plan or for otherwise permitted internal research and development
work performed by N-Mer; or 7) use or, [***], of the Custom Probe Arrays
delivered hereunder outside of the N-Mer Field. N-Mer and its Affiliates will
allow Affymetrix [***] access during regular business hours and with advance
written notice to ensure compliance with these prohibitions. The Custom Probe
Arrays transferred pursuant to this Agreement are not licensed for use in
violation of the above restrictions. In the event that N-Mer wishes to provide
for end users to be permitted to [***] using the Probe Arrays supplied
hereunder, Affymetrix will permit N-Mer to do so provided N-Mer shall [***].
3.7 System Supply. N-Mer has the right to issue, upon execution of this
Agreement and from time to time thereafter, as approved by the Project
Coordination Committee, purchase orders for the System(s) and reagents that are
[***] required for N-Mer to perform its research and development activities as
permitted under this Agreement and the Product Solicitation Agreement. Such
System(s) and reagents shall be supplied at [***]. N-Mer shall be permitted to
use such Systems, including software and reagents, purchased at [***] in the
N-Mer Area of Interest. The supply of all other Systems and reagents for
commercial purposes shall be at [***]. N-Mer shall also be permitted to use such
Systems purchased hereunder at [***] in a manner consistent with the permitted
uses of such Systems when sold by Affymetrix to Third Parties customers.
4 PROPRIETARY RIGHTS
4.1 No [***]. Until the end of the Term, N-Mer will [***]. This
paragraph shall not confer on N-Mer or any Third Party any rights under the
patent rights of Affymetrix.
4.2 License Limitation. Except as otherwise stated herein, including,
without limitation, Sections 2.2, 2.3, 3.6 and 3.7, N-Mer acknowledges and
understands that no license is conveyed or implied for use of the Systems
herein.
4.3 Covenant Not to Assert Inventions. N-Mer covenants not to assert the
patent rights in any [***] to the Probe Arrays supplied hereunder against
Affymetrix [***], for use outside of the N-Mer Field.
5 COMPENSATION
5.1 For each Custom Probe Array delivered to N-Mer or its Affiliates for
researching and developing products in the N-MER Field, N-Mer will pay
Affymetrix [***] for such Probe
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
8
Arrays. For each Probe Array delivered to N-Mer or its Affiliates for
distribution to end users, N-Mer shall pay Affymetrix according to the following
formula:
PER UNIT PROBE ARRAY PRICE = [***]
where [***] is calculated under general accepted accounting principles as
applied by [***]. For purposes of clarity, for capital equipment paid for by
N-Mer at the time such capital equipment is purchased, pursuant to Section 3.3,
the [***]. For the purposes of calculating the [***] described in the above
formula, Affymetrix will look to [***]. Notwithstanding the foregoing, in no
event shall Affymetrix charge N-Mer more than the following amounts for Standard
Custom Probe Arrays: $[***] per Standard Custom Probe Array in a [***] Probe
Array/wafer format; $[***] per Standard Custom Probe Array in a [***] Probe
Array/wafer format; $[***] per Standard Custom Probe Array in a [***] Probe
Array/wafer format and $[***] per Standard Custom Probe Array in a [***] Probe
Array/wafer format.
5.2 Notwithstanding the foregoing or any provision to the contrary in
this Agreement, N-Mer will be responsible for any and all [***] for Probe Arrays
supplied to N-Mer hereunder, and the Probe Array fees described in Section 5.1
of this Agreement shall be exclusive of any such [***].
5.3 All amounts referred to in this Section 5 will be invoiced by
Affymetrix when due. All Custom Probe Arrays supplied under this Agreement will
be deemed accepted unless they are returned to Affymetrix within [***] of
delivery to N-Mer, with written explanation of the basis on which such Probe
Arrays have been returned on Affymetrix' standard "Return Materials
Authorization" according to the procedures provided for in such Return Materials
Authorization, including, without limitation, [***]. All payments will be made
to Affymetrix [***] from the date of invoicing by Affymetrix. Late payments
shall earn interest at the rate equal to the lesser of [***] percent ([***]%)
per month or the maximum rate allowable under law. All payments in this
Agreement will be made in the form of a check or wire transfer to Affymetrix in
United States Dollars.
6 PROJECT COORDINATION
6.1 The Parties will form a committee (the "Project Coordination
Committee" or "PCC") to aid in coordinating the performance of this Agreement,
including, without limitation, the Work Plan. The PCC will have general
responsibility for ensuring the performance of this Agreement pursuant to the
terms of this Agreement. The PCC shall be composed of two (2) representatives of
each of Affymetrix and N-Mer as each shall respectively appoint and be
reasonably acceptable to the other Party. Each Party by its representative(s)
shall cast one vote on the PCC. A quorum shall consist of at least one PCC
representative from each Party. The PCC shall act only with the [***]. 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 PCC shall have its
first meeting within [***] after the Effective Date. Thereafter, the PCC shall
meet at least [***] during the Term, except at such times as the Parties
mutually believe there are no significant agenda items. The site of such
meetings shall alternate between the offices of Affymetrix and N-
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
9
Mer, (or any other site mutually agreed upon by the Parties) or be arranged by
video conference. The proceedings of all meetings of the PCC shall be prepared
alternately by the Parties, unless otherwise agreed, and sent to both Parties.
In the event that the PCC is unable to reach a decision by [***] with respect to
any matter and such inability continues for a period of [***] after the date on
which the matter is first submitted to the PCC, each Party shall refer the
matter to the Chief Executive Officers of Affymetrix and N-Mer for resolution.
Each Party shall set forth in writing a proposed solution to the impasse. If an
acceptable resolution is not achieved, either Party may choose to arbitrate the
issue(s) in accordance with Section 11.5.1. The Parties shall use reasonable
efforts to [***].
7 CONFIDENTIALITY
7.1 For a period of [***] from following the expiration of this
Agreement, each Party shall maintain the Confidential Information of the other
Party in strict 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. Without limiting the foregoing, the Parties will use [***]
precautions to prevent and restrain the unauthorized disclosure of any
Confidential Information of the other Party. The provisions of this paragraph
shall not apply to Confidential Information which:
7.1.1 was known or used by the receiving Party or its Affiliates
without any restriction on disclosure, 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
7.1.2 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;
7.1.3 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;
7.1.4 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;
7.1.5 is independently developed by the receiving Party or its
Affiliates without reference to the Confidential Information.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
10
7.2 N-Mer may publish the results of use of the Probe Arrays after [***]
advance notice to the Project Coordination Committee as set forth in this
Section 7.2; provided, however, that in no event shall N-Mer publish Affymetrix'
Confidential Information without the prior written approval of Affymetrix.
Subject to the limitations of the foregoing and Section 3 above N-Mer may
publish the results of its research at its sole discretion. In the event that
N-Mer chooses to publish such results, if Affymetrix scientists have contributed
to such work, authorship will be according to scientific input and Affymetrix
will cooperate in such publications. If it is decided that publications will be
made pursuant to this Section, Affymetrix and N-Mer will provide the Project
Coordination Committee draft versions of all publications reporting results of
the use of the Probe Arrays, and will provide at least [***] for technical
review thereof, and will allow for removal of Confidential Information.
8 REPRESENTATIONS AND WARRANTIES
8.1 Both Parties to this Agreement represent and warrant that they have
the full right and authority to enter into and perform this Agreement.
8.2 Affymetrix represents and warrants that the Probe Arrays delivered
hereunder do not incorporate the [***] of a Third Party. EXCEPT FOR THE
FOREGOING SENTENCE, AFFYMETRIX DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES
RELATING TO INTELLECTUAL PROPERTY, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR
PURPOSE. With respect to Third Party tort claims that arise from the use,
handling or storage of the products supplied to N-Mer pursuant to this
Agreement, Affymetrix shall [***].
9 INDEMNITY
9.1 Indemnity by Affymetrix. Affymetrix shall indemnify, defend and hold
N-Mer and its Affiliates, successors-in-interest, assigns, agents, employees,
officers and directors (the "N-Mer Indemnitees") harmless from and against any
and all liability, damage, loss, cost or expense (including reasonable
attorneys' fees) arising out of Third Party claims or suits related to: (i)
Affymetrix' performance of, or failure to perform, its obligations under this
Agreement; (ii) breach by Affymetrix of its representations and warranties under
this Agreement; or (iii) any suit or proceeding brought against N-Mer or its
Affiliates to the extent based on a claim that [***]; provided, however, that
Affymetrix' obligations pursuant to this Section 9.1 will not apply to the
extent such claims or suits result from the gross negligence or willful
misconduct of any of the N-Mer Indemnitees. Affymetrix will settle or defend any
suit or proceeding brought against N-Mer to the extent based on a claim that the
Probe Arrays delivered hereunder [***]. Affymetrix shall have no liability under
this paragraph to the extent that [***] ("Non-Covered Claims"). Notwithstanding
the foregoing, Affymetrix will have no obligation to defend or indemnify the
N-Mer Indemnitees with respect to Third Party claims arising out of breach by
N-Mer of its representations and warranties set forth in this Agreement.
9.2 Indemnity by N-Mer. N-Mer shall indemnify, defend and hold
Affymetrix and its Affiliates, successors-in-interest, assigns, agents,
employees, officers and directors (the "Affymetrix Indemnitees") harmless from
and against any and all liability, damage, loss, cost or
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
11
expense (including reasonable attorneys' fees) arising out of Third Party claims
or suits related to: (i) N-Mer's performance of, or failure to perform, its
obligations under this Agreement; (ii) breach by N-Mer of its representations
and warranties under this Agreement; (iii) any suit or proceeding based on [***]
brought against Affymetrix for Non-Covered Claims; provided, however, that
N-Mer's obligations pursuant to this Section 9.2 will not apply to the extent
such claims or suits result from the gross negligence or willful misconduct of
any of the Affymetrix Indemnitees. Notwithstanding the foregoing, N-Mer will
have no obligation to defend or indemnify the Affymetrix Indemnitees with
respect to Third Party claims arising out of breach by Affymetrix of its
representations and warranties set forth in this Agreement.
9.3 Conditions to Indemnification. As a condition to a Party's right to
receive indemnification under this Section 9, it shall: (i) promptly notify
("Claim Notice") the other Party as soon as it becomes aware of a claim or suit
for which indemnification may be sought pursuant hereto (provided that the
failure to give a Claim Notice promptly shall not prejudice the rights of an
indemnified Party except to the extent that the failure to give such prompt
notice materially adversely affects the ability of the indemnifying Party to
defend the claim or suit); (ii) cooperate with the indemnifying Party in the
defense of such claim or suit, at the expense of the indemnifying Party; and
(iii) if the indemnifying Party confirms in writing to the indemnified Party its
intention to defend such claim or suit within [***] of receipt of the Claim
Notice, permit the indemnifying Party to control the defense of such claim or
suit, including without limitation the right to select defense counsel; provided
that if the indemnifying Party fails to (x) provide such confirmation in writing
within the [***] period; or (y) diligently and reasonably defend such suit or
claim at any time, its right to defend the claim or suit shall terminate
immediately in the case of (x) and otherwise upon [***] written notice to the
indemnifying Party and the indemnified Party may assume the defense of such
claim or suit at the sole expense of the indemnifying Party and may settle or
compromise such claim or suit without the consent of the indemnifying Party. In
no event, however, may the indemnifying Party compromise or settle any claim or
suit in a manner which admits fault or negligence on the part of any indemnified
Party or that otherwise materially affects such indemnified Party's rights under
this Agreement or requires any payment by an indemnified Party without the prior
written consent of such indemnified Party. Subject as expressly provided above,
the indemnifying Party will have no liability under this Section 10 with respect
to claims or suits settled or compromised without its prior written consent.
Affymetrix' liability under Section 9.1(iii) shall be limited to [***]. N-Mer's
liability under Section 9.2(iii) shall be limited to [***]. In the event that
the Probe Arrays [***]. This paragraph states the entire liability for [***] and
is in lieu of all other warranties, express or implied except as stated in
Section 8.
10 TERM AND TERMINATION
10.1 This Agreement shall extend until the end of the Term unless
terminated earlier by a Party for cause by written notice if the other Party (or
its Affiliate) materially breaches any material provision of this Agreement and
fails to substantially cure such breach within [***] of written notice
describing the breach and the intent of the notifying Party to terminate the
Agreement in the event such breach is not substantially cured.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
12
10.2 Upon termination of this Agreement, the following provisions will
survive: Sections 1, 7, 8, 9 and 11 (in their entirety) and Sections 3.6, 4.2,
4.3 and 10.2.
11 MISCELLANEOUS
11.1 N-MER UNDERSTANDS THAT THE PROBE ARRAYS DELIVERED HEREUNDER ARE NOT
FDA APPROVED. N-MER AGREES NOT TO USE THE PROBE ARRAYS DELIVERED HEREUNDER IN
ANY CLINICAL OR OTHER SETTING REQUIRING FDA REVIEW OR APPROVAL. [***]. THE PROBE
ARRAYS AND SYSTEMS ARE NOT LICENSED EXCEPT AS SPECIFICALLY RECITED HEREIN UNDER
ANY INTELLECTUAL PROPERTY RIGHTS OF AFFYEMTRIX.
11.2 Neither Party nor any of its Affiliates shall issue any press
release or otherwise publicly disseminate any information relating to this
Agreement without the prior written approval of the other Party, [***], or
except as otherwise required by law.
11.3 Neither this Agreement nor the rights, interests or obligations of
either Party may be assigned by such Party without the prior written consent of
the other Party, which shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing, Affymetrix may assign any rights or
obligations of this Agreement to a Party who acquires all or substantially all
of the assets of the business of Affymetrix to which this Agreement relates by
merger or sale of assets or otherwise. For purposes of clarity, any [***] shall
be deemed to be a transfer of rights and obligations hereunder. Any attempted or
purported assignment in violation of the foregoing shall be void. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
successors and permitted assigns of each Party hereto.
11.4 This Agreement shall be construed according to the laws of
California without regard to conflict of law provisions.
11.5
11.5.1 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 [***]
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. The procedure for the arbitration will be
as follows: 1. [***] arbitrator will be chosen in accordance with
the arbitration selection rules of JAMS. The selection process
will take a maximum of [***]. 2. The arbitration will take place
under JAMS rules to the extent the rules are not superceded by
the agreements of the party to arbitrate or any agreed limitation
on damages. 3. The letter of allegation and a response shall be
filed with [***] arbitrator within [***] of the selection and
agreement of [***] arbitrator to participate. 4. The Parties
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
13
agree that [***] in connection with any arbitration that may take
place pursuant to this Section 11.5.1 and, therefore, the Parties
and [***] arbitrator shall use their [***] efforts to conclude
the arbitration, including the issuance of any award resulting
therefrom, within a maximum of [***] from the time of the filing
of the complaint or letter of allegation with [***] arbitrator.
5. The arbitration shall take place in the San Francisco Bay
Area. 6. [***]. 7. [***]. Judgment on the award of [***]
arbitrator may be entered in the Superior Court of Santa Xxxxx
County in the State of California. All Parties admit to the
jurisdiction of the Superior Court of Santa Xxxxx County in the
State of California for purposes of enforcement of the award of
[***] arbitrator and compelling arbitration in accordance with
this Section 11.5.1. 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. Nothing in this Section 11.5.1
shall be construed to preclude a Party from seeking injunctive
relief in a court of law for a breach of Section 7 where absent
such relief such Party would suffer irreparable harm. [***].
11.6 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.
11.7 This Agreement and the documents referred to herein, together with
the Letter Agreement, dated as of the date hereof, among Affymetrix, N-Mer,
Callida Genomics, Inc. and Hyseq, Inc., 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.
11.8 The headings in this Agreement are for convenience only and shall
not be considered in construing this Agreement.
11.9 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.
11.10 None of the provisions of this Agreement shall be for the benefit
of or enforceable by any Third Party.
11.11 Any notice required under this Agreement shall be made by
overnight mail or courier to the addresses below.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
14
If to N-Mer:
N-Mer, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxxx Xxxxxxx
Facsimile Number: (000) 000-0000
If to Affymetrix:
Affymetrix, Inc.
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
Facsimile Number: (000) 000-0000
11.12 "Force Majeure" shall mean an Act of God, flood, fire, explosion,
earthquake, strike, lockout, casualty or accident, war, civil commotion, act of
public enemies, blockage or embargo, or any injunction, law, order proclamation,
regulation, ordinance, demand or requirement of any government or any
subdivision, authority representative thereof, or the inability, after all
commercially reasonable efforts have been made, to procure materials, labor,
equipment, transportation or energy sufficient to meet manufacturing needs
without the necessity of allocation, or any other cause whatsoever, whether
similar or dissimilar to those enumerated above, which are beyond the reasonable
control of such Party, which the Party affected has used its reasonable best
efforts to avoid, and which prevent, restrict or interfere with the performance
by a Party of its obligations hereunder. The Party affected by Force Majeure
shall give notice to the other Party promptly in writing and whereupon shall be
excused from those obligations hereunder, to the extent of such prevention,
restriction or interference, provided that the affected Party shall use its
[***] efforts to overcome, avoid or remove such cause(s) of non-performance and
shall continue performance whenever such cause(s) is removed with all possible
speed. Nothing herein shall be deemed to require any Party to settle on terms
unsatisfactory to such Party with regard to any [***].
11.13 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.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
15
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: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
---------------------------------------------
Title: Executive Vice President and General Counsel
---------------------------------------------
Date: October 24, 2001
---------------------------------------------
N-Mer, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxx Xxxxxxxx
---------------------------------------------
Title: Chairman and Interim Chief Executive Officer
---------------------------------------------
Date: October 24, 2001
---------------------------------------------
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
16
EXHIBIT A
COLLABORATIVE WORK PLAN
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
A-1
INITIAL WORK PLAN FOR N-MER COMPANY
[***]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
A-2
EXHIBIT B
EXISTING AFFYMETRIX PRODUCTS
[***]
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.
B-1
